Exhibit
10.1


STOCK CONTRIBUTION AGREEMENT


                This
Stock Contribution Agreement (“Agreement”) is dated as of May 16, 2006,
and is made by and among 1-800 CONTACTS, INC., a Delaware corporation (the “Company”),
and Jonathan C. Coon (“JCC”).


                WHEREAS,
subject to the terms and conditions set forth herein, JCC has agreed to
contribute to the Company upon the consummation of a Change in Control (as
defined herein), and in accordance with the terms of this Agreement, shares of
the Company’s common stock, par value $0.01 per share (“Common Stock”).


                NOW,
THEREFORE, in consideration of the premises and the representations, warranties
and agreements herein contained and intending to be legally bound hereby, the
Company and JCC hereby agree as follows:


ARTICLE I

CONTRIBUTION OF COMMON STOCK AND RELATED MATTERS


Section 1.1             Contribution
of Common Stock.  Subject to the
terms and conditions set forth herein, immediately after the consummation of a
Change in Control, JCC hereby agrees to deliver to the Company, and the Company
hereby agrees to accept, one (1) share of Common Stock for every five (5)
shares of Common Stock that vests pursuant to the terms of the Long Term
Incentive Plan as a result of the Change in Control up to an aggregate of
100,000 shares of Common Stock (the “Contributed Shares”).  The Contributed Shares shall immediately be
cancelled, and JCC shall not be entitled to any consideration on account of the
Contributed Shares, including any consideration to be paid or payable in
connection with any transaction or series of transactions that give rise to the
Change in Control.  The number of
Contributed Shares required to be contributed to the Company pursuant to this
Section 1.1 shall be adjusted in accordance with Section 1.4.  JCC shall deliver to the Company certificates
representing the Contributed Shares being contributed to the Company pursuant
to this Section 1.1, duly endorsed in blank in proper form for transfer,
with appropriate transfer stamps, if any, affixed.


Section 1.2             Exception
to Contribution.  JCC shall not be
required to make the contribution described in Section 1.1 if the price per
share paid in connection with the Change in Control plus any dividends paid by
the Company to shareholders during the term of this Agreement is more than $30
per share.


Section 1.3             Certain
Defined Terms.  For purposes of this Agreement, the following
terms shall have the meaning assigned to them below:


“Board” means the
Board of Directors of the Company.


                “Change
in Control” shall mean the occurrence of one of the following events:


                (i)            when any “person” as defined in
Section 3(a)(9) of the Exchange Act and as used in Sections 13(d) and 14(d)
thereof, including a “group” as defined in Section 13(d) of the Exchange Act
but excluding the Company and any subsidiary, any existing stockholders of the
Company and any employee benefit plan sponsored or maintained by the Company or
any subsidiary (including any trustee of such plan acting as trustee), directly
or indirectly, becomes 


 

















 


the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), of securities of the Company representing 50% or more of the
combined voting power of the Company’s then outstanding securities; provided
that no Change in Control will be deemed to have occurred as a result of a
change in ownership percentage resulting solely from an acquisition of
securities by the Company; and provided further that no Change in Control will
be deemed to have occurred if JCC (including any “person” controlled by JCC (as
defined in Rule 12b-2 under the Exchange Act)) owns more than 10% of the
Company or any person that becomes the “beneficial owner” of 50% or more of the
combined voting power of the Company’s then outstanding securities; or


                (ii)           when, during any period of 24
consecutive months, the individuals who, at the beginning of such period,
constitute the Board (the “Incumbent Directors”) cease for any reason other
than death to constitute at least a majority of the members of the Board;
provided, however, that a director who was not a director at the beginning of
such 24-month period shall be deemed to have satisfied such 24-month
requirement (and be an Incumbent Director) if such director was elected by, or
on the recommendation of or with the approval of, at least a majority of the
directors who then qualified as Incumbent Directors either actually (because
they were directors at the beginning of such 24 month period) or by prior
operation of this provision; or


                (iii)          the consummation of a reorganization,
merger or consolidation or sale or other disposition of all or substantially
all of the assets of the Company in one or a series of related transactions (a “Business
Combination”), in each case, unless, following such Business Combination, (i)
all or substantially all of the individuals and entities who were the
beneficial owners of outstanding voting securities of the Company immediately
prior to such Business Combination beneficially own, by reason of such
ownership of the Company’s voting securities immediately before the Business
Combination, directly or indirectly, 50% or more of the combined voting power
of the then outstanding voting securities entitled to vote generally in the
election of directors of the company resulting from such Business Combination
(including, without limitation, a company which as a result of such transaction
owns the Company or all or substantially all of the Company’s assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination
of the outstanding voting securities of the Company; (ii) no person (excluding,
any company resulting from such Business Combination or any employee benefit
plan (or related trust) of the company or such company resulting from such
Business Combination) beneficially owns, directly or indirectly, 50% or more of, respectively, the then
combined voting power of the then outstanding voting securities or equity of
such company except to the extent that such ownership existed prior to the
Business Combination; and (iii) at least a majority of the members of the Board
of directors of the company resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the board of directors, providing for such
Business Combination; or


                (iv)          the
stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company.


 “Exchange Act” means the Securities
Exchange Act of 1934, as amended, and any successor statute.


 


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“Long Term Incentive
Plan” means the terms and conditions set forth in the form of Restricted
Stock Grant Agreement filed as Exhibit 99.2 to the Company’s Current Report on
Form 8-K filed with the Securities and Exchange Commission on March 30, 2006.


Section 1.4             Certain
Adjustments, etc.  In the event of
any merger, consolidation, reorganization, recapitalization, stock dividend,
stock split, combination of shares, exchange of shares, change in corporate
structure, or other change in the shares of Common Stock, the number of shares
required to be contributed to the Company pursuant to Section 1.1 shall be
appropriately adjusted to reflect such event. 
The issuance by the Company of shares of stock of any class, or options
or securities exercisable or convertible into shares of stock of any class, for
cash or property, or for labor or services either upon direct sale, or upon the
exercise of rights or warrants to subscribe therefor, or upon exercise or
conversion of other securities, will not affect, and no adjustment by reason
thereof will be made with respect to, the number of Contributed Shares.


 


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ARTICLE II


REPRESENTATIONS
AND WARRANTIES OF THE COMPANY


 


The
Company represents and warrants to JCC as follows:


Section 2.1             Organization
and Standing of the Company. The Company is a corporation duly organized,
validly existing and in good standing under the laws of its state of
incorporation and has all requisite corporate power and authority (i) to own,
lease and operate its properties, to carry on its business as now being
conducted and (ii) to execute, deliver and perform its obligations under this
Agreement.


Section 2.2             Authorization. 
All corporate action on the part of the Company, its officers, directors
and stockholders, necessary for the authorization, execution and delivery of
this Agreement and the performance of all obligations of the Company hereunder
has been taken.  This Agreement constitutes
a valid and legally binding obligation of the Company, enforceable in
accordance with its terms.


Section 2.3             No Conflicts. 
The execution, delivery and performance of this Agreement will not (i)
violate any provision of law or statute or any order of any court or other
governmental authority binding on the Company; (ii) contravene or conflict
with the Company’s certificate of incorporation or bylaws; or (iii) conflict
with or result in any breach of any of the terms, conditions or provisions of,
or constitute (with due notice or lapse of time or both) a default, or result
in the creation of any lien upon any of the properties or assets of the
Company, under any indenture, mortgage, lease agreement or other agreement or
instrument to which the Company is a party or by which it or any of its
property is bound or affected.


Section 2.4             No Consents Required. 
No consent, approval, authorization, order, registration or
qualification of or with any governmental or regulatory authority or any court
is required for the execution, delivery and performance by the Company of this
Agreement, except such consents, approvals, authorizations, orders and
registrations or qualifications that if not obtained or made would not,
individually or in the aggregate, reasonably be expected to have material
adverse effect on the business, properties, management, financial position or
results of operations of the Company and its subsidiaries taken as a whole.


ARTICLE III

REPRESENTATIONS AND WARRANTIES OF JCC


 


                JCC
represents and warrants to the Company as follows:


 


Section 3.1             Authorization. 
All action on the part of JCC necessary for the authorization, execution
and delivery of this Agreement and the performance of his obligations of
hereunder has been taken.  This Agreement
constitutes a valid and legally binding obligation of JCC enforceable in
accordance with its terms.


Section 3.2             No Conflicts. 
The execution, delivery and performance of this Agreement will not (i)
violate any provision of law or statute or any order of any court or other
governmental authority binding on JCC; or (ii) conflict with or result in any
breach of any of the 


 


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terms, conditions
or provisions of, or constitute (with due notice or lapse of time or both) a
default, or result in the creation of any lien upon any of the properties or
assets of the JCC under any indenture, mortgage, lease agreement or other
agreement or instrument to which JCC is a party or by which his or any of his
property is bound or affected.


Section 3.3             No
Consents Required.  No consent,
approval, authorization, order, registration or qualification of or with any
governmental or regulatory authority or any court is required for the
execution, delivery and performance by JCC of this Agreement, except for such
consents, approvals, authorizations, orders and registrations or qualifications
that if not obtained or made would not, individually or in the aggregate,
reasonably be expected to have material adverse effect on the ability of JCC to
perform his obligations under this Agreement.


Section 3.4             Common
Stock Ownership.  As of the date
hereof, JCC is the “beneficial owner” of that number of shares of Common Stock
listed opposite his name on the signature page hereto.


ARTICLE IV

MISCELLANEOUS


Section 4.1             Termination.  This Agreement shall automatically terminate
upon the earliest to occur of any of the following events:  (i) two years from the date of this
Agreement; (ii) the consummation of a Change in Control; or (iii) the mutual
agreement of JCC and the Company.  (Such
date that this Agreement terminates in accordance with this Section 4.1 is
referred to herein as the “Termination Date”).  In the event of the termination of this Agreement
pursuant to this Section 4.1, this Agreement shall forthwith become null and
void and have no effect, without any liability on the part of the parties
hereto and each of their respective directors, trustees, officers, employees,
partners, stockholders or shareholders, as applicable, and all rights and obligations
of any party hereto shall cease, provided, however,
that nothing contained in this Section 4.1 shall relieve any party from
liabilities or damages arising out of any fraud or breach by such party of any
of its representations, warranties, covenants or other agreements contained in
this Agreement prior to the Termination Date.


Section 4.2             Costs,
Expenses and Taxes.  Each party shall
bear its own costs and expenses in connection with the preparation, execution
and delivery of this Agreement and the transactions contemplated hereby.


Section 4.3             Prior
Agreements. This Agreement constitutes the entire agreement between the
parties concerning the subject matter hereof and supersedes any prior
representations, understandings or agreements. 
There are no representations, warranties, agreements, conditions or
covenants, of any nature whatsoever (whether express or implied, written or
oral) between the parties hereto with respect to such subject matter except as
expressly set forth herein and in the other agreements contemplated hereby.


Section 4.4             Severability.  The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision or the validity and enforceability of this Agreement in any
other jurisdiction.


 


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Section 4.5             Governing
Law.  This Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
state of Delaware, without regard to its choice of law rules.


Section 4.6             Headings.
Section headings in this Agreement are included herein for convenience of
reference only and shall not constitute a part of, or affect the interpretation
of, this Agreement.


Section 4.7             Counterparts.  This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and either of the parties hereto may execute this Agreement by
signing any such counterpart. A facsimile transmission of this Agreement
bearing a signature on behalf of a party hereto shall be legal and binding on
such party.


Section 4.8             Assignment;
Binding Effect.  JCC shall not
convey, assign or otherwise transfer any of his rights or obligations under
this Agreement without the express written consent of the other party.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.  Nothing is this Agreement
shall be interpreted to limit in any manner the ability of JCC to sell, dispose
or otherwise transfer any shares of Common Stock that JCC may beneficially own
as of the date hereof or hereinafter acquire.


Section 4.9             Waiver;
Remedies.  No delay on the part of
any party hereto in exercising any right, power or privilege under this
Agreement shall operate as a wavier thereof, nor shall any waiver on the part
of any party hereto of any right, power or privilege under this Agreement
operate as a waiver of any other right, power or privilege of such party under
this Agreement, nor shall any single or partial exercise of any right, power or
privilege under this Agreement preclude any other or further exercise thereof
or the exercise of any other right, power or privilege under this Agreement.


Section 4.10           Amendment.  Except as set forth herein, this Agreement
may be modified or amended only by written agreement of the parties to this
Agreement.


                IN
WITNESS WHEREOF, the parties hereto, intending to be legally bound, have caused
this Agreement to be executed by their respective duly authorized officers, as
of the date first above written.


	
   

  	
   

  	
   

  	
  1-800 CONTACTS, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Brian W. Bethers

  
	
   

  	
   

  	
  Name:

  	
  Brian
  W. Bethers

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
  Number
  of Shares Owned:

  	
   

  	
  By:

  	
  /s/
  Jonathan C. Coon

  
	
   

  	
   

  	
  Name:

  	
  Jonathan
  C. Coon

  
	
  3,033,215
  Shares

  	
   

  	
   

  	
   

  



 


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