Exhibit
10.1


 


EMPLOYMENT AGREEMENT


 


THIS EMPLOYMENT AGREEMENT (this “Agreement”) is
made as of June 15, 2003 between 1-800 CONTACTS, INC., a Utah corporation (the
“Company”), and David M. Saylor (the “Executive”).  This Agreement shall be deemed to be effective
as of June 15,  2003 (the “Effective
Date”).


 


In consideration
of the mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:


 


1.                                       Employment.  The Company shall employ Executive, and
Executive hereby accepts employment with the Company, upon the terms and
conditions set forth in this Agreement, for the period beginning on the
Effective Date and ending as provided in paragraph 4 hereof (the “Employment
Period”).


 


2.                                       Position
and Duties.


 


(a)                                  During
the Employment Period, Executive shall serve as the Vice President, Operations
and Project Manager of the Company and shall have the normal duties,
responsibilities and authority of such position.


 


(b)                                 Executive
shall report to the Company’s Chief Executive Officer and such other persons as
the board of directors (“the Board”) may direct from time to time, and
Executive shall devote his best efforts and his full business time and
attention (except for permitted vacation periods and reasonable periods of
illness or other incapacity) to the business and affairs of the Company and its
Subsidiaries (as hereinafter defined). 
Executive shall perform his duties and responsibilities to the best of
his abilities in a diligent, trustworthy, businesslike and efficient manner.


 


(c)                                  For
purposes of this Agreement, “Subsidiaries” shall mean any corporation of
which the securities having a majority of the voting power in electing
directors are, at the time of determination, owned by the Company, directly or
through one of more Subsidiaries.


 

















 


3.                                       Base
Salary and Benefits.


 


(a)                                  During
the first year of the Employment Period, Executive’s base salary shall be
$160,000 per annum (the “Base Salary”), which salary shall be payable in
regular installments in accordance with the Company’s general payroll practices
and shall be subject to customary withholding. 
Thereafter, the Base Salary shall be such higher rate as the Board may
designate from time to time.  As used in
this Agreement, the term “Base Salary” shall be deemed to include any such
increases as may be designated from time to time by corporate management.  During the Employment Period, Executive
shall be entitled to participate in all of the Company’s employee benefit
programs for which management employees of the Company and its Subsidiaries are
generally eligible (including the Company’s stock option program).


 


(b)                                 In
addition to the Base Salary, the Board will award an annual bonus of up to 10%
of the Executive’s Base Salary to Executive following the end of each fiscal
year during the Employment Period upon the Company achieving certain operating
targets as determined by the Board at the beginning of each fiscal year during
the Employment Period.  In addition to
the Base Salary and any bonuses payable to Executive pursuant to this
paragraph, Executive shall be entitled to the following benefits during the
Employment Period:


 


(i)                                     Reimbursement
for the cost of an annual physical examination by a physician of Executive’s
choice;


(ii)                                  A
maximum of fifteen days vacation each year with salary, subject to additional
vacation upon executive approval; and


(iii)                               Reimbursement
for travel, entertainment and other business expenses reasonably incurred by
Executive (including costs associated with the use of a mobile telephone); and


(iv)                              $500
per month car allowance; and


(v)                                 $400
per month house cleaning allowance; and


(vi)                              $1000
annual tax planning allowance; and


(vii)                           401 (k)
– Company will match 50% up to 6% deferral; and


(viii)                        Paid LTD;
and


(ix)                                Paid
Life Insurance (Supplemental Life Available); and


(x)                                   Paid
Medical Coverage for self, spouse and dependants; and


(xi)                                Dental
and Vision coverage available


 


4.                                   Termination.


 


(a) The Employment Period shall continue until earlier
of (i) the fourth anniversary of the Effective Date (the “Expiration Date”)
or (ii) Executive’s resignation, death or disability or other incapacity (as
determined by the Board in its good faith judgment) or until the Board
determines in its good faith judgment that termination of Executive’s
employment is in the best interests of the Company.  Notwithstanding the foregoing, the Employment Period shall be
automatically extended for an additional year unless either the Company or the
Executive delivers written notice to the other within 60 days of the Expiration
Date of its or his intention not to extend the Employment Period.  In


 


2

















 


the event of Executive’s
resignation of employment for any reason, (other than a breach by the Company
of paragraph 2(a)) or termination for Cause (as defined herein), Executive
shall not be entitled to receive his Base Salary or any fringe benefits for any
period after the termination of the Employment Period.  Upon any other termination of the Employment
Period, Executive shall be entitled to receive (i) his Base Salary and health
benefits for a period of 12 months thereafter, and (ii) following the end of
the fiscal year in which Executive’s employment would have been entitled if he
remained employed by the Company or its Subsidiaries for the entire fiscal year
(the “Bonus Amount”), (A) 50% of the Bonus Amount if such termination occurs in
the first six months of such fiscal year or (B) 100% of the Bonus Amount if such
termination occurs in the second six months of such fiscal year.


 


(b) For purposes of this Agreement, “Cause” shall mean (i) the willful and
continued failure by Executive to perform his duties of the position set forth
herein or his continued failure to perform duties reasonably requested or
reasonably prescribed by the Board, (ii) the engaging by Executive in conduct
which is materially monetarily injurious to the Company or any of its
Subsidiaries, (iii) gross negligence or willful misconduct by Executive in the
performance of his duties which results in, or causes, material monetary harm
to the Company or any of its Subsidiaries, or (iv) Executive’s commission of a
felony or other civil or criminal offense involving moral turpitude.  In the case of (i), (ii) and (iii) above,
finding of Cause for termination shall be made only after reasonable notice to
Executive and an opportunity for Executive, together with counsel (if requested
by executive), to be heard before the Board.


 


5.                                       Confidential
Information.  Executive acknowledges
that the information, observations, data, strategic and development plans,
financial condition, business plans, co-developer identities, business records,
customer lists, clients and suppliers, project records, market reports, employee
lists and business manuals, policies and procedures, information relating to
processes, technologies of theory and all other information which may be
disclosed or obtained by Executive while employed by the Company and its
Subsidiaries concerning the business or affairs of the Company or any other
Subsidiary (“Confidential Information”) are the property of the Company or such
Subsidiary.  Therefore, Executive agrees
that he shall not disclose to any unauthorized person or use for his own
purposes any Confidential Information without the prior written consent of the
Board, unless and to the extent that the aforementioned matters become
generally known to and available for use by the public other than as a result
of Executive’s acts or omissions. 
Executive shall deliver to the Company at the termination of the
Employment Period, or at any other time the Company may request, all memoranda,
notes, plans, records, reports, computer tapes, printouts and software and
other documents and data (and copies or reproductions thereof) relating to the
Confidential Information, Work Product (as defined below) or the business of
the Company or any Subsidiary which he may then possess or have under his
control.


 


6.                                       Inventions
and Patents.  In accordance with UCA
§34-39-1 et. seq., Executive acknowledges that any invention or part thereof
conceived, developed, reduced to practice, or created by Executive which is:


(a) conceived, developed, reduced to practice, or
created by Executive:


(i) within the scope of
his employment;


 


3

















 


(ii) on Company’s or its
Subsidiaries’ time; or


(iii) with the aid, assistance, or use of any of
Company’s or its Subsidiaries’ property, equipment, facilities, supplies,
resources, or intellectual property;


(b) the result of any work, services, or duties
performed by Executive for Company or its Subsidiaries;


(c) related to the industry or trade of the Company or
its Subsidiaries; or


(d) related to the current or demonstrably anticipated
business, research, or development of the Company or its Subsidiaries is an
(“Employment invention”) and belongs to the Company or such Subsidiary.


(e) 
(“Intellectual property”) means any and all patents, trade secrets,
know-how, technology, confidential information, ideas, copyrights, trademarks,
and service marks and any and all rights, applications, and registrations
relating to them.


(f) Executive shall promptly disclose such Employment
invention to the Board and perform all actions reasonably requested by the
Board (whether during or after the Employment Period) to establish and confirm
such ownership (including, without limitation, assignments, consents, powers of
attorney and other instruments).


 


7.                                       Non-Compete,
Non-Solicitation.


 


(a)                                  In
further consideration of the compensation to be paid to Executive hereunder,
Executive acknowledges that in the course of his employment with the Company he
shall become familiar with the Company’s trade secrets and with other
Confidential Information concerning the Company and its Subsidiaries and that
his services shall be of special, unique and extraordinary value to the Company
and its Subsidiaries.  Therefore,
Executive agrees that, during the Employment Period and for two years thereafter
(the “Noncompete Period”), he shall not, without the express written
consent of the Company, directly or indirectly own any interest in, manage,
control, participate in, consult with, render services for, or in any manner
engage in any business competing with the businesses of the Company or its
Subsidiaries, as such businesses exist or are in process on the date of the
termination of Executive’s employment, within any geographical area in which
the Company or its Subsidiaries engage or plan to engage in such businesses.  Nothing herein shall prohibit Executive from
being a passive owner of not more than 2% of the outstanding stock of any class
of a corporation which is publicly traded, so long as Executive has no active
participation in the business of such corporation.


 


(b)                                 During
the Noncompete Period, Executive shall not directly or indirectly through
another entity (i) hire any person who was an employee of the Company or any
Subsidiary at any time during the three-month period prior to the expiration of
the Employment Period or (ii) induce or attempt to induce any customer,
supplier, licensee, licensor, franchisee or other business relation of the
Company or any Subsidiary to cease doing business with the Company or such
Subsidiary, or in any way interfere with the relationship between any such
customer, supplier, licensee or business relation and the Company or any
Subsidiary (including, without limitation, making any negative statements or
communications about the Company or its Subsidiaries) which interference causes
material monetary damage to the Company or its Subsidiaries.


 


4

















 


8.                                       Enforcement.  If, at the time of enforcement of
paragraph 5, 6, 7 or 8 of this Agreement, a court holds that the
restrictions stated herein are unreasonable under circumstances then existing,
the parties hereto agree that the maximum period, scope or geographical area
reasonable under such circumstances shall be substituted for the stated period,
scope or area. Because Executive’s services are unique and because Executive
has access to Confidential Information and Work Product, the parties hereto
agree that money damages would not be an adequate remedy for any breach of this
Agreement.  Therefore, in the event a
breach or threatened breach of this Agreement, the Company or its successors or
assigns may, in addition to other rights and remedies existing in their favor,
apply to any court of competent jurisdiction for specific performance and/or
injunctive or other relief in order to enforce, or prevent any violations of,
the provisions hereof (without posting a bond or other security).  In addition, in the event of an alleged
breach or violation by Executive of paragraph 7, the Noncompete Period shall be
tolled until such breach or violation has been duly cured.  Executive agrees that the restrictions
contained in paragraph 7 are reasonable.


 


9.                                       Other
Businesses.  As long as Executive is
employed by the Company or any of its Subsidiaries, Executive agrees that he
will not, except with the express written consent of the Board, become engaged
in, or render services for, any business other than the business of the
Company, any of its Subsidiaries or any corporation or partnership in which the
Company or any of its Subsidiaries have an equity interest; provided, that Executive
may devote a de minimis portion of his time to engaging in, or rendering
services for, any such business if such activities do not in any material way
interfere with the performance by Executive of his obligations hereunder and
such activities do not  in any way
materially and adversely affect the Company. 
Executive shall notify the Company prior to engaging in any such
activities.  Nothing contained in this
paragraph 9 shall limit the provisions of paragraph 7 above.


 


10.                                 Executive’s
Representations.  Executive hereby
represents and warrants to the Company that (i) the execution, delivery and
performance of this Agreement by Executive do not and shall not conflict with,
breach, violate or cause a default under any contract, agreement, instrument,
order, judgment or decree to which Executive is a party or by which he is
bound, (ii) Executive is not a party to or bound by any employment
agreement, noncompete agreement or confidentiality agreement with any other
person or entity and (iii) upon the execution and delivery of this Agreement by
the Company, this Agreement shall be the valid and binding obligation of
Executive, enforceable in accordance with its terms.  Executive hereby acknowledges and represents that he fully
understands the terms and conditions contained herein.


 


11.                                 Survival.  Paragraphs 5, 6, and 7 and
paragraphs 11 through 19 shall survive and continue in full force in
accordance with their terms notwithstanding any termination of the Employment
Period.


 


12.                                 Notices.  Any notice provided for in this Agreement
shall be in writing and shall be either personally delivered, or mailed by
first class mail, return receipt requested, to the recipient at the address
below indicated:


 


5

















 


	
  Notices to Executive:

  
	
   

  
	
  David M. Saylor

  
	
  21960 N. Harbor Road

  
	
  Barrington, IL 60010

  
	
   

  
	
  Notices to the Company:

  
	
   

  
	
  1-800 CONTACTS, INC.

  
	
  13751 Wadsworth Park Drive, Suite D-140

  
	
  Draper, Utah 
  84020

  
	
  Attn:  Board
  of Directors

  
	
   

  
	
  with a copy to:

  
	
   

  
	
  Kirkland & Ellis

  
	
  200 E. Randolph Drive

  
	
  Chicago, Illinois 
  60601

  
	
  Attn:  Dennis
  M. Myers

  



 


or such other address or to the attention of such other person as the
recipient party shall have specified by prior written notice to the sending
party.  Any notice under this Agreement
shall be deemed to have been given when so delivered or mailed.


 


13.                                 Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision or any other jurisdiction, but this Agreement shall
be reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.


 


14.                                 Complete
Agreement.  This Agreement, those
documents expressly referred to herein and other documents of even date
herewith embody the complete agreement and understanding among the parties and
supersede and preempt any prior understandings, agreements or representations
by or among the parties, written or oral, which may have related to the subject
matter hereof in any way.


 


15.                                 No
Strict Construction.  The language
used in this Agreement shall be deemed to be the language chosen by the parties
hereto to express their mutual intent, and no rule of strict construction shall
be applied against any party.


 


6

















 


16.                                 Counterparts.  This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.


 


17.                                 Successors
and Assigns.  This Agreement is
intended to bind and inure to the benefit of and be enforceable by Executive,
the Company and their respective heirs, successors and assigns, except that
Executive may not assign his rights or delegate his obligations hereunder
without the prior written consent of the Company.


 


18.                                 Choice of
Law.  All issues
and questions concerning the construction, validity, enforcement and
interpretation of this Agreement and the exhibits and schedules hereto shall be
governed by, and construed in accordance with, the laws of the State of Utah,
without giving effect to any choice of law or conflict of law rules or
provisions (whether of the State of Utah or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of
Utah.


 


19.                                 Amendment
and Waiver.  The provisions of this
Agreement may be amended or waived only with the prior written consent of the
Company and Executive, and no course of conduct or failure or delay in
enforcing the provisions of this Agreement shall affect the validity, binding
effect or enforceability of this Agreement.


 


*    *   
*    *    *


 


 


IN WITNESS
WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.


 


 


	
   

  	
  1-800 CONTACTS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Jonathan C. Coon

  
	
   

  	
   

  	
  Its: Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  David M. Saylor

  
					



 


7