<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                 ---------------

                                    FORM 10-K
(Mark One)

X        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED JANUARY 31, 2002

                                       OR

__       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934 COMMISSION FILE NO. 0-23397

                               U. S. VISION, INC.
             (Exact name of registrant as specified in its charter)

         DELAWARE                                      22-3032948
(State or other jurisdiction of             (I.R.S. employer identification no.)
 incorporation or organization)

                                 1 HARMON DRIVE
                            GLEN OAKS INDUSTRIAL PARK
                           GLENDORA, NEW JERSEY 08029
               (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (856) 228-1000

        Securities registered pursuant to Section 12(b) of the Act: NONE

           Securities Registered Pursuant to Section 12(g) of the Act:

<TABLE>
<S>                                                     <C>
COMMON STOCK, PAR VALUE $.01 PER SHARE                                         7,802,942
         (Title of class)                               (Number of Shares Outstanding as of April  19, 2002)
</TABLE>


         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO _

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

         The aggregate market value of voting stock held by nonaffiliates of the
registrant is approximately $4,886,063. This amount was calculated by reducing
the total number of shares of the registrant's common stock outstanding by the
total number of shares of common stock held by officers, directors, and
stockholders owning in excess of 10% of the registrant's common stock, and
multiplying the remainder by the average of the bid and asked price for the
registrant's common stock on April 19, 2002, as reported on the National
Association of Securities Dealers, Inc. Automated Quotation System. The
information provided shall in no way be construed as an admission that any
officer, director, or more than 10% stockholder of the registrant may be deemed
an affiliate of the registrant or that such person is the beneficial owner of
the shares reported as being held by such person, and any such inference is
hereby disclaimed.







<PAGE>
                                     PART I


ITEM 1.  BUSINESS.

OVERVIEW

         U.S. Vision, Inc. ("we," "us," "our," or the "company") is a retailer
of optical products and services through retail optical departments licensed to
operate within national and regional department stores and through a limited
number of freestanding retail locations. As of January 31, 2002, we operated 603
locations in 47 states and Canada, consisting of 577 licensed departments and 26
freestanding stores. We currently operate 406 retail optical departments in J.C.
Penney's and are their primary optical licensee. In addition, we operate 66
Sears retail optical departments and 105 retail optical departments in regional
department stores. Our freestanding stores are located in malls and shopping
centers.

         Our retail optical departments are full-service retail vision care
stores that offer a wide selection of designer brands and private label
prescription eyewear, contact lenses, sunglasses, ready made readers and
accessories. Also, an on-premises, independent doctor of optometry performs
complete eye examinations and prescribes eyeglasses and contact lenses. Our wide
selection of designer and private label branded eyewear allows us to tailor our
merchandise selection to meet the needs of our host store customers. See
"Business -- Products and Services -- Merchandise Selection" and "Store
Operations."

         We operate a single, modern optical laboratory, distribution and lens
grinding facility at which we fill customer orders for prescription eyewear and
maintain a central inventory of frames. Customer orders are placed at the retail
stores and are transmitted into the central optical laboratory daily, where the
lenses are ground, cut, finished and custom fitted to optical frames in the size
and style selected by the customer. The finished eyewear is then shipped to the
retail store for delivery to the customer within a few working days and can be
completed overnight if requested by the customer. See "Business -- Optical
Laboratory."

         Since 1991, we have been a national provider of managed vision care
benefits through our participation in programs, which offer comprehensive
eyewear benefits to plan participants. In fiscal 2001, approximately 33% of our
revenues were attributable to purchases by participants in managed vision care
programs. See "Business -- Managed Vision Care."

         Our corporate headquarters are located at 1 Harmon Drive, Glen Oaks
Industrial Park, Glendora, New Jersey 08029 and our telephone number is (856)
228-1000.

PRODUCTS AND SERVICES

         Merchandise Selection. We carry a full selection of men's, women's and
children's eyeglass frames, a complete line of contact lenses, sunglasses, ready
made readers, and ancillary products for eyeglasses and contact lenses.
Prescription eyewear and accessories accounted for 90% of our sales during
fiscal 2001. We offer a wide selection of designer and private label branded
eyewear. Designer eyeglass frames offered include Guess, Revlon, Halston and
Eddie Bauer, among others and, at certain stores, Giorgio Armani, Kenneth Cole,
Calvin Klein and Polo by Ralph Lauren. We also offer private label branded
eyeglass frames such as Arizona, Ashley Stewart, Joneswear, Oliver Winston, City
Slickers and Rascals, among others. U.S. Vision also offers a wide variety of
value-added eyewear features and services on which we realize a higher gross
margin. These eyewear features and services include lightweight, virtually
unbreakable polycarbonate lenses, including progressive lenses and photochromic
lenses, as well as scratch resistant and anti-reflective coatings. In addition,
we carry a complete line of contact lenses by major contact lens manufacturers
such as Bausch & Lomb, Ciba Vision, and Johnson &




                                       2
<PAGE>

Johnson, including daily wear and extended wear soft contact lenses and cosmetic
tinted lenses. During fiscal 2001, contact lenses accounted for approximately
10% of the company's sales.

         Pricing. U.S. Vision maintains a promotional pricing strategy, which
stresses a quality product delivered at a competitive price. Our frames and
lenses are generally competitively priced, with prices varying based on market
locations. While we earn a higher gross margin on our private-label lines,
designer frames generally command premium prices, resulting in higher gross
profit dollars per transaction.

         Full Customer Service. We strive to provide our customers with
exceptional care and value by combining the personal service typically
associated with a private optometrist with the broad product selection and
competitive prices of a large optical retailer. Management believes that
providing superior customer service from knowledgeable and courteous employees
complements the customer-oriented policies of our department store hosts.

MANAGED VISION CARE

         Since 1991, we have been a participating provider of managed vision
care benefits primarily through Vision One, a national vision care program which
offers comprehensive eyewear and eyecare benefits to over 94 million covered
lives through a network of over 2,000 optical locations. Managed care programs
are marketed directly to employers, employee benefit plan sponsors and insurance
companies such as General Motors, Metropolitan Life, Aetna, Cigna, AARP,
Prudential and Blue Cross/Blue Shield. Managed care programs give employers the
opportunity to offer their employees a group discount at retail optical
locations of participating providers with minimal direct cost to the employer.
The discounts vary under the plans from fixed percentage discounts to fixed
dollar amounts with the balance paid by the subscriber. As a result of these
benefits, management believes that many managed care participants have vision
examinations on a regular basis and may become more frequent customers of the
company. In addition, managed care participants frequently apply their discounts
and allowances toward the purchase of premium eyeglass products and related
accessories. Under the terms of our contract with Cole National, a competitor of
the company and the owner of the Vision One program, we pay an administrative
fee for each Vision One member transaction. Our contract with Cole National
expires on December 31, 2002. Management has already commenced negotiations for
a new long-term agreement with Cole National and hopes to have signed a new
agreement prior to the expiration of the current agreement. We retain the right,
though we have not exercised it in the past, to refuse to participate in
particular Vision One programs under which we cannot profitably provide goods
and services, and to participate in other managed care vision plans under
certain conditions. Approximately 33% of our revenues are generated from our
participation in various managed vision care programs.

STORE OPERATIONS

         Location and Layout. We operate most of our stores on the premises of
national and regional department stores in the United States and Canada. These
stores generally operate under names such as "J.C. Penney Optical Center" and
"Sears Optical," which associate the departments with the host store. Our retail
optical departments generally operate under a lease or license arrangement
through which the host store collects the sales receipts, retains rent computed
as an agreed upon percentage of sales and remits the remainder to us on a
regular basis. Our leased retail optical departments typically average in size
from 500 to 800 square feet. Our retail optical departments are often located
within the host department store near the host store's other licensed
departments such as the beauty salon and photography studio. Management believes
that the location of our retail optical departments within a host store
influences our ability to take full advantage of the host store's customer
traffic.



                                       3
<PAGE>

         Each of our stores follows a standard merchandise layout plan which is
designed to emphasize fashion, invite customer browsing and enhance the
customer's shopping experience. All of our stores are similar in appearance and
are operated under certain uniform standards and procedures. We have developed a
new store prototype design and all of our new and remodeled retail optical
departments are designed in accordance with this prototype.

         Our freestanding stores operate under various trade names such as Royal
Optical, Service Optical and Wall & Ochs and are located in malls and shopping
centers. Our freestanding stores generally range in size from 900 to 1,400
square feet.

         Store Management. Our store management structure consists of field
managers and store managers. The store managers, along with two to three
associates known as Optechs, are responsible for the day-to-day operations of
each of our retail optical departments. Optechs undertake a training program
that familiarizes them with the company's product lines, customer services,
store procedures and automated systems. Our field managers are each assigned
responsibility for the sales, customer relations and daily operation for a
number of stores in their geographic area. Management believes that providing
knowledgeable and responsive customer service is an important element of our
success and, accordingly, has developed and implemented a variety of employee
training and incentive programs.

         On-Site Independent Optometrist. We have made arrangements with
licensed optometrists to provide eye examination services at or adjacent to our
retail locations in those states where it is permitted. See "Government
Regulations." The independent optometrists sublease space and equipment from us
or from the host store. We and the optometrists do not share in each other's
revenues. We believe the presence of the optometrists at the stores helps to
generate eyeglass sales, leads to repeat customers and reinforces the quality
and professionalism of each store.

RELATIONSHIP WITH HOST STORES

         Most of our stores operate as licensed optical departments within a
host department store such as J.C. Penney, Sears, Hudson's Bay, Marshall Field's
and Boscov's, among others. Management believes that our relationships with our
host stores provide several competitive advantages such as:

         o        lower operating expenses;

         o        lower initial capital investment;

         o        loyal host store customer base;

         o        established host store advertising and marketing programs;

         o        one-stop shopping convenience; and

         o        access to the host store's private label credit card.

         Management believes its hosts' reputation of quality, trust and value
further enhances our customer relations.

         Management believes the company has developed excellent relationships
with the host stores in which it operates. We routinely consult with the host
stores about the size and placement of our optical departments within newly
opened or remodeled host stores. Although management strives to continue to
enhance these relationships, the loss of one of our major host stores, such as
J.C. Penney or Sears, could cause a significant decrease in our sales and have a
materially adverse effect on our results of operations.



                                       4
<PAGE>

         Our retail optical departments within J.C. Penney stores are subject to
a master lease that expires in December 2003. Management has already commenced
negotiations for a new long-term agreement with J.C. Penney and hopes to have
signed a new agreement prior to the expiration of the current agreement. On
January 31, 2002, we had 406 locations within J.C. Penney. Our master lease with
J.C. Penney provides that only a limited number of our J.C. Penney optical
centers may be closed by J.C. Penney in any calendar year without cause. This
limitation, however, does not apply if J.C. Penney closes an entire J.C. Penney
department store, either temporarily or permanently. The lease also provides
that J.C. Penney will reimburse us for certain costs relating to the closed
department. Our optical departments within Sears stores are each subject to a
lease which provides for a year-to-year term, subject to early termination by
either party, without cause, on thirty-days prior written notice. Our retail
optical departments located within other department stores are subject to lease
arrangements which contain short notice lease termination provisions. These
leases provide for monthly lease payments based upon a percentage of our sales
at each location.

         In January 1999, as part of our objective to diversify our host store
base, we signed a lease agreement with Hudson's Bay Company, the operator of
over 450 retail locations in Canada. In March 1999, we opened 15 retail optical
departments within The Bay, a traditional department store division of Hudson's
Bay. At January 31, 2002, we were operating in 42 Hudson's Bay vision centers
under the names The Bay and Zellers.

MARKETING AND ADVERTISING

         We engage in a variety of marketing and promotional efforts to maintain
and strengthen our customer base. Our advertising program is targeted at the
department store consumer and is designed to convey a message of value, fashion,
convenience and trust to our customer base. We work with each of our host stores
to design advertising programs that convey this message in a manner consistent
with that of the host store, targeted at their specific customer base. For
example, we work with J.C. Penney to develop targeted catalog inserts which
advertise our J.C. Penney optical departments. These advertising promotions
generally mention the availability of on-site professional eye examinations and
our acceptance, as a participating provider of managed vision care benefits, of
the discounts and allowances offered by managed vision care plans. These
targeted inserts are mailed to selected customers based on previous spending
patterns at the host store. We augment these programs by providing local
advertising in individual geographic markets. We have an in-house advertising
department which permits us to respond quickly to fashion trends, competitor
advertising and promotional initiatives.

OPTICAL LABORATORY

         We operate a 60,000 square foot modern optical laboratory and lens
grinding facility adjacent to our headquarters in Glendora, New Jersey. Customer
orders for prescription eyewear, sunglasses and contact lenses are transmitted
daily from each of our store locations to our central laboratory. Customer
orders generally are processed and shipped to stores within a few working days
and can be completed overnight if requested by the customer. Most prescription
lenses are completed from semi-finished polycarbonate or plastic lenses obtained
from third-party suppliers. These lenses are finished in a highly technical
process that grinds the surface of the lens to fit the prescription utilizing
modern grinding equipment, much of it computer-guided. The lenses are then
custom fitted to optical frames in the size and style selected by the customer.
Other prescriptions, including many standard prescriptions, can be manufactured
by cutting and edging a prefinished lens, also purchased from a third-party
supplier, to fit the frames selected. Contact lenses, accessories and
non-prescription sunglass orders are filled from available stock and shipped to
our retail optical departments.



                                       5
<PAGE>

         Our laboratory is furnished with machinery capable of custom grinding,
polishing, cutting, edging, tinting and coating prescription lenses. Management
believes it has the manufacturing capacity in our laboratory to accommodate all
of our projected growth for the foreseeable future.

PURCHASING

         Our relationship with our vendors has enabled us to gain access to a
wide array of brand name product offerings. As a leading retailer of eyewear in
the United States, we purchase significant quantities of frames, lenses and
contact lenses from our suppliers. In fiscal 2001, Sola, Vistakon, and Bausch &
Lomb, our largest suppliers, accounted for approximately 22%, 8%, and 7%,
respectively, of our total merchandise purchases. Our frames and lenses are
available from numerous suppliers.

         Historically, we manufactured, imported and distributed optical frames
and sunglasses principally for sale in our retail optical stores and, to a
lesser extent, for sale to other optical distributors and retailers through our
Styl-Rite Optical subsidiary. During fiscal 1999, we decided it was more cost
effective to import optical frames and sunglasses rather than manufacture these
products. Accordingly in July 2000, management closed our manufacturing
operations at Styl-Rite and consolidated our importing and distribution
functions with our other centralized operations at our corporate headquarters in
Glendora, New Jersey. See "Management's Discussion and Analysis of Financial
Condition and Results of Operation."

MANAGEMENT INFORMATION SYSTEMS

         Currently, customer prescription orders for our optical products are
prepared by the stores on order forms and the details of each order are
transmitted daily to our centralized laboratory. These orders are then entered
into the laboratory's computerized order entry system, which, for lenses, also
makes the necessary optical calculations to grind and finish the lenses to the
correct prescription and shape them to the dimensions of the frame selected by
the customer. The present laboratory order entry system also tracks each order
through every step of the finishing process until the finished product is
shipped to the retail optical department.

         In fiscal 2000, we completed the design of an integrated management
information system, which includes an automated order entry system at each of
our optical stores, and new manufacturing and financial systems at our corporate
headquarters. This new integrated system is designed to facilitate the
transmission of the order to the laboratory and provide our stores with improved
order pricing and costing capability. This new system is also designed to
provide our stores with the capability to capture sales and customer
information, including prescription data, enhancing our ability to monitor sales
and merchandise trends and to improve customer service after the sale. In
addition, the automated order entry system is designed to enable the stores to
validate, at the time of sale, whether a particular frame selected by the
customer is in stock and whether the combination of the customer's prescription,
selected lenses and frame is within manufacturing tolerances. The integrated
information system is expected to enhance our operating efficiencies by
permitting all orders to be electronically transmitted from the stores to the
laboratory. As of January 31, 2002, sixty-one of our stores have successfully
implemented this system and the rollout of eighty more stores commenced in April
2002. Management expects to continue to bring the remainder of its stores
on-line in an orderly fashion throughout the next twelve to eighteen months.




                                       6
<PAGE>

COMPETITION

         We compete with other national, regional, and local retail optical
chains and independent optical retailers. Most optical retailers generally serve
individual or local markets, and, as a result, competition is fragmented and
varies substantially among locations and geographic areas. Although the retail
optical industry is highly competitive, management believes none of our
competitors has more than an 8% market share based on revenue. The principal
competitive factors affecting our retail operations are merchandise selection,
quality and consistency of products and services, price, location within the
host store, convenience, availability of on-site professional eye examinations
and access to a host store's private label credit card. The retail optical
industry engages in price-related promotions as a standard marketing practice.
Several of our competitors have greater financial and other resources than us,
which may enable competitors to pursue more aggressive pricing and promotional
strategies at the expense of profits for longer periods of time than we can.

         Our ability to achieve our growth strategy by opening new retail
optical departments in existing and new host stores is dependent on our ability
to obtain suitable optical locations within existing and new host stores.
Management does not believe our growth strategy will be adversely affected by
the fact that some competitors operate more retail optical departments in host
stores than we do.

         Additionally, we face competition from advances in vision correction
technologies, including laser surgery and other surgical vision correction
procedures. This could result in decreased demand for eyeglasses and contact
lenses.

         To the extent our customers may not be covered by our eye care benefit
plans, we may compete with other vision care benefit plans and retailers who
provide alternative vision care plans. As the number of national and regional
managed vision care programs increase, competition for customers will intensify
among the various vision care programs.

EMPLOYEES

         As of January 31, 2002, we had approximately 2,350 full-time and
part-time employees, of which approximately 1,900 were employed in our retail
outlets, 350 were employed in manufacturing and distribution in our laboratory
in Glendora, New Jersey, and 100 were employed in administrative, marketing and
managerial positions at the company's headquarters in Glendora.

GOVERNMENT REGULATIONS

         We are subject to a variety of federal, state and local laws, rules and
regulations affecting the health care industry and the delivery of health care
services. State and local legal requirements vary widely among jurisdictions and
are subject to frequent change. Federal legal requirements are also subject to
change.

         Relationships between the company and independent optometrists and
ophthalmologists are subject to federal, state and local laws and regulations.
State laws generally prohibit the practice of medicine and optometry by
unlicensed practitioners. In addition, many states prohibit medical
practitioners and optometrists from splitting fees with business corporations
such as the company and prohibit the practice of medicine and optometry by
corporate entities. Some states have enacted laws governing the ability of
ophthalmologists and optometrists to enter into contracts to provide
professional services with business corporations or lay persons. Some states
prohibit the company from computing our fee for rent, equipment leases and
management services provided by us based on a percentage of the gross revenue of
the ophthalmologists and the optometrists. Such requirements are particularly
comprehensive in California and Texas, where we operate a significant number of
stores. Further, some




                                       7
<PAGE>

states restrict the location of optometric offices in relation to optical
stores, such as ours, and regulate advertising and the solicitation of
prospective patients.

         Relationships between us and independent ophthalmologists and
optometrists are also subject to the fraud and abuse provisions of the federal
Social Security Act which include the "anti-kickback" laws. The anti-kickback
laws prohibit the offering, payment, solicitation or receipt of any direct or
indirect remuneration for the referral of Medicare or Medicaid patients or for
the ordering or providing of Medicare or Medicaid covered services, items or
equipment. Violations of these laws may result in substantial civil or criminal
penalties for individuals or entities and exclusion from participation in the
Medicare and Medicaid programs. Several states, including states in which we
operate, have adopted similar laws that cover patients with private health
insurance coverage as well as those covered by government programs. Although
management believes it is not in violation of the anti-kickback laws, the
applicability of these provisions has been subject to only limited judicial and
regulatory interpretation. In addition, certain of our products must comply with
standards set by the United States Food and Drug Administration.

         We, as well as the independent optometrists providing services in or
adjacent to our stores, from time to time receive inquiries from regulatory
bodies regarding our compliance with applicable state and local regulations. If
our relationships with ophthalmologists and optometrists are challenged, we may
be required to alter the manner in which we conduct our business. There can be
no assurance that a review of our business by courts or regulatory authorities
will not result in determinations that could adversely affect operations or that
new laws, regulations or interpretations of current laws and regulations will
not have a material adverse effect on our business, financial condition or
results of operations.

ITEM 2.  PROPERTIES

         We own a 20,000 square foot facility in Glendora, New Jersey, which
serves as our corporate headquarters, a neighboring 24,000 square foot
distribution facility, and a neighboring 60,000 square foot optical laboratory.
The real property on which these facilities are located, as well as the
buildings and certain equipment located therein, other than the distribution
facility, secure the company's obligations under the DRPA Term Loans. See Note 4
to Notes to Consolidated Financial Statements. The real property on which the
distribution facility is located secures the company's obligations under a
mortgage loan agreement. See "Management's Discussion and Analysis of Financial
Conditions and Results of Operations--Liquidity and Capital Resources."

         Our freestanding store locations are subject to lease arrangements
which contain varying terms and are not subject to short notice lease
termination provisions. The leases provide for monthly base lease payments plus,
under certain circumstances, include an additional rent provision based on a
percentage of the company's sales at each location.

ITEM 3.   LEGAL PROCEEDINGS.

         We are subject to various pending and threatened litigation from time
to time in the ordinary course of our business. Although all litigation involves
some degree of uncertainty, in the opinion of management, liabilities, if any,
arising from such litigation or threat thereof are not expected to have a
material adverse effect on the financial position, results of operations, or
cash flows of the company.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         None.



                                       8
<PAGE>

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS.

         Our stock is traded on Nasdaq National Market under the symbol "USVI."

         For the periods indicated below, the following table sets forth the
high and low bid information of our stock as reported on Nasdaq.

<TABLE>
<CAPTION>
                                                   2001 CLOSING PRICES            2000 CLOSING PRICES
                                                   -------------------            -------------------
           CALENDAR PERIOD                           LOW          HIGH               LOW       HIGH
           ---------------                         ------        -----            -------      ------
        <S>                                        <C>           <C>              <C>          <C>
        February 1 - April 30                       $1.91        $4.25              $2.00      $3.25
        May 1 - July 31                              2.55         3.95               1.50       3.13
        August 1 - October 31                        3.25         4.10               2.75       4.25
        November 1 - January 31                      1.83         3.77               1.94       4.25
</TABLE>

         As of April 19, 2002, there were approximately 55 record holders of our
stock. We have not declared or paid any cash dividends on our stock since our
organization. Under the terms of our revolving bank line of credit, our ability
to pay cash dividends to our shareholders is restricted.



                                       9
<PAGE>


ITEM 6.  SELECTED FINANCIAL DATA.

         The selected consolidated financial information regarding the company's
financial position and operating results set forth below for the fiscal years
ended January 31, 2002, 2001, 2000, 1999 and 1998 has been derived from our
audited consolidated financial statements. The selected consolidated financial
data set forth below should be read in conjunction with our consolidated
financial statements and related notes thereto and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere in
this report.



<TABLE>
<CAPTION>
                                                               YEAR ENDED JANUARY 31,
                                    ---------------------------------------------------------------------
                                        2002           2001           2000           1999          1998
                                    -----------    -----------   -----------    -----------   -----------
                                                    (In thousands except share and per share data)
<S>                                 <C>            <C>           <C>            <C>           <C>
STATEMENTS OF OPERATIONS DATA:
Net sales .......................   $   134,756    $   147,617   $   143,419    $   131,491   $   122,763
Cost of sales ...................        40,560         44,645        45,516         40,648        38,584
                                    -----------    -----------   -----------    -----------   -----------
Gross profit ....................        94,196        102,972        97,903         90,843        84,179
Operating expenses:
  Selling, general and
    administrative ..............        88,479         92,070        91,726         79,119        73,367
  Unusual items  (1,2) ..........          (289)           752         2,835           --            (389)
   Depreciation and amortization          5,216          4,708         4,670          3,879         3,390
                                    -----------    -----------   -----------    -----------   -----------
        Total operating expenses         93,406         97,530        99,231         82,998        76,368
                                    -----------    -----------   -----------    -----------   -----------
Operating income (loss) .........           790          5,442        (1,328)         7,845         7,811
Interest expense, net ...........         1,042            456           469             21         2,486
                                    -----------    -----------   -----------    -----------   -----------
Income (loss) before income tax .          (252)         4,986        (1,797)         7,824         5,325
Income tax provision ............            93            191            22            355          --
                                    -----------    -----------   -----------    -----------   -----------
Net income (loss) ...............   $      (345)   $     4,795   $    (1,819)   $     7,469   $     5,325
                                    ===========    ===========   ===========    ===========   ===========
Net income (loss) per share -
  basic (3) .....................   $     (0.04)   $      0.61   $     (0.23)   $      0.96   $      0.90
                                    ===========    ===========   ===========    ===========   ===========

Shares used in computing
net income (loss) per share -
  basic (3) .....................     7,802,942      7,802,942     7,802,942      7,789,299     5,661,089
Net income (loss) per share -
  assuming dilution (4) .........   $     (0.04)   $      0.61   $     (0.23)   $      0.94   $      0.89
                                    ===========    ===========   ===========    ===========   ===========

Shares used in computing
net income (loss) per share -
   assuming dilution (4) ........     7,802,942      7,835,554     7,802,942      7,964,409     5,767,546
Net income per share -
  pro forma (5) .................                                                             $      0.96
                                                                                              ===========
Shares used in computing net
  income per share - pro
  forma (5) .....................                                                               7,877,835
</TABLE>

                          Footnotes on following page.



                                       10
<PAGE>

<TABLE>
<CAPTION>

                                       YEAR ENDED JANUARY 31,
                                --------------------------------------
                                2002     2001     2000    1999    1998
                                ----     ----     ----    ----    ----
<S>                             <C>      <C>      <C>     <C>     <C>
SELECTED OPERATING DATA:
Stores open at end of period:
  Licensed departments ......    577      596     640     557     507
  Freestanding stores .......     26       33      46      57      63
Total stores ................    603      629     686     614     570
Comparable store sales
  increase (decrease) (6) ...   (2.1)%    3.3%    1.9%    4.2%    9.2%
</TABLE>


<TABLE>
<CAPTION>
                                         JANUARY 31,
                       -----------------------------------------------
                         2002      2001      2000      1999      1998
                       -------   -------   -------   -------   -------
                                       (In thousands)
<S>                    <C>       <C>       <C>       <C>       <C>
BALANCE SHEET DATA:
Cash ...............   $   357   $   240   $   454   $   693   $   365
Working capital ....    19,961    20,460    19,127    23,152    17,967
Total assets .......    77,405    81,078    83,033    75,594    60,129
Long-term debt .....    15,915    18,384    20,369    14,069     8,296
Shareholders' equity    49,101    49,446    44,651    46,470    38,818
</TABLE>

-------------------------

(1)      See Note 10 to Notes to Consolidated Financial Statements.

(2)      As a result of favorable settlements on terminated leases, the company
         realized a gain in fiscal 1997 related to the closing and disposal of
         stores during fiscal 1992 through 1995.

(3)      Net income per share has been computed using the weighted average
         number of shares outstanding after giving effect for all periods
         presented to the 64-for-1 stock dividend and the conversion of all
         outstanding Series A Preferred Stock and Series C Preferred Stock into
         common stock upon the closing of the company's initial public offering
         in December 1997. Cash dividends on preferred stock of $217,000 were
         deducted from net income in computing net income per share for the
         fiscal year ended January 31, 1998.

(4)      Net income per share -- assuming dilution has been computed using the
         weighted average number of shares outstanding after giving effect to
         the 64-for-1 stock dividend and the conversion of all outstanding
         Series A Preferred Stock and Series C Preferred Stock into common stock
         upon the closing of the company's initial public offering in December
         1997. In addition, common share equivalents such as warrants and
         options are included in the computation for the years ended January 31,
         2001, 1999 and 1998, respectively. Cash dividends on preferred stock of
         $217,000 were deducted from net income in computing net income per
         share - assuming dilution for the fiscal year ended January 31, 1998.

(5)      Net income per share -- pro forma is calculated by dividing net income
         after adjustment for applicable interest expense, net of tax
         ($2,208,000) by the adjusted number of weighted average shares
         outstanding after giving effect to the 2,500,000 shares that were sold
         at the initial public offering price to repay $20,375,000 of debt.

(6)      Comparable-store sales reflect existing stores that have been open over
         twelve months.



                                       11
<PAGE>


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS.

GENERAL OVERVIEW

         Our discussion and analysis of our financial condition and results of
operations are based upon our financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States.
The preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues,
expenses, and related disclosure of contingent assets and liabilities. We base
our estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying value of the assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions.

         Our net sales consist primarily of retail sales of prescription eyewear
and contact lenses, net of refunds and allowances for customer returns. The
company's sales are influenced by customer traffic in our host department
stores, the successful implementation of our promotional programs and our
participation in various managed vision care plans. The principal components of
our cost of sales include the cost of materials, including eyeglass frames and
lenses, as well as manufacturing, assembly, labor and overhead costs associated
with operating our centralized optical laboratory. Prices of frames vary widely,
from inexpensive to high-end designer brands.

         Our selling, general and administrative expenses include primarily
labor-related expenses at the store level, rent and occupancy costs, managed
vision care costs, advertising and administrative expenses. The rent we pay to
our host stores is calculated as a percentage of net sales within each retail
optical department. Freestanding store rent is generally a fixed monthly payment
plus, in many cases, a percentage of net sales above certain revenue levels.
Flat fees per transaction are paid by us to vision care plans in which we
participate.

         Our fiscal year ends on January 31. Accordingly, references herein to
"fiscal 2001," "fiscal 2000," and "fiscal 1999" refer to the company's fiscal
years ended January 31, 2002, January 31, 2001, and January 31, 2000,
respectively.

RESULTS OF OPERATIONS

         The following table sets forth selected statements of operations items
expressed as a percentage of net sales for the periods indicated:

<TABLE>
<CAPTION>
                                                           YEAR ENDED JANUARY 31,
                                                  -----------------------------------------
                                                  2002               2001             2000
                                                  ------            ------           ------
<S>                                               <C>               <C>              <C>
Net sales...............................          100.0%            100.0%           100.0%
Cost of sales...........................           30.1              30.2             31.7
                                                  -----             -----            -----
  Gross profit..........................           69.9              69.8             68.3

Operating expenses:
  Selling, general and administrative...           65.6              62.4             63.9
  Depreciation and amortization.........            3.9               3.2              3.3
                                                  -----             -----            -----

Operating income, excluding
  unusual items.........................            0.4               4.2              1.1
Unusual items...........................            0.2              (0.5)            (2.0)
                                                  -----             -----            -----
</TABLE>



                                       12
<PAGE>

<TABLE>
<S>                                                 <C>               <C>             <C>
Operating income (loss).................            0.6               3.7             (0.9)
Interest expense, net...................            0.8               0.3              0.3
                                                  -----             -----            -----
Income (loss) before income tax provision          (0.2)              3.4             (1.2)
Income tax provision ...................            0.1               0.2              0.0
                                                  -----             -----            -----
Net income (loss) ......................           (0.3)%             3.2%            (1.2)%
                                                  =====             =====            =====
</TABLE>

FISCAL 2001 COMPARED TO FISCAL 2000

         Net sales decreased $12.8 million, or 8.7%, from $147.6 million for
fiscal 2000 to $134.8 million for fiscal 2001. The closure of 129 unproductive
stores, net of 46 openings, during the two year period, accounted for $8.6
million of the decrease in net sales. The remaining decrease in net sales was
primarily attributable to a 2.1% decrease in comparable-store sales.

         Cost of sales, as a percentage of net sales, remained relatively
constant at 30.2% and 30.1% for the fiscal years ended 2000 and 2001.

         Selling, general and administrative expenses ("SG&A") as a percentage
of net sales, increased by 3.2%, from 62.4% for fiscal 2000 to 65.6% for fiscal
2001 due to the lower sales volume. SG&A expenses decreased $3.6 million, from
$92.1 million in fiscal 2000 to $88.5 million in fiscal 2001. The reduction in
SG&A expense was principally due to lower rent expenses based on the lower sales
volume and an overall decrease in operating expenses from the closing of
unproductive stores. As of February 1, 2001, the Company completed the
development stage of its point of sale system. Prior to that date, the Company
capitalized all costs (including interest and salaries) incurred in connection
with the development of the point of sale system. During fiscal 2001, no costs
were capitalized related to the point of sale system. Excluding the impact of
those additional expenses, SG&A expense for fiscal 2001 would have decreased
$4.4 million compared to fiscal 2000.

         Interest expense increased $586,000, from $456,000 for fiscal 2000 to
$1,042,000 for fiscal 2001. The increase in interest expense is primarily due to
the effect of capitalizing interest expense incurred in connection with the
development of the point of sale system during fiscal 2000. During fiscal 2001,
no interest was capitalized. The increase in interest expense was partially
offset by the impact of a lower outstanding balance and a lower rate of interest
on the Company's revolving line of credit.

         Unusual items for fiscal 2001 included the one time write-off of
approximately $0.2 million related to the closing of 42 unprofitable stores and
a net gain of $0.5 million for the sale of the frame manufacturing buildings in
Florida.

FISCAL 2000 COMPARED TO FISCAL 1999

         Net sales increased $4.2 million, or 2.9%, from $143.4 million for
fiscal 1999 to $147.6 million for fiscal 2000. A 3.3% increase in
comparable-store sales accounted for nearly all of the increase in net sales.
The increase in comparable store sales was mostly the result of an increase in
the number of eyeglasses sold.

         Cost of sales decreased by $0.9 million, or 1.9%, from $45.5 million in
fiscal 1999 to $44.6 million in fiscal 2000. The decrease was due principally to
a reduction in labor costs including the closing of the frame manufacturing
plant in Miami, Florida in July 2000. As a percentage of net sales, cost of
sales decreased from 31.7% in fiscal 1999 to 30.2% in fiscal 2000. The decrease
was due to a reduction in material costs and labor costs.





                                       13
<PAGE>

         SG&A increased by $0.3 million, or 0.4%, from $91.7 million in fiscal
1999 to $92.1 million in fiscal 2000. As a percentage of net sales, SG&A
decreased from 63.9% in fiscal 1999 to 62.4% in fiscal 2000. The decrease was
principally due to cost savings implemented by management, a reduction in
advertising expenditures, closing of unprofitable locations and leverage created
by the comparable store sales increase.

         Unusual items for fiscal 2000 included the one time write-off of
approximately $0.8 million related to the closing of 87 unprofitable stores.

QUARTERLY FLUCTUATIONS

         Our financial position and results of operations are slightly affected
by seasonal fluctuations in sales and operating profits. Our sales and operating
profits are generally lower in the fourth quarter, due to the Christmas season,
which has historically been a period of reduced sales of prescription optical
products. This trend has been mitigated somewhat by the increase in vision care
sales under plans which are on a calendar year basis and require participants to
use or lose their benefits annually. Quarterly sales can also be affected by the
timing and amount of sales contributed by new stores. Accordingly, the results
of operations for interim periods are not necessarily indicative of results for
the entire fiscal year.

         The following tables set forth certain unaudited financial data for the
quarters indicated:



<TABLE>
<CAPTION>
                                          FISCAL 2001 QUARTER ENDED                       FISCAL 2000 QUARTER ENDED
                                 --------------------------------------------     --------------------------------------------
                                 APRIL 30,  JULY 31,   OCT. 31,      JAN. 31,     APRIL 30,   JULY 31,    OCT. 31,    JAN. 31,
                                   2001       2001       2001         2002          2000       2000        2000         2001
                                 --------   --------   --------      --------     --------    --------    --------    --------
<S>                              <C>        <C>        <C>           <C>          <C>         <C>         <C>         <C>
                                                  (In thousands, except percentages and per share data)
Net sales                        $ 36,805   $ 33,471   $ 34,231      $ 30,249     $ 41,894    $ 36,771    $ 37,395    $ 31,557
Gross profit                       25,657     23,492     23,917        21,130       29,040      25,610      26,252      22,070
 % of net sales                      69.7%      70.2%      69.9%         69.9%        69.3%       69.6%       70.2%       69.9%
Operating income (loss)          $  1,803   $     95   $   (549)     $   (559)    $  2,619    $  1,149    $  1,484    $    190
 % of net sales                       4.9%       0.3%      (1.6)%        (1.8)%        6.3%        3.1%        4.0%        0.6%
Net income (loss)                $  1,474   $   (193)  $   (773)     $   (853)    $  2,345    $    994    $  1,358    $     98
% of net sales                        4.0%      (0.6)%     (2.3)%        (2.8)%        5.6%        2.7%        3.6%        0.3%
 Net income (loss)
   per share -- basic....        $   0.19   $  (0.02)  $  (0.10)     $  (0.11)    $   0.30    $   0.13    $   0.17    $   0.01
Net income (loss) per share -
   assuming dilution.....        $   0.19   $  (0.02)  $  (0.10)     $  (0.11)    $   0.30    $   0.13    $   0.17    $   0.01
</TABLE>


         The Company's operating results for the fiscal year ended January 31,
2002, were significantly impacted by the downturn in the U.S. economy and an
overall weakness in the optical industry. The Company's operating results, for
the first quarter, were positively impacted by the $493,000 net gain realized by
the Company on the sale of its manufacturing facility. The Company's operating
results for the third quarter were significantly impacted by the events of
September 11th. Comparable store sales fell over 7% in the month of September
alone. While comparable store sales began to recover in October, operating
income in the fourth quarter was negatively impacted due to seasonally lower net
sales and a $204,000 write off due to store closings.

         The decrease in operating income in the fourth quarter of fiscal 2000
was due to seasonally lower net sales and a $752,000 write-off due to store
closings.





                                       14
<PAGE>

INCOME TAXES

         As of January 31, 2002, we had federal and state net operating loss
carry forwards of approximately $16,900,000, which will begin to expire in the
year 2006. Approximately $9,500,000 of these carry forwards are available to
offset future taxable income without limitation and approximately $7,400,000 of
these carry forwards (the "Restricted NOLs") are significantly limited due to
ownership changes. Approximately $780,000 of the Restricted NOLs will become
available for use each year through the year 2008. Approximately $3,400,000 of
the Restricted NOLs are expected to expire unutilized. A valuation allowance has
been established to fully reserve the future benefit of all the net operating
loss carry forwards.

LIQUIDITY AND CAPITAL RESOURCES

         Our primary cash sources for fiscal 2001 were from operations. Our
working capital requirements are seasonal and traditionally peak at the end of
the fourth quarter and the beginning of the first quarter. Cash and working
capital at January 31, 2002 were $357,000 and $20.0 million, respectively,
compared to $240,000 and $20.5 million, respectively, at January 31, 2001.

         For the year ended January 31, 2002, cash provided by operating
activities was $4.5 million compared to cash provided by operating activities of
$9.5 million for the year ended January 31, 2001. The $5.0 million decrease
resulted primarily from a decrease in net income.

         Cash used in investing activities was $1.8 million in fiscal 2001
compared to $6.3 million in fiscal 2000. Investing activities in fiscal 2001
consisted of expenditures of $3.1 million primarily for new store openings and
refurbishments of existing stores partially offset by the proceeds of $1.3
million from the sale of our frame manufacturing facility. The decrease in cash
used in investing activities from the prior year is a result of reduced
expenditures on the Company's point of sale system and fewer new store openings
and refurbishments. In fiscal 2002, we expect to spend approximately $3.1
million on capital expenditures for new store openings, the integrated
management information system and other capital expenditures. Historically, we
have funded capital expenditures through a revolving line of credit, debt
financing activities, including capital leases and operating cash flow.

         Our principal external source of liquidity is our $20.0 million
revolving line of credit with Commerce Bank, N.A. The revolving line of credit
facility bears interest at the lower of the prime rate as published in the Wall
Street Journal or the ninety (90) day rate for United States Treasury Bills plus
250 basis points and matures in July 2003. As of January 31, 2002, we had
$10,951,000 outstanding under our revolving line of credit and $9,049,000 of
availability. The loan agreement prohibits the payment of dividends to
shareholders and contains customary covenants. We must also maintain certain
financial ratios, including a specified net worth level, current ratio, and a
fixed charge ratio. As of January 31, 2002, the Company was in compliance with
all the financial covenants. We do not believe that the financial covenants set
forth in our revolving line of credit will have an adverse impact on our
operations or future plans.

         We have commitments from Commerce BankLease, a unit of Commerce Bank,
N.A., for a $2,000,000 five-year equipment lease financing facility. As of
January 31, 2002, we have approximately $700,000 available on this facility.

         Based upon our current operating and new store opening plans, we
believe we can fund our working capital and capital expenditure needs for the
foreseeable future through borrowings under the revolving line of credit and
cash generated from operations.






                                       15
<PAGE>

EFFECTS OF INFLATION

         We believe that the effects of inflation on our operations have not
been material during the past three years.


PENDING ACCOUNTING PRONOUNCEMENTS

         In June 2001, the Financial Accounting Standards Board (FASB) issued
SFAS No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other
Intangible Assets. SFAS No. 141 requires that the purchase method of accounting
be used for all business combinations initiated after June 30, 2001. SFAS No.
141 also includes guidance on the initial recognition and measurement of
goodwill and other intangible assets arising from business combinations
completed after June 30, 2001. SFAS No. 142 prohibits the amortization of
goodwill and intangible assets with indefinite useful lives. SFAS No. 142
requires that these assets be reviewed for impairment as least annually.
Intangible assets with finite lives will continue to be amortized over their
estimated useful lives.

         The Company will apply SFAS No. 142 beginning in the first quarter of
2002. Application of the nonamortization provisions of SFAS No. 142 is expected
to result in an increase in net income of $349,000 ($0.05 per share) in 2002.
The Company will test goodwill for impairment using the two-step process
prescribed in SFAS No. 142. The first step is a screen for potential impairment,
while the second step measures the amount of the impairment, if any. The Company
expects to perform the first of the required impairment tests of goodwill and
indefinite-lived intangible assets as of February 1, 2002 in the second quarter
of fiscal 2002. If an impairment charge were to result from these transitional
impairment tests, it would be reflected as the cumulative effect of a change in
accounting principle in the first quarter of 2002. The Company has not yet
determined what the effect, if any, of these tests will be on the earnings and
financial position of the Company.

         In 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. This statement supersedes SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of, and provides a single accounting model for long-lived assets to
be disposed and broadens the presentation of discontinued operations to include
more disposal transactions. SFAS No. 144 is effective for fiscal years beginning
after December 15, 2001, and interim periods within those fiscal years, with
early application encouraged. The Company adopted this statement on February 1,
2002, and the effect of the adoption was not material to the Company.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

         We occasionally make forward-looking statements concerning our plans,
goals, product and service offerings, store openings and closings and
anticipated financial performance. These forward-looking statements may
generally be identified by introductions such as "outlook" for an upcoming
period of time, or words and phrases such as "should", "expect", "hope",
"plans", "projected", "believes", "forward-looking" (or variants of those words
and phrases) or similar language indicating the expression of an opinion or view
concerning the future.

         These forward-looking statements are subject to risks and uncertainties
based on a number of factors and actual results or events may differ materially
from those anticipated by such forward-looking statements. These factors
include, but are not limited to the following:






                                       16
<PAGE>

         Risks Relating to Host Store Relationships and Short-Term Leases

                  For the fiscal year ended January 31, 2002, 95% of our net
         sales were derived from sales in optical centers located within
         department stores. For the same period, sales attributable to optical
         centers located within J.C. Penney Company, Inc. stores represented
         approximately 68% of our sales. We are indirectly dependent on the
         operations and financial success of our host department stores. A
         decline in the sales, customer traffic or overall financial performance
         of one or more of our host department stores could have a material
         adverse effect on our business. In addition, our future expansion plans
         depend, to a large extent, on the expansion or renewal plans of our
         host department stores, primarily J.C. Penney. A substantial change in
         J.C. Penney's expansion or remodeling plans could have a material
         adverse effect on our planned growth strategy and future financial
         performance and results of operations. We anticipate that we will
         continue to rely upon several host stores for a significant portion of
         our revenues and as a part of our business strategy we intend to
         increase the number of leased departments we operate within
         J.C. Penney. However, we cannot assure you that we will be able to
         maintain our relationships with our host stores on favorable terms, if
         at all.

                  Our optical centers within J.C. Penney stores are subject to a
         master lease that expires in December 2003. The master lease may be
         terminated early, but no more than 40 of our J.C. Penney optical
         centers may be closed by J.C. Penney in any calendar year for any
         reason. This limitation does not apply, however, if J.C. Penney closes
         an entire J.C. Penney department store, either temporarily or
         permanently. Each of our retail optical departments within Sears stores
         is subject to an individual lease that provides for a year-to-year
         term. Each of our leases with Sears may be terminated early by either
         us or Sears for any reason, on 30 days prior written notice. One of our
         principal competitors operates most of the Sears optical departments.
         Our retail optical departments located within other department stores
         are subject to lease arrangements that contain short notice lease
         termination provisions. There can be no assurance that any lease
         between us and a host store will not be terminated or its terms
         adversely changed. A substantial change in our relationship with one or
         more of our host department stores resulting in the termination or
         change of optical center leases could have a material adverse effect on
         our business, financial condition or results of operations.

         Competition

                  The optical retail business is highly competitive, and several
         of our competitors have more resources than we have. These additional
         resources may enable competitors to pursue more aggressive pricing and
         promotional strategies at the expense of profits for longer periods of
         time than we can and may enable them to pursue these strategies through
         an extended downturn in the optical market. We compete with other
         national, regional, and local retail optical chains and independent
         optical retailers. Optical retailers generally serve individual or
         local markets and, as a result, competition is fragmented and varies
         substantially among locations and geographic areas. The principal
         competitive factors affecting our retail operations are merchandise
         selection, quality and consistency of products and services, price,
         location within the host store, convenience, availability of on-site
         professional eye examinations and access to a host store's private
         label credit card. The retail optical industry engages in price-related
         promotional offers as a standard marketing practice. We cannot assure
         you that periods of intense price competition resulting from those
         offers will not materially affect our profitability.

                  Additionally, we face competition from advances in vision
         correction technologies, including laser surgery and other surgical
         vision correction procedures. This could result in decreased demand for
         eyeglasses and contact lenses, which could have a material adverse
         effect on our business, financial condition or results of operations.



                                       17
<PAGE>

                  To the extent our customers may not be covered by our eye care
         benefit plans, we may compete with other vision care benefit plans and
         retailers who provide alternative vision care plans. As the number of
         national and regional managed vision care programs increase,
         competition for customers will intensify among the various vision care
         programs.

         Growth Strategy; Dependence on Host Stores for Growth

                  We intend to pursue a strategy of growth through internal
         expansion and acquisitions as opportunities arise. This strategy is
         likely to place significant demands on our capital, operational and
         management resources and may expose us to a variety of risks, including
         the risk that we will be unable to retain personnel or acquire other
         resources necessary to adequately service our growth. Our expansion
         strategy will be predominantly dependent upon our expansion within our
         current host stores, particularly J.C. Penney. Because we have a strong
         relationship with our existing host stores and many of our hosts have
         numerous locations that do not yet contain optical departments, we
         believe a significant portion of our future growth will come from
         existing host stores. Although as a part of our growth strategy we
         anticipate the opening of a significant number of new retail optical
         departments, we are under no obligation to do so and we cannot assure
         you that we will open these locations. None of our agreements with our
         host department stores require the host stores to offer us additional
         optical center leases. If we do not open new stores as we anticipate
         our future results of operations may be materially and adversely
         affected.

         Dependence on Single Managed Vision Care Provider

                  Since 1991, we have been a national provider of managed vision
         care through Vision One. Vision One is a third-party vision care plan
         owned by Cole National Corporation. Cole is one of our principal
         competitors. For the fiscal year ended January 31, 2002, approximately
         33% of our revenues were generated from sales to members of Vision One
         and other vision care benefit plans, and we anticipate that this
         percentage will increase over the next several years. Our contract with
         Cole National expires in December 2002. Our contract with Cole National
         may be terminated earlier under certain circumstances. We cannot assure
         you that we will be able to maintain our relationship with Cole
         National. A substantial change in our relationship with Cole National
         could have a material adverse effect on our business, financial
         condition or results of operations.

         Dependence on Key Personnel

                  We are highly dependent on certain members of our management
         team, particularly William A. Schwartz, Jr., the Company's Chairman,
         President and Chief Executive Officer. The loss of his services could
         have a material adverse effect on our business, financial condition and
         results of operations. See "Executive Compensation - Employment
         Agreements."

         Risks Related to Government Regulation

                  The field of optical retailing is regulated by many of the
         states in which we do business. Certain states require the presence of
         licensed opticians in vision centers where eyeglasses or contact lenses
         are fitted or dispensed. Any difficulties or delays in securing the
         services of such optical professionals could adversely affect our
         business and our relationship with our host stores. We are subject to a
         variety of federal, state and local laws, rules and regulations
         affecting the health care industry and the delivery of health care
         services. State and local legal requirements vary widely among
         jurisdictions and are subject to change, as are federal legal
         requirements.



                                       18
<PAGE>

                  The legality of our relationships with opticians and
         optometrists in the states in which we operate may be challenged in the
         future, and if challenged, we may be required to alter the manner in
         which we conduct our business. Any such alteration could adversely
         affect our business and our relationships with our host stores. Failure
         to comply with existing laws and regulations or the adoption of new
         laws and regulations could have a material adverse effect on our
         business, financial condition and results of operations.

         Dependence on Centralized Laboratory Facility

                  We finish 100% of our merchandise at our main optical
         laboratory, distribution and lens grinding facility. An interruption in
         production at the facility could have a material adverse effect on the
         Company's business, financial condition or results of operations.

         Other Factors Affecting Future Operating Performance

                  Our future quarterly results may be materially affected by a
         variety of factors, some of which may be beyond our control. Some of
         these factors include, but are not limited to:

         o        our ability to select and stock merchandise attractive to
                  customers;

         o        our ability to efficiently fill customer orders;

         o        the mix of products sold, pricing and other competitive
                  factors;

         o        the seasonality of our business;

         o        weather factors affecting retail operations; and

         o        general economic cycles affecting consumer spending.

                  Accordingly, results of operations for any particular quarter
         may not be indicative of results of operations for future periods.


         In addition, forward-looking statements concerning our expected revenue
or earnings levels are subject to many additional uncertainties applicable to
competitors generally and to general economic conditions over which we have no
control, such as the performance of our host stores. We do not plan in general
to publicly update prior forward-looking statements for unanticipated events or
otherwise and, accordingly, prior forward-looking statements should not be
considered to be "fresh" simply because we have not made additional comments on
those forward-looking statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         Our earnings are affected by changes in interest rates due to the
impact those changes have on the interest expense payable by us under our
variable rate debt revolving line of credit, for which the outstanding balance
was $10,951,000 as of January 31, 2002. A 1.0% change in the underlying prime
rate or the ninety (90) day rate for United States Treasury Bills would result
in an $110,000 change in the annual amount of interest on such debt. This amount
is determined by considering the impact of the hypothetical interest rates on
our revolving line of credit outstanding as of January 31, 2002.






                                       19
<PAGE>

ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

         The Financial Statements together with the report thereon of Ernst &
Young LLP, independent auditors, are included in this report commencing at Page
F-1.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE.

         None.







                                       20
<PAGE>

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

         Set forth below is biographical and other information about the persons
who make up the Board of Directors and are expected to be nominated for election
at the company's 2002 annual meeting:

<TABLE>
<S>                                                     <C>
RICHARD K. MCDONALD                                     Mr.  McDonald is  currently  a director  of USV.  Since 1989,
Age:  55                                                Mr.  McDonald  has served as the  President  and  Director of
Director since 1994                                     Constitution  Capital  Corporation,  a general partner of M&M
Executive, Audit and Compensation                       General  Partnership  and a general partner of RKM Investment
Committees                                              Company, the general partner of Constitution Partners I, L.P.

G. KENNETH MACRAE                                       Mr.   Macrae  is  currently  a  director  of  USV.  He  is  a
Age:  73                                                consultant  to Keystone  Venture  Capital  Management  Co., a
Director since 1990                                     venture  capital firm in  Philadelphia,  Pennsylvania.  Prior
Compensation, Executive                                 to serving as a consultant,  Mr. Macrae was from 1983 to 1997
and Stock Option Committees                             the President of Keystone Venture Capital  Management Co. and
                                                        the President and Director of KVM IV MCGP,  Inc., the general
                                                        partner of Keystone Venture IV Management  Company,  L.P. and
                                                        Keystone IV, L.P.

GEORGE E. NORCROSS III                                  Mr.  Norcross  is  currently  a  director  of USV.  He is the
AGE:  46                                                Chairman  and Chief  Executive  Officer of Commerce  National
Director since 2002                                     Insurance  Services,  the insurance unit of Commerce Bancorp.
                                                        Mr.  Norcross  has  served in that  position,  or in  similar
                                                        positions  with  predecessor   companies,   since  1979.  Mr.
                                                        Norcross  also serves on the board of  directors  of Commerce
                                                        Bancorp (NYSE:  CBH).

JOSEPH J. ROBERTS                                       Mr.  Roberts is  currently a director  of USV.  Since 1987 he
AGE:  49                                                has served as a Member of the  General  Assembly of the State
Director since 2002                                     of New  Jersey,  where he is  currently  serving as  Majority
                                                        Leader.   Mr.  Roberts,  a  self-employed   businessman,   is
                                                        President of Jersey Shore  Hospitality,  LLC,  which owns and
                                                        operates three restaurants in Cape May County, New Jersey.

WILLIAM A. SCHWARTZ, JR.                                Mr.  Schwartz  serves  as USV's  President,  Chief  Executive
Age:  60                                                Officer  and  Chairman  of the Board  and has  served in that
Director since 1967                                     capacity  for the  Company and its  predecessors  since 1967.
Executive Committee                                     Mr.  Schwartz  also  serves  on the  board  of  directors  of
                                                        Commerce  Bancorp  (NYSE:  CBH).  Mr.  Schwartz is married to
                                                        Gayle E. Schmidt.
</TABLE>



                                       21
<PAGE>

<TABLE>
<S>                                                     <C>
DENNIS J. SHAUGHNESSY                                   Mr.  Shaughnessy  is currently a director of USV. Since 1989,
Age:  54                                                Mr.   Shaughnessy  has  served  as  the  Managing   Director,
Director since 1994                                     Treasurer and Director of Grotech  Capital  Group,  Inc., the
Audit, Compensation and Stock Option                    general  partner of Grotech  Partners III, L.P.,  Grotech III
Committees                                              Companion Fund, L.P. and Grotech III Pennsylvania  Fund, L.P.
                                                        and  Managing  Director,  Treasurer  and  Director of Grotech
                                                        Capital  Group IV,  Inc.,  the  general  partner  of  Grotech
                                                        Partners  IV, L.P. Mr.  Shaughnessy  also serves on the board
                                                        of  directors  of Polk  Audio  Inc.  (NASDAQ:  PKAU)  and FTI
                                                        Consulting, Inc. (AMEX: FCN).

J. ROGER SULLIVAN, JR.                                  Mr.  Sullivan is  currently  a director  of USV.  Since March
Age:  59                                                1994, Mr.  Sullivan has served as a vice president of Grotech
Director since 1994                                     Capital Group,  Inc., the general partner of Grotech Partners
Audit Committee                                         III, L.P. and Grotech  Capital IV, Inc., the general  partner
                                                        of Grotech Partners IV, L.P.

PETER M. TROUP                                          Mr.  Troup is  currently a director of USV.  Since 1996,  Mr.
Age:  58                                                Troup has  served as a  management  consultant  to the retail
Director since 1997                                     industry.
</TABLE>



                                       22
<PAGE>


INFORMATION CONCERNING EXECUTIVE OFFICERS


         Background information about the Company's executive officers, is set
forth below.

<TABLE>
<S>                                        <C>
GAYLE E. SCHMIDT                           Ms. Schmidt has served as USV's Executive Vice
Age:  49                                   President and Chief Operating Officer since April
                                           2000. From 1990 to March 2000, she served as the
                                           company's Executive Vice President, Manufacturing.

GEORGE T. GORMAN                           Mr. Gorman has served as USV's President, Retail
Age:  50                                   since February 1998. From September 1996 to January
                                           1998, he served as the Executive Vice President,
                                           Retail of the Company.

CARMEN J. NEPA, III                        Mr. Nepa has served as USV's Senior Vice President,
Age:  36                                   Chief Financial Officer and Secretary since November
                                           2001. From 1995 to October 2001, Mr. Nepa was a
                                           senior manager with Ernst & Young, LLP.

</TABLE>

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

           Section 16(a) of the Exchange Act of 1934, as amended, requires the
company's executive officers and directors and persons who own more than ten
percent of a registered class of the company's equity securities (collectively,
the "Reporting Persons") to file reports of ownership and changes in ownership
with the Securities and Exchange Commission and to furnish the company with
copies of these reports. The company believes that all filings required to be
made by the Reporting Persons during the fiscal year ended January 31, 2002 were
made on a timely basis, except for the initial statement of beneficial ownership
of Mr. Nepa, which was not filed until April 2002, reporting no securities owned
of USV by Mr. Nepa.




                                       23
<PAGE>

ITEM 11. EXECUTIVE COMPENSATION.

SUMMARY COMPENSATION TABLE

           The following table summarizes the total compensation, for each of
the last three fiscal years, earned by the Named Executive Officers--the Chief
Executive Officer and the three other most highly compensated executive officers
of USV who earned over $100,000 and who were serving in such capacities as of
January 31, 2002. The information presented below represents all compensation
earned by the Named Executive Officers for all services performed for the
company or any of its subsidiaries.

<TABLE>
<CAPTION>
                                         Annual Compensation                  Long-Term Compensation Awards
                              ----------------------------------- --------------------------------------------------
                                                                            Shares
                              Fiscal                                      Underlying                All Other
Name and Principal Positions   Year          Salary       Bonus              Options              Compensation(1)
----------------------------- ---------- ------------- ---------- ---------------------------- ---------------------
<S>                           <C>        <C>           <C>               <C>                      <C>

William A. Schwartz, Jr.       2001        $305,000    $    --                --                 $   2,070
   President and Chief         2000         297,000         --           228,735                     2,070
   Executive  Officer          1999         275,000         --                --                        --


Gayle E. Schmidt........       2001         194,200         --                --                     5,394
   Executive Vice              2000         185,000         --            76,050                     4,902
   President and Chief         1999         176,000         --                --                        --
   Operating Officer

George T. Gorman............   2001         193,900         --                --                     1,525
   President, Retail           2000         185,000         --            80,665                     1,256
                               1999         176,000         --                --                     1,297

Carmen  J. Nepa, III....       2001(2)       47,100     25,000                --                        --
   Senior Vice President,
   Chief Financial Officer
   and Secretary


George E. McHenry, Jr. .       2001(3)      147,700         --                --                     1,177
   Executive Vice President,   2000         175,000         --            76,050                     1,167
   Chief Financial Officer     1999         163,900         --                --                       860
   and Secretary
</TABLE>

------------------------------------

(1)      Includes the value of the Company's contributions to the
         Company-sponsored 401(k) plan and the amount paid by the Company for
         term life insurance coverage under health and welfare plans.

(2)      Mr. Nepa joined the Company in November 2001.

(3)      Mr. McHenry resigned from his position with the Company in November
         2001.




                                       24
<PAGE>


STOCK OPTIONS

         The following table sets forth certain information about the number of
unexercised stock options and the value of any in-the-money options that are
held by the Named Executive Officers. All of these options are transferable to
family members under specified conditions.



                 AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                        AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
                                                       NUMBER OF SHARES                VALUE OF UNEXERCISED
                                                    UNDERLYING UNEXERCISED            IN-THE MONEY OPTIONS(1)
                                                  OPTIONS AT FISCAL YEAR-END            AT FISCAL YEAR-END
                                                 ----------------------------      -------------------------------
NAME                                             EXERCISABLE    UNEXERCISABLE      EXERCISABLE       UNEXERCISABLE
----                                             -----------    -------------      -----------       -------------
<S>                                                <C>             <C>                  <C>               <C>
William A. Schwartz, Jr.                            228,735        228,735              $0                $0
George T. Gorman                                     80,665         80,665               0                 0
Gayle E. Schmidt                                     76,050         76,050               0                 0
</TABLE>

(1)      Amounts were calculated using the closing price of the common stock on
         the last trading day of the fiscal year ($2.75).

EMPLOYMENT AGREEMENTS

         We entered into an employment agreement in 1998 with William A.
Schwartz, Jr., President and Chief Executive Officer. The employment agreement
provides for a guaranteed base salary and the right to be considered for such
bonus programs as are adopted by the board. The initial term of Mr. Schwartz's
employment agreement was for three years and automatically renews annually for
successive three-year terms if not terminated by either party. Under the terms
of Mr. Schwartz's agreement, he is entitled to salary continuation of the
balance of the term of his employment agreement, but not less than one year, if
his employment is terminated by us other than for cause or if he resigns for
good reason under the terms of the agreement. The severance payable to Mr.
Schwartz will depend on his monthly salary at that time. His current monthly
salary is $25,417. If all or substantially all of the assets of the company are
sold, or a merger or sale of all or substantially all of the stock of the
company occurs while Mr. Schwartz is employed by the company, he will receive a
bonus payment of $750,000.

         We also entered into salary continuation agreements in 1998 with George
T. Gorman, President-Retail, and Gayle E. Schmidt, Executive Vice President and
Chief Operating Officer. Under the terms of each of these agreements, the
executive is entitled to salary continuation for one year if the executive's
employment is terminated by us other than for cause, or if the executive resigns
with good reason under the terms of the agreement. The severance due to each
executive depends on the executive's monthly salary at that time. The current
monthly salary for each executive is as follows: Mr. Gorman -- $16,158; and Ms.
Schmidt -- $16,183. Each executive has also agreed not to compete with the
Company for a period of six months following the termination of the executive's
employment with the company.

         In October 2001, we entered into an employment agreement with Carmen
Nepa, our Chief Financial Officer. The employment agreement provides for a
guaranteed base salary and the right to be considered for such bonus programs as
are adopted by the board. The initial term of Mr. Nepa's employment agreement is
for 2 years and automatically renews for successive one year periods thereafter
if not terminated by either party. Under the terms of Mr. Nepa's agreement, he
is entitled to salary continuation for a period of 12 months if his employment
is terminated by the Company other than for cause or if Mr. Nepa resigns for
good reason under the terms of the agreement. The severance payable to Mr. Nepa,
if any, will depend on his monthly salary at that time.




                                       25
<PAGE>

OTHER BENEFITS

         401(k) Retirement Plan. The company maintains a 401(k) retirement
savings plan that is available to substantially all employees. Under the terms
of the plan, the company matches 25% of each participant's voluntary
contributions up to 3% of the participant's compensation. A participant vests
ratably in the matching contributions over the first five years of employment
(20% per year).

DIRECTOR COMPENSATION

         Mr. Schwartz, who is the only director that is also an employee, does
not receive any additional compensation for serving on the Board of Directors.

         Annual Retainer Fee. Historically, each director of the company who is
not an employee of the company or any of its subsidiaries receives an annual
retainer payable in either cash or shares of company stock. Each current
director, who is not an employee of the Company, received a cash payment of
$15,000 for serving as a director during fiscal 2001. The form and amount of the
annual retainer to be paid by the company to eligible directors in fiscal 2002
has not yet been determined.

         Other Benefits. We reimburse directors for the reasonable expenses
associated with attending Board meetings and provide them with liability
insurance coverage for their activities as directors of the company.

MEETINGS AND COMMITTEES OF THE BOARD

         The Board met five times during fiscal 2001. During fiscal 2001, all
then incumbent directors attended at least 75% of the meetings of the Board and
the Board committees on which they served.

         The Board has four standing committees: the Audit Committee, the
Compensation Committee, the Executive Committee and the Stock Option Committee.
The Board does not have a nominating committee. The functions customarily
attributable to a nominating committee are performed by the Board as a whole.

         Audit Committee. The Audit Committee of the Board of Directors,
currently consisting of Messrs. McDonald, Shaughnessy and Sullivan, is
authorized to recommend to the Board of Directors independent certified public
accounting firms for selection as auditors of the company, make recommendations
to the Board of Directors on auditing matters, examine and make recommendations
to the Board of Directors concerning the scope of audits, and review and approve
the terms of transactions between or among the company and related parties. None
of the members of the Audit Committee is an employee of the company. Mr.
McDonald is the Chairman of the Audit Committee. The Audit Committee met four
times during fiscal 2001.

         Compensation Committee. The Compensation Committee of the Board of
Directors, currently consisting of Messrs. Shaughnessy, Macrae and McDonald, is
authorized to exercise all of the powers of the Board of Directors with respect
to matters pertaining to compensation and benefits, including, but not limited
to, salary matters, incentive/bonus plans, investment programs and insurance
plans. The Compensation Committee is also authorized to exercise all of the
powers of the Board of Directors in matters pertaining to employee promotions
and the designation or revision of employee positions and job titles. None of
the members of the Compensation Committee is an employee of the company. Mr.
Shaughnessy is Chairman of the Compensation Committee. The Compensation
Committee met once during 2001.

         Executive Committee. The Executive Committee of the Board of Directors,
currently consisting of Messrs. Macrae, McDonald and Schwartz, is authorized to
exercise substantially all of the powers of the board in the management and
business affairs of the company, except it does not have the authority to



                                       26
<PAGE>

declare dividends, authorize the issuance of shares of our common stock, modify
the company's certificate of incorporation or bylaws, adopt any agreement of
merger or consolidation or recommend to the shareholders the sale, lease or
exchange of all or substantially all of the company's assets or the dissolution
of the company. Regularly scheduled meetings of the board are held periodically
each year and special meetings are held from time to time. As a consequence, the
occasions on which this committee is required to take action are limited. The
committee did not meet during fiscal 2001.

         Stock Option Committee. The Stock Option Committee of the Board of
Directors, currently consisting of Messrs. Shaughnessy and Macrae, is authorized
to administer the company's existing stock option plan. The committee did not
meet separately from the board during fiscal 2001.

AUDIT COMMITTEE REPORT

The audit functions of the Audit Committee are focused on three areas:

         o        the adequacy of the company's internal controls and financial
                  reporting process and the reliability of the company's
                  financial statements;

         o        the independence and performance of the company's independent
                  auditors; and

         o        the company's compliance with legal and regulatory
                  requirements.

         We meet with management periodically to consider the adequacy of the
company's internal controls and the objectivity of its financial reporting. We
discuss these matters with the company's independent auditors and with
appropriate company financial personnel. We regularly meet privately with the
independent auditors who have unrestricted access to the Audit Committee. We
also recommend to the Board the appointment of the independent auditors and
review periodically their performance and independence from management. In
addition, the Audit Committee reviews the company's financing plans and reports
recommendations to the full Board for approval and to authorize action.

         The Directors who serve on the committee are all "Independent" for
purposes of the Nasdaq listing standards. That is, the Board of Directors has
determined that none of us has a relationship with USV that may interfere with
our independence from USV and its management. The Board has adopted a written
charter setting out the audit related functions the committee is to perform.

Management has primary responsibility for the company's financial statements and
the overall reporting process, including the company's system of internal
controls. The independent auditors audit the annual financial statements
prepared by management, express an opinion as to whether those financial
statements fairly present the financial position, results of operations and cash
flows of the company in conformity with accounting principles generally accepted
in the United States and discuss with us any issues they believe should be
raised with us. We reviewed the company's audited financial statements for the
fiscal year ended January 31, 2002, with both management and Ernst & Young, the
company's independent auditors, to discuss those financial statements.
Management represented to us that the financial statements were prepared in
accordance with generally accepted accounting principles.

         We received from and discussed with Ernst & Young the written
disclosure and the letter required by Independence Standards Board Standard No.
1, (Independence Discussions with Audit Committees). These items relate to that
firm's independence from the company. We also discussed with Ernst & Young any
matters required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees).

         Based on these reviews and discussions, we recommended to the Board
that the company's audited financial statements for the fiscal year ended
January 31, 2002, be included in its Annual Report on Form 10-K for filing with
the Securities and Exchange Commission. The Committee also




                                       27
<PAGE>

recommended the reappointment, subject to shareholder approval, of the
independent auditors, and the Board of Directors concurred in such
recommendation.

Submitted by the Audit Committee of the company's Board of Directors.

Richard K. McDonald (Chairman)
Dennis J. Shaughnessy
J. Roger Sullivan, Jr.

COMPENSATION COMMITTEE REPORT

         The company's executive compensation program is philosophically
designed to reward exceptional performance and to align the financial interests
of the company's senior executives with those of the equity owners of the
company. To achieve this end, the Committee has developed and implemented a
compensation program designed to attract and retain highly skilled executives
with the business experience and acumen necessary for achievement of the
company's long-term business objectives. The Compensation Committee uses
compensation surveys to provide information and data to assist it in developing
compensation programs that are competitive with other similarly-situated
companies.

         The company's executive compensation consists of three components: base
salary; an annual performance-based bonus; and stock-based compensation. The
general guidelines used by the company to determine these components are
described below. Subject to these guidelines, bonus awards and option grants are
awarded on a discretionary rather than a formulaic basis.

BASE SALARY

         The base salaries paid to the company's executive officers are based
upon recommendations of senior management, and require approval of the
Compensation Committee. Management takes into account a variety of factors in
determining base salary, including:

         o        competitive salaries for comparable officers at comparable
                  companies;

         o        individual performance and an assessment of the value of the
                  individual's services to USV;

         o        the fairness of individual executive officers' salaries
                  relative to their responsibilities;

         o        the salaries of other executive officers; and

         o        the company's financial performance.

         At different times, depending upon prevailing circumstances, the
Compensation Committee gives these criteria varying degrees of weight.

ANNUAL BONUS

         The company uses annual incentive bonuses to recognize individual
performance and reward exceptional contributions to the company's business.
Bonuses are determined as follows. At the end of each fiscal year, a bonus pool
is proposed by senior management and reviewed with the Compensation Committee.
The bonus pool, which includes amounts to be paid to the Chief Executive Officer
and the three other most highly compensated officers in the company, is
allocable based on:



                                       28
<PAGE>

         o        the company's EBITDA growth rate for the year (taking into
                  account long-term investment);

         o        each individual's contribution to the whole; and

         o        the prior year's bonus pool.

         Although these factors are considered, bonus pools are allocated on a
discretionary, rather than a formulaic basis.

         Once the bonus pool is established, senior USV management are
responsible for making recommendations to the Compensation Committee regarding
allocation to executives other than the three most highly compensated officers
of the company based on a subjective assessment of individual performance. The
Compensation Committee is responsible for determining the CEO's bonus and the
CEO makes recommendations to the Compensation Committee regarding allocation of
the bonus pool to the four other most highly compensated executive officers of
the company, which the Compensation Committee then approves or disapproves.
Subject to certain guidelines based on salary levels, bonuses are entirely
discretionary, with exceptional efforts and results rewarded disproportionately.

STOCK OPTIONS

         The Committee believes that its stock option program appropriately
links executive interest to stockholder value. The company makes annual option
grants to eligible employees based on performance and issues options to certain
employees upon initial employment and (promotion) and in connection with
entering into certain new employment arrangements.

         The number of options available for grant each year and the allocation
of options is determined as described below. At the end of the year, an
aggregate option pool available for grant to company executives is proposed by
senior management and reviewed with and approved by the Compensation Committee
and the Stock Option Committee. As is the case with bonuses, once the option
pool is established, senior USV management are responsible for making
recommendations to the Compensation Committee regarding allocation to executives
other than the five most highly compensated executive officers. As is the case
with bonuses, the CEO makes recommendations to the Compensation Committee
regarding option grants to the four most highly compensated executive officers
other than the CEO and the Compensation Committee determines the number of
options to be granted to the CEO. Subject to certain guidelines based on salary
levels, option grants from the established pool are discretionary. In addition,
a certain number of options are set aside each year for extraordinary grants to
new hires, renewals or other grants that fall outside the annual grant program.
All grants are reviewed and approved by the Compensation Committee and the Stock
Option Committee, and the vast majority of the options granted vest over a
three-year period.

SUMMARY

         The Compensation Committee believes that the company's executive
compensation program must continually provide executives with a strong incentive
to focus on and achieve the company's business objectives and link a significant
portion of long-term remuneration directly to stock price appreciation realized
by all of the company's shareholders. By assuring that executives are
appropriately compensated and therefore motivated, the long-term interests of
shareholders will be best served. The actions taken by the Compensation
Committee in 2001 were consistent with this focus and the principles outlined
above.

Submitted by the Compensation Committee of the company's Board of Directors

Dennis J. Shaughnessy (Chairman)


                                       29
<PAGE>

G. Kenneth Macrae
Richard K. McDonald

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

         Neither Messrs. Shaughnessy, Macrae or McDonald is an officer or
employee, or former officer or employee, of the company or any of its
subsidiaries. No interlocking relationship exists between the members of the
company's Board or Compensation Committee and the board of directors or
compensation committee of any other company, nor has any such interlocking
relationship existed in the past.

PERFORMANCE GRAPH

         The following Performance Graph compares, for the period that our Peer
Group common stock has been publicly traded (since December 2, 1997), the
cumulative total stockholder return for the company, The Nasdaq Stock Market
(U.S. Compares) Index (the "Nasdaq Market Index"), and The Peer Group Index (the
"Peer Group Index"). The Peer Group Index consists of the company and the
following companies which are engaged primarily in the retail optical business:
Cole National Corporation; Luxottica; National Vision, Inc. f/k/a Vista Eyecare,
Inc.; and Emerging Vision, Inc. The Performance Graph assumes that $100 was
invested beginning on the date of our initial public offering in each of USV and
the indexes. Total return performance for the Nasdaq Market Index and the Peer
Group Index is weighted based on the market capitalization of the companies
included in each index and assumes that dividends are reinvested. In fiscal
2001, we did not declare or pay any dividends on our common stock. Immediately
following the Performance Graph is a chart of the numerical plot-points that
support the graph. We caution that the stock price performance shown in the
graph below should not be considered indicative of potential future stock price
performance.

                          TOTAL RETURN TO STOCKHOLDERS
                      (Assumes $100 Investment on 12/2/97)

<TABLE>
<CAPTION>
                              1/31/97       1/30/98      1/29/99       1/31/00       1/31/01       1/31/02
                              -------       -------      -------       -------       -------       -------
<S>                           <C>           <C>          <C>           <C>           <C>           <C>
U.S. Vision, Inc              $100.00       $105.92      $  78.41      $  31.30      $  46.78      $  30.27
Nasdaq Market Index           $100.00       $ 99.92      $ 155.22      $ 244.79      $ 172.25      $ 120.15
Peer Group Index              $100.00       $111.35      $  87.58      $ 130.15      $ 218.08      $ 266.97
</TABLE>




ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

STOCK OWNERSHIP

         The following table sets forth, as of January 31, 2002, certain
information regarding the beneficial ownership of our common stock by:

         o        Each person or entity who is known by us to own beneficially
                  5% or more of our outstanding common stock;

         o        each director of the company;

         o        each of our Named Executive Officers; and

         o        all of our directors and executive officers as a group.




                                       30
<PAGE>

<TABLE>
<CAPTION>
                                                                          OPTIONS OR
                                                                           WARRANTS
                                                                          EXERCISABLE
              NAME AND ADDRESS                  NUMBER OF SHARES           WITHIN 60          PERCENTAGE OF SHARES
            OF BENEFICIAL OWNER               BENEFICIALLY OWNED(1)          DAYS            BENEFICIALLY OWNED(1)
            -------------------               ---------------------       -----------        ---------------------
<S>                                           <C>                         <C>                <C>

Norcross Roberts Group(5)                           2,011,401                    --                 25.8%
     c/o George E. Norcross III
     1701 Route 70 East
     Cherry Hill, NJ  08034

Grotech Partners IV, L.P. ..............            1,583,951                    --                 20.3%
     9690 Deereco Road
     Timinium, MD  21093

Stolberg Partners, L.P..................            1,525,159                    --                 19.5%
     767 Third Avenue
     New York, NY  10017

Constitution Partners I, L.P............              487,228                    --                  6.2%
     600 Grant Street, 57th Floor, USX Tower
     Pittsburgh, PA  15219

William A. Schwartz, Jr.(2).............               60,190                228,735                 3.6%

Dennis J. Shaughnessy(3)................            1,953,795                 39,000                25.4%

J. Roger Sullivan, Jr.(3)...............            1,953,795                 39,000                25.4%

Richard K. McDonald(4)..................              737,254                 19,500                 9.7%

George T. Gorman(2).....................               --                     80,665                 1.0%

Gayle E. Schmidt(2) ....................                1,040                 76,050                 *

Carmen J. Nepa III(2) ..................               --                         --                 *

Peter M. Troup    ......................                8,228                 63,944                 *

G. Kenneth Macrae  .....................                2,471                 27,618                 *

George E. Norcross III                              2,011,401                     --                25.8%

Joseph J. Roberts                                   2,011,401                     --                25.8%

Directors and executive
  officers as a group
  (11) persons..........................            4,774,379                574,512                63.8%
</TABLE>


------------------------------

*        Represents less than 1%

(1)      Beneficial ownership is determined in accordance with the rules of the
         Commission and generally includes voting or investment power with
         respect to securities. Except as otherwise indicated by footnote, and
         subject to community property laws where applicable, the persons named
         in the table above have sole voting and investment power with respect
         to all shares of Class A common stock shown as beneficially owned by
         them.

(2)      The address of Messrs. Schwartz, Gorman and Nepa, and Ms. Schmidt is
         c/o U.S. Vision, Inc., One Harmon Drive, Glendora, NJ 08029.

(3)      The shares of stock listed in Mr. Shaughnessy's and Mr. Sullivan's name
         are owned by Grotech Partners IV, L.P., Grotech Partners III, L.P.,
         Grotech III Companion Fund, L.P. and Grotech III Pennsylvania Fund,
         L.P., each a limited partnership in which Mr. Shaughnessy and Mr.
         Sullivan serve as directors or officers of the respective general
         partners. Grotech Capital Group, Inc., the general partner of Grotech
         Partners III, L.P., Grotech III Companion Fund, L.P. and Grotech III
         Pennsylvania Fund, L.P., is the holder of 1,295 of these shares.
         Grotech Capital Group IV, LLC, the general partner of Grotech Partners
         IV, L.P., is the holder of 3,166 of these shares. Messrs. Shaughnessy
         and Sullivan disclaim beneficial ownership of these shares for all
         purposes.

(4)      A portion of these shares of stock held in Mr. McDonald's name are
         owned by M&M General Partnership and Constitution Partners I, L.P.,
         each a limited partnership in which Mr. McDonald serves as a director
         or officer of the respective general partners. Mr. McDonald disclaims
         beneficial ownership of these shares, except to the extent of his
         pecuniary interest therein.

(5)      The shares of stock listed in Mr. Norcross' and Mr. Roberts' name are
         owned by the Norcross Roberts Group.







                                       31
<PAGE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

         Since 1990, we have leased a retail store, office and administrative
space located in a 7,000 square foot building in Philadelphia, Pennsylvania,
from a limited partnership in which William A. Schwartz, Jr. and Gayle E.
Schmidt, each of whom is an executive officer of the company and a 10% limited
partner of the partnership. Mr. Schwartz is also the general partner of the
partnership. We made payments to the partnership of $154,000, $153,000, and
$149,000 in fiscal 2001, 2000, and 1999, respectively. Management believes that
the lease terms are comparable to those that could have been obtained pursuant
to an arm's length transaction with unaffiliated partners.


                                     PART IV

ITEM 14.      EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

FINANCIAL STATEMENTS

The following financial statements of the Company are filed as a part of this
report:

<TABLE>
<CAPTION>
                                                                                                               PAGE
                                                                                                               ----
<S>                                                                                                            <C>
Report of Independent Auditors..................................................................................F-1
Consolidated Balance Sheets as of January 31, 2002 and 2001.....................................................F-2
Consolidated Statements of Operations -- For the Fiscal Years Ended
  January 31, 2002, 2001 and 2000...............................................................................F-3
Consolidated Statements of Shareholders' Equity -- For the Fiscal Years Ended
  January 31, 2002, 2001 and 2000 ..............................................................................F-4
Consolidated Statements of Cash Flows --For the Fiscal Years Ended
  January 31, 2002, 2001 and 2000...............................................................................F-5
Notes to Consolidated Financial Statements......................................................................F-6
</TABLE>

         All financial statement schedules have been omitted because they are
not applicable or the required information is shown in the consolidated
financial statements and notes thereto.




Reports on Form 8-K

         On November 29, 2001, U. S. Vision furnished information under Item 5
of Form 8-K regarding its earnings for the third quarter ended October 31, 2001,
and the termination by the Norcross Roberts Group of the previously announced
merger agreement pursuant to which the Norcross Roberts Group would have
acquired U. S. Vision at a price of $4.25 per share.



                                       32
<PAGE>

                                    EXHIBITS

         The following exhibits are filed as a part of this report:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER            EXHIBIT
------            -------
<S>           <C>
3.1*          Restated Certificate of Incorporation of the Company

3.2*          Bylaws of the Company

10.1*         Loan and Security Agreement between the Company and Commerce Bank, as amended

10.2*         Stock Option Plan, including form of Stock Option Agreement

10.3v         Amendment to Stock Option Plan

10.4**        Subordinated Note Purchase Agreement

10.5**        Amendment to Subordinated Note Purchase Agreement

10.6**        J.C. Penney License Agreement

10.7**        Vision Care Agreement

10.8***       Employment Agreement for William A. Schwartz, Jr.

10.9***       Form of Employment Severance Agreement

10.10**       Form of Non-Statutory Option Agreement

10.11**       Form of Indemnification Agreement

10.12**       Shareholders' Agreement

10.13**       Form of Sears Lease

10.14**       Commerce Bank Mortgages and Schedules

10.15**       DRPA Loan Documentation

10.16*v       Form of Warrant

21+           Subsidiaries of the Company

23+           Consent of Independent Auditors
</TABLE>


*        Previously filed as an exhibit to the Form S-1 (Reg. No. 333-35819)
         filed with the Commission on September 17, 1997.

**       Previously filed as an exhibit to Amendment No. 1 to the Form S-1 (Reg.
         No. 333-35819) filed with the Commission on October 29, 1997.

***      Previously filed as an exhibit to the Company's report on Form 10-K for
         the fiscal year ended January 31, 1998, which was filed with the
         Securities and Exchange Commission on April 30, 1999.

*v       Previously filed as an exhibit to the Company's report on Form 10-Q for
         the quarter ended July 31, 2000, which was filed with the Securities
         and Exchange Commission on September 13, 2000.

v        Previously filed as an exhibit to the Company's report on Form 10-K for
         the fiscal year ended January 31, 2001, which was filed with the
         Securities and Exchange Commission on April 30, 2001.

+        Filed herewith.



                                       33
<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.

                                            U. S. VISION, INC.



May 1, 2002                              By:  /s/ William A. Schwartz, Jr.
                                                --------------------------------
                                            William A. Schwartz, Jr., President
                                            and Chief Executive Officer

         Pursuant to the requirements of the Securities Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities indicated on May 1, 2002.

<TABLE>
<CAPTION>
         Signature                                            Capacity
         ---------                                            --------
<S>                                                        <C>

    /s/ William A. Schwartz, Jr.                           President, Chief Executive Officer and Director
----------------------------------                         (Principal Executive Officer)
   William A. Schwartz, Jr.


    /s/ Carmen J. Nepa, III                                Senior Vice President, Chief Financial Officer and
----------------------------------                         Secretary
   Carmen J. Nepa, III                                     (Principal Financial and Accounting Officer)


    /s/ Dennis J. Shaughnessy                              Director
----------------------------------
   Dennis J. Shaughnessy


    /s/ J. Roger Sullivan, Jr.                             Director
----------------------------------
   J. Roger Sullivan, Jr.


    /s/ Richard K. McDonald                                Director
----------------------------------
   Richard K. McDonald


    /s/ G. Kenneth Macrae                                  Director
----------------------------------
   G. Kenneth Macrae


     /s/ Peter M. Troup                                    Director
----------------------------------
   Peter M. Troup


    /s/ George  E. Norcross III                            Director
----------------------------------
   George E. Norcross III


    /s/ Joseph J. Roberts                                  Director
----------------------------------
   Joseph J. Roberts
</TABLE>




<PAGE>


                         REPORT OF INDEPENDENT AUDITORS


Board of Directors and Shareholders
U.S. Vision, Inc.

         We have audited the accompanying consolidated balance sheets of U.S.
Vision, Inc. as of January 31, 2002 and 2001, and the related consolidated
statements of operations, changes in shareholders' equity, and cash flows for
each of the three years in the period ended January 31, 2002. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

         We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of U.S.
Vision, Inc. at January 31, 2002 and 2001, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
January 31, 2002, in conformity with accounting principles generally accepted in
the United States.


                                                      /s/Ernst & Young LLP


Philadelphia, Pennsylvania
April 12, 2002


                                      F-1
<PAGE>
                                U.S. Vision, Inc.

                           Consolidated Balance Sheets

                (Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                    JANUARY 31,
                                                              ----------------------
                                                                 2002         2001
                                                              ---------    ---------
<S>                                                           <C>          <C>
ASSETS

Current assets:
   Cash                                                       $     357    $     240
   Accounts receivable                                           10,883       10,879
   Inventory                                                     20,203       20,954
   Prepaid expenses and other                                       617        1,130
                                                              ---------    ---------
Total current assets                                             32,060       33,203
Property, plant, and equipment, net                              38,365       40,524
Goodwill, net of accumulated amortization of $1,566
  and $1,217, respectively                                        6,007        6,356
Other                                                               973          995
                                                              ---------    ---------
Total assets                                                  $  77,405    $  81,078
                                                              =========    =========


LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
   Accounts payable--trade                                    $   4,456    $   4,865
   Accrued wages                                                  2,521        2,421
   Accrued rent                                                   1,300        1,415
   Accrued expenses                                               2,132        2,647
   Current portion of obligations under capital lease             1,323          945
   Current portion of long-term debt                                367          450
                                                              ---------    ---------
Total current liabilities                                        12,099       12,743
Obligations under capital lease                                   1,257        2,272
Long-term debt, less current portion                             14,658       16,112
Other long-term liabilities                                         290          505
Shareholders' equity:
   Common stock, $0.01 par value:
      Authorized shares--15,000,000, issued and outstanding
            shares--7,802,942                                        78           78
   Additional paid-in capital                                   115,766      115,766
   Accumulated deficit                                          (66,743)     (66,398)
                                                              ---------    ---------
Total shareholders' equity                                       49,101       49,446
                                                              ---------    ---------
Total liabilities and shareholders' equity                    $  77,405    $  81,078
                                                              =========    =========
</TABLE>


          See accompanying notes to consolidated financial statements.



                                       F-2



<PAGE>





                                U.S. Vision, Inc.


                      Consolidated Statements of Operations

                (Dollars in thousands, except per share amounts)







<TABLE>
<CAPTION>
                                                        YEAR ENDED JANUARY 31,
                                                  ----------------------------------
                                                      2002        2001        2000
                                                  ---------    ---------   ---------
<S>                                               <C>          <C>         <C>
Net sales                                         $ 134,756    $ 147,617   $ 143,419
Cost of sales                                        40,560       44,645      45,516
                                                  ---------    ---------   ---------
Gross profit                                         94,196      102,972      97,903
Operating expenses:
    Selling, general, and administrative
       expenses                                      88,479       92,070      91,726
    Unusual items                                      (289)         752       2,835
    Depreciation and amortization                     5,216        4,708       4,670
                                                  ---------    ---------   ---------
                                                     93,406       97,530      99,231
                                                  ---------    ---------   ---------
Operating income (loss)                                 790        5,442      (1,328)
Interest expense, net                                 1,042          456         469
                                                  ---------    ---------   ---------
Income (loss) before income tax provision              (252)       4,986      (1,797)
Income tax provision                                     93          191          22

                                                  ---------    ---------   ---------
Net income (loss)                                 $    (345)   $   4,795   $  (1,819)
                                                  =========    =========   =========

Net income (loss) per share - basic               $   (0.04)   $    0.61   $   (0.23)
                                                  =========    =========   =========
Net income (loss) per share - assuming dilution   $   (0.04)   $    0.61   $   (0.23)
                                                  =========    =========   =========
</TABLE>



          See accompanying notes to consolidated financial statements.






                                       F-3


<PAGE>



                                U.S. Vision, Inc.

           Consolidated Statements of Changes in Shareholders' Equity

                        (In thousands, except share data)

<TABLE>
<CAPTION>
                                          COMMON STOCK
                                   ($0.01 PAR VALUE PER SHARE)    ADDITIONAL                        TOTAL
                                   -----------------------------    PAID-IN    ACCUMULATED       SHAREHOLDERS'
                                          SHARES       AMOUNT      CAPITAL        DEFICIT          EQUITY
                                   --------------    -----------  ---------    -----------       -------------
<S>                                <C>               <C>          <C>           <C>                <C>
Balance at January 31, 1999             7,802,942    $    78      $ 115,766     $  (69,374)        $  46,470
Net loss                                                                            (1,819)           (1,819)
                                        ---------    -------      ---------     ----------         ---------
Balance at January 31, 2000             7,802,942         78        115,766        (71,193)           44,651
Net income                                                                           4,795             4,795
                                        ---------    -------      ---------     ----------         ---------
Balance at January 31, 2001             7,802,942         78        115,766        (66,398)           49,446
Net loss                                                                              (345)             (345)
                                        ---------    -------      ---------     ----------         ---------
Balance at January 31, 2002             7,802,942    $    78      $ 115,766     $  (66,743)        $  49,101
                                        =========    =======      =========     ==========         =========
</TABLE>

          See accompanying notes to consolidated financial statements.


                                       F-4

<PAGE>
                                U.S. Vision, Inc.

                      Consolidated Statements of Cash Flows

                                 (In thousands)

<TABLE>
<CAPTION>
                                                                             YEAR ENDED JANUARY 31,
                                                                  --------------------------------------------
                                                                     2002              2001             2000
                                                                  ---------          --------        ---------
<S>                                                               <C>                <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                                 $    (345)         $  4,795        $  (1,819)
Adjustments to reconcile net income (loss) to net cash
   provided by operating activities:
     Depreciation and amortization                                    5,216             4,708            4,670
     (Gain) loss on closure of manufacturing facility                  (493)              --             2,835
     Loss on closure of non-performing stores                           204               396               --
     Changes in operating assets and liabilities, net of
     effect of acquisitions:
       Accounts receivable                                               (4)            1,127            1,104
       Inventory                                                        751             2,831           (2,918)
       Other                                                            515                49             (953)
       Accounts payable - trade                                        (409)           (5,229)           2,200
       Accrued expenses                                                (981)              777              203
                                                                  ---------          --------        ---------
Net cash provided by operating activities                             4,454             9,454            5,322

CASH FLOWS FROM INVESTING ACTIVITIES:
     Additions to property, plant, and equipment, net                (3,098)           (6,313)          (9,601)
     Sale of manufacturing facility                                   1,307                --               --
     Acquisitions                                                       --                 --             (795)
                                                                  ---------          --------        ---------
Net cash used in investing activities                                (1,791)           (6,313)         (10,396)

CASH FLOWS FROM FINANCING ACTIVITIES:
     Net borrowings (payments) on revolving credit line              (1,082)           (2,181)           5,890
     Proceeds from long-term borrowing                                   --               682              870
     Principal payments on long-term debt and capital
       leases                                                        (1,464)           (1,856)          (1,925)
                                                                  ---------          --------        ---------
Net cash provided by (used in) financing activities                  (2,546)           (3,355)           4,835
                                                                  ---------          --------        ---------
Net increase (decrease) in cash                                         117              (214)            (239)
Cash at beginning of period                                             240               454              693
                                                                  ---------          --------        ---------
Cash at end of period                                             $     357          $    240        $     454
                                                                  =========          ========        =========
Supplemental disclosure of cash flow information:
Interest paid                                                     $   1,104          $  1,434        $   1,065
                                                                  =========          ========        =========
Income taxes paid                                                 $     149          $    188        $     863
                                                                  =========          ========        =========
Supplemental schedule of non-cash investing and
   financing activities:
Capital lease obligations incurred                                $     352          $  1,575        $      45
                                                                  =========          ========        =========
Note payable incurred in connection with acquisitions             $      --          $     --        $     758
                                                                  =========          ========        =========
</TABLE>


          See accompanying notes to consolidated financial statements.



                                       F-5

<PAGE>




                                U.S. Vision, Inc.

                   Notes to Consolidated Financial Statements

1.     ORGANIZATION

         U.S. Vision, Inc. is a retailer of optical products and services
through retail optical departments licensed to operate within national and
regional department stores and through a limited number of freestanding retail
locations. Our retail optical departments are full-service retail vision care
stores that offer an extensive selection of designer brands and private label
prescription eyewear, contact lenses, sunglasses, ready-made readers and
accessories. As of January 31, 2002, we operated 603 locations in 47 states and
Canada, consisting of 577 licensed departments and 26 freestanding stores.

2.     SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

         The consolidated financial statements include the accounts of the
Company and all of its wholly owned subsidiaries. All significant intercompany
transactions and balances have been eliminated.

USE OF ESTIMATES

         The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ significantly
from those estimates.

REVENUE RECOGNITION

         Revenue is recognized when merchandise is delivered or shipped to the
customer.

ADVERTISING

         The Company expenses advertising costs as incurred. Advertising expense
was $9,325,000, $8,950,000, and $9,764,000 in fiscal 2001, 2000, and 1999,
respectively.

INVENTORY

         Inventory, consisting principally of frames and lenses, is valued at
the lower of cost or market, determined by the first-in, first-out method.

PROPERTY, PLANT, AND EQUIPMENT

         Property, plant, and equipment are stated at cost. Depreciation, which
includes assets under capital leases, is computed using the straight-line
method. The general range of useful lives is 10 to 30 years for buildings and
improvements, and 3 to 10 years for automobiles, machinery and equipment,
computer equipment, and furniture and fixtures. Depreciation expense totaled
$4,847,000, $4,342,000, and $4,349,000 in fiscal 2001, 2000, and 1999,
respectively.



                                       F-6



<PAGE>


                                U.S. Vision, Inc.


             Notes to Consolidated Financial Statements (continued)

2.     SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

ACCOUNTING FOR INTERNAL USE SOFTWARE

         The Company capitalizes certain costs incurred with developing or
obtaining internal-use software in accordance with the provisions of AICPA
Statement of Position 98-1. Total costs capitalized for the years ended January
31, 2001 and 2000 included capitalized interest expense of $999,000, and
$739,000, respectively.

LONG-LIVED ASSETS

         Long-lived assets, which principally includes property, plant, and
equipment, and goodwill arising from business acquisitions, are amortized on a
straight-line basis over the expected period to be benefited from 15 to 40
years. In accordance with FASB Statement No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," the Company
periodically evaluates the realizability of long-lived assets as events or
circumstances indicate a possible inability to recover their carrying amounts.
Long-lived assets are grouped and evaluated on a per store basis by applying
various analyses, including undiscounted cash flows and profitability
projections.

STORE OPENINGS AND CLOSINGS

         The noncapital expenditures incurred in opening new stores or
remodeling existing stores are expensed as incurred. When a store is closed, the
remaining investment in leasehold improvements and the amount estimated to
terminate the lease are expensed.

RECLASSIFICATION

         Certain prior-year amounts have been reclassified to conform with the
current-year presentation.

PENDING ACCOUNTING PRONOUNCEMENTS

         In June 2001, the Financial Accounting Standards Board (FASB) issued
SFAS No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other
Intangible Assets. SFAS No. 141 requires that the purchase method of accounting
be used for all business combinations initiated after June 30, 2001. SFAS No.
141 also includes guidance on the initial recognition and measurement of
goodwill and other intangible assets arising from business combinations
completed after June 30, 2001. SFAS No. 142 prohibits the amortization of
goodwill and intangible assets with indefinite useful lives. SFAS No. 142
requires that these assets be reviewed for impairment as least annually.
Intangible assets with finite lives will continue to be amortized over their
estimated useful lives.

         The Company will apply SFAS No. 142 beginning in the first quarter of
2002. Application of the nonamortization provisions of SFAS No. 142 is expected
to result in an increase in net income of $349,000 ($0.05 per share) in 2002.
The Company will test goodwill for impairment using the two-step process
prescribed in SFAS No. 142. The first step is a screen for potential impairment,
while the second step measures the amount of the impairment, if any. The Company
expects to perform the first of the



                                       F-7


<PAGE>

                                U.S. Vision, Inc.

             Notes to Consolidated Financial Statements (continued)

2.       SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


required impairment tests of goodwill and indefinite-lived intangible assets as
of February 1, 2002 in the second quarter of 2002. If an impairment charge were
to result from these transitional impairment tests, it would be reflected as the
cumulative effect of a change in accounting principle in the first quarter of
2002. The Company has not yet determined what the effect, if any, of these tests
will be on the earnings and financial position of the Company.

         In 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. This statement supersedes SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of, and provides a single accounting model for long-lived assets to
be disposed and broadens the presentation of discontinued operations to include
more disposal transactions. SFAS No. 144 is effective for fiscal years beginning
after December 15, 2001, and interim periods within those fiscal years, with
early application encouraged. The Company adopted this statement on February 1,
2002, and the effect of the adoption was not material to the Company.


3.       PROPERTY, PLANT, AND EQUIPMENT

         Property, plant, and equipment is as follows (In thousands):

<TABLE>
<CAPTION>
                                       JANUARY 31,
                                   -----------------
                                     2002      2001
                                   -------   -------
<S>                                <C>       <C>
Land and buildings                 $ 7,059   $ 8,018
Leasehold improvements              10,713    10,641
Machinery and equipment             22,961    22,639
Data processing equipment and
   related capitalized costs        18,339    17,744
Furniture and fixtures              17,960    16,653
                                   -------   -------
                                    77,032    75,695
   Less accumulated depreciation    38,667    35,171
                                   -------   -------
                                   $38,365   $40,524
                                   =======   =======
</TABLE>


4.       LONG-TERM DEBT

         Long-term debt is as follows (In thousands):

<TABLE>
<CAPTION>
                                                                                          JANUARY 31,
                                                                                   --------------------------
                                                                                     2002             2001
                                                                                   --------         ---------
<S>                                                                                <C>              <C>
$20,000,000 Revolving Line of Credit which expires on
July 31, 2003. Interest is payable monthly at the lower of prime, as defined, or
the ninety day rate for U.S. Treasury Bills plus 250 basis points (4.22% at
January 31, 2002). The revolving line
of credit is secured by substantially all the assets of the Company.               $ 10,951         $  12,033
</TABLE>

                                       F-8



<PAGE>

                                U.S. Vision, Inc.

             Notes to Consolidated Financial Statements (continued)

4.     LONG-TERM DEBT  (CONTINUED)

<TABLE>
<S>                                                                                <C>              <C>
DRPA Term Loan due February 1, 2010. Requires quarterly payments of $13,322,
which includes principal and interest at 2%. Final payment of $702,434 is due on
January 31, 2010. The term loan is secured by the
land and building of the Corporate headquarters.                                          989          1,022

DRPA Term Loan due February 1, 2010. Requires quarterly payments of $25,313,
which includes principal and interest at 2%. Final payment of $1,334,625 is due
on January 31, 2010. The term loan is secured by the
land and building of the New Jersey manufacturing facility.                             1,879          1,942

DRPA Term Loan due on June 7, 2005.  Requires quarterly payments
of $33,175, which includes principal and interest at 2%.  The term loan
is secured by certain equipment located in the New Jersey
manufacturing facility.                                                                   416            539

Mortgage loan payable due October 2004.  Requires monthly payments
of $5,121, which includes principal and interest at 8.5%.  Final payment
of $413,000 is due on October 2004.  The loan is secured by the land
and building of the New Jersey distribution facility.                                     477            497

Note payable to stockholder, which was repaid in full on July 7, 2001. Required
quarterly payments of $41,666 plus simple interest based
on the prime rate at the first day of each calendar quarter.                                -             83

Other                                                                                     313            446
                                                                                  -----------        -------
                                                                                       15,025         16,562

Less current portion                                                                      367            450
                                                                                  -----------        -------
                                                                                  $    14,658        $16,112
                                                                                  ===========        =======
</TABLE>


         The revolving credit agreement contains various financial covenants
including maintaining a specified net worth level, current ratio, and a fixed
charge ratio. The revolving credit agreement also prohibits the payment of
dividends to common shareholders. As of January 31, 2002, the Company was in
compliance with the all the financial covenants.

         The carrying amounts of the Company's debt approximate their fair
values.



                                       F-9

<PAGE>

                                U.S. Vision, Inc.

             Notes to Consolidated Financial Statements (continued)

4.       LONG-TERM DEBT (CONTINUED)


         Maturities of long-term debt for each of the next five years and
thereafter are as follows (In thousands):

<TABLE>
<CAPTION>
            YEAR ENDED JANUARY 31,
            ----------------------

<S>                           <C>
      2003                    $   367
      2004                     11,318
      2005                        726
      2006                        148
      2007                        108
Thereafter                      2,358
                              -------
                              $15,025
                              =======
</TABLE>


5.       LEASE COMMITMENTS

         Capital lease obligations are machinery and equipment leases which
expire on various dates through 2005. Assets under capital leases at January 31,
2002 and 2001, were $3,161,000 and $3,389,000, net of accumulated amortization
of $1,721,000 and $1,211,000, respectively, and are included as a component of
property, plant, and equipment in the consolidated balance sheets.

         Future minimum payments required under capital leases and
noncancellable operating leases with lease terms in excess of one year as of
January 31, 2002, are as follows (In thousands):

<TABLE>
<CAPTION>
                                                             CAPITAL                OPERATING
           YEAR ENDED JANUARY 31,                             LEASES                  LEASES
           ----------------------                          ----------               ---------
           <S>                                             <C>                       <C>
           2003                                            $    1,496                $    763
           2004                                                   814                     384
           2005                                                   493                     211
           2006                                                    86                      56
           2007                                                    --                      13
                                                           ----------                 -------
           Total lease payments                                 2,889                 $ 1,427
                                                                                      =======
           Less amount representing interest                      309
                                                           ----------
           Present value of minimum capitalized
               lease payments                                   2,580
           Less current portion                                 1,323
                                                           ----------
           Long-term portion                               $    1,257
                                                           ==========
</TABLE>


         The Company has commitments from Commerce Bank Lease, a unit of
Commerce Bank, N.A., for a $2,000,000 five-year equipment lease financing
facility. The facility expires on July 31, 2003 and provides the Company with a
number of leasing alternatives. At January 31, 2002 approximately $700,000 was
available on this facility.

                                      F-10
<PAGE>



                                U.S. Vision, Inc.

             Notes to Consolidated Financial Statements (continued)

5.       LEASE COMMITMENTS (CONTINUED)

         At January 31, 2002, the Company operated 26 of its retail stores under
operating leases with varying terms. The leases expire at various dates from
fiscal 2002 to fiscal 2006, and many have renewal options for up to five
additional years. The leases provide for minimum lease payments and, in many
cases, require payment of additional rents if sales exceed stipulated levels.
These additional rents are not significant. The leases also require, in most
cases, payment of taxes and common area expenses such as maintenance, security,
and other expenses.

         The Company also operated 577 licensed optical departments under leases
with expiration dates ranging from 60-days to 5-years. These leases provide for
monthly lease payments calculated as a percentage of sales. Rent expense under
these leases was $16,646,000, $18,215,000, and $17,378,000 in fiscal 2001, 2000,
and 1999, respectively. Approximately 70% of these leases are with one large
national retailer. The Company's master lease provides that only a limited
number of the Company's optical centers with this retailer may be closed in any
calendar year without cause.

         The Company also operates other facilities under operating leases. Rent
expense for all operating leases, including those on its retail stores and
licensed optical departments described above, was $18,120,000, $20,323,000, and
$19,867,000 in fiscal 2001, 2000, and 1999, respectively.

6.     INCOME TAXES

         The components of the income tax provision are as follows (In
thousands):

<TABLE>
<CAPTION>
                        YEAR ENDED JANUARY 31,
                       ------------------------
                        2002     2001     2000
                       -----    -----    ------
<S>                    <C>      <C>      <C>
Current provision      $  96    $ 217    $  48
Deferred benefit          (3)     (26)     (26)
                       -----    -----    -----
Income tax provision   $  93    $ 191    $  22
                       =====    =====    =====
</TABLE>



                                      F-11



<PAGE>



                                U.S. Vision, Inc.

             Notes to Consolidated Financial Statements (continued)


6.       INCOME TAXES (CONTINUED)

         Deferred income tax liabilities and assets result from differences in
the tax basis of assets and liabilities and their reported amounts in the
consolidated financial statements. Significant components of the Company's
deferred income taxes are as follows (In thousands):

<TABLE>
<CAPTION>
                                                                      YEAR ENDED JANUARY 31,
                                                               ------------------------------------
                                                                2002           2001          2000
                                                               --------      --------       -------
<S>                                                            <C>           <C>            <C>
Deferred tax assets:
      Net operating loss carryover                             $  6,422      $  5,347       $ 5,856
      Inventory costs                                               195           466         1,262
      Alternative Minimum Tax Credit                                261           258           232
      Other                                                         158           196           124
      Store closing reserves                                          -             8           171
                                                               --------      --------       -------
Total deferred tax assets                                         7,036         6,275         7,645
Valuation allowance                                              (3,820)       (3,970)       (5,451)
                                                               --------      --------       -------
Net deferred tax assets                                           3,216         2,305         2,194
                                                               --------      --------       -------
Deferred tax liability:
      Depreciation                                               (2,955)       (2,047)       (1,962)
                                                               --------      --------       -------
Total deferred tax liability                                     (2,955)       (2,047)       (1,962)
                                                               --------      --------       -------
Net deferred tax asset                                         $    261      $    258       $   232
                                                               ========      ========       =======
</TABLE>

         The deferred tax valuation reserve decreased by $150,000 and $1,481,000
for fiscal 2001 and 2000, respectively. The valuation reserve has been
established to eliminate the benefit of all net deferred tax assets except for
the credit on the Alternative Minimum Tax.

         A reconciliation of the income tax provision with amounts determined by
applying the U.S. Statutory rate to income before income tax is as follows (in
thousands):

<TABLE>
<CAPTION>
                                                                       YEAR ENDED JANUARY 31,
                                                                ----------------------------------------
                                                                   2002           2001            2000
                                                                ---------       --------       ---------
<S>                                                             <C>             <C>            <C>
Income tax provision at the statutory rate                      $     (86)      $  1,738       $    (611)
Amortization of goodwill                                               99             99              83
Nondeductible expenses                                                 42             61             121
Increase (decrease) in deferred tax
       asset valuation reserve                                       (150)        (1,481)            486
State income tax provision                                             62            111              76
Other taxes                                                           126           (337)           (133)
                                                                ---------       --------       ---------
Income tax provision                                            $      93       $    191       $      22
                                                                =========       ========       =========
</TABLE>






                                      F-12

<PAGE>


                                U.S.Vision, Inc.

             Notes to Consolidated Financial Statements (continued)


6.       INCOME TAXES (CONTINUED)

         As of January 31, 2002, the Company had federal and state net operating
loss carry forwards of approximately $16,900,000 which will begin to expire in
the year 2006. Approximately $9,500,000 of these carry forwards are available to
offset future taxable income without limitation and approximately $7,400,000 of
these carry forwards (the "Restricted NOLs") are significantly limited due to
ownership changes. Approximately $780,000 of the Restricted NOLs will become
available for use each year through the year 2008. Approximately $3,400,000 of
the Restricted NOLs are expected to expire unutilized.

7.     NET INCOME PER SHARE

         The following table (In thousands except per share data) presents the
calculation of earnings per share for the periods indicated.

<TABLE>
<CAPTION>
                                                                       YEAR ENDED JANUARY 31,
                                                              ----------------------------------------
                                                                 2002           2001            2000
                                                              ---------      ---------       ---------
<S>                                                           <C>            <C>             <C>
Net income (loss) available to common shareholders            $    (345)     $   4,795       $ (1,819)
Basic average common shares outstanding                           7,803          7,803          7,803
Effect of dilutive securities:
      Options and warrants                                            -             33              -
                                                              ---------      ---------       --------
Diluted average common shares outstanding                         7,803          7,836          7,803
                                                              ---------      ---------       --------
Net income (loss) per share - basic applicable to
         common shareholders                                  $   (0.04)     $    0.61       $  (0.23)
                                                              =========      =========       ========
Net income (loss) per share - assuming dilution
         applicable to common shareholders                    $   (0.04)     $    0.61       $  (0.23)
                                                              =========      =========       ========
</TABLE>

         For the years ended January 31, 2002, 2001 and 2000, respectively,
options and warrants to purchase 1,653,920 shares of common stock at prices
ranging from $2.88 to $12.00 per share, 952,443 shares of common stock at prices
ranging from $7.69 to $12.00 per share, and 1,010,473 shares of common stock at
prices ranging from $7.69 to $12.00 per share were not included in the
computation of diluted earnings per share because the options' exercise prices
were greater than the average market price of the common shares and in 2002 and
2000 the shares were anti-dilutive.

8.       COMMITMENTS AND CONTINGENCIES

         The Company is subject to various pending and threatened litigation
from time to time in the ordinary course of our business. Although all
litigation involves some degree of uncertainty, in the opinion of management,
liabilities, if any, arising from such litigation or threat thereof are not
expected to have a material adverse effect on the Company.

9.       ACQUISITIONS

         On July 31, 1999, the Company acquired ten licensed optical retail
stores located within The Bay and Zeller's full line stores in the Quebec
province. On September 20, 1999, the Company acquired all of the assets and
inventory of twenty-four licensed optical departments from a regional department
store retailer. Both acquisitions were accounted for under the purchase method
of accounting. The operating results of these acquisitions are included in the
consolidated financial statements since the date of the acquisitions. The total
cost of these acquisitions was $1.5 million, and the excess of the purchase
price over the fair market value of the acquired assets and liabilities assumed
has been recorded as goodwill.


                                      F-13





<PAGE>

                                U.S. Vision, Inc.

             Notes to Consolidated Financial Statements (continued)

9.       ACQUISITIONS (CONTINUED)

The total goodwill recorded on these acquisitions was $1.2 million, which is
being amortized on a straight- line basis from the respective date of each
acquisition. Pro forma results of operations have not been included for these
acquisitions as the effect is not material.

10.      UNUSUAL ITEMS

         In fiscal 1999 the Company's Board of Directors approved a plan to
close its plastic frame manufacturing facility located in Florida. The Company
relocated the importing and distribution of frames, previously manufactured or
imported in Florida, to its Glendora, NJ distribution facility. In connection
with this plan, the company recorded a charge of $2,835,000, which was comprised
of $2,224,000 in write-offs of inventory used solely in the manufacturing
process, $161,000 in machinery and equipment, $250,000 in buildings and $200,000
for uncollectible receivables. The write-offs associated with the buildings and
machinery and equipment were intended to reduce their carrying costs to their
estimated net realizable value.

         In fiscal 2000 the Company closed approximately 80 under-performing
stores and recorded a charge of $752,000 for lease termination charges and the
write-off of furniture and fixtures and leasehold improvements.

         In fiscal 2001, we sold the frame manufacturing building located in
Florida and realized a net gain of $493,000. This gain was offset by a charge of
$204,000 for the write-off of furniture and fixtures and leasehold improvements
in connection with the closure of approximately 40 under-performing stores.

11.      SEGMENT INFORMATION

         The Company operates exclusively in the business of marketing,
distribution, and production of optical products through retail optical stores.
On January 31, 2002, the Company operated in 47 states and in Canada.
Approximately 68%, 66% and 66% of the Company's sales were in licensed
departments of one retailer for fiscal 2001, 2000 and 1999. Sales in licensed
departments of another retailer were approximately 13%, 12% and 12% for fiscal
2001, 2000 and 1999. A termination of either of these licenses could cause a
significant loss of sales, which would affect operating results adversely.

         The Company's sales to customers, operating income and net property,
plant and equipment are summarized below by geographical areas. Sales to
customers are attributed to the geographical areas based on the point of sale.

<TABLE>
<CAPTION>
                                      UNITED STATES       CANADA       CONSOLIDATED
                                      -------------     ----------     ------------
<S>                                     <C>             <C>             <C>
                                                      (In thousands)
YEAR ENDED JANUARY 31, 2002
Sales to customers                      $ 128,232       $   6,524       $ 134,756
Operating income (loss)                     1,742            (952)            790
Property, plant and equipment, net         36,093           2,272          38,365

YEAR ENDED JANUARY 31, 2001
Sales to customers                      $ 141,616       $   6,001       $ 147,617
Operating income (loss)                     6,615          (1,173)          5,442
Property, plant and equipment, net         38,535           1,989          40,524

YEAR ENDED JANUARY 31, 2000
Sales to customers                      $ 140,463       $   2,956       $ 143,419
Operating income (loss)                      (333)           (995)         (1,328)
Property, plant and equipment, net         37,010             880          37,890
</TABLE>





                                      F-14

<PAGE>


                                U.S. Vision, Inc.

             Notes to Consolidated Financial Statements (continued)

12.      STOCK BASED COMPENSATION PLANS

         In February 1996, the Board of Directors authorized the formation of an
employee incentive stock option plan. The number of shares of Common Stock for
which options could be granted under this plan cannot exceed in the aggregate
1,300,000 shares. The price at which shares may be purchased pursuant to options
granted under the plan may not be less than the fair market value of the shares
of Common Stock on the date the option is granted. In June 2000, the Board of
Directors amended the employee incentive stock option plan to increase the
aggregate number of shares subject to issuance by 700,000 shares from 1,300,000
shares to 2,000,000 shares.

         The following table summarizes the Company's stock option activity:

<TABLE>
<CAPTION>
                                                     YEAR ENDED JANUARY 31,
                               -----------------------------------------------------------------------------
                                        2002                       2001                        2000
                               ----------------------      ---------------------      ----------------------
                                            Weighted                    Weighted                    Weighted
                                            Average                     Average                     Average
                               Number       Exercise        Number      Exercise      Number        Exercise
                               of shares    Price          of shares    Price         of shares      Price
                               ---------    ---------      ---------    --------      ---------     --------
<S>                            <C>          <C>            <C>           <C>          <C>           <C>
Options outstanding at
  beginning of year            1,700,520    $    6.31      1,010,473     $   9.09     1,086,523     $   8.99
      Granted                         --           --        797,467         3.00            --           --
      Forfeited                  152,100         5.35        107,420         7.34        76,050         7.69
                               ---------    ---------      ---------     --------     ---------     --------
Options outstanding
  at end of year               1,548,420    $    6.40      1,700,520     $   6.31     1,010,473     $   9.09
                               ---------    ---------      ---------     --------     ---------     --------
Exercisable at end of year       898,615    $    8.86        906,665     $   8.52       851,973     $   8.54
Available for future grants      603,695                     451,595                    419,385
</TABLE>

         In June 2000, 105,500 warrants were issued to various directors with an
exercise price of $2.88 per share (fair market value on date of grant). These
warrants vested immediately upon grant and expire in June 2005.

         The Company has elected to follow Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" (APB 25) and related
interpretations in accounting for its employee stock options because the
alternative fair value accounting provided for under FASB Statement No. 123,
"Accounting for Stock-Based Compensation," requires use of option valuation
models that were not developed for use in valuing employee stock options. If the
Company had recognized compensation costs based upon the fair value of the stock
options at the date of the grant, as prescribed by FAS 123, the Company's pro
forma results would have been:

                                      F-15

<PAGE>


                                U.S. Vision, Inc.

             Notes to Consolidated Financial Statements (continued)

12.           STOCK BASED COMPENSATION PLANS (CONTINUED)

<TABLE>
<CAPTION>
                                                   Pro Forma            Pro Forma - Diluted
                Fiscal Year Ended                 Net Income            Net Income (Loss)
                    January 31,                    (Loss)                   Per Share
                -----------------                ------------           -------------------
                <S>                              <C>                    <C>
                      2002                       $  (878,000)             $   (0.11)
                      2001                       $ 3,970,000              $    0.51
                      2000                       $(2,300,000)             $   (0.29)
</TABLE>


         The fair value of options granted in fiscal 2000 was $1.07. The fair
value of the options was estimated at the date of the grant using a
Black-Scholes option pricing model with the following assumptions: risk-free
interest rate of 5.75%, dividend yield of 0%, expected volatility of the market
price of the common stock of 63.8% and weighted average expected life of the
options of 2 years. The estimated fair value of the options was amortized to
expense over the vesting period of the options for the purposes of determining
pro forma net income and pro forma net income per share. The effects of applying
FAS 123 for purposes of providing pro forma disclosures are not likely to be
representative of the effects on reported net income in future years.

13.      EMPLOYEE BENEFIT PLAN

         The Company implemented an employee savings plan (the "plan") during
fiscal 1995 pursuant to Section 401(k) of the Internal Revenue Code. All
employees who have been credited with at least 250 hours of service within three
consecutive months are eligible to participate in the plan. Employees may elect
to contribute to the plan through payroll deductions in an amount not to exceed
the amount permitted under the Internal Revenue Code. The Company has the
discretion to make matching contributions on behalf of the participants.
Employees are fully vested in their contributions. Company contributions vest at
a rate of 20% on each participant's anniversary date in the plan provided that
the participant has completed 1,000 hours of service with the Company as of such
date. During fiscal 2001, 2000 and 1999, the Company contributed $110,000,
$140,000, and $135,000, respectively to the plan.




                                      F-16


<PAGE>

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER           EXHIBIT
------           -------
<S>         <C>
3.1*        Restated Certificate of Incorporation of the Company

3.2*        Bylaws of the Company

10.1*       Loan and Security Agreement between the Company and Commerce Bank, as amended

10.2*       Stock Option Plan, including form of Stock Option Agreement

10.3v       Amendment to Stock Option Plan

10.4**      Subordinated Note Purchase Agreement

10.5**      Amendment to Subordinated Note Purchase Agreement

10.6**      J.C. Penney License Agreement

10.7**      Vision Care Agreement

10.8***     Employment Agreement for William A. Schwartz, Jr.

10.9***     Form of Employment Severance Agreement

10.10**     Form of Non-Statutory Option Agreement

10.11**     Form of Indemnification Agreement

10.12**     Shareholders' Agreement

10.13**     Form of Sears Lease

10.14**     Commerce Bank Mortgages and Schedules

10.15**     DRPA Loan Documentation

10.16*v     Form of Warrant

21+         Subsidiaries of the Company

23+         Consent of Independent Auditors
</TABLE>


*        Previously filed as an exhibit to the Form S-1 (Reg. No. 333-35819)
         filed with the Commission on September 17, 1997.

**       Previously filed as an exhibit to Amendment No. 1 to the Form S-1 (Reg.
         No. 333-35819) filed with the Commission on October 29, 1997.

***      Previously filed as an exhibit to the Company's report on Form 10-K for
         the fiscal year ended January 31, 1998, which was filed with the
         Securities and Exchange Commission on April 30, 1999.

*v       Previously filed as an exhibit to the Company's report on Form 10-Q for
         the quarter ended July 31, 2000, which was filed with the Securities
         and Exchange Commission on September 13, 2000.

v        Previously filed as an exhibit to the Company's report on Form 10-K for
         the fiscal year ended January 31, 2001, which was filed with the
         Securities and Exchange Commission on April 30, 2001.

+        Filed herewith.