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Exhibit 10.2  

 
 

EMPLOYMENT AGREEMENT    
    

        THIS EMPLOYMENT AGREEMENT (this "Agreement") is made as of December 31, 2001 between 1-800
CONTACTS, INC., a Delaware corporation (the "Company") and S. Todd Witzel (the "Executive"). This
Agreement shall be deemed to be effective as of December 31, 2001 (the "Effective Date"). 

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

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

        2.    Position and Duties.    

        (a)   During
the Employment Period, Executive shall serve as the Director of Information Technology of the Company and shall have the normal duties, responsibilities and
authority of such position. 

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

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

        3.    Base Salary and Benefits.    

        (a)   During
the first year of the Employment Period, Executive's base salary shall be $101,280 per annum (the "Base Salary"),
which salary shall be payable in regular installments in accordance with the Company's general payroll practices and shall be subject to customary withholding. Thereafter, the Base Salary shall be
such higher rate as the Board may designate from time to time. As used in this Agreement, the term "Base Salary" shall be deemed to include any such increases as may be designated from time to time by
corporate management. During the Employment Period, Executive shall be entitled to participate in all of the Company's employee benefit programs for which management employees of the Company and its
Subsidiaries are generally eligible (including the Company's stock option program). 

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

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

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        (ii)   A
maximum of two weeks vacation each year with salary, subject to additional vacation time either upon executive approval or according to the Company vacation policy;
and 

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

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

        (v)   Payment
of all medical premiums 

        4.    Termination.    (a) The Employment Period shall continue until earlier of (i) the fourth
anniversary of the Effective Date (the "Expiration Date") or (ii) Executive's resignation, death or disability or other incapacity (as determined
by the Board in its good faith judgment) or until the Board determines in its good faith judgment that termination of Executive's employment is in the best interests of the Company. Notwithstanding
the foregoing, the Employment Period shall be automatically extended for an additional year unless either the Company or the Executive delivers written notice to the other within 60 days of the
Expiration Date of its or his intention not to extend the Employment Period.. However, in the event there is a change in control of the Company, Employee will have a separate right to renegotiate the
Agreement by notifying the Company in writing at least 60 calendar days after such change in control occurs. Employee will then have the right to either renegotiate this Agreement or terminate
employment immediately. 

        In
the event of Executive's resignation of employment for any reason, (other than a breach by the Company of paragraph 2(a)), or termination for Cause (as defined herein),
Executive shall not be entitled to receive his Base Salary or any fringe benefits for any period after the termination of the Employment Period. Upon any other termination of the Employment Period,
Executive shall be entitled to receive (i) his Base Salary and the health and disability benefits described in paragraph 3(a) for a period of 12 months thereafter, and
(ii) following the end of the fiscal year in which Executive's employment is terminated and the determination of the amount of bonus which Executive would have been entitled if he remained
employed by the Company or its Subsidiaries for the entire fiscal year (the "Bonus Amount"), (A) 50% of the Bonus Amount if such termination occurs in the first six months of such fiscal year
or (B) 100% of the Bonus Amount if such termination occurs in the second six months of such fiscal year. 

        (b)   For
purposes of this Agreement, "Cause" shall mean (i) the willful and continued failure by Executive to perform his duties of the position set forth herein or
his continued failure to perform duties reasonably requested or reasonably prescribed by the Board (other than as a result of Executive's death or disability), (ii) the engaging by Executive in
conduct which is materially monetarily injurious to the Company or any of its Subsidiaries, (iii) gross negligence or willful misconduct by Executive in the performance of his duties which
results in, or causes, material monetary harm to the Company or any of its Subsidiaries, or (iv) Executive's commission of a felony or other civil or criminal offense involving moral turpitude.
In the case of (i), (ii) and (iii) above, finding of Cause for termination shall be made only after reasonable notice to Executive and an opportunity for Executive, together with counsel
(if requested by executive), to be heard before the Board. A determination of Cause by the Board shall be effective only if agreed upon by a majority of the directors, which shall include at least one
director who is not an employee of the Company or its Subsidiaries. 

        5.    Confidential Information.    Executive acknowledges that the information, observations and data obtained by him
while employed by the Company and its Subsidiaries concerning the business or affairs of the Company or any other Subsidiary ("Confidential
Information") are the property of the Company or such Subsidiary. Therefore, Executive agrees that he shall not disclose to any unauthorized person or use for his own purposes
any Confidential Information without the prior written consent of the Board, unless and to the extent that the aforementioned matters become generally known to and available for use by the public
other than as a result of Executive's acts or omissions. Executive shall deliver to the 

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Company
at the termination of the Employment Period, or at any other time the Company may request, all memoranda, notes, plans, records, reports, computer tapes, printouts and software and other
documents and data (and copies thereof) relating to the Confidential Information, Work Product (as defined below) or the business of the Company or any Subsidiary which he may then possess or have
under his control. 

        6.    Inventions and Patents.    Executive acknowledges that all inventions, innovations, improvements, developments,
methods, designs, analyses, drawings, reports and all similar or related information (whether or not patentable) which relate to the Company's or any of its Subsidiaries' actual or anticipated
business, research and development or existing or future products or services and which are conceived, developed or made by Executive while employed by the Company and its Subsidiaries
("Work Product") belong to the Company or such Subsidiary. Executive shall promptly disclose such Work Product to the Board and perform all actions
reasonably requested by the Board (whether during or after the Employment Period) to establish and confirm such ownership (including, without limitation, assignments, consents, powers of attorney and
other instruments). 

        7.    Non-Compete, Non-Solicitation.    

        (a)   In
further consideration of the compensation to be paid to Executive hereunder, Executive acknowledges that in the course of his employment with the Company he shall
become familiar with the Company's trade secrets and with other Confidential Information concerning the Company and its Subsidiaries and that his services shall be of special, unique and extraordinary
value to the Company and its Subsidiaries. Therefore, Executive agrees that, during the Employment Period and for two years thereafter (the "Noncompete
Period"), he shall not, without the express written consent of the Company, directly or indirectly own any interest in, manage, control, participate in, consult with, render
services for, or in any manner engage in any business competing with the businesses of the Company or its Subsidiaries, as such businesses exist or are in process on the date of the termination of
Executive's employment, within any geographical area in which the Company or its Subsidiaries engage or plan to engage in such businesses. Nothing herein shall prohibit Executive from being a passive
owner of not more than 1% of the outstanding stock of any class of a corporation which is publicly traded, so long as Executive has no active participation in the business of such corporation 

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

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

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Noncompete
Period shall be tolled until such breach or violation has been duly cured. Executive agrees that the restrictions contained in paragraph 7 are reasonable. 

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

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

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

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

 Notices to Executive:  

S.
Todd Witzel

917 Spires

Draper, UT 84020 

 Notices to the Company:  

1-800
CONTACTS, INC.

66 E. Wadsworth Park Drive, 3rd Floor

Draper, Utah 84020

Attn: Board of Directors 

 with a copy to:  

Kirkland &
Ellis

200 E. Randolph Drive

Chicago, Illinois 60601

Attn: Dennis M. Myers 

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

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

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

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

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

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

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

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

* * * * *  

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

	 	 	1-800 CONTACTS, INC.
	

 	
 	

By:	
 	

/s/  JONATHAN COON      
 Name: Jonathan Coon

Its: Chief Executive Officer
	

 	
 	

/s/  S. TODD WITZEL      
 S. Todd Witzel

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Exhibit 10.3  

 
 

SEVERANCE AGREEMENT AND GENERAL RELEASE    
    

        This Severance Agreement and General Release (this "Agreement") is made and entered into this 25th day of February 2003 by and between Scott S. Tanner
("Tanner"), and 1-800 CONTACTS, Inc. ("1-800 CONTACTS"). 

 
 

RECITALS    
    

        a.     Tanner
is currently employed by 1-800 CONTACTS pursuant to an Employment Agreement made as of February 9, 2002 between 1-800 CONTACTS and
Tanner (the "Employment Agreement"). A copy of the Employment Agreement is attached hereto as Exhibit "A". The Employment Agreement superceded and replaced in its entirety an Employment Agreement
between 1-800 CONTACTS and Tanner dated February    , 1998. 1-800 CONTACTS and Tanner have agreed that Tanner's employment with 1-800 CONTACTS will end
effective March 29, 2003; and 

        b.     Tanner
and 1-800 CONTACTS desire to settle fully and finally all differences between them, if any, including but not limited to, any differences in any way
related to or arising out of Tanner's employment with 1-800 CONTACTS or the termination of his employment. 

 
 

COVENANTS    
    

        In consideration of the mutual promises in this Agreement, it is agreed as follows: 

	1.
	Transitional Period.    Although Tanner will remain employed with 1-800 CONTACTS from the date of this Agreement
through March 29, 2003 (the "Transitional Period"), from and after January 10, 2003 and through the Transitional Period, he has not rendered and shall not be required to render
substantial services to 1-800 CONTACTS, but has devoted and may devote as much time as he deems appropriate to seeking other employment or to attending to his personal affairs.
Furthermore, from and after January 10, 2003, Tanner has not had and during the Transitional Period will not have access to any confidential information concerning 1-800 CONTACTS,
its affiliates, or the business or affairs of any of them. It is expressly understood and agreed that notwithstanding the continuation of Tanner's employment with 1-800 CONTACTS through
March 29, 2003, (i) Tanner resigned from and discontinued providing services in all management positions and roles with or to 1-800 CONTACTS or any affiliates of
1-800 CONTACTS no later than January 10, 2003, including, but not limited to, his positions and services as a director, the Chief Operating Officer, and the Chief Financial Officer
of 1-800 CONTACTS and as a director of CLEARLAB PTE. LTD., (ii) Tanner has not provided and will not provide any services as an officer or director of 1-800
CONTACTS or any affiliate of 1-800 CONTACTS since the date of his resignation, and (iii) Tanner has not had and will not have any responsibilities and/or liabilities associated with
any such positions with 1-800 CONTACTS or its affiliates since the date of his resignation. Since the date of his resignation Tanner has not been and during the Transitional Period will
not be (a) the president, (b) the principal financial officer, (c) the principal accounting officer, (d) a vice president of 1-800 CONTACTS in charge of a
principal business unit, division, or function of 1-800 CONTACTS, (e) any other officer of 1-800 CONTACTS who performed or performs a significant policy-making function,
or (f) any other person who performed or performs similar policy-making functions for 1-800 CONTACTS. Tanner hereby ratifies and confirms his resignation from any and all management
positions with 1-800 CONTACTS and any affiliate of 1-800 CONTACTS.

	2.
	Post-Employment Payments.    Tanner will receive $190,890.00 following termination of his employment, to be paid
in 24 equal semi-monthly payments over a 12-month period consistent with the Employment Agreement. 

 

	3.
	2002 Bonus.    Within 2 business days following expiration of the revocation period specified in Paragraph 10, Tanner
will receive a bonus payment in the amount of $19,089.00, less withholding.

	4.
	Benefits.    From the date of this Agreement through March 29, 2004, 1-800 CONTACTS shall pay Tanner or
other relevant party or reimburse Tanner the following amounts or expenses:

	a.
	Monthly
medical insurance premiums for Tanner and his dependents (to consist of COBRA payments after March 29, 2003, assuming Tanner continues on 1-800 CONTACTS'
health plan in accordance with COBRA).

	b.
	Out
of pocket dental expenses incurred by Tanner or his dependents.

	c.
	Throughout
the period of March 29, 2003 through March 29, 2004, premiums for a long term disability insurance policy for Tanner, the terms, conditions, and benefits of
which are substantially the same as the disability insurance coverage that Tanner currently has under the 1-800 CONTACTS long term disability plan.

	d.
	All
costs incurred by Tanner for mobile (cell) phone services, Internet connections and services and other connectivity fees, up to but not in excess of $350 per month.

	5.
	Stock Options.    Consistent with paragraph 2(b) titled "Expiration Upon Termination of Employment" and other relevant
provisions of the Stock Option Agreements entered into on 11/20/1997, 02/16/1999, 02/17/2000, 02/02/2001 and 01/26/02 between 1-800 CONTACTS and Tanner (collectively, the "Stock Options"),
Tanner shall be permitted to exercise the Stock Options as to the shares of 1-800 CONTACTS' common stock, par value $.01 (the "Common Stock"), subject thereto with respect to which the
Stock Options will be vested as of the close of business on March 29, 2003, the date of termination of his employment, consisting of a total of 77,722 shares of the Common Stock (the "Option
Shares"). Tanner may exercise the Stock Options as to some or all of the Option Shares at any time from and after the date of this Agreement through April 28, 2003 (i.e. not later than
30 days after the effective date of the termination of his employment with 1-800 CONTACTS, as specified in the Stock Options) without further approvals or restrictions by
1-800 CONTACTS. In exercising some or all of the Stock Options, 1-800 CONTACTS shall (i) permit and assist Tanner to participate in any same-day sale or
similar program, which allows or permits employees of 1-800 CONTACTS to pay some or all of the exercise price of a stock option that has an exercise price below the then market price of
the shares subject to the stock option with the proceeds from the sale of the stock underlying such stock option, and (ii) cause Tanner's instructions in accordance with any such program to be
executed by no later than the close of business on the next business following the day such instructions are received by 1-800 CONTACTS.

	6.
	Transfer of Company Property.    1-800 CONTACTS hereby conveys to Tanner its ownership interest in certain items
of personal property, purchased with company funds and used by Tanner during his employment, which items are listed on Exhibit "B", attached hereto.

	7.
	General Release by Tanner.    As a material inducement to 1-800 CONTACTS to enter into this Agreement, Tanner, on
behalf of himself and his heirs, executors, administrators and assigns, irrevocably and unconditionally releases, acquits and forever discharges 1-800 CONTACTS, its officers, directors,
owners, partners, agents, predecessors, successors, affiliates, subsidiaries, parent companies, insurers and current and former employees from any and all charges, complaints, claims, liabilities and
obligations of any nature whatsoever, including but not limited to, rights or claims arising out of contract, express or implied, any covenant of good faith and fair dealing, any tort, Title VII of
the Civil Rights Act of 1964, as amended, the 1991 Civil Rights Act, the Americans With Disabilities Act, the Fair Labor Standards Act, the Family and Medical Leave Act, the Employee Retirement Income
Security 

2

 

Act
of 1974, or any other federal, state or other governmental statute, regulation or ordinance, any rights or claims for wages, vacation, overtime, commissions, bonuses, stock, stock options,
entitlements or benefits, which Tanner had, now has, or claims to have, or which he at any time hereinafter may have or claim to have, whether known or unknown as of the date that this Agreement is
fully executed; provided, however, that the release set forth in this paragraph 8 shall not apply to (i) the payments and benefits provided for in this Agreement, (ii) any rights
that Tanner may have under or pursuant to the 1-800 CONTACTS 401(k) plan and any law applicable thereto, or (iii) any claim, right, cause of action, or demand that may arise from or
out of an event occurring after the date on which this Agreement is executed by Tanner, and specifically any claim that may arise from a breach of this Agreement by 1-800 CONTACTS. 

	8.
	General Release by 1-800 CONTACTS.    As a material inducement to Tanner to enter into this Agreement, on behalf
of itself and its officers, directors, owners, partners, agents, predecessors, successors, affiliates, subsidiaries, parent companies, insurers and current and former employees, and assigns,
1-800 CONTACTS irrevocably and unconditionally releases, acquits and forever discharges Tanner, his heirs, administrators, and assigns from any and all charges, complaints, claims,
liabilities and obligations of any nature whatsoever, including but not limited to, rights or claims arising out of contract, express or implied, any covenant of good faith and fair dealing, any tort,
breach of duty, any federal, state or other governmental statute, regulation or ordinance, which any of them had, now has, or claims to have, or which any of them at any time hereinafter may have or
claim to have, whether known or unknown as of the date that this Agreement is fully executed; provided, however, that the release set forth in this paragraph 9 shall not apply to any claim,
right, cause of action, or demand that may arise from or out of an event occurring after the date on which this Agreement is executed by 1-800 CONTACTS, and specifically any claim that may
arise from a breach of this Agreement by Tanner.

	9.
	Waiver of Unknown Claims.    Tanner and 1-800 CONTACTS expressly waive the benefits of any rule or law that
provides, in sum or substance, that a release does not extend to claims which the party does not know or suspect to exist in his or its favor at the time of executing the release, which if known by
him or it, would have materially affected his or its settlement with the other party. Tanner and 1-800 CONTACTS expressly waive and release all such claims.

	10.
	Release of Age Discrimination Claims.    Tanner understands that he is releasing any and all claims or causes of action he
has or may have under state and federal law concerning age discrimination, including but not limited to, the Age Discrimination in Employment Act of 1967, 29 U.S.C. Section 621 et seq. He
further acknowledges that he has been advised that this release does not apply to any age-based claims arising after the date of this Agreement and that he should seek the advice of his
own independent attorney. He has been given 21 days in which to review and consider this Agreement. Should he elect to execute this Agreement sooner than 21 days after receiving it, he
specifically and voluntarily waives the right to claim that he has not been allowed by 1-800 CONTACTS or by any other circumstances to consider this Agreement for a full 21 days. He
has been advised that he has an additional 7 days after signing this Agreement to change his mind and rescind it by giving notice to 1-800 CONTACTS. This Agreement will not become
effective or enforceable until after this 7 day period has expired.

	11.
	Return of Company Property.    On or before the date he signs this Agreement, and except as expressly provided in
Paragraph 7 above, Tanner shall deliver to 1-800 CONTACTS any and all of 1-800 CONTACTS' documents, computer information and other property and all property in his
possession purchased with 1-800 CONTACTS funds ("1-800 CONTACTS' 

3

 

Property").
By signing below, Tanner warrants that from and after the date he signs this Agreement he will not retain any of the 1-800 CONTACTS Property (or copies or other reproductions
or duplications thereof) for his own use or the use of any third parties, and that he has not provided to any third parties any of the 1-800 CONTACTS Property or reproductions thereof. 

	12.
	Non-Disparagement.    Tanner agrees that he will not make any disparaging remarks about 1-800
CONTACTS or its employees, to any persons whatsoever and that he will refrain from casting any aspersions as to the quality of their work, products, services, competence, ethics or management.
1-800 CONTACTS agrees that it will not make any disparaging remarks about Tanner to any persons whatsoever and that it will refrain from casting any aspersions as to the quality of his
work, services, competence or ethics. If any officer, board member or employee of 1-800 CONTACTS makes any such remarks about Tanner, the Company will promptly upon request from Tanner
issue a statement disaffirming such remarks and stating that such person did not speak for the Company.

	13.
	Transitional Cooperation.    Throughout the Transitional Period Tanner agrees to (i) cooperate with 1-800
CONTACTS and its management in the transition to new leadership of 1-800 CONTACTS and in the reassignment of his former duties and responsibilities to others, and (ii) make himself
reasonably available upon request to answer questions and provide information and guidance in this transitional process, and (iii) make himself available as his schedule reasonably permits to
cooperate in any legal proceeding that may relate to his duties or work at 1-800 CONTACTS and to testify if requested by 1-800 CONTACTS.

	14.
	Final Employment.    Tanner understands and agrees that his employment with 1-800 CONTACTS will terminate with
the close of business on March 29, 2003, and that from and after that date 1-800 CONTACTS or its affiliates will have no obligation to employ him in the future. Tanner further
acknowledges and agrees that except as expressly stated in this Agreement, 1-800 CONTACTS does not owe him any additional payments or benefits of any kind.

	15.
	Agreement Confidential.    Tanner represents that he will keep the specific financial and the non-financial terms
of this Agreement confidential. Specifically, and except as otherwise required by law, Tanner agrees that he will not disclose the specific financial and the non-financial terms of this
Agreement to anyone other than attorneys, accountants, other professionals or family, provided they agree to keep such information confidential.

	16.
	401(k) Plan.    Tanner is and will be a participant in the 1-800 CONTACTS 401(k) Plan (the
"401(k) Plan"). The value of Tanner's account in the 401(k) Plan shall be determined in accordance with and pursuant to the terms and provisions of the
401(k) Plan and applicable law. 1-800 CONTACTS shall make its customary matching contribution to Tanner's account in the 401(k) Plan as a result or on the basis of all contributions made
to the 401(k) Plan by Tanner through March 29, 2003, if any.

	17.
	Post-Employment Provisions of Employment Agreement.    The following post-employment provisions of
the Employment Agreement shall continue to apply in full force and effect and Tanner will continue to strictly follow and adhere to them: Paragraph 5, Confidential Information,
Paragraph 6, Inventions and Patents, Paragraph 7, Non-Compete, Non-Solicitation, and Paragraph 8, Enforcement; provided, however, that
Paragraph 7(a) of the Employment Agreement shall be amended to read as follows: 

(a)    In
further consideration of the compensation to be paid to Executive hereunder, Executive acknowledges that in the course of his employment with the Company he shall become familiar
with the Company's trade secrets and with other Confidential Information 

4

 

concerning
the Company and its Subsidiaries and that his services shall be of special, unique and extraordinary value to the Company and its Subsidiaries. Therefore, Executive agrees that during the
Employment Period and for two years thereafter (the "Noncompete Period"), he shall not, without the express written consent of the Company, directly or
indirectly own any interest in, manage, control, participate in, consult with, render services for, or in any manner engage in any business similar to or competing with the Company Business, as the
Company Business exists or is in process on March 29, 2003, within any geographical area in which the Company or its Subsidiaries engage in the Company Business on March 29, 2003.
Nothing herein shall prohibit Executive from being a passive owner of not more that 2% of the outstanding stock of any class of a corporation, which is publicly traded, so long as Executive has no
active participation in the business of such corporation. As used in this Agreement, "Company Business" shall mean and refer to the business of marketing and selling contact lenses and related
products and other business activities related thereto. 

Effective
February 1, 2002, 1-800 CONTACTS and Tanner made and entered into a certain Confidentiality and Non-Competition Agreement (the "Confidentiality Agreement").
The Confidentiality Agreement was superceded and replaced by the Employment Agreement. 

	18.
	No Admission of Liability.    This Agreement shall not in any way be construed as an admission by 1-800 CONTACTS
or Tanner that either of them has acted wrongfully with respect to the other or any other person, and 1-800 CONTACTS and Tanner specifically disclaim any liability to or wrongful acts
against the other or any other person, on the part of itself or himself, its employees or their respective agents.

	19.
	Utah Agreement.    This Agreement shall be subject to and governed by the laws of the State of Utah. The parties agree that
any dispute, claim or controversy arising out of or relating to the interpretation, validity or enforcement of this Agreement shall be brought in a court of competent jurisdiction in Salt Lake City.
In the event of any litigation arising under this Agreement, 1-800 CONTACTS and Tanner agree that the prevailing party shall be entitled to reasonable attorneys' fees and costs.

	20.
	Entire Agreement.    The terms and conditions contained herein constitute the entire agreement between the parties and
supersede all previous communications, either oral or written, between the parties with respect to the subject matter of this Agreement, and no agreement or understanding varying or extending the
terms of this Agreement shall be binding upon either party unless in writing signed by or on behalf of such party.

	21.
	Notices.    Any notice provided for in this Agreement shall be in writing and shall be cither personally delivered, or mailed
by first class mail, return receipt requested, to the recipient at the address below indicated: 

Notices to Tanner:

Scott
S. Tanner

717 So. Old Lake Lane

Fruit Heights, UT 84037 

Notices to 1-800 CONTACTS:

1-800
CONTACTS, INC.

66 E. Wadsworth Park Drive, 3rd Floor

Draper, UT 84020

Attention: Jonathan Coon 

or
to such other address or to the attention of such other person as the recipient party shall have specified by prior written notice to the sending party given in accordance with this 

5

 

paragraph 21.
Any notice under this Agreement shall be deemed given when so delivered or mailed. 

	22.
	Binding Effect.    All of the terms of this Agreement shall be binding upon and inure to the benefit of and be enforceable by
the parties and their respective successors, heirs, administrators, assigns, and legal representatives.

	23.
	Tanner represents and acknowledges that he has read the foregoing Agreement, fully understands its content and effect, and without duress or coercion,
knowingly and voluntarily agrees to its terms.

	2/25/03
	 	/s/  SCOTT S. TANNER      

	Date	 	Scott S. Tanner
	

 	
 	

1-800 CONTACTS, Inc.
	

2/25/03
	
 	

By	
 	

/s/  JONATHAN COON      

	Date	 	Its: Chief Executive Officer

6

 
 
 

EXHIBIT B    
    

1
Sony Vaio PCG-FX390K. (Serial #: 28332130 3201131) 

1
Toshiba Portege 2000 (Serial #: 22101785PU) 

1
HP OfficeJet G95 (Serial #: SGG18E0HT1) 

1
Dlink wireless router (Serial #: 0Q01804740) 

1
Cisco wireless access point (Serial #: VDF0635S3WD) 

Other
miscellaneous devices, cards and cables used in connection with the above and the software installed thereon. 

7

QuickLinks

SEVERANCE AGREEMENT AND GENERAL RELEASE

RECITALS

COVENANTS

EXHIBIT B

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