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EXHIBIT 4.1  

 
 

REGISTRATION RIGHTS AGREEMENT    
    

        THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered into effective as of the 30th day of January, 2003, by and among
1-800 CONTACTS, INC., a Delaware corporation (the "Company"), and CAMELOT VENTURES/CJ, L.L.C. d/b/a LENS 1st, a Michigan limited liability company, and LENS EXPRESS LLC, a Michigan
limited liability company (collectively the "Investors"). 

RECITALS  

        A.    The
Company and the Investors have entered into an Asset Purchase Agreement of even date herewith (the "Purchase Agreement"), whereby the Company will purchase certain of
the assets and assume certain of the liabilities of the Investors. 

        B.    Pursuant
to the Purchase Agreement, the purchase price for the Acquired Assets will be paid by the Company by the delivery to the Investors of (1) cash,
(2) the Closing Buyer Shares, and (3) by the assumption by the Company of the Assumed Liabilities. Pursuant to the Purchase Agreement, the Company has agreed to grant to each of the
Investors certain registration rights, to enable the Investors to participate, under certain specified circumstances, in registrations of the Common Stock of the Company with the Securities and
Exchange Commission, pursuant to the Securities Act of 1933, as amended. 

        C.    The
purpose of this Agreement is to document and establish the terms of the registration rights granted to each of the Investors. 

        D.    Terms
not otherwise defined in this Agreement shall have the meanings ascribed to them in the Purchase Agreement. 

AGREEMENT  

        NOW, THEREFORE, the parties hereto agree as follows: 

        1.    Definitions.    

        "Act" shall mean the Securities Act of 1933, as amended. 

        "Closing Buyer Shares" shall mean nine hundred thousand (900,000) shares of the Company's Common Stock. 

        "Commission" shall mean the Securities and Exchange Commission. 

        "Common Stock" shall mean the Company's $0.01 par value common stock. 

        "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. 

        "Holder" or "Holders" shall mean any Investor or Investors holding Registrable Securities
(including shares of Common Stock convertible into Registrable Securities) and any person holding Registrable Securities to whom the rights under this Agreement have been transferred, in accordance
with Section 9 hereof. 

        The
terms "register," "registered," and
"registration" refer to a registration effected by preparing and filing a registration statement in compliance with the requirements of the Act and the
declaration or ordering of the effectiveness of such registration statement. 

        "Piggyback Registration" shall have the meaning set forth in Section 2(a) hereof. 

        "Registrable Securities" shall mean the Closing Buyer Shares and any shares of Common Stock issued in respect of the Closing Buyer Shares,
as a result of a stock split, stock dividend, recapitalization or otherwise; provided, however, that
shares of Common Stock shall only be treated as 

 

Registrable
Securities if and so long as they have not been (i) sold to or through a broker, dealer or underwriter in a public distribution or a public securities transaction, or
(ii) sold or all of the otherwise Registrable Securities are available for sale in the opinion of counsel to the Company in a transaction exempt from the registration and prospectus delivery
requirements of the Act so that all transfer restrictions and restrictive legends with respect thereto are removed upon the consummation of the sale. 

        "Registration Expenses" shall mean all expenses incurred in complying with Sections 2 and 4 hereof, including all registration and filing
fees, fees and disbursements of counsel for the Company, blue sky fees and expenses, and the reasonable fees and disbursements of one counsel for all Holders of Registrable Securities participating in
the registration, but excluding Selling Expenses. 

        "Selling Expenses" shall mean all underwriting discounts, selling commissions and stock transfer taxes applicable to any securities
registered or sold by the Holders and all fees and disbursements of counsel or consultants for the Holders (except for fees and disbursements of counsel included within the definition of Registration
Expenses). 

        2.    Grant of Piggyback Registration Rights.    

        a.    Right to Piggyback.    Subject to Section 2(e) below, whenever the Company proposes to register any of
its securities under the Act in connection with a public offering of such securities solely for cash (but not including any registration relating solely to employee benefit plans or a registration
relating solely to a Commission Rule 145 transaction), and the registration form to be used may be used for the registration of Registrable Securities (a "Piggyback
Registration"), the Company shall give prompt written notice (before the initial filing of the registration statement relating to such public offering and at least twenty
(20) days before the effective date of such registration statement) to all Holders of Registrable Securities of its intention to effect such a registration and shall use its best efforts, in
accordance with the terms and conditions of this Agreement, to include in such registration all Registrable Securities with respect to which the Company has received written requests for inclusion
therein before the effective date of the related registration statement. In the event that any Piggyback Registration shall be an underwritten offering of securities of the Company, any requests by
the Holders pursuant to this Section 2(a) to register Registrable Securities must specify that such shares are to be included in the
underwriting on the same terms as the shares of Common Stock otherwise being sold through such registration. 

        b.    Expenses Relating to Piggyback Registrations.    The Registration Expenses incidental to the Company's
performance of, or compliance with, this Agreement in connection with each Piggyback Registration shall be paid by the Company. Except for the reasonable fees and disbursements of one counsel for the
Holders included in the Registration Expenses, each participating Holder shall bear the fees and costs of its own counsel. All Selling Expenses relating to the Registrable Securities being sold by a
Holder in a Piggyback Registration shall be paid by such selling Holder. 

        c.    Priority on Primary Registrations.    If a Piggyback Registration is an underwritten primary registration on
behalf of the Company, and the managing underwriters advise the Company in writing that, in their opinion, the number of securities requested to be included in such registration exceeds the number
which can be sold in an orderly manner in such offering within a price range acceptable to the Company, the Company shall be entitled to cut-back the number of securities to be included in
such registration. In such event, securities shall be included in the Piggyback Registration in accordance with the following priority: (i) first, the securities the Company proposes to sell;
(ii) second, any securities proposed to be sold by shareholders of the Company exercising any existing demand registration rights; and (iii) third, all shareholders of the Company
exercising piggyback registration rights, including the Holders requesting that Registrable Securities be included in the registration pursuant to the terms of this Agreement. In the event of a
cut-back 

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of
the number of securities that may be included in a Piggyback Registration, the number of Registrable Securities and other securities of the Company that may be included in the registration upon the
exercise of piggyback registration rights shall be allocated among all of the Company's shareholders (including the Holders) who are exercising such Piggyback Registration rights, in proportion, as
nearly as practicable, to the respective amounts of Registrable Securities and other securities which each such Holder requests to be included in such registration. 

        d.    Priority on Secondary Registrations.    If a Piggyback Registration is an underwritten secondary registration of
the Company's securities, and the managing underwriters advise the Company in writing that, in their opinion, the number of securities requested to be included in such registration exceeds the number
which can be sold in an orderly manner in such offering within a price range acceptable to the Company and the Holders initially requesting such registration, the Company shall be entitled to
cut-back the number of securities in such registration and include in such registration (i) first, any securities proposed to be sold by any shareholders of the Company exercising
any existing demand registration rights; and (ii) second, the Registrable Securities and other securities of the Company requested to be included therein by the Holders and other shareholders
of the Company exercising Piggyback Registration rights. The number of Registrable Securities and other securities of the Company that may be included in the registration on behalf of the Holders and
other shareholders exercising Piggyback Registration rights shall be allocated among all of such Holders and other shareholders who are exercising Piggyback Registration rights, in proportion, as
nearly as practicable, to the respective amounts of Registrable Securities and other securities which each such Holder requests to be included in such registration. 

        e.    Exception.    Notwithstanding any of the foregoing provisions of this Section 2, the Holders of
Registrable Securities shall not be entitled to participate in, and the Company shall have no obligation to register any Holders' Registrable Securities in connection with the filing of the
registration statement covering the shares of the Company's Common Stock issued in connection with the Company's acquisition of the assets of IGEL C.M. Laboratory Pte Ltd, International Vision
Laboratories Pte Ltd and IGEL Visioncare Pte Ltd. 

        3.    Holdback Agreements.    In consideration for the grant of the Piggyback Registration rights described in this
Agreement, no Investor or Holder shall effect any public sale or distribution (including sales pursuant to Rule 144) of any equity securities of the Company during the seven (7) business
days prior to and the one hundred eighty (180) day period beginning on the effective date of any underwritten Piggyback Registration in which such Investor's or Holder's Registrable Securities
are included (except as part of such underwritten registration), unless the underwriters managing the public offering otherwise agree. Moreover, each Investor and each Holder agrees, if requested by
the Company and any underwriter of the Common Stock of the Company, to execute such agreements and instruments as are necessary, in the Company's and underwriter's reasonable opinion, to effect the
foregoing. 

        4.    Registration Procedures.    Whenever Holders of Registrable Securities have requested that any Registrable
Securities be included in and covered by any Piggyback Registration pursuant to this Agreement, such Holders shall furnish to the Company in writing such information as may be reasonably requested by
the Company for inclusion in, or relating to, such Piggyback Registration, and the Company shall use its best efforts to include such Registrable Securities in such Piggyback Registration, consistent
with the terms of this Agreement. In furtherance of this obligation, the Company shall: 

        a.     subject
to the Company's right to reduce the number of Registrable Securities to be included in a Piggyback Registration, use its best efforts to include in the Piggyback
Registration those Registrable Securities as to which the Company has received written requests for inclusion pursuant to Section 2(a) above, consistent with the terms of this Agreement
(provided, however, 

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that
the Company shall not be precluded from abandoning any Piggyback Registration that it determines not to be in the best interests of the Company); 

        b.     notify
each Holder of Registrable Securities of the effectiveness of each Piggyback Registration filed hereunder and prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for a period of not less than one
hundred and eighty (180) days and to comply with the provisions of the Act with respect to the disposition of all securities covered by such registration statement during such period in
accordance with the terms applicable to such registration statement and any related underwriting agreements; 

        c.     furnish
to each Holder who intends to sell Registrable Securities such number of copies of such registration statement, each amendment and supplement thereto, the
prospectus included in such registration statement (including each preliminary prospectus) and such other documents as such Holder of Registrable Securities may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such Holder; 

        d.     use
its best efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions as any Holder reasonably
requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such Holder of Registrable Securities to consummate the disposition in such jurisdictions of
the Registrable Securities owned by such Holder (provided that the Company shall not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 4, (ii) subject itself to taxation in any such jurisdiction or (iii) consent to general service of process in any such jurisdiction); and 

        e.     otherwise
use its best efforts to comply with all applicable rules and regulations of the Commission; and 

        f.      cooperate
with the Holder of Registrable Securities and any underwriter to prepare and deliver timely certificates representing Registrable Securities to be sold and not
bearing any restrictive legends. 

        5.    Exchange Act Reports.    Notwithstanding the registration rights set forth herein, the Company acknowledges
that, in the event such registration statement shall not become effective, or, in the event there shall be a default in the undertaking by the Company of its obligations pursuant to this Agreement,
the Holders may be required to rely upon an exemption under the Act for the purpose of disposing of the Registrable Securities. Accordingly, with a view to making available to the Holders the benefits
of Rule 144 promulgated under the Act, and any other rule or regulation of the Commission that may at any time permit the Holders to sell the Registrable Securities to the public without
registration, the Company shall (a) make and keep "public information" available, as such terms are contemplated and defined in Rule 144, (b) file with the Commission in a timely
manner all reports and other documents required of the Company under the Act (if any) and the Exchange Act, and (c) furnish to each Holder, so long as each Holder owns any of the Registrable
Securities, forthwith upon request (i) a written statement by the Company that it has complied with the Commission's reporting requirements necessary to enable the Holders to sell the
Registrable Securities pursuant to Rule 144, (ii) a copy of the most recent annual or quarterly report of the Company, and (iii) such other reports and documents so filed by the
Company as may be reasonably requested and necessary in availing a Holder of any rule or regulation of the Commission permitting the selling of any such securities without registration. 

4

 

        6.    Indemnification.    

        a.     The
Company agrees to indemnify, defend and hold harmless, to the extent permitted by law, each Holder of Registrable Securities and their members, managers, officers and
control persons (within the meaning of the Act) from and against all losses, claims, damages, liabilities and expenses (including reasonable attorneys' fees and expenses) caused by any untrue or
alleged untrue statement of material fact contained in any registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged
omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished
in writing to the Company by such Holder expressly for use therein or by such Holder's failure to deliver a copy of the registration statement or prospectus or any amendments or supplements thereto
after the Company has furnished such Holder with a sufficient number of copies of the same. 

        b.     In
connection with any Piggyback Registration in which a Holder of Registrable Securities is participating, each such Holder shall furnish to the Company in writing such
information and affidavits as the Company reasonably requests for use in connection with any such registration statement or prospectus and, to the extent permitted by law, shall indemnify, defend and
hold harmless the Company, its directors, officers and control persons (within the meaning of the Act) from and against all losses, claims, damages, liabilities and expenses resulting from any untrue
or alleged untrue statement of material fact contained in any registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged
omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is cause by or
contained in any information or affidavit so furnished in writing to the Company by such Holder expressly for use therein, provided that the obligation to indemnify shall be individual and not joint
and several for each Holder and shall be limited to the net amount of proceeds received by such Holder from the sale of Registrable Securities pursuant to such Piggyback Registration. 

        c.     Any
party entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks
indemnification (provided that the failure to give prompt notice shall not impair any person's right to indemnification hereunder to the extent such failure has not prejudiced the indemnifying party)
and (ii) unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with the assistance of counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be
subject to any liability for any settlement made by the indemnified party without its consent, which consent shall not be unreasonably withheld. An indemnifying party that is not entitled to, or
elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such
claim, unless, in the reasonable judgment of any indemnified party, a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such
claim. 

        d.     The
indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party
and shall survive the transfer of any Registrable Securities. 

        7.    Participation in Underwritten Registrations.    No Holder may participate in any Piggyback Registration
hereunder which is underwritten unless such Holder (i) agrees to sell any Registrable 

5

 

Securities
to be included in such registration on the basis provided in any underwriting arrangements applicable to the registration, as approved by the Company and to the extent they are the same as
those applied to the other sellers in connection with such registration, and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other
documents required under the terms of such underwriting arrangements to the extent they are the same as those applied to the other sellers in connection with such registration. The Company shall be
entitled to select and approve the managing underwriter involved in any Piggyback Registration, in its sole and absolute discretion. 

        8.    Contribution.    If for any reason the indemnification provided for in Sections 6(a) and (b) is
unavailable to an indemnified party or insufficient to hold it harmless as contemplated by the preceding Sections 6(a) and (b), then the indemnifying party shall contribute to the amount paid or
payable by the indemnified party as a result of the loss, claim, damage, liability or expense in the proportion as is appropriate to reflect (1) the relative benefits received by the
indemnified party and the indemnifying party, (2) the relative fault of the indemnified party and the indemnifying party, and (3) any other relevant equitable considerations. 

        9.    Transfer of Registration Rights.    The rights to cause the Company to include Registrable Securities in
Piggyback Registrations as provided in this Agreement may be assigned or transferred to any transferee who: (i) acquires at least one hundred thousand (100,000) shares (as currently
constituted, and to be appropriately adjusted for stock splits, combinations, stock dividends and the like) of Registrable Securities (including shares of Registrable Securities into which Shares are
transferable); or (ii) who is (1) a member of an Investor, (2) an immediate family member of one or more members of an Investor who agree to act through a single representative,
or (3) an affiliate controlled by one or more members of an Investor, provided that any transfer of rights shall not be effective until: (x) the Company is given written notice of the
transfer, which notice shall state the name and address of the transferee and identify the number of securities with respect to which the rights under this Section 9 are being assigned;
(y) the transfer of the securities to which the registration rights relate has been effected in compliance with any legend requirements or other requirements reasonably imposed by the Company
to ensure compliance with applicable securities laws; and (z) the transferee has executed an agreement in a form approved by the Company, agreeing to be bound by the obligations imposed on the
Investors and Holders under this Agreement. Any transfer pursuant to clause (ii) to one or more persons who own less than 100,000 shares of Registrable Securities shall be conditioned upon such
transferees appointing a representative, representing holders of at least 100,000 shares of Registrable Securities, to exercise all of such transferee's rights under this Agreement. 

        10.    Miscellaneous.    This Agreement may be executed by facsimile in any number of counterparts, and different
Investors may execute different counterparts. Each executed counterpart shall be deemed an original, and all executed counterparts together shall constitute one and the same agreement. This Agreement
shall be governed by, and construed in accordance with, the laws of the State of Utah. The jurisdiction and venue of any legal action under this Agreement shall be as set forth in the Purchase
Agreement. 

6

 

        IN
WITNESS WHEREOF, this Agreement is executed by the undersigned, effective as of the date first set forth above. 

	THE COMPANY:	 	INVESTORS:
	

1-800 CONTACTS, INC.	
 	

CAMELOT VENTURES/CJ, L.L.C. d/b/a LENS 1st
	

 	
 	

By:	

 
	
	 	 	

	Jonathan C. Coon	 	 	 
	President and Chief Executive Officer	 	Its:	 
	 	 	 	

	

 	
 	

LENS EXPRESS LLC
	

 	
 	

By:	

 
	 	 	 	

	 	 	 	 
	 	 	Its:	 
	 	 	 	

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Exhibit 10.1  

 
 

EMPLOYMENT AGREEMENT    
    

        THIS EMPLOYMENT AGREEMENT (this "Agreement") is made as of September 6, 2000 between 1-800
CONTACTS, INC., a Utah corporation (the "Company"), and R. Joe Zeidner (the "Executive"). This
Agreement shall be deemed to be effective as of September 6, 2000 (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 General Counsel 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. Executive shall perform his duties and responsibilities to the
best of his abilities in a diligent, trustworthy, businesslike and efficient manner. 

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

        3.    Base Salary and Benefits.    

        (a)   During
the first year of the Employment Period, Executive's base salary shall be $110,000 per annum (the "Base Salary"),
which salary shall be payable in regular installments in accordance with the Company's general payroll practices and shall be subject to customary withholding. Thereafter, the Base Salary shall be
such higher rate as the Board may designate from time to time. As used in this Agreement, the term "Base Salary" shall be deemed to include any such increases as may be designated from time to time by
corporate management. During the Employment Period, Executive shall be entitled to participate in all of the Company's employee benefit programs for which management employees of the Company and its
Subsidiaries are generally eligible (including the Company's stock option program). 

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

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

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

 

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

        (iv)  $500
per month car allowance 

        (v)   $400
per month house cleaning allowance 

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

2

 

(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 2% of the outstanding stock of any class of a corporation which is publicly traded, so long as Executive has no active participation in the business of such corporation. 

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

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

        9.    Other Businesses.    As long as Executive is employed by the Company or any of its Subsidiaries, Executive
agrees that he will not, except with the express written consent of the Board, become engaged in, or render services for, any business other than the business of the Company, any of its Subsidiaries
or any corporation or partnership in which the Company or any of its Subsidiaries have an equity interest; provided, that Executive may devote a de minimis portion of his time to engaging in, or 

3

 

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:  

R.
Joe Zeidner

1346 East Hana Court

Draper, Utah 84020 

 Notices to the Company:  

1-800
CONTACTS, INC.

13751 Wadsworth Park Drive, Suite D-140

Draper, Utah 84020

Attn: Board of Directors 

 with a copy to:  

Kirkland &
Ellis

200 E. Randolph Drive

Chicago, Illinois 60601

Attn: Dennis M. Myers 

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

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

4

 

        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. 

* * * * *  

5

 

        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: President
	

 	
 	

/s/  R. JOE ZEIDNER      
 R. Joe Zeidner

6

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