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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
1-800 CONTACTS, INC.
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(Name of Issuer)
Common Stock, par value $0.01 per share
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(Title of Class of Securities)
681977104
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(CUSIP Number)
David Katzman
c/o Camelot Ventures, L.L.C.
20555 Victor Parkway, Suite 100
Livonia, Michigan 48152
(734) 805-5111
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 2, 2004
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(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
Schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box. [ ]
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 240.13d-7 for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
POTENTIAL PERSONS WHO ARE TO RESPOND TO THE COLLECTION OF INFORMATION CONTAINED
IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A CURRENTLY
VALID OMB CONTROL NUMBER.
Page 1
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1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only)..David Katzman
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a)....................................................................[ ]
(b)....................................................................[x]
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3. SEC Use Only..............................................................
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4. Source of Funds (See Instructions)..............................AF, WC, OO
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5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e)...........................................................[ ]
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6. Citizenship or Place of Organization..............United States of America
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7. Sole Voting Power......................................0
Number of --------------------------------------------------------------
Shares Bene- 8. Shared Voting Power..............................762,676
ficially
Owned by Each --------------------------------------------------------------
Reporting 9. Sole Dispositive Power.................................0
Person With:
--------------------------------------------------------------
10. Shared Dispositive Power.........................762,676
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11. Aggregate Amount Beneficially Owned by Each Reporting Person.......762,676
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)..........................................................[ ]
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13. Percent of Class Represented by Amount in Row (11)....................5.7%
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14. Type of Reporting Person (See Instructions).............................IN
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Page 2
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1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).Daniel Gilbert
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a)....................................................................[ ]
(b)....................................................................[x]
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3. SEC Use Only..............................................................
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4. Source of Funds (See Instructions)..............................AF, WC, OO
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5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e)...........................................................[ ]
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6. Citizenship or Place of Organization..............United States of America
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7. Sole Voting Power......................................0
Number of --------------------------------------------------------------
Shares Bene- 8. Shared Voting Power..............................762,676
ficially
Owned by Each --------------------------------------------------------------
Reporting 9. Sole Dispositive Power.................................0
Person With:
--------------------------------------------------------------
10. Shared Dispositive Power.........................762,676
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11. Aggregate Amount Beneficially Owned by Each Reporting Person.......762,676
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)..........................................................[ ]
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13. Percent of Class Represented by Amount in Row (11)....................5.7%
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14. Type of Reporting Person (See Instructions).............................IN
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Page 3
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1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities
only)..........................................Camelot Ventures/CJ, L.L.C.
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a)....................................................................[ ]
(b)....................................................................[x]
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3. SEC Use Only..............................................................
--------------------------------------------------------------------------------
4. Source of Funds (See Instructions)..............................AF, WC, OO
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5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e)...........................................................[ ]
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6. Citizenship or Place of Organization.....................State of Michigan
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7. Sole Voting Power................................725,000
Number of --------------------------------------------------------------
Shares Bene- 8. Shared Voting Power...............................37,676
ficially
Owned by Each --------------------------------------------------------------
Reporting 9. Sole Dispositive Power...........................725,000
Person With:
--------------------------------------------------------------
10. Shared Dispositive Power..........................37,676
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11. Aggregate Amount Beneficially Owned by Each Reporting Person.......762,676
--------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)..........................................................[ ]
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)....................5.7%
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14. Type of Reporting Person (See Instructions).............................OO
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Page 4
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1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities
only).............................................Camelot Ventures, L.L.C.
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a)....................................................................[ ]
(b)....................................................................[x]
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3. SEC Use Only..............................................................
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4. Source of Funds (See Instructions)..............................AF, WC, OO
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5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e)...........................................................[ ]
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6. Citizenship or Place of Organization.....................State of Michigan
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7. Sole Voting Power......................................0
Number of --------------------------------------------------------------
Shares Bene- 8. Shared Voting Power..............................762,676
ficially
Owned by Each --------------------------------------------------------------
Reporting 9. Sole Dispositive Power.................................0
Person With:
--------------------------------------------------------------
10. Shared Dispositive Power.........................762,676
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11. Aggregate Amount Beneficially Owned by Each Reporting Person.......762,676
--------------------------------------------------------------------------------
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)..........................................................[ ]
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)....................5.7%
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14. Type of Reporting Person (See Instructions).............................OO
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Page 5
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1. Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities
only).....................................................Lens Express LLC
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a)....................................................................[ ]
(b)....................................................................[x]
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3. SEC Use Only..............................................................
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4. Source of Funds (See Instructions)..............................AF, WC, OO
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5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e)...........................................................[ ]
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6. Citizenship or Place of Organization.....................State of Michigan
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7. Sole Voting Power.................................37,676
Number of --------------------------------------------------------------
Shares Bene- 8. Shared Voting Power..............................725,000
ficially
Owned by Each --------------------------------------------------------------
Reporting 9. Sole Dispositive Power............................37,676
Person With:
--------------------------------------------------------------
10. Shared Dispositive Power.........................725,000
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11. Aggregate Amount Beneficially Owned by Each Reporting Person.......762,676
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)..........................................................[ ]
--------------------------------------------------------------------------------
13. Percent of Class Represented by Amount in Row (11)....................5.7%
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14. Type of Reporting Person (See Instructions).............................OO
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Page 6
ITEM 1. SECURITY AND ISSUER.
The title of the class of equity securities to which this statement
relates is Common Stock, par value $0.01 per share ("Common Stock"), of 1-800
CONTACTS, INC., a Delaware corporation ("1-800 Contacts"). The address of 1-800
Contacts' principal executive offices is 66 E. Wadsworth Park Drive, 3rd Floor,
Draper, Utah 84020.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is being filed by David Katzman, Daniel Gilbert, Camelot
Ventures/CJ, L.L.C., a manager-managed Michigan limited liability company d/b/a
Lens 1st ("Lens 1st"), Camelot Ventures, L.L.C., a manager-managed Michigan
limited liability company ("Camelot"), and Lens Express LLC, a manager-managed
Michigan limited liability company ("Lens Express"), who are collectively
referred to in this Schedule as the "Reporting Persons" and individually as a
"Reporting Person". David Katzman and Daniel Gilbert are the managers of Lens
1st, Camelot and Lens Express. Each of David Katzman's and Daniel Gilbert's
present principal occupation or employment is private investor. Lens 1st's and
Lens Express' principal business was supplying contact lenses, solutions,
accessories and other vision care products directly to consumers and retailers,
until that business was sold to 1-800 Contacts on January 30, 2003. Currently,
Lens 1st and Lens Express primarily hold the proceeds of such sale. Camelot's
principal business is being a private venture capital firm. David Katzman's, Dan
Gilbert's, Lens 1st's, Camelot's and Lens Express' principal business address is
20555 Victor Parkway, Suite 100, Livonia, Michigan 48152.
None of the Reporting Persons has, during the last five years, been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors). None of the Reporting Persons has, during the last five years,
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
David Katzman and Daniel Gilbert are citizens of the United States of
America.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Pursuant to an Asset Purchase Agreement, dated as of January 30, 2003,
among 1-800 Contacts, Lens 1st, Lens Express, David Katzman and Daniel Gilbert
(the "Asset Purchase Agreement"), 1-800 Contacts purchased from Lens 1st and
Lens Express specified assets in exchange for the assumption of specified
liabilities, the payment of cash and the issuance of 900,000 unregistered shares
of Common Stock. At the closing of the Asset Purchase Agreement on January 30,
2003, Lens 1st acquired 725,000 shares of Common Stock and Lens Express acquired
175,000 shares of Common Stock pursuant to the Asset Purchase Agreement. The
closing sale price of the Common Stock on January 30, 2003 was $20.92. At that
time, Camelot owned 555,700 shares of Common Stock that it had acquired in the
open market for an aggregate of $6,602,174, using its working capital to fund
the purchases. Camelot sold its 555,700 shares
Page 7
of Common Stock on February 26, 2004 at $20.75 a share. This report is being
filed to report Lens Express's sale of 137,324 shares of Common Stock on various
dates through July 6, 2004 for an aggregate of $2,053,712.44.
Each of Camelot, Lens 1st and Lens Express had loans relating to its
business from a commercial bank, and Lens 1st and Lens Express acquired their
Common Stock as part of the purchase price for the assets they sold to 1-800
Contacts. Lens 1st borrowed $3,000,000 from Camelot to repay its revolving line
of credit.
ITEM 4. PURPOSE OF TRANSACTION.
Lens 1st and Lens Express acquired their shares of Common Stock as part of
the purchase price for their assets sold to 1-800 Contacts pursuant to the Asset
Purchase Agreement, as described in Item 3. Camelot acquired the shares of
Common Stock it beneficially owned for investment purposes. This report is being
filed to report Lens Express's sale of 137,324 shares of Common Stock on various
dates through July 6, 2004.
In connection with the Asset Purchase Agreement, 1-800 Contacts, Jonathan
Coon, Stephen A. Yacktman, Jason Subotky and John F. Nichols (the "Principal
Stockholders"), Lens 1st, Lens Express and David Katzman entered into a Voting
Agreement, dated as of January 30, 2003 (the "Voting Agreement"). Pursuant to
the Voting Agreement, the size of 1-800 Contacts' Board of Directors was
increased, and David Katzman was elected as a Class II Director of 1-800
Contacts on January 31, 2003. In addition, 1-800 Contacts agreed to nominate and
recommend David Katzman for election as a Class II Director at the 2003 Annual
Meeting of Stockholders of 1-800 Contacts for a term expiring at the 2006 Annual
Meeting of Stockholders, and the Principal Stockholders, Lens 1st and Lens
Express agreed to vote for his election, subject to the terms and conditions of
the Voting Agreement. The Reporting Persons disclaim beneficial ownership of the
Common Stock owned by the Principal Stockholders. Effective February 26, 2004,
David Katzman resigned as a director of 1-800 Contacts.
In connection with the Asset Purchase Agreement, 1-800 Contacts, Lens 1st
and Lens Express entered into a Registration Rights Agreement, dated as of
January 30, 2003 (the "Registration Rights Agreement"). The Registration Rights
Agreement generally provides Lens 1st, Lens Express and specified assignees with
piggyback registration rights with respect to 900,000 shares of Common Stock.
Pursuant to those rights, 1-800 Contacts registered for resale the 900,000
shares of Common Stock acquired by Lens 1st and Lens Express as part of the
purchase price for their assets sold to 1-800 Contacts pursuant to the Asset
Purchase Agreement, including the 137,324 shares of Common Stock sold by Lens
Express described in this Schedule 13D and the remaining 762,676 shares of
Common Stock they own.
Subject to market conditions, the Registration Rights Agreement, the
registration statement on Form S-3 and the related prospectus dated June 18,
2004 covering the shares owned by Lens 1st and Lens Express (the "Registration
Statement"), and other factors that the Reporting Persons may deem material to
their investment decisions, each of the Reporting Persons has determined to
significantly reduce his or its Common Stock ownership over time, by public or
private sale (registered or unregistered), distribution to members of Lens 1st
and/or Lens Express,
Page 8
gift, pledge or otherwise, including, without limitation, sales of Common Stock
by the Reporting Persons pursuant to the Registration Statement, pursuant to
Rule 144 under the Securities Act of 1933, as amended, or otherwise. Each of the
Reporting Persons intends to review on a continuing basis various factors
relating to his or its investment in 1-800 Contacts, including 1-800 Contacts'
business and prospects, the price and availability of 1-800 Contacts'
securities, subsequent developments affecting 1-800 Contacts, other investment
and business opportunities available to the Reporting Person, his or its general
investment and trading policies, market conditions or other factors. Based on
these factors, each of the Reporting Persons may, from time to time, acquire
additional shares of Common Stock, or rights to purchase shares of Common Stock
in the open market, in privately negotiated transactions or otherwise, depending
upon the price and availability of such shares or rights. Each Reporting Person
reserves the right not to acquire Common Stock or not to dispose of all or part
of such Common Stock if he or it determines such acquisition or disposal is not
in his or its best interests at that time.
Other than as described above, none of the Reporting Persons has any
current plans or proposals which relate to, or would result in, (a) any
acquisition or disposition by him or it of securities of 1-800 Contacts, (b) any
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving 1-800 Contacts or any of its subsidiaries, (c) any sale
or transfer of a material amount of assets of 1-800 Contacts or any of its
subsidiaries, (d) any change in the present Board of Directors or management of
1-800 Contacts, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the Board, (e) any material
change in 1-800 Contacts' present capitalization or dividend policy, (f) any
other material change in 1-800 Contacts' business or corporate structure, (g)
any changes in 1-800 Contacts' Certificate of Incorporation or Bylaws or other
actions which may impede the acquisition of control of 1-800 Contacts by any
person, (h) causing a class of securities of 1-800 Contacts to be delisted from
a national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association,
(i) a class of 1-800 Contacts' equity securities becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934, as amended, or (j) any action similar to those enumerated
above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) The number and percentage of shares of Common Stock beneficially owned
by the Reporting Persons as of July 8, 2004 are as follows:
Number Percent*
------ --------
Lens 1st 762,676 ** 5.7%
Camelot 762,676 ** 5.7%
Lens Express 762,676 ** 5.7%
David Katzman 762,676 ** 5.7%
Daniel Gilbert 762,676 ** 5.7%
*Based on the 13,285,501 shares of Common Stock reported as outstanding as of
May 5, 2004 in the Company's Quarterly Report on Form 10-Q for the quarter ended
April 3, 2004.
Page 9
**Includes 725,000 shares of Common Stock acquired by Lens 1st pursuant to the
Asset Purchase Agreement and 37,676 of the shares of Common Stock acquired by
Lens Express pursuant to the Asset Purchase Agreement. David Katzman and Daniel
Gilbert are the managers of Lens 1st, Camelot and Lens Express, and, therefore,
share voting and investment power over the shares of Common Stock they hold.
Because of the common managers of Lens 1st, Camelot and Lens Express, the
Reporting Persons might constitute a group, although the Reporting Persons
disclaim the existence of a group.
(b) Lens 1st and Lens Express have sole voting and investment power over
the 725,000 and 37,676 shares of Common Stock respectively owned by them. David
Katzman and Daniel Gilbert, as the managers of Lens 1st, Camelot and Lens
Express, and Camelot, as a commonly controlled entity, share voting and
investment power over the 762,676 shares of Common Stock owned by Lens 1st and
Lens Express.
(c) The Reporting Persons effected the following sales of shares of Common
Stock in open market transactions during the sixty days before July 2, 2004 or
the date of this Schedule 13D:
Name Transaction Date Shares Price Per Share
---- ---------------- ------ ---------------
Lens Express 06/29/04 22,569 $14.95
Lens Express 07/01/04 40,800 $14.95
Lens Express 07/01/04 58,500 $14.96
Lens Express 07/01/04 5,000 $14.97
Lens Express 07/02/04 3,000 $14.95
Lens Express 07/02/04 5,800 $14.9558
Lens Express 07/06/04 1,655 $14.95
(d) No other person is known to have the right to receive, or the power to
direct the receipt of, dividends from, or the proceeds from the sale of, the
shares of Common Stock beneficially owned by the Reporting Persons.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
The Reporting Persons are parties to the Voting Agreement and the
Registration Rights Agreement described in Item 4 above.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
99.1 Agreement of Joint Filing among the Reporting Persons, dated as of
February 7, 2003, incorporated by reference to Exhibit 99.1 to the
Schedule 13D of the Reporting Persons, dated February 7, 2003.
Page 10
99.2 Voting Agreement, dated as of January 30, 2003, among 1-800
Contacts, the Principal Stockholders, Lens 1st, Lens Express and
David Katzman, incorporated by reference to Exhibit 99.2 to the
Schedule 13D of the Reporting Persons, dated February 7, 2003.
99.3 Registration Rights Agreement, dated as of January 30, 2003, among
1-800 Contacts, Lens 1st and Lens Express, incorporated by reference
to Exhibit 99.4 to the Schedule 13D of the Reporting Persons, dated
February 7, 2003.
Page 11
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: July 8, 2004 /s/ DAVID KATZMAN
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David Katzman
Dated: July 8, 2004 /s/ DANIEL GILBERT
---------------------------------------
Daniel Gilbert
Dated: July 8, 2004 CAMELOT VENTURES/CJ, L.L.C.
By: /s/ DAVID KATZMAN
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David Katzman
Its: President and Manager
Dated: July 8, 2004 CAMELOT VENTURES, L.L.C.
By: /s/ DAVID KATZMAN
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David Katzman
Its: President and Manager
Dated: July 8, 2004 LENS EXPRESS LLC
By: /s/ DAVID KATZMAN
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David Katzman
Its: President and Manager
Page 12