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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)*
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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)
February 26, 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
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.
SEC 1746 (11-03)
Page 1
CUSIP No.
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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 -----------------------------------------------------------------
8. Shared Voting Power 900,000
Beneficially
Owned by Each -----------------------------------------------------------------
9. Sole Dispositive Power 0
Reporting
Person -----------------------------------------------------------------
10. Shared Dispositive Power 900,000
With
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11. Aggregate Amount Beneficially Owned by Each Reporting Person 900,000
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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) 6.9%
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14. Type of Reporting Person (See Instructions) IN
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Page 2
CUSIP No.
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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 -----------------------------------------------------------------
8. Shared Voting Power 900,000
Beneficially
Owned by Each -----------------------------------------------------------------
9. Sole Dispositive Power 0
Reporting
Person -----------------------------------------------------------------
10. Shared Dispositive Power 900,000
With
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11. Aggregate Amount Beneficially Owned by Each Reporting Person 900,000
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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) 6.9%
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14. Type of Reporting Person (See Instructions) IN
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Page 3
CUSIP No.
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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
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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 725,000
Number of
Shares -----------------------------------------------------------------
8. Shared Voting Power 175,000
Beneficially
Owned by Each -----------------------------------------------------------------
9. Sole Dispositive Power 725,000
Reporting
Person -----------------------------------------------------------------
10. Shared Dispositive Power 175,000
With
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11. Aggregate Amount Beneficially Owned by Each Reporting Person 900,000
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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) 6.9%
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14. Type of Reporting Person (See Instructions) OO
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Page 4
CUSIP No.
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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 -----------------------------------------------------------------
8. Shared Voting Power 900,000
Beneficially
Owned by Each -----------------------------------------------------------------
9. Sole Dispositive Power 0
Reporting
Person -----------------------------------------------------------------
10. Shared Dispositive Power 900,000
With
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11. Aggregate Amount Beneficially Owned by Each Reporting Person 900,000
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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) 6.9%
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14. Type of Reporting Person (See Instructions) OO
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Page 5
CUSIP No.
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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 175,000
Number of
Shares -----------------------------------------------------------------
8. Shared Voting Power 725,000
Beneficially
Owned by Each -----------------------------------------------------------------
9. Sole Dispositive Power 175,000
Reporting
Person -----------------------------------------------------------------
10. Shared Dispositive Power 725,000
With
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11. Aggregate Amount Beneficially Owned by Each Reporting Person 900,000
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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) 6.9%
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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. This report is being filed to
Page 7
report Camelot's sale of its 555,700 shares of Common Stock on February 26, 2004
at $20.75 a share.
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's remaining $3,000,000 revolving line of credit, however, is
secured by the 725,000 shares of Common Stock it owns and the 175,000 shares of
Common Stock owned by Lens Express.
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 Camelot's sale of its 555,700 shares of Common Stock on February
26, 2004 at $20.75 a share.
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.
Also 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.
Subject to market conditions, the Registration Rights Agreement 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, gift,pledge or otherwise, including, without limitation, sales of
Common Stock by the Reporting Persons 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
Page 8
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 March 1, 2004 are as follows:
Number Percent*
------ --------
Lens 1st 900,000 ** 6.9%
Camelot 900,000 ** 6.9%
Lens Express 900,000 ** 6.9%
David Katzman 900,000 ** 6.9%
Daniel Gilbert 900,000 ** 6.9%
*Based on the 13,106,228 shares of Common Stock reported as outstanding as of
November 4, 2003 in the Company's Quarterly Report on Form 10-Q for the quarter
ended September 27, 2003.
**Includes 725,000 shares of Common Stock acquired by Lens 1st pursuant to the
Asset Purchase Agreement and 175,000 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
Page 9
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 175,000 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 900,000 shares of Common Stock owned by Lens 1st and
Lens Express.
(c) The Reporting Persons have not effected any transactions in shares
of Common Stock during the sixty days before February 26, 2004 or the date of
this Schedule 13D, except for Camelot's sale of its 555,700 shares of Common
Stock in an arranged open market transaction on February 26, 2004 at $20.75 a
share, as described in Item 3.
(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.
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 10
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: March 1, 2004 /s/ DAVID KATZMAN
-------------------------------
David Katzman
Dated: March 1, 2004 /s/ DANIEL GILBERT
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Daniel Gilbert
Dated: March 1, 2004 CAMELOT VENTURES/CJ, L.L.C.
By: /s/ DAVID KATZMAN
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David Katzman
Its: President and Manager
Dated: March 1, 2004 CAMELOT VENTURES, L.L.C.
By: /s/ DAVID KATZMAN
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David Katzman
Its: President and Manager
Dated: March 1, 2004 LENS EXPRESS LLC
By: /s/ DAVID KATZMAN
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David Katzman
Its: President and Manager
Page 11