1.1.5. **“Business Day”**means any day, other than Saturday, Sunday or any statutoryholiday in the Province of Ontario;1.1.6. **“Change of Control”**for the purposes of this Agreement, shall be deemed tohave occurred when:1.1.6.1. any Person acquires or becomes the beneficial owner of, or acombination of Persons acting jointly and in concert acquires or becomes thebeneficial owner of, directly or indirectly, more than 40% of the votingsecurities of the Corporation, whether through the acquisition of previouslyissued and outstanding voting securities, or of voting securities that havenot been previously issued, or any combination thereof, or any othertransaction having a similar effect;1.1.6.2. the Corporation amalgamates with one or more corporations otherthan a Subsidiary;1.1.6.3. the Corporation sells, leases or otherwise disposes of all orsubstantially all of its assets and undertaking, whether pursuant to one ormore transactions;1.1.6.4. any Person not part of existing management of the Corporation orany Person not controlled by the Corporation or by any Affiliate enters intoany arrangement to provide management services to the Corporation whichresults in either (i) the termination by the Corporation of the employmentof any two of the Chief Executive Officer, Chief Operating Officer, ChiefFinancial Officer and General Counsel for any reason other than Just Cause;or (ii) the termination by the Corporation for any reason other than JustCause of the employment of all such senior executive personnel within sixmonths of the date that such arrangement is entered into for any reasonother than Just Cause; or1.1.6.5. the Corporation enters into any transaction or arrangement whichwould have the same or similar effect as the transactions referred to in1.1.6.1, 1.1.6.2, 1.1.6.3 or 1.1.6.4 above.
 

 
1.1.7. **“Confidential Information”**means all confidential or proprietary information,intellectual property (including trade secrets ) and confidential facts relating tothe business or affairs of the Corporation or any of its Subsidiaries;1.1.8. **“Disability”**means the mental or physical state of the Employee such that theEmployee has been unable as a result of illness, disease, mental or physicaldisability or similar cause to fulfill his obligations under this Agreement eitherfor any consecutive 6 month period or for any period of 12 months (whether or notconsecutive) in any consecutive 24 month period;1.1.9. **“Employment Period”**has the meaning attributed to such term in section 4;1.1.10. **“ESA”**means the *Employment Standards Act*(Ontario) as the same may beamended from time to time and any successor legislation thereto;1.1.11. **“Good Reason”**means1.1.11.1. without the express written consent of the Employee, any change orseries of changes in the responsibilities or status of the Employee with theCorporation, such that immediately after such change or series of changesthe responsibilities and status of the Employee, taken as a whole, andtaking into account the size and complexity of the business of theCorporation and its Subsidiaries and Affiliates are not at leastsubstantially equivalent to those assigned to him immediately prior to suchchange or series of changes, except in connection with the termination ofthe Employee’s employment by the Corporation for Just Cause or on death,Disability or Retirement or a voluntary resignation by the Employee otherthan a resignation for Good Reason;1.1.11.2. a reduction by the Corporation in the Employee’s Basic Salary asin effect on the date hereof or as the same may be increased from time totime;1.1.11.3. the taking of any action by the Corporation which would materiallyadversely affect the Employee’s participation in, or materially reduce theEmployee’s Benefits or bonus remuneration and other similar plans in whichthe Employee is participating at the date hereof (or such other package ofplans as may be implemented after the date hereof providing the Employeewith substantially similar benefits), or the taking of any action
 

 
by the Corporation which would deprive the Employee of any material fringebenefit enjoyed by him at the date hereof;1.1.11.4. the requirement that the Employee be based anywhere other then theCorporation’s principal executive offices except for required travel on theCorporations business to an extent substantially consistent with theEmployee’s present travel obligations, or in the event the Employee consentsto any such relocation, the failure by the Corporation to pay (or reimbursethe Employee for) all reasonable moving expenses incurred by the Employee orto indemnify the Employee against any excess in (A) the cost of a principalresidence I the new location which is comparable to the Employee’s principalresidence at the time of the relocation, over (B) the amount realized by theEmployee upon the sale of his principal residence at the tie of therelocation; orany reason which would be considered to amount to constructive dismissal by a courtof competent jurisdiction.1.1.12. **“Just Cause”**means the willful failure of the Employee to properly carry outhis duties after notice by the Corporation of the failure to do so and anopportunity for the Employee to correct the same within a reasonable time from thedate of receipt of such notice, or theft, fraud, dishonesty or misconduct by theEmployee involving the property, business or affairs of the Corporation or itsSubsidiaries or the carrying out of the Employee’s duties;1.1.13. **“Person”**means an individual, partnership, limited partnership, jointventure, syndicate, sole proprietorship, company or corporation with or withoutshare capital, unincorporated association, trust, trustee, executor, administratoror other legal personal representative, regulatory body or agency, government orgovernmental agency, authority or entity however designated or constituted;1.1.14. **“Restricted Period”**means, as the case may be, (i) the notice periodprovided for in section 8; or (ii) one year if the employment of the Employee isterminated pursuant to section 10.2 or 10.3;1.1.15. **“Retirement”**means Retirement in accordance with the Corporation’sretirement policy;
 

 
1.1.16. **“Subsidiaries”**has the meaning attributed to such term by the *BusinessCorporations Act*(Ontario) as the same may be amended from time to time and anysuccessor legislation thereto;1.1.17. **“Year of Employment”**means any 12 month period commending on February 23,1998 or any anniversary of such date, provided that for the purposes of thisAgreement, the “First Year of Employment” shall be deemed to commence on February23, 1998 and to end on February 22, 1999.**2.****Employment of the Employee**     The Corporation shall employ the Employee, and the Employee shall serve the Corporation, inthe position of Executive Vice-President, Information Systems on the conditions and for theremuneration hereinafter set out. In such position, the Employee shall perform or fulfill suchduties and responsibilities as the Corporation may designate from time to time and as arereasonably consistent with the position of Executive Vice President, Information Systems. TheEmployee shall report to the Chief Executive Officer of the Corporation.**3****Performance of Duties**     During the Employment Period, the Employee shall faithfully, honestly and diligently serve theCorporation and its Subsidiaries as contemplated above. The Employee shall (except in the case ofillness or accident) devote all of his working time and attention to his employment hereunder andshall use his best efforts to promote the interests of the Corporation.**4.****Employment Period**     The Employee’s employment under this Agreement shall, subject to section 8 and section 10, befor an indefinite term. Accordingly, the Corporation shall employ the Employee and the Employeeshall serve the Corporation as an employee in accordance with this Agreement for the periodbeginning on the date hereof and ending on the effective date the employment of the Employee underthis Agreement is terminated in accordance with section 8.2 or section 10 (the “EmploymentPeriod”).**5.****Remuneration**     5.1. **Basic Remuneration**. The Corporation shall pay the Employee a gross salary inrespect of each Year of Employment in the Employment Period (before deduction for income taxes andother required deductions, such as C.P.P. and E.I. contributions but excluding the Benefits paid bythe Corporation as provided in the TLC
 

 
Benefit Plan) of $168,000 (the “Basic Salary”) plus a $7,500 annual Car Allowance and a 5% annualRetirement Allowance, payable in equal installments on every second Friday in each month duringsuch year, with a pro-rata adjustment in the Basic Salary in the event that such year begins orterminates on a day other than the second Friday in each month, the first payment to be madeJanuary 8, 1999. The Basic Salary shall, in the sole and absolute discretion of the board ofdirectors of the Corporation, be subject to an increase on the basis of an annual review (September1st). The Basic Salary shall be prorated in respect of the First Year of employmentsuch that the employee shall be entitled and the Corporation shall be required to pay in respect ofeach such year only that proportion of the Basic Salary that the number of days in the First Yearof Employment is to 365.     5.2. **Bonus Remuneration**. The Executive shall, in respect of each year of Employmentduring the Employment Period, receive such bonus remuneration, as outlined in Schedule 5.2.     5.3. **Stock Options**. The Employee shall, in respect of each Year of Employment duringthe Employment Period, receive such stock options, if any, as the board of directors of theCorporation, in its sole discretion may, pursuant to the terms of the Corporation’s stock optionplan, authorize.     5.4. **Benefits**. The Corporation shall provide to the Employee, in addition to Salaryand stock options, if any, the benefits (the “Benefits”) described in the TLC Benefit Plan, suchBenefits to be provided in accordance with and subject to the terms and conditions of theapplicable plan relating thereto in effect from time to time.     5.5. **Pro-Rata Entitlement in the Event of Termination**. If the Employee’s employmentis terminated pursuant to section 8 or section 10 or if the Employee dies during the EmploymentPeriod, the Employee shall be entitled to receive in respect of his entitlement to Salary, and theCorporation shall be required to pay in respect thereof, only that proportion of the Salary inrespect of the Year of Employment in which the effective date of the termination of employment orthe date of death occurs that the number of days elapsed from the commencement of such Year ofEmployment to the effective date of termination or the date of death is to 365.**6.****Expenses**     Subject to the terms of the Corporation’s expense policy, the Corporation shall pay orreimburse the Employee for all travel; and out-of-pocket expenses reasonably incurred or paid bythe Employee in the performance of his duties and responsibilities upon presentation of expensestatements or receipts or such other supporting documentation as the Corporation may reasonablyrequire.**7.****Vacation**
 

 
     The Employee shall be entitled during each Year of Employment during the Employment Period tovacation with pay of four weeks. Vacation shall be taken by the Employee at such time as may beacceptable to the Corporation having regard to its operations. Except with the prior writtenconsent of the Chief Executive Officer (i) no more than two weeks of vacation shall be takenconsecutively; and (ii) the vacation entitlement earned in a Year of Employment cannot be carriedforward to a subsequent Year of Employment. Notwithstanding the foregoing, in the event that theEmployee’s employment is terminated pursuant to section 8 or section 10, the Employee shall not beentitled to receive any payment in lieu of any vacation to which he was entitled and which had notalready been taken by him except to the extent, if any, of the payments in respect of vacation payrequired by the Employment Standards Act.**8.****Termination**     8.1. Notice. The Employee’s employment may, subject to section 10 and section 11hereof, be terminated at any time:          8.1.1. by the Corporation without prior notice and without further obligations to the Employeefor reasons of Just Cause;8.1.2. by the Corporation for any reason other than Just Cause, including theoccurrence of Disability, on eighteen months prior written notice to the Employeeprovided that if the Employee is entitled under the ESA to a longer period of noticethan that prescribed above, the notice to be given b the Corporation under thissection 8.1.2 shall be that minimum period of notice which is required under the ESAand no more; or8.1.3. by the Employee on one month’s notice to the Corporation.The Employee’s employment shall be automatically terminated in the event of his death.8.2 **Effective Date**. The Effective date on which the Employee’s employment shall beterminated shall be:8.2.1. in the case of termination under section 8.1.1, the day the Employee isdeemed, under section 18, to have received notice from the Corporation of suchtermination;8.2.2. in the case of termination under section 8.1.2 or section 8.1.3, the last dayof the minimum period referred to therein; and8.2.3. in the event of the death of the Employee, on the date of his death.
 

 
     Notwithstanding the foregoing, where the Corporation is giving or has given the noticepursuant to section 8.1.2 above, the Corporation shall have the right, at any time prior to the endof the Employment Period and by giving notice to the Employee to that effect ( a :“Stop WorkNotice”), to require that the Employee cease to perform his duties and responsibilities and ceaseattending the Corporation’s premises immediately upon the giving of the Stop Work Notice. If aStop Work Notice is given, the Corporation shall continue to pay the Employee to the end of theEmployment Period. For that purpose, in calculating the Employee’s entitlement to Salary, bonus,and to Benefits under any fund, plan or arrangement, if any, the Employee shall be considered tohave been actively employed by the Corporation to the end of the Employment Period.Notwithstanding the foregoing, if the employment of the Employee is terminated because of theoccurrence of Disability, the Employee will, in accordance with the terms of the particular plan,be eligible to continue to receive Benefits.**9.****Rights of Employee on Termination and Lump Sum Payment**     Where the Employee’s employment under this Agreement has been terminated by the Corporationunder section 8.1.2, the Employee shall be entitled, upon receipt by the Corporation of appropriatereleases, resignations, and other similar documentation, to receive from the Corporation, inaddition to accrued but unpaid Salary and bonus remuneration, in any and any entitlement in respecto f vacation as contemplated by section 7, a lump sum payment equal to eighteen months’ Salary andfive (5) percent of his Salary in respect of his entitlement to Benefits, less any amounts payableto the Employee in lieu of notice where a Stop Work Notice has been given pursuant to section 8.2and less any amounts owing by the Employee to the Corporation for any reason. For the purposes ofthe Employee’s entitlement to Benefits, the Employee shall receive an amount equal to five (5)percent of his Basic Salary for the purpose of obtaining equivalent coverage during the noticeperiod. Notwithstanding the foregoing, if the employment of the Employee is terminated because ofthe occurrence of Disability, the Employee will, in accordance with the terms of the particularplan, be eligible to continue to receive Benefits.     Except as provided above in this section and subject to section 10 and section 11, where theEmployee’s employment has been terminated by the Employee or by the Corporation for any reason, theEmployee shall not be entitled, except to the extent required under any mandatory employmentstandard under the ESA, to receive any payment as severance pay, in lieu of notice, or as damages.Except as to any entitlement as provided above and subject to section 10 and section 12, theEmployee hereby waives any claims that the Employee may have against the Corporation for or inrespect of severance pay or on account of loss of office or employment or notice in lieu
 

 
thereof or damages in lieu thereof (other than rights to accrued but unpaid Salary and vacation payand to reimbursement for expenses pursuant to section 6). The payments to the Employee where theCorporation has given notice pursuant to section 8.1.2 above, whether or not a Stop Work Notice isgiven, shall be deemed to include and to satisfy entitlement to severance pay pursuant to the ESAto the Extent of such payments.**10.****Change of Control**     10.1. **Termination of Employment by the Corporation for Just Cause**. Following Changeof Control, the Corporation may terminate the Employee’s employment at any time without notice orfurther obligations to the Employee under this Agreement for reasons of Just Cause. For greatercertainty, following a Change of Control the Employee shall not be deemed to have been terminatedfor Just Cause unless and until there has been delivered to the Employee a copy of a resolutionduly adopted by the affirmative vote of not less than three-quarters of the entire membership ofthe board of directors of the Corporation (excluding the Employee if the Employee is at the time adirector of the Corporation) at a meeting of the board called and held for the purpose (afterreasonable notice to the Employee), finding that in good faith opinion of the Board the Employee’sconduct constituted Just Cause and specifying the particulars thereof. The date on which suchresolution is given to the Employee shall be the effective date of any termination pursuant to thissection 10.1.10.2 **Termination by the Employee Without Good Reason**Notwithstanding the provisions of section 8 hereof, if at any time within six months following aChange of Control the Employment of the Employee is voluntarily terminated by the Employee for anyreason other than (i) Good Reason, Disability, death, or Retirement; or (ii) by the Corporation forJust Cause, the Employee shall be entitled to an amount equal to his annual Salary (less anyrequired statutory deductions and withholdings).10.3. **Termination of Employment Without Just Cause or for Good Reason**.Notwithstanding the provisions of section 8 and section 10.2 hereof, if at any time within 24months following a Change of Control, the Employee’s employment is terminated, (i) by theCorporation other than for Just Cause; or (ii) by the Employee in response or a Good Reason, thefollowing provisions shall apply:10.3.1. the Employee shall be entitled to receive, and the Corporation shall pay tothe Employee immediately following termination, a cash amount equal to two times theEmployee’s Basic Salary less any required statutory deductions;
 

 
10.3.2. the Employee shall be entitled to receive, and the Corporation shall pay tothe Employee, immediately following termination, a cash amount equal to ten percentof his annual Salary in lieu of continued benefit coverage; and10.3.3. if at the date of termination of the Employee’s employment, the Employeeholds options for the purchase of shares under a share option plan, all options soheld shall, notwithstanding the terms of the Corporation’s share option plan, (i)immediately vest to the extent they have not already vested at such date; and (ii)(A) continue to be held on the same terms and conditions as if the Employeecontinued to be employed by the Corporation or (B) if the Employee so elects inwriting within 90 days after the date of termination, be purchased by theCorporation at a cash purchase price equal to the amount by which the aggregate“fair market value” of the shares subject to such options exceeds the aggregateoption price for such shares, provided that for this purpose, “fair market value”means the higher of (i) the average of the closing prices for the shares of the sameclass of the Corporation on the principal securities exchange (in terms of volume oftrading) on which such shares are listed at the time of termination for each of thelast 10 days prior to such time on which such shares traded on such securitiesexchange, and (ii) if the Change of Control involved the purchase and sale of suchshares, the average value of the cash consideration paid to the shareholders of theCorporation in connection with the transactions resulting in the Change of Control.For purposes of this Agreement, the Employee’s employment shall be deemed to have been terminatedfollowing a Change of Control by the Corporation without Just Cause or by the Executive with GoodReason, if (i) the Employee’s employment is terminated by the Corporation without Just Cause priorto a Change of Control and such termination was a the request or direction of a Person who hasentered into an agreement with the Corporation or any shareholder of the Corporation theconsummation of which would constitute a Change of Control; (ii) the Employee terminates hisemployment with Good Reason prior to a Change Reason prior to a Change of Control and thecircumstance or event which constitutes Good Reason occurs at the request or direction of a Personwho has entered into an agreement with the Corporation or any shareholder of the Corporation theconsummation of which would constitute a Change of Control; or (iii) the Employee’s employment isterminated by the Corporation without
 

 
Just Cause prior to a Change of Control and the Employee reasonably demonstrates that suchtermination is otherwise in connection with or in anticipation of a Change of Control whichactually occurs.For greater certainty, this section 10(3) does not apply in the event of the termination of theemployment of the Employee as a result of death, Disability or Retirement or by the Corporation forJust Cause or, subject to section 10.2 by the Employee without Good Reason. If the Employee or theCorporation intends to terminate the Employee’s employment as contemplated in this section 10, theparty having such intention shall in accordance with the provisions of section 18 hereof give theother notice thereof.**11.****No Obligation to Mitigate**     The Employee shall not be required to mitigate the amount of any payment or Benefits providedfor in this Agreement by seeking other employment or otherwise, nor (except as specificallyprovided herein), shall the amount of any payment provided for in this Agreement be reduced by anycompensation earned by the Employee as a result of employment by another employer after terminationor otherwise.**12.****Non-Competition**     The Employee shall not, either during the Employment Period or for the greater of theRestricted Period and for a period for 1 year following the end of the employment Period, directlyor indirectly, in any manner whatsoever including, without limitation, either individually, or inpartnership, jointly or in conjunction with any other Person, or as employee, principal, agent,director or shareholder.12.1. be engaged in any undertaking;12.2. have any financial or other interest (including an interest by way of royalty or othercompensation arrangement) in or in respect of the business of any Person which carries on abusiness; or12.3. advise, lend money to, guarantee the debts or obligations of or permit the useof the Employee’s name or any parts thereof by any Person which carries on a business;in which is the same as or substantially similar to or which competes with or would compete withthe refractive laser corrective surgery business carried on during the Employment Period or at theend thereof, as the case may be, by the Corporation or any of its Subsidiaries.     Notwithstanding the foregoing, nothing herein shall prevent the Employee from owning not morethan 5% of the issued shares of a corporation, the shares of which are listed on a recognized stockexchange or traded in the over the counter market in Canada or the United States, which carries ona business which is the same
 

 
as or substantially similar to or which competes with or would compete with the business of theCorporation or any of its Subsidiaries.**13.****No Solicitation of Patients**     The Employee shall not, either during the Employment Period or the greater of the RestrictedPeriod or a period of 1 year following the end of the Employment Period, directly or indirectly,contact or solicit any designated patients of the Corporation or any of its Subsidiaries for thepurpose of selling to the designated patients any products or services which are the same as orsubstantially similar to, or in any way competitive with, the refractive laser corrective surgeryproducts or services sold by the Corporation or any of its Subsidiaries during the EmploymentPeriod or at the end thereof, as the case may be. For the purpose of this section, a designatedpatient means a person who was a patient of the Corporation or of any of its Subsidiaries duringsome part of the Employment Period.**14.****No Solicitation of Employees**     The Employee shall not, either during the Employment Period or the Restricted Period and for aperiod of 1 year following the Restricted Period, directly or indirectly, employ or retain as anindependent contractor any employee of the Corporation or any of its Subsidiaries or induce orsolicit, or attempt to induce, any such person to leave his/her employment.**15.****Confidentiality**     The Employee shall not, either during the Employment Period or at any time thereafter,directly or indirectly, use or disclose to any Person any Confidential Information provided,however, that nothing in this section shall preclude the Employee from disclosing or usingConfidential Information if:15.1. the Confidential Information is available to the public or in the public domain at thetime of such disclosure or use, without breach of this Agreement; or15.2. disclosure of the Confidential information is required to be made by any law,regulation, governmental body, or authority or by court order.The Employee acknowledges and agrees that the obligations under this section are to remain ineffect in perpetuity and shall exist and continue in full force and effect notwithstanding anybreach or repudiation, or alleged breach or repudiation, the by the Corporation of this Agreement.**16.****Remedies**
 

 
     The Employee acknowledges that a breach or threatened breach by the Employee of the provisionsany of sections 12 to 18 inclusive will result in the Corporation and its shareholders sufferingirreparable harm which is not capable of being calculated and which cannot be fully or adequatelycompensated by the recovery of damages alone. Accordingly, the Employee agrees that theCorporation shall be entitled to interim and permanent injunctive relief, specific performance andother equitable remedies, in addition to any other relief to which the Corporation may becomeentitled.**17.****Notices**     Any notice or other communication required or permitted to be given hereunder shall be inwriting and shall be given by prepaid first-class mail, by facsimile or other means of electroniccommunication or by hand-delivery as hereinafter provided, except that any notice of termination bythe Corporation under section 8 or section 10 shall be hand-delivered or given by registered mail.Any such notice or other communication, if mailed by prepaid first-class mail at any time otherthan during a general discontinuance of postal service due to strike, lockout or otherwise, shallbe deemed to have been received on the fourth Business Day after the post-marked date thereof, orif mailed by registered mail, shall be deemed to have been received on the day such mail isdelivered by the post office, or if sent by facsimile or other means of electronic communication,shall be deemed to have been received on the Business Day following the sending, or if delivered byhand shall be deemed to have been received at the time it is delivered to the applicable addressnoted below either to the individual designated below or to an individual at such address havingapparent authority to accept deliveries on behalf of the addressee. Notice of change of addressshall also be governed by this section. In the event of a general discontinuance of postal servicedue to strike, lock-out or otherwise, notices or other communication shall be delivered by hand orsent by facsimile or other means of electronic communication and shall be deemed to have beenreceived in accordance with this section. Notices and other communications shall be addressed asfollows:     a) if to the Employee:Henry Lynn