-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PMrN/lDlk25Jie+acJOSBId5mbg5CqArlzmLNhhrpvEu8ddLlKyRSrSEhg+0mQGm bW56E8NH3Bb2PlalFsCmKg== 0001005477-98-002717.txt : 19980907 0001005477-98-002717.hdr.sgml : 19980907 ACCESSION NUMBER: 0001005477-98-002717 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 19980903 EFFECTIVENESS DATE: 19980903 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: TLC LASER CENTER INC CENTRAL INDEX KEY: 0001010610 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SPECIALTY OUTPATIENT FACILITIES, NEC [8093] IRS NUMBER: 000000000 STATE OF INCORPORATION: A6 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-62907 FILM NUMBER: 98704550 BUSINESS ADDRESS: STREET 1: 5600 EXPLORER DRIVE STREET 2: SUITE 301 CITY: MISSISSAUGA STATE: A6 ZIP: 00000 BUSINESS PHONE: 3015712020 MAIL ADDRESS: STREET 1: 6701 DEMOCRACY BLVD STREET 2: SUITE 200, LEGAL DEPT. CITY: BETHESDA STATE: MA ZIP: 20817 S-8 1 FORM S-8 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 TLC THE LASER CENTER INC. ------------------------- (Exact name of registrant as specified in its charter) Ontario, Canada 980151150 (State or jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 5600 Explorer Drive, Suite 301 Mississauga, Ontario L4W 4Y2 (905) 602-2020 (Address and Telephone Number of Principal Executive Offices, Including Zip Code) 20/20 LASER CENTERS, INC. 1995 STOCK OPTION PLAN INDIVIDUAL STOCK OPTION AGREEMENTS (Full Title of the Plan) Elizabeth A. Karmin, Esq. 6701 Democracy Blvd., Suite 200 Bethesda, MD 20817 (Name and address of Agent for Service) 301-571-2020 (Telephone Number, Including Area Code, of Agent for Service) Calculation of Registration Fee
================================================================================================== Proposed maximum Proposed maximum Amount of Title of Securities Amount to offering price per aggregate offering registration to be registered to be registered share (1) price (1) fee - -------------------------------------------------------------------------------------------------- Common Shares, 510,000 $0.03 $ 15,300 no par value 68,372 $4.45 $304,255 6,296 $5.33 $ 33,558 -------- $353,113 $104.17 ==================================================================================================
(1) Pursuant to Rule 457(h)(1), based upon the exercise price of outstanding options. PART I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS Item 1. Plan Information* Item 2. Registrant Information and Employee Plan Annual Information* * Information required by Part I to be contained in a Section 10(a) prospectus is omitted from the Registration Statement in accordance with Rule 428 under the Securities Act of 1933, as amended (the "Securities Act"), and the Note to Part I of Form S-8. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference The following documents previously filed by the Registrant with the Securities and Exchange Commission (the "Commission") are incorporated by reference in this Registration Statement: 1. The Registrant's Form 10-K for the fiscal year ended May 31, 1998. 2. All other reports filed pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), since the end of the fiscal year ended May 31, 1998 and prior to the date of the filing of this Registration Statement on Form S-8. 3. Registrant's Form 8-A Registration Statement filed pursuant to Section 12 of the Exchange Act, containing a description of the Registrant's common shares ("Shares"), including any amendment or report filed for the purpose of updating such description. In addition, all documents subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing of such documents. Item 4. Description of Securities. Not Applicable. Item 5. Interests of Named Experts and Counsel None. -2- Item 6. Indemnification of Directors and Officers Under the Business Corporations Act (Ontario), the Registrant may indemnify a present or former director or officer or a person who acts or acted at the Registrant's request as a director or officer of another corporation of which such Registrant is or was a shareholder or creditor, and his heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him in respect of any civil, criminal or administrative action or proceeding to which he is made a party by reason of his position with the Registrant or such other corporation, as the case may be, provided that such person acted honestly and in good faith with a view to the best interests of the Registrant and, in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, such person had reasonable grounds for believing that his conduct was lawful. Such indemnification may be made in connection with an action by or on behalf of the Registrant or such other corporation, as the case may be, only with court approval. A director or officer referred to above is entitled to indemnification from the Registrant as a matter of right if he was substantially successful on the merits and fulfilled the conditions set forth above. In accordance with the Business Corporations Act (Ontario), the By-laws of the Registrant indemnify a director or officer, a former director or officer, a person who acts or acted at the Registrant's request as a director or officer of a corporation of which the Registrant is or was a shareholder or creditor, or such person's heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by such person in respect of any civil, criminal or administrative action or proceeding to which such person is made a party by reason of being or having been a director or officer of the Registrant or such other corporation if such person acted honestly and in good faith with a view to the best interests of the Registrant, and, in the case of a criminal or administrative action or proceeding that is enforced by monetary penalty, such person had reasonable grounds for believing that such person's conduct was lawful. A policy of directors' and officers' liability insurance is maintained by the Company which insures, subject to certain exclusions, directors and officers of the Registrant for damages, judgments, settlements and defense costs as a result of claims based upon their acts or omissions in their capacities as directors and officers of the Registrant, and also reimburses the Registrant for payments made pursuant to the indemnity provisions under the Business Corporations Act (Ontario), the Registrant's Articles or By-laws or the common law. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the Registrant pursuant to the foregoing provisions, the Registrant has been informed that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable. Item 7. Exemption from Registration Claimed Not applicable. Item 8. Exhibits See Exhibit Index on page 8. Item 9. Undertakings (a) The Registrant hereby undertakes: -3- (1) To file, during any period in which offers or sales are being made of the securities registered hereby, a post-effective amendment to this Registrant Statement; (i) To include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high and of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; provided, however, that the undertakings set forth in paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in this Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered that remain unsold at the termination of the offering. (b) The Registrant hereby further undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in the Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant, unless in the opinion of its counsel the matter has been settled by controlling precedent, will submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. -4- SIGNATURES Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Mississauga, Province of Ontario, Canada, on the 3rd day of September, 1998. TLC THE LASER CENTER INC. By: /s/ Elias Vamvakas -------------------------------- Elias Vamvakas Chief Executive Officer POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears below constitutes and appoints each of Elias Vamvakas and Peter Kastelic, or any of them, each acting alone, his true and lawful attorney-in-fact and agent with full power of substitution and resubstitution, for him, and in his name, place and stead, in any and all capacities, to sign this Registration Statement on Form S-8 in the name and on behalf of the Registrant or on behalf of the undersigned as a director or officer of the Registrant, and any and all stickers and amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Commission and any applicable securities exchange or securities self-regulatory body, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done to comply with the provisions of the Securities Act and all requirements of the Commission, hereby ratifying and confirming all that said attorney-in-fact or any of them, or their or his or her substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act, this Registration Statement has been signed below by the following persons in the capacities and on the date indicated: Signatures Title Date - ---------- ----- ---- /s/ Elias Vamvakas Chairman of the Board, September 3, 1998 - ------------------------------ President and Chief Elias Vamvakas Executive Officer /s/ Peter Kastelic Chief Financial Officer and August 27, 1998 - ------------------------------ Treasurer (Principal Peter Kastelic Financial and Accounting Officer) -5- Director - ------------------------------ Jeffery J. Machat /s/ James R. Connacher Director September 3, 1998 - ------------------------------ James R. Connacher /s/ John F. Riegert Director August 31, 1998 - ------------------------------ John F. Riegert /s/ Howard J. Gourwitz Director September 1, 1998 - ------------------------------ Howard J. Gourwitz Director - ------------------------------ Warren S. Rustand /s/ William David Sullins, Jr. Director August 31, 1998 - ------------------------------ William David Sullins Jr. -6- EXHIBIT INDEX 4. Instruments defining the rights of security holders (a) 20/20 Laser Centers, Inc. 1995 Stock Option Plan (b) Stock Exchange Agreement Between the Company and Elizabeth A. Karmin dated February 10, 1997 (c) Stock Exchange Agreement Between the Company and Eric J. Hatch dated February 10, 1997 (d) Stock Option Agreement Between 20/20 Laser Centers, Inc. and Mark Speaker, M.D. dated September 19, 1996 (e) Stock Exchange Agreement Between the Company and Mark Speaker, M.D. dated February 10, 1997 (f) Stock Option Agreement Between 20/20 Laser Centers, Inc. and Eric Donnenfeld, M.D. dated September 19, 1996 (g) Stock Exchange Agreement Between the Company and Eric Donnenfeld, M.D. dated February 10, 1997 (h) Stock Option Agreement Between 20/20 Laser Centers, Inc. and J. James Thimons, O.D. dated September 19, 1996 (i) Stock Exchange Agreement Between the Company and J. James Thimons, O.D. dated February 10, 1997 5. Opinion of Counsel re: validity of securities registered 6. Consents of experts and counsel (a) Consent of Ernst and Young, Chartered Accountants Certified Public Accountants (b) Consent of Counsel included in Exhibit 5 24. Power of Attorney: included on signature page. -7- EX-4.(A) 2 1995 STOCK OPTION PLAN Adopted August 30, 1995 As Amended September 21, 1995 and July 18, 1996 and February 6, 1997 20/20 LASER CENTERS, INC. 1995 STOCK OPTION PLAN 20/20 LASER CENTERS, INC. 1995 STOCK OPTION PLAN 1. Purpose of the Plan. The purpose of the 1995 Stock Option Plan (the "Plan") of 20/20 Laser Centers, Inc. (the "Corporation") is to give the Corporation a significant advantage in attracting, retaining and motivating key employees, directors and advisers and to provide the Corporation, and its Subsidiaries and Unincorporated Affiliates with the ability to provide incentives more directly linked to the profitability of the Corporation's businesses and increases in stockholder value. 2. Definitions. A. "Adviser" means any special adviser to the Corporation who is designated as such by the Board for purposes of this Plan. B. "Board" means the Board of Directors of the Corporation. C. "Code" means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto. D. "Committee" means the committee provided for in Section 4 to administer the Plan. E. "Common Stock" means the common shares, $0.01 par value per share, of the Corporation. F. "Corporation" means 20/20 Laser Centers, Inc., a Maryland corporation. G. "Date of Grant" means the date on which an Option granted. H. "Director" means a member of the Corporation's Board of Directors. I. "Fair Market Value" shall mean, with respect to a share of Common Stock, the current price per share of Common Stock as determined by the Board of Directors in good faith on a fully diluted basis. With respect to the determination of the price per share of Common Stock, if the Common Stock is currently being offered for sale to investors, the Board shall take into account the current per share price offered to investors, as adjusted -2- for any premiums paid or discounts received by an investor attributable to the investor's acquisition of a block of Common Stock or other securities of the Corporation or any other consideration to be paid or received by the Corporation in connection with such stock offering. "Fully diluted" as used herein shall mean the total number of shares of Common Stock outstanding and shall treat all shares subject to outstanding warrant or option agreements and all shares of restricted stock as outstanding and all securities convertible into Common Stock as if fully converted. Notwithstanding the above provision, if the Common Stock is traded on a national market or on an established stock exchange as of the date of determination, the Fair Market Value shall be the closing price of the Common Stock on such market or exchange, as applicable. J. "Incentive Stock Option" means an Option qualifying for special tax treatment under Section 422 of the Code. K. "Key Employee" means any employee, including employees who are also officers or directors, but not including directors who are not also employees, of the Corporation, a Parent Corporation, Subsidiary Corporation or Unincorporated Affiliate who have substantial responsibility in the direction and management of the Corporation, a Parent Corporation, Subsidiary Corporation or Unincorporated Affiliate as determined by the Committee. L. "Non-employee Director" means a Director who is neither an officer nor an employee of the Corporation, Parent Corporation or any Subsidiary Corporation. M. "Nonqualified Stock Option" means an Option that is not an Incentive Stock Option. N. "Option" means an Incentive Stock Option or a Nonqualified Stock Option granted under this Plan. O. "Parent Corporation" has the same meaning used in Section 424(e) of the Code. P. "Plan" means the 20/20 Laser Centers, Inc. 1995 Stock Option Plan as set forth herein, which may be amended from time to time. Q. "Subsidiary" or "Subsidiary Corporation" has the same meaning used in Section 424(f) of the Code. R. "Unincorporated Affiliate" means any entity that would qualify as a Subsidiary Corporation but for the fact that the entity is not incorporated. -3- S. In addition, certain other terms used herein have definitions given to them in the first place in which they are used. 3. Shares of Common Stock Subject to the Plan. A. Subject to the provisions of Section 9 of the Plan, the aggregate number of authorized but unissued shares of Common Stock that may be issued pursuant to Options granted under the Plan will not exceed one million (1,000,000) shares. Shares that by reason of expiration or cancellation of an Option or that are otherwise no longer subject to purchase pursuant to an Option granted under the Plan may again be available for issuance pursuant to Options under the Plan. B. Upon the exercise of an Option, the Corporation may issue new shares or reissue shares of Common Stock previously repurchased by or on behalf of the Corporation. 4. Administration of the Plan. The Plan will be administered by the Committee. The Board shall be the Committee unless the Board appoints a committee of three (3) or more Directors to serve as such. Grants of Nonqualified Stock Options and Incentive Stock Options to Key Employees will be made in the discretion of the Committee. All questions of interpretation of the Plan or of any Options granted under it will be determined by the Committee and such determination will be final and binding upon all persons having an interest in the Plan. Any or all powers and discretion vested in the Board under this Plan may be exercised by the Committee or any other subcommittee so authorized by the Board. Among other things, the Committee shall have the authority, subject to the terms of the Plan: A. to select the eligible Key Employees to whom awards may from time to time be granted; B. to determine whether and to what extent Incentive Stock Options and Nonqualified Stock Options or any combination thereof are to be granted hereunder; C. to determine the number of shares of Common Stock to be covered by each award granted hereunder; D. to determine the terms and conditions of any award granted hereunder (including, but not limited to, subject to Section 6, the option price, any -4- vesting restrictions or limitations and any vesting acceleration or forfeiture waiver regarding any award and the shares of Common Stock relating thereto, based on such factors as the Committee shall determine); and E. to modify, amend or adjust the terms and conditions of any Option, at any time or from time to time, including, but not limited to, with respect to performance goals and measurements applicable to performance-based awards pursuant to the terms of the Plan. The Committee shall have the authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall from time to time deem advisable, to interpret the terms and provisions of the Plan and any award issued under the Plan (and any agreement relating thereto), and to otherwise supervise the administration of the Plan. The Committee and the Board may act with respect to the Plan only by a majority of the respective members then in office, except that the members thereof may authorize any one or more of their number or any officer of the Corporation to execute and deliver documents with respect to the Plan on behalf of the Committee or the Board, respectively. Any determination made by the Committee, the Board or pursuant to delegated authority under the Plan with respect to any award shall be made in the sole discretion of that body at the time of the grant of the award or, unless in contravention of any express term of the Plan, at any time thereafter. All decisions made by the Committee or the Board pursuant to the provisions of the Plan shall be final and binding on all persons, including the Corporation and Plan participants. 5. Eligibility. Advisers, Directors and Key Employees of the Corporation, the Parent Company, a Subsidiary Corporation or an Unincorporated Affiliate will be eligible to participate in the Plan. Advisers and Non-employee Directors of the Corporation, a Parent Corporation and any Subsidiary Corporations and Key Employees of Unincorporated Affiliates will be eligible to receive only Nonqualified Stock Options under the Plan. Notwithstanding the foregoing, in no event will any options be granted under this Plan to Gary Jonas, Norman Understein, Charles Citrin, Stephen Goldstein, or any affiliates of any of the foregoing. -5- 6. Terms and Conditions of Options. Options granted under the Plan may be of two types: Incentive Stock Options and Nonqualified Stock Options. Each Option granted under this Plan will be evidenced by an Option agreement between the Corporation and the recipient which sets forth the exercise price of the Option, the vesting schedule (if any) of the Option, the expiration date of the Option, and any other terms or conditions approved by the Committee subject to the following terms and conditions: 7. Types of Options. (1) Nonqualified Stock Option. A Nonqualified Stock Option may be granted to an Adviser, a Non-employee Director and a Key Employee in the discretion of the Committee. The option exercise price per share for the shares subject to a Nonqualified Stock Option shall be determined by the Committee. The option price of a Nonqualified Stock Option may be less than 100% of the Fair Market Value of the Common Stock on the Date of Grant but may not be less than the par value of the Common Stock. (2) Incentive Stock Option. An Incentive Stock Option intended to qualify for special tax treatment under Section 422 of the Code may be granted to a Key Employee of the Corporation, a Parent Corporation or a Subsidiary Corporation in the discretion of the Committee. A Key Employee of an Unincorporated Affiliate is not eligible to receive an Incentive Stock Option. a) No Incentive Stock Option may be granted more than ten (10) years after the earlier of the date the Plan was adopted or the date the Plan was approved by the shareholders pursuant to Section 14 of the Plan. b) The option exercise price per share for the shares covered by a Incentive Stock Option granted to an individual who on the Date of Grant owns (or who is deemed to own under Section 424(d) of the Code) more than ten percent (10%) of the total combined voting power of all classes of stock of the Corporation (or of a Parent Corporation or a Subsidiary Corporation) will not be less than 110% of the Fair Market Value of the Common Stock on the Date of Grant. The option exercise price per share for the shares covered by a Incentive Stock Option granted to an individual who on the Date of Grant owns ten percent (10%) or less of the total -6- combined voting power of all classes of stock of the Corporation will not be less than 100% of the Fair Market Value of the Common Stock on the Date of Grant. c) To the extent that the aggregate Fair Market Value of the Common Stock with respect to which Incentive Stock Options granted to any person are exercisable for the first time during any calendar year (under all stock option plans of the Corporation, its parent and subsidiaries) exceeds $100,000, the Options are not Incentive Stock Options. For purposes of this paragraph, the Fair Market Value of the Common Stock will be determined as of the time the Option with respect to the Common Stock is granted. This paragraph will be applied by taking Options into account in the order in which they are granted. d) Each Incentive Stock Option granted under the Plan may be exercised only in accordance with the schedule set forth in the option agreement. B. Term of Options. Notwithstanding any other provisions of the Plan or any Option agreement, no Option will be exercisable after the expiration of ten (10) years from the Date of Grant. Furthermore, no Incentive Stock Option granted to an individual who on the Date of Grant owns (or who is deemed to own under Section 424(d) of the Code) more than ten percent (10%) of the total combined voting power of all classes of stock of the Corporation (or of a Parent Corporation or a Subsidiary Corporation) will be exercisable after the expiration of five (5) years from the Date of Grant. C. Vesting of Options. An Option will be exercisable only to the extent that it is vested on the date of exercise. Vesting of an Option will cease on the date that an optionee is no longer an employee of, or no longer provides services to, the Corporation, a Parent Corporation, Subsidiary Corporation or an Unincorporated Affiliate. An Option will be exercisable only to the extent it is vested on the date of the optionee's termination. The Committee retains the right to accelerate the vesting of any Option in its sole discretion. D. Termination of Employment. If an optionee terminates employment or service for any reason other than death or full disability for six months, the optionee shall be entitled to exercise the Option to the extent vested as of the optionee's termination date until the date that is thirty (30) calendar days after the optionee's termination of employment. If an optionee terminates employment or service because of death or full disability for six months, the optionee's heirs, legatees or legal representative may -7- exercise any portion of the Option to the extent vested as of the date of the optionee's death within one (1) year of the date of the Optionee's death. Any outstanding vested but unexercised Option shall terminate on the date after the end of the thirty-day or one-year period, as appropriate, following the optionee's termination of employment. Furthermore, no Option will be exercisable after the expiration date stated in the stock option agreement executed by the Corporation and the Optionee. Each Option will be subject to termination before its date of expiration as hereinafter provided. The Committee retains the right to extend the expiration date of any Option following a termination of employment. E. Exercise. Options may be exercised only by written notice to the Corporation at its head office accompanied by payment of the full consideration for the shares as to which they are exercised. Payment of the exercise price may be in cash or, in the sole discretion of the Committee, (1) by exchange of Common Stock of the Corporation, or (2) partly in cash and partly by exchange of such Common Stock. The value of exchanged Common Stock will be the Fair Market Value on the date of exercise. F. Nontransferability. No Option granted under the Plan, contingent or otherwise, will be transferable, assignable or subject to any encumbrance, pledge, or charge of any nature, except by will or the laws of descent and distribution. During the lifetime of an optionee, an Option will be exercisable only by the optionee or by the optionee's legal representative. The executor or administrator of the estate of the optionee may transfer any rights with respect to such Option to the person or persons or entity (including a trust) entitled thereto under the will of the optionee or under the laws of intestacy. 8. Stock Legend. The Corporation may require that certificates evidencing shares of Common Stock purchased upon the exercise of Incentive Stock Options issued under the Plan be endorsed with a legend in substantially the following form: The shares evidenced by this certificate may not be sold or transferred prior to ______, 19__, in the absence of a written statement from 20/20 Laser Centers, Inc. (the "Corporation") to the effect that the Corporation is aware of the fact of such sale or transfer. The blank contained in such legend shall be filled in with the date that is the later of: (A) one year and one day after the date of exercise of such Incentive Stock Option or (B) two years and one day after the date of grant of such Incentive Stock Option. Upon delivery to the Corporation, at its principal executive office, of a written -8- statement to the effect that such shares have been sold or transferred prior to such date, the Corporation does hereby agree to deliver promptly to the transfer agent for such shares, if a transfer agent is required for the transaction, a written statement to the effect that the Corporation is aware of the fact of such sale or transfer. The Corporation may also require the inclusion of any additional legend which may be necessary or appropriate. 9. Termination and Amendment of the Plan and Options. The Board may terminate the Plan at any time except with respect to any outstanding Options. The Board may amend the Plan in any manner with respect to future grants of Options and may amend outstanding Options in any manner consistent with the Plan subject to the following limitations. No amendment will be effective if the amendment changes the manner of determining the exercise price of Incentive Stock Options, makes individuals who are not employees of the Corporation or of any Parent or Subsidiary Corporation eligible to be granted Incentive Stock Options, changes the nontransferability of the Options, alters or impairs any rights or obligations of any outstanding Option without the written consent of the optionee, or either increases the number of shares eligible for issuance under the Plan or adds a class of employees eligible to be granted Incentive Stock Options unless such additional shares or new class is approved by the shareholders of the Corporation. 10. Change in Capital Structure. A. The existence of outstanding Options shall not affect in any way the right or power of the Corporation or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Corporation's capital structure or its business, or any merger or consolidation of the Corporation, or any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Corporation, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. B. If the Corporation shall effect a subdivision or consolidation of shares or other capital readjustment, the payment of a stock dividend, or other increase or reduction of the number of shares of the Common Stock outstanding, without receiving compensation therefore in money, services or property, then (1) the number, class, and per share price of shares of Common Stock subject to outstanding Options hereunder shall be appropriately adjusted in such a manner as to entitle an optionee to receive upon exercise of an Option, for the same aggregate cash consideration, the same total number and class of shares as he would have received had the optionee exercised his or her Option in full -9- immediately prior to the event requiring the adjustment; and (2) the number and class of shares then reserved for issuance under the Plan shall be adjusted by substituting for the total number and class of shares of Common Stock then reserved that number and class of shares of Common Stock that would have been received by the owner of an equal number of outstanding shares of each class of Common Stock as the result of the event requiring the adjustment. C. After a merger of one or more corporations into the Corporation or after a consolidation of the Corporation and one or more corporations in which the Corporation shall be the surviving corporation, each optionee shall, at no additional cost, be entitled upon exercise of such Option to receive (subject to any required action by stockholders) in lieu of the number and class of shares as to which such Option shall then be so exercisable, the number and class of shares of stock or other securities to which such optionee would have been entitled pursuant to the terms of the agreement of merger or consolidation if, immediately prior to such merger or consolidation, such optionee had been the holder of record of the number and class of shares of Common Stock equal to the number and class of shares as to which such Option shall be so exercised. D. If the Corporation is merged into or consolidated with another corporation under circumstances where the Corporation is not the surviving corporation, or if the Corporation is liquidated, or sells or otherwise disposes of substantially all of its assets to another corporation while unexercised Options remain outstanding under the Plan, unless provisions are made in connection with such transaction for the continuance of the Plan and/or the assumption or substitution of such Options with new options covering the stock of the successor corporation, or parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices, then all outstanding Options shall be vested as of the effective date of any such merger, consolidation, liquidation, or sale (the "corporate event"). E. Except as previously expressly provided, neither the issuance by the Corporation of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Corporation convertible into such shares or other securities, nor the increase or decrease of the number of authorized shares of stock, nor the addition or deletion of classes of stock, shall affect, and no adjustment by reason thereof shall be made with respect to, the number, class or price of shares of Common Stock then subject to outstanding Options. -10- F. Adjustment under the preceding provisions of this section will be made by the Board, whose determination as to what adjustments will be made and the extent thereof will be final, binding, and conclusive. No fractional interest will be issued under the Plan on account of any such adjustment. No adjustment will be made in a manner that causes an Incentive Stock Option to fail to continue to qualify as an Incentive Stock Option under the Code. 11. Taxes. A. Tax Withholding. When any portion of a Nonqualified Stock Option is exercised, the optionee shall elect either to pay cash or to have the Corporation withhold from the Common Stock issued upon such exercise the number of shares sufficient to satisfy the Corporation's obligations, if any, to withhold taxes under Federal, state, or local law as a result of such exercise. The Fair Market Value of the Common Stock withheld must, as of the date the Nonqualified Stock Option is exercised, at least equal the aggregate unsatisfied withholding obligations for the portion of the Option that is exercised. B. Tax Qualification. Incentive Stock Options granted under the Plan are intended to qualify as Incentive Stock Options within the meaning of Section 422 of the Code, and the terms of the Plan and Options granted hereunder shall be so construed. Notwithstanding the foregoing, nothing in the Plan shall be interpreted as a representation, guarantee or other undertaking on the part of the Corporation that any Options are, or will be, determined to qualify as incentive stock options within the meaning of the Code. 12. General Provisions. A. The Corporation shall not be required to sell or issue any shares under any Option if the issuance of such shares shall constitute a violation by the optionee or the Corporation of any provision of any law, statute, or regulation of any stock exchange upon which the Common Stock may be listed or any governmental authority whether it be Federal or State. Unless a registration statement is in effect under the Securities Act of 1933, as amended (the "Securities Act") with respect to the shares of Common Stock covered by an Option, the Corporation shall not be required to issue shares upon exercise of any Option (1) unless the Committee has received evidence satisfactory to it to the effect that the optionee is acquiring such shares for investment and not with a view to the distribution thereof or (2) unless an opinion of counsel to the Corporation has been received by the Corporation, in a form and substance which is deemed acceptable by the Committee, to the effect -11- that a registration statement is not required. Any determination in this connection by the Committee shall be final, binding and conclusive. In the event the shares issuable on exercise of an Option are not registered under the Securities Act, the Corporation may imprint the following legend or any other legend which counsel for the Corporation considers necessary or advisable to comply with the Securities Act: "The shares of stock represented by this certificate have not been registered under the Securities Act of 1933 or under the securities laws of any State and may not be sold or transferred except pursuant to an effective registration statement or upon receipt by the Corporation of any opinion of counsel, in form and substance satisfactory to the Corporation, that registration is not required for such sale or transfer." The Corporation may, but shall in no event be obligated to, register any securities covered hereby pursuant to the Securities Act. In the event any shares are so registered, the Corporation may remove any legend on certificates representing such shares. The Corporation shall not be obligated to take any affirmative action in order to cause the exercise of an Option or the issuance of shares pursuant thereto to comply with any law or regulation of any governmental authority. B. No optionee and no beneficiary or other person claiming under or through an optionee will have any right, title or interest in or to any shares of Common Stock allocated or reserved under the Plan or subject to any Option except as to such shares of Common Stock, if any, that have been issued or transferred to such optionee or beneficiary. C. The Plan and all determinations made and actions taken pursuant thereto will be governed by the laws of the State of Maryland and construed in accordance therewith. D. Options may be granted under this Plan from time to time in substitution for stock options held by employees of other corporations who become employees of the Corporation or a Subsidiary Corporation as a result of a merger or consolidation of the employing corporation with the Corporation or the Subsidiary Corporation or the acquisition by the Corporation or a Subsidiary Corporation of the assets of the employing corporation, or the acquisition by the Corporation or a Subsidiary Corporation of at least 50% of the issued and outstanding stock of the employing corporation as the result of which it becomes a Subsidiary Corporation of the Corporation. The terms and conditions of the substitute options so granted may vary from the terms and conditions set forth in this Plan to such extent as the Board at the time of grant may deem appropriate to conform, in whole or -12- in part, to the provisions of the stock options for which they are granted in substitution, but no such variation shall be such as to affect the status of any such substitute option as an "incentive stock option" under Section 422 of the Code. E. At the time of grant, the Committee may provide in connection with any grant made under the Plan that the shares of Common Stock received as a result of such grant shall be subject to (1) a right of first refusal pursuant to which the optionee shall be required to offer to the Corporation any shares that the optionee wishes to sell at the then Fair Market Value of the Common Stock and/or (2) a right of repurchase pursuant to which the Corporation shall have the right to repurchase at the then Fair Market Value any shares of Common Stock that the optionee acquired through the exercise of such Options upon the optionee's termination of employment with the Corporation, any Parent Corporation, Subsidiary Corporation or Unincorporated Affiliate, subject to such other terms and conditions as the Committee may specify at the time of grant. If such a right of first refusal or right of repurchase is included in the optionee's Stock Option Agreement, the execution by the optionee of an agreement that grants such rights to the Corporation shall be a condition of the exercise of the Option. F. All headings in this Plan are for convenience of reference only and are to be ignored in construing the Plan. Any masculine pronoun shall include the feminine and the singular shall include the plural, and vice versa. 13. Indemnification of Board and Compensation Committees The members of the Board of Directors and the Committee will be indemnified by the Corporation against the reasonable expenses, including attorneys' fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan or Option agreements, and against all amounts paid by them in settlement thereof (provided such settlement is approved by legal counsel selected by the Corporation) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it is adjudged in such action, suit or proceeding that the member is liable for negligence or misconduct in the performance of the member's duties; provided that within sixty (60) days after institution of any such action, suit or proceeding a member will in writing offer the Corporation the opportunity, at its own expense, to defend the same. The foregoing right of indemnification shall inure to the benefit of the heirs, executors or administrators of each such member of the Board of Directors and the Committee and shall be in addition to any and all other rights of indemnification to which such members may be entitled to as a matter of law, contract, or otherwise. -13- 14. Limitation of Rights Neither the adoption and maintenance of the Plan nor the grant of Options will: A. limit the right of the Corporation, Parent Corporation, Subsidiary Corporation or Unincorporated Affiliate to discharge or discipline any employee, or otherwise terminate or modify the terms of any employment agreement, or B. confer upon any optionee any contract or other right or interest other than as specifically provided in the Plan and the Option agreement. 15. Effective Date of the Plan, Duration of the Plan. A. On August 31, 1995, the Board adopted this Plan subject to approval by the shareholders of the Corporation. On September 21, 1995, the Board adopted certain amendments to this Plan subject to approval by the shareholders of the Corporation. On April 26, 1996, the shareholders of the Corporation approved the Plan (as amended by the Board on September 21, 1995) and all Options previously granted under the Plan. The Board adopted an additional amendment to this Plan on July 18, 1996 which did not require shareholder approval. The Plan shall be effective as of August 31, 1995. B. Unless previously terminated, the Plan will terminate on August 31, 2005, except that Options that are granted under the Plan before its termination will continue to be administered under the terms of the Plan until the Options terminate or are exercised. -14- EX-4.(B) 3 STOCK EXCHANGE AGREEMENT STOCK EXCHANGE AGREEMENT THIS STOCK EXCHANGE AGREEMENT (this "Agreement") is entered into and is effective for all purposes as of the 10th day of February, 1997, by and between TLC The Laser Center, Inc., a corporation organized under the laws of Ontario ("TLC") and Elizabeth A. Karmin ("Karmin"). RECITALS WHEREAS, Karmin is an officer and employee of 20/20 Laser Centers, Inc., a Maryland corporation ("20/20") as well as a holder of certain incentive stock options to purchase stock in 20/20, both vested and unvested (the "Options"), pursuant to that certain Stock Option Agreement (the "Stock Option Agreement") between 20/20 and Karmin dated as of August 31, 1995, as amended by First Amendment to Stock Option Agreement (the "First Amendment") dated as of September 1, 1996 and by Second Amendment to Stock Option Agreement (the "Second Amendment") to be executed concurrently herewith. The Stock Option Agreement as amended by the First Amendment and Second Amendment shall be referred to herein as the "Option Agreement". WHEREAS, 20/20 and TLC have entered into a Share for Share Exchange Agreement dated as of December 15, 1996 (the "TLC Exchange Agreement") pursuant to which TLC is offering to purchase all of the outstanding shares of 20/20 from its existing shareholders. WHEREAS, Karmin received her Options in consideration of personal services provided to 20/20 as an officer and employee of 20/20. WHEREAS, 20/20 and TLC requested that Karmin waive her right to vest certain options that were granted to her under the Stock Option Agreement, and, pursuant to the Second Amendment to the Stock Option Agreement, Karmin has agreed to do so in consideration of TLC entering into this agreement concerning the exchange of shares at the time Karmin exercises her outstanding options to purchase shares of 20/20, and TLC is willing to do so on the terms and conditions set forth below. -1- NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, agree to the following terms: 1. Ratification of Option. The parties hereto ratify and confirm the Option Agreement, as amended by the First Amendment and Second Amendment and acknowledge that it is in full force and effect. 2. Share Exchange. In the event Karmin exercises her options to purchase 20/20 stock pursuant to the Option Agreement on or before March 1, 1999, then immediately upon the exercise of such option, TLC agrees to issue TLC stock in exchange for the 20/20 stock purchased by Karmin, at an exchange ratio of .37517 shares of TLC stock for each share of 20/20 stock and Karmin agrees to accept such exchange of TLC stock, subject to the provisions of paragraphs 3 and 7 below. In the event any Options are not exercised on or before March 1, 1999, then the obligations of TLC and Karmin under this paragraph 2 shall be null and void with respect to such Options. The parties are entering into this Agreement in connection with a transaction described in Section 424(a) of the Internal Revenue Code in order to retain the status of the Options as qualified incentive stock options. 3. Adjustment of Option Shares and Change in Capital Structure. a. This Agreement shall not affect in any way the right or power of TLC or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in TLC's capital structure or its business, or any merger or consolidation of TLC, or any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the common stock or the rights thereof, or the dissolution or liquidation of TLC, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. b. If TLC shall effect a subdivision or consolidation of shares or other capital readjustment, the payment of a stock dividend, or other increase or reduction of the number of shares of the common stock outstanding, without receiving compensation therefor in money, services or property, then (1) the number, class, and per share price of shares of common stock to be exchanged hereunder shall be appropriately adjusted in such a manner as to entitle Karmin to receive upon exercise of an Option, for the same aggregate cash consideration, the same total number and class of shares as he would have received had Karmin exercised her Option in full immediately prior to the event requiring the adjustment; and (2) the number and class of shares then reserved for issuance hereunder as a result of Options outstanding shall be adjusted by substituting for the -2- total number and class of shares of common stock then reserved that number and class of shares of common stock that would have been received by the owner of an equal number of outstanding shares of each class of common stock as the result of the event requiring the adjustment. c. After a merger of one or more corporations with TLC or after a consolidation of TLC and one or more corporations, Karmin shall, at no additional cost, be entitled upon exercise of an Option to receive pursuant to this Agreement in lieu of the number and class of shares as to which he would be entitled to exchange pursuant to paragraph 2 hereof, the number and class of shares of stock or other securities to which Karmin would have been entitled pursuant to the terms of the agreement of merger or consolidation if, immediately prior to such merger or consolidation, Karmin had been the holder of record of the number and class of shares of common stock equal to the number and class of shares as to which he would be entitled under paragraph 2 hereof. d. Except as previously expressly provided, neither the issuance by TLC of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of TLC convertible into such shares or other securities, nor the increase or decrease of the number of authorized shares of stock, nor the addition or deletion of classes of stock, shall affect, and no adjustment by reason thereof shall be made with respect to, the number, class or price of shares of common stock then subject to this Agreement. e. Adjustment under the preceding provisions of this section will be made by the Board of Directors of TLC in good faith, whose determination as to what adjustments will be made and the extent thereof will be final, binding, and conclusive. 4. Authorization and Reservation of Shares. During the term of this Agreement, TLC will at all times have authorized and reserved a sufficient number of shares of its common stock to provide for the rights to exchange as provided for herein. TLC represents and warrants that (i) all stock issued to Karmin in exchange for 20/20 stock shall be validly issued, fully paid and non-assessable, and (ii) such stock shall be free of restrictions on transferability imposed by 20/20 or TLC other than the provisions of paragraph 7 hereof and the terms and conditions of the Holdback Agreement (defined in paragraph 7), provided however, that, subject to the provisions of paragraph 6 hereof and the terms and conditions of the Registration Rights Agreement (defined in paragraph 6), such stock may be subject to restrictions on transferability imposed by applicable law. -3- 5. No Fractional Share or Scrip. No fractional shares or scrip representing fractional shares shall be issued hereunder. Any fractional shares shall be rounded to the nearest whole share such that fractions of .50 and greater shall be rounded up to the next whole share and fractions of less than .50 shall be rounded down. 6. Registration Rights Agreement. TLC acknowledges and agrees that the TLC shares issuable to Karmin pursuant to this Agreement (a) shall be included as part of the shares that are subject to that certain Registration Rights Agreement dated concurrently herewith between TLC and the shareholders of 20/20 (the "Registration Rights Agreement"), and (b) shall be included in any obligation of TLC to register shares of former 20/20 shareholders on the Toronto Stock Exchange pursuant to the TLC Exchange Agreement. 7. Holdback Agreement. The parties acknowledge and agree that the TLC shares to which Karmin may be entitled pursuant to this Agreement are subject to the terms and conditions of that certain Holdback Agreement dated concurrently herewith between TLC and the shareholders of 20/20 (the "Holdback Agreement") and that any TLC shares issued to Karmin pursuant to this Agreement shall be subject to the terms and conditions of the Holdback Agreement. In the event TLC is entitled to indemnification under the Holdback Agreement prior to a time that Karmin has exercised all of her Options, then the exchange ratio set forth in paragraph 2 hereof shall be modified so that the number of TLC shares that Karmin receives pursuant to this Agreement upon exercise of an Option shall be adjusted so that upon the exercise of an Option, Karmin receives the number and class of shares of stock or other securities to which Karmin would have been entitled pursuant to the terms of the Holdback Agreement if, immediately prior to the exercise of such Options, Karmin had been the holder of record of the number and class of shares of common stock equal to the number and class of shares as to which he would be entitled under paragraph 2 hereof. Karmin acknowledges that she is an "Insider" for purposes of the Holdback Agreement. TLC agrees that in the event Karmin's employment agreement with TLC is terminated for any reason prior to the time that all of her stock is released from the Holdback Agreement, then TLC shall release at least a sufficient amount of Karmin's stock from the Holdback Agreement so that she can use the stock to pay the tax liability on any deferred compensation that Karmin receives pursuant to Karmin's deferred compensation agreement with 20/20 as a result of such termination and on capital gain from the sale of the stock. 8. Miscellaneous. This Agreement shall be governed by and construed under the laws of the State of Maryland. This Agreement shall be binding upon and benefit the parties hereto and their respective successors, heirs, personal representatives and assigns. The titles of the sections and subsections of this Agreement are for convenience only and are not to be considered in construing this Agreement. This Agreement does not entitle Karmin to any voting rights or -4- other rights as a shareholder of TLC with respect to any shares that are the subject matter hereof prior to the exercise of the Options as provided for herein. All notices required or permitted to be given under this Agreement shall be in writing and shall be delivered in person, by telecopy, by express courier or by certified mail, return receipt requested, postage prepaid. IN WITNESS WHEREOF, the parties have signed this Agreement as of the date first set forth above. TLC: TLC The Laser Center, Inc. By: /s/ Ronald J. Kelly ---------------------------------- Ronald Kelly, Vice President KARMIN: /s/ Elizabeth A. Karmin ---------------------------------- Elizabeth A. Karmin Acknowledged and Agreed To: 20/20 Laser Centers, Inc. By: /s/ Gary F. Jonas ----------------------- -5- EX-4.(C) 4 STOCK EXCHANGE AGREEMENT STOCK EXCHANGE AGREEMENT THIS STOCK EXCHANGE AGREEMENT (this "Agreement") is entered into and is effective for all purposes as of the 10th day of February, 1997, by and between TLC The Laser Center, Inc., a corporation organized under the laws of Ontario ("TLC") and Eric J. Hatch ("Hatch"). RECITALS WHEREAS, Hatch is an officer and employee of 20/20 Laser Centers, Inc., a Maryland corporation ("20/20") as well as a holder of certain incentive stock options to purchase stock in 20/20, both vested and unvested (the "Options"), pursuant to that certain Stock Option Agreement (the "Stock Option Agreement") between 20/20 and Hatch dated as of August 31, 1995, as amended by First Amendment to Stock Option Agreement (the "First Amendment") dated as of September 1, 1996 and by Second Amendment to Stock Option Agreement (the "Second Amendment") to be executed concurrently herewith. The Stock Option Agreement as amended by the First Amendment and Second Amendment shall be referred to herein as the "Option Agreement". WHEREAS, 20/20 and TLC have entered into a Share for Share Exchange Agreement dated as of December 15, 1996 (the "TLC Exchange Agreement") pursuant to which TLC is offering to purchase all of the outstanding shares of 20/20 from its existing shareholders. WHEREAS, Hatch received his Options in consideration of personal services provided to 20/20 as an officer and employee of 20/20. WHEREAS, 20/20 and TLC requested that Hatch waive his right to vest certain options that were granted to his under the Stock Option Agreement, and, pursuant to the Second Amendment to the Stock Option Agreement, Hatch has agreed to do so in consideration of TLC entering into this agreement concerning the exchange of shares at the time Hatch exercises his outstanding options to purchase shares of 20/20, and TLC is willing to do so on the terms and conditions set forth below. -1- NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, agree to the following terms: 1. Ratification of Option. The parties hereto ratify and confirm the Option Agreement, as amended by the First Amendment and Second Amendment and acknowledge that it is in full force and effect. 2. Share Exchange. In the event Hatch exercises his options to purchase 20/20 stock pursuant to the Option Agreement on or before March 1, 1999, then immediately upon the exercise of such option, TLC agrees to issue TLC stock in exchange for the 20/20 stock purchased by Hatch, at an exchange ratio of .37517 shares of TLC stock for each share of 20/20 stock and Hatch agrees to accept such exchange of TLC stock, subject to the provisions of paragraphs 3 and 7 below. In the event any Options are not exercised on or before March 1, 1999, then the obligations of TLC and Hatch under this paragraph 2 shall be null and void with respect to such Options. The parties are entering into this Agreement in connection with a transaction described in Section 424(a) of the Internal Revenue Code in order to retain the status of the Options as qualified incentive stock options. 3. Adjustment of Option Shares and Change in Capital Structure. a. This Agreement shall not affect in any way the right or power of TLC or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in TLC's capital structure or its business, or any merger or consolidation of TLC, or any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the common stock or the rights thereof, or the dissolution or liquidation of TLC, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. b. If TLC shall effect a subdivision or consolidation of shares or other capital readjustment, the payment of a stock dividend, or other increase or reduction of the number of shares of the common stock outstanding, without receiving compensation therefor in money, services or property, then (1) the number, class, and per share price of shares of common stock to be exchanged hereunder shall be appropriately adjusted in such a manner as to entitle Hatch to receive upon exercise of an Option, for the same aggregate cash consideration, the same total number and class of shares as he would have received had Hatch exercised his Option in full immediately prior to the event requiring the adjustment; and (2) the number and class of shares then reserved for issuance hereunder as a result of Options outstanding shall be adjusted by substituting for the total -2- number and class of shares of common stock then reserved that number and class of shares of common stock that would have been received by the owner of an equal number of outstanding shares of each class of common stock as the result of the event requiring the adjustment. c. After a merger of one or more corporations with TLC or after a consolidation of TLC and one or more corporations, Hatch shall, at no additional cost, be entitled upon exercise of an Option to receive pursuant to this Agreement in lieu of the number and class of shares as to which he would be entitled to exchange pursuant to paragraph 2 hereof, the number and class of shares of stock or other securities to which Hatch would have been entitled pursuant to the terms of the agreement of merger or consolidation if, immediately prior to such merger or consolidation, Hatch had been the holder of record of the number and class of shares of common stock equal to the number and class of shares as to which he would be entitled under paragraph 2 hereof. d. Except as previously expressly provided, neither the issuance by TLC of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of TLC convertible into such shares or other securities, nor the increase or decrease of the number of authorized shares of stock, nor the addition or deletion of classes of stock, shall affect, and no adjustment by reason thereof shall be made with respect to, the number, class or price of shares of common stock then subject to this Agreement. e. Adjustment under the preceding provisions of this section will be made by the Board of Directors of TLC in good faith, whose determination as to what adjustments will be made and the extent thereof will be final, binding, and conclusive. 4. Authorization and Reservation of Shares. During the term of this Agreement, TLC will at all times have authorized and reserved a sufficient number of shares of its common stock to provide for the rights to exchange as provided for herein. TLC represents and warrants that (i) all stock issued to Hatch in exchange for 20/20 stock shall be validly issued, fully paid and non-assessable, and (ii) such stock shall be free of restrictions on transferability imposed by 20/20 or TLC other than the provisions of paragraph 7 hereof and the terms and conditions of the Holdback Agreement (defined in paragraph 7), provided however, that, subject to the provisions of paragraph 6 hereof and the terms and conditions of the Registration Rights Agreement (defined in paragraph 6), such stock may be subject to restrictions on transferability imposed by applicable law. -3- 5. No Fractional Share or Scrip. No fractional shares or scrip representing fractional shares shall be issued hereunder. Any fractional shares shall be rounded to the nearest whole share such that fractions of .50 and greater shall be rounded up to the next whole share and fractions of less than .50 shall be rounded down. 6. Registration Rights Agreement. TLC acknowledges and agrees that the TLC shares issuable to Hatch pursuant to this Agreement (a) shall be included as part of the shares that are subject to that certain Registration Rights Agreement dated concurrently herewith between TLC and the shareholders of 20/20 (the "Registration Rights Agreement"), and (b) shall be included in any obligation of TLC to register shares of former 20/20 shareholders on the Toronto Stock Exchange pursuant to the TLC Exchange Agreement. 7. Holdback Agreement. The parties acknowledge and agree that the TLC shares to which Hatch may be entitled pursuant to this Agreement are subject to the terms and conditions of that certain Holdback Agreement dated concurrently herewith between TLC and the shareholders of 20/20 (the "Holdback Agreement") and that any TLC shares issued to Hatch pursuant to this Agreement shall be subject to the terms and conditions of the Holdback Agreement. In the event TLC is entitled to indemnification under the Holdback Agreement prior to a time that Hatch has exercised all of his Options, then the exchange ratio set forth in paragraph 2 hereof shall be modified so that the number of TLC shares that Hatch receives pursuant to this Agreement upon exercise of an Option shall be adjusted so that upon the exercise of an Option, Hatch receives the number and class of shares of stock or other securities to which Hatch would have been entitled pursuant to the terms of the Holdback Agreement if, immediately prior to the exercise of such Options, Hatch had been the holder of record of the number and class of shares of common stock equal to the number and class of shares as to which he would be entitled under paragraph 2 hereof. Hatch acknowledges that she is an "Insider" for purposes of the Holdback Agreement. TLC agrees that in the event Hatch's employment agreement with TLC is terminated for any reason prior to the time that all of his stock is released from the Holdback Agreement, then TLC shall release at least a sufficient amount of Hatch's stock from the Holdback Agreement so that she can use the stock to pay the tax liability on any deferred compensation that Hatch receives pursuant to Hatch's deferred compensation agreement with 20/20 as a result of such termination and on capital gain from the sale of the stock. 8. Miscellaneous. This Agreement shall be governed by and construed under the laws of the State of Maryland. This Agreement shall be binding upon and benefit the parties hereto and their respective successors, heirs, personal representatives and assigns. The titles of the sections and subsections of this Agreement are for convenience only and are not to be considered in construing this Agreement. This Agreement does not entitle Hatch to any voting rights or other rights as a shareholder of TLC with respect to any shares that are the -4- subject matter hereof prior to the exercise of the Options as provided for herein. All notices required or permitted to be given under this Agreement shall be in writing and shall be delivered in person, by telecopy, by express courier or by certified mail, return receipt requested, postage prepaid. IN WITNESS WHEREOF, the parties have signed this Agreement as of the date first set forth above. TLC: TLC The Laser Center, Inc. By: /s/ Ronald J. Kelly ---------------------------------- Ronald Kelly, Vice President HATCH: /s/ Eric J. Hatch ---------------------------------- Eric J. Hatch Acknowledged and Agreed To: 20/20 Laser Centers, Inc. By: /s/ Gary F. Jonas ----------------------- -5- EX-4.(D) 5 STOCK OPTION AGREEMENT THE OPTIONS GRANTED BY THIS STOCK OPTION AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED, OR UNLESS SOLD PURSUANT TO RULE 144. 20/20 LASER CENTERS, INC. STOCK OPTION AGREEMENT 20/20 Laser Centers, Inc. (the "Company") hereby grants to Mark G. Speaker, M.D., PhD. ("Optionee"), effective as of September 19, 1996, options (the "Options") to purchase shares of common stock, $.0.01 par value, of the Company (the "Option Shares") pursuant to that certain letter agreement between the Company and Optionee dated as of June 23, 1995 regarding Optionee's services as a Medical Practice Site Organizer and a City Organizer, that certain side letter agreement, also dated as of June 23, 1995 with respect to Optionee's certain other personal service roles and contributions to the Company, and that certain side letter agreement dated August 1, 1996 amending and clarifying the earlier two agreements (collectively, the "Service Agreements"). This Stock Option Agreement is intended to formalize the Options that Optionee has earned pursuant to the Service Agreements. The Options are subject to the terms and conditions set forth below and in the Service Agreements, which are incorporated herein by reference and made a part hereof. Capitalized terms not defined herein shall have the meaning as set forth in the Service Agreements. 1. Number of Option Shares: 310,000 shares (the "Option Shares") 2. Exercise Price: $0.01 per Option Share. 3. Type of Option: The Options shall not be considered as qualified stock options under Section 422 of the Internal Revenue Code. The Options are granted to Optionee's as compensation for personal services pursuant to Rule 701 under the Securities Exchange Act of 1933 (the "Act"). 4. Method of Exercise; Payment. (a) Subject to paragraph 5 hereof, the Options may be exercised by the Optionee, in whole or in part and from time to time, by tendering to the Company at its principal office a notice of exercise form attached hereto as Appendix A duly executed, together with the Stock Option Agreement and payment to the Company by check of an amount equal to the Exercise Price multiplied by the number of Option Shares purchased. (b) Promptly following receipt from the Optionee of the notices and instruments required for the Optionee to exercise the Options, including payment of the then applicable Exercise Price, the Company shall issue to the Optionee a certificate for the number of Option Shares acquired. If all of the Options are not exercised, the Company shall return the Stock Option Agreement to the Optionee, together with a written notice indicating the aggregate number of shares acquired upon the current and all prior exercises of the Options. 5. Expiration of Options: The Options will expire on March 1, 1999. If Optionee does not exercise the respective Options on or before such expiration dates set forth above, then the applicable Options will be null and void. 6. Acknowledgments of Optionee: The Options granted pursuant to this Stock Option Agreement are personal to the Optionee and, prior to exercising such Options, may not be assigned or transferred to any other person except by will or the laws of descent and distribution. The Optionee acknowledges that he was informed that the Option Shares are not currently registered under the Act. Even after the Options are exercised, unless the Company has registered the Option Shares under the Act at that time, the Option Shares may not be transferred or otherwise disposed of unless the Option Shares are subsequently registered under the Act or an exemption from such registration is available. The Optionee was informed that the Company is under no obligation to register the Option Shares under the Act or to comply with any other applicable exemption under the Act with respect to the Option Shares. The undersigned will not sell or otherwise transfer the Option Shares, except by will or the laws of descent and distribution or except when such sale or transfer is made in compliance with the Act and all federal, state and local laws. The Optionee accepts the Options described herein in full satisfaction of all stock options and rights to receive any stock compensation under the Service Agreements. 7. Restrictions on Transferability: The Option Shares granted upon exercise of the Options may not be transferred or assigned in whole or in part without compliance with applicable federal and state securities laws by the transferor and the transferee (including the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, if required by the Company). The Options Shares granted upon exercise of this the Options shall be imprinted with a legend in substantially the following form: "THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME." 8. Adjustment of Option Shares and Change in Capital Structure a. The existence of outstanding Options shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company's capital structure or its business, or any merger or consolidation of the Company, or any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. b. If the Company shall effect a subdivision or consolidation of shares or other capital readjustment, the payment of a stock dividend, or other increase or reduction of the number of shares of the Common Stock outstanding, without receiving compensation therefor in money, services or property, then (1) the number, class, and per share price of shares of Common Stock subject to outstanding Options hereunder shall be appropriately adjusted in such a manner as to entitle the Optionee to receive upon exercise of an Option, for the same aggregate cash consideration, the same total number and class of shares as he would have received had the Optionee exercised his or her Option in full immediately prior to the event requiring the adjustment; and (2) the number and class of shares then reserved for issuance as a result of Options outstanding shall be adjusted by substituting for the total number and class of shares of Common Stock then reserved that number and class of shares of Common Stock that would have been received by the owner of an equal number of outstanding shares of each class of Common Stock as the result of the event requiring the adjustment. c. After a merger of one or more corporations with the Company or after a consolidation of the Company and one or more corporations, Optionee shall, at no additional cost, be entitled upon exercise of such Option to receive (subject to any required action by stockholders) in lieu of the number and class of shares as to which such Option shall then be so exercisable, the number and class of shares of stock or other securities to which Optionee would have been entitled pursuant to the terms of the agreement of merger or consolidation if, immediately prior to such merger or consolidation, Optionee had been the holder of record of the number and class of shares of Common Stock equal to the number and class of shares as to which such Option shall be so exercised. d. Except as previously expressly provided, neither the issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, nor the increase or decrease of the number of authorized shares of stock, nor the addition or deletion of classes of stock, shall affect, and no adjustment by reason thereof shall be made with respect to, the number, class or price of shares of Common Stock then subject to outstanding Options. e. Adjustment under the preceding provisions of this section will be made by the Board of Directors of the Company in good faith, whose determination as to what adjustments will be made and the extent thereof will be final, binding, and conclusive. 9. Authorization and Reservation of Shares. During the term of this Stock Option Agreement, the Company will at all times have authorized and reserved a sufficient number of shares of its Common Stock to provide for the exercise of the rights to purchase Common Stock as provided for herein. 10. No Fractional Share or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of the Optionee's rights to purchase Common Stock, but in lieu of such fractional shares the Company shall make a cash payment therefor upon the basis of the Exercise Price then in effect. 11. Registry. The Company shall maintain a registry showing the name and address of the registered Optionee of this Stock Option Agreement. 12. Miscellaneous. This Stock Option Agreement shall be governed by and construed under the laws of the State of Maryland. The titles of the sections and subsections of this Stock Option Agreement are for convenience only and are not to be considered in construing this Stock Option Agreement. All pronouns used in this Stock Option Agreement shall be deemed to include masculine, feminine or neuter forms. This Stock Option Agreement does not entitle the Optionee to any voting rights or other rights as a shareholder of the Company prior to the exercise of the Optionee's rights to purchase Common Stock as provided for herein. All notices required or permitted to be given under this Stock Option Agreement shall be in writing and shall be delivered in person, by telecopy, by express courier or by certified mail, return receipt requested, postage prepaid. The Company, by its duly authorized officer, agrees to the terms and conditions of this Stock Option Agreement. ATTEST: 20/20 LASER CENTERS, INC. By: /s/ Elizabeth A. Karmin By: /s/ Gary F. Jonas ----------------------- ---------------------------- Secretary President and CEO The Optionee accepts the Options subject to the terms and conditions of this Stock Option Agreement and the Services Agreement. WITNESS: OPTIONEE: /s/ Mark G. Speaker, M.D. PhD. - ------------------------------ ------------------------------ Mark G. Speaker, M.D., PhD. APPENDIX A NOTICE OF EXERICISE TO: 20/20 Laser Centers, Inc. 6701 Democracy Boulevard; Suite 200 Bethesda, Maryland 20817 1. The undersigned hereby elects to purchase ______ shares of the Common Stock of 20/20 Laser Centers, Inc. pursuant to the terms of the attached Stock Option Agreement, and tenders herewith payment of the purchase price of such shares in full. 2. The undersigned further acknowledges that the undersigned was informed as to and understands the circumstances under which the undersigned is required to hold the Option Shares pursuant to the requirements of the Securities Act of 1933 (the "Act") and other applicable state securities laws. 3. The undersigned acknowledges that the undersigned was informed that the Option Shares are not registered under the Act and may not be transferred or otherwise disposed of unless the Option Shares are subsequently registered under the Act or an exemption from such registration is available. The undersigned was informed that the Company is under no obligation to register the Option Shares under the Act or to comply with Regulations A or D or any other applicable exemption under the Act with respect to the Option Shares. 4. The Option Shares being purchased by the undersigned are solely for the undersigned's own account and are being acquired for investment only and not with a view to resale or distribution. No persons other than the undersigned will have any interest in the Option Shares being purchased by the undersigned. The undersigned will not sell or otherwise transfer the Option Shares, except when such sale or transfer is made in compliance with the Act and all state and local laws. 5. Please issue a certificate or certificates representing such shares of the Common Stock in the name of the undersigned or in such other name as is specified below. ------------------------- (Name) ------------------------- (Address) ------------------------- ------------------------- Taxpayer ID # - ----------------------------- ------------------------- (Date) (Signature) EX-4.(E) 6 STOCK EXCHANGE AGREEMENT STOCK EXCHANGE AGREEMENT THIS STOCK EXCHANGE AGREEMENT (this "Agreement") is entered into and is effective for all purposes as of the 10th day of February, 1997, by and between TLC The Laser Center, Inc., a corporation organized under the laws of Ontario ("TLC") and Mark Speaker, M.D. ("Speaker"). RECITALS WHEREAS, Speaker is a shareholder of 20/20 Laser Centers, Inc., a Maryland corporation ("20/20") as well as a holder of certain options to purchase stock in 20/20 (the "Options"), pursuant to that certain Stock Option Agreement between 20/20 and Speaker dated as of August 1, 1996 (the "Option Agreement"). WHEREAS, 20/20 and TLC have entered into a Share for Share Exchange Agreement dated as of December 15, 1996 (the "TLC Exchange Agreement") pursuant to which TLC is offering to purchase all of the outstanding shares of 20/20 from its existing shareholders. WHEREAS, Speaker received his Options in consideration of personal services provided to 20/20 pursuant to that certain (a) letter of agreement dated June 23, 1995 (the "City Organizer Agreement") describing Speaker's responsibilities and compensation in connection with being an M.D. City Organizer in the New York Metropolitan area, and (b) a letter of agreement dated June 23, 1995 (the "Other Services Letter") which confirms Speaker's agreement with 20/20 with respect to certain other services for 20/20, each of which has been amended by that certain letter agreement dated as of August 1, 1996 (the "Letter Amendment") with respect to the stock compensation to be paid under the City Organizer Agreement and the Other Services Letter. In addition, Speaker is a party to that certain Team Surgeon Agreement dated June 23, 1995 among Speaker, 20/20, and 20/20 Laser Vision Correction Associates, P.C. (the "Team Surgeon Agreement"). The City Organizer Agreement, the Other Services Letter, the Letter Amendment, and the Team Surgeon Agreement shall be referred to herein collectively as the "Services Agreements". WHEREAS, it is in the best interests of 20/20 and TLC that Speaker continue to provide his personal services under the existing Services Agreements. -1- WHEREAS, Speaker is willing to continue to provide services pursuant to the terms and conditions of the existing Service Agreements so long as TLC enters into this agreement concerning the exchange of shares at the time Speaker exercises his outstanding options to purchase shares of 20/20, and TLC is willing to do so on the terms and conditions set forth below. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, agree to the following terms: 1. Ratification of Services Agreements. The parties hereto ratify and confirm the Services Agreements and acknowledge that they are in full force and effect. 2. Share Exchange. In the event Speaker exercises his options to purchase 20/20 stock pursuant to the Option Agreement on or before March 1, 1999, then promptly after the exercise of such option, TLC agrees to issue TLC stock in exchange for the 20/20 stock purchased by Speaker, at an exchange ratio of .37517 shares of TLC stock for each share of 20/20 stock and Speaker agrees to accept such exchange of TLC stock, subject to the provisions of paragraphs 4 and 8 below. In the event any Options are not exercised on or before March 1, 1999, then the obligations of TLC and Speaker under this paragraph 2 shall be null and void with respect to such Options. 3. Continuance of Services Agreements. Speaker agrees not to give notice of termination of his Services Agreements with 20/20 prior to the earlier to occur of (i) the closing of the TLC stock exchange pursuant to the TLC Exchange Agreement, or (ii) the termination of the TLC Exchange Agreement. 4. Adjustment of Option Shares and Change in Capital Structure. a. This Agreement shall not affect in any way the right or power of TLC or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in TLC's capital structure or its business, or any merger or consolidation of TLC, or any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the common stock or the rights thereof, or the dissolution or liquidation of TLC, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. b. If TLC shall effect a subdivision or consolidation of shares or other capital readjustment, the payment of a stock dividend, or other increase or reduction of the number of shares of the common stock outstanding, without receiving compensation therefor in money, services or -2- property, then (1) the number, class, and per share price of shares of common stock to be exchanged hereunder shall be appropriately adjusted in such a manner as to entitle Speaker to receive upon exercise of an Option, for the same aggregate cash consideration, the same total number and class of shares as he would have received had Speaker exercised his Option in full immediately prior to the event requiring the adjustment; and (2) the number and class of shares then reserved for issuance hereunder as a result of Options outstanding shall be adjusted by substituting for the total number and class of shares of common stock then reserved that number and class of shares of common stock that would have been received by the owner of an equal number of outstanding shares of each class of common stock as the result of the event requiring the adjustment. c. After a merger of one or more corporations with TLC or after a consolidation of TLC and one or more corporations, Speaker shall, at no additional cost, be entitled upon exercise of an Option to receive pursuant to this Agreement in lieu of the number and class of shares as to which he would be entitled to exchange pursuant to paragraph 2 hereof, the number and class of shares of stock or other securities to which Speaker would have been entitled pursuant to the terms of the agreement of merger or consolidation if, immediately prior to such merger or consolidation, Speaker had been the holder of record of the number and class of shares of common stock equal to the number and class of shares as to which he would be entitled under paragraph 2 hereof. d. Except as previously expressly provided, neither the issuance by TLC of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of TLC convertible into such shares or other securities, nor the increase or decrease of the number of authorized shares of stock, nor the addition or deletion of classes of stock, shall affect, and no adjustment by reason thereof shall be made with respect to, the number, class or price of shares of common stock then subject to this Agreement. e. Adjustment under the preceding provisions of this section will be made by the Board of Directors of TLC in good faith, whose determination as to what adjustments will be made and the extent thereof will be final, binding, and conclusive. 5. Authorization and Reservation of Shares. During the term of this Agreement, TLC will at all times have authorized and reserved a sufficient number of shares of its common stock to provide for the rights to exchange as provided for herein. TLC represents and warrants that (i) all stock issued to Speaker in -3- exchange for 20/20 stock shall be validly issued, fully paid and non-assessable, and (ii) such stock shall be free of restrictions on transferability imposed by TLC other than the provisions of paragraph 8 hereof and the terms and conditions of the Holdback Agreement (defined in paragraph 8), provided however, that, subject to the provisions of paragraph 7 hereof and the terms and conditions of the Registration Rights Agreement (defined in paragraph 7), such stock may be subject to restrictions on transferability imposed by applicable law. 6. No Fractional Share or Scrip. No fractional shares or scrip representing fractional shares shall be issued hereunder. Any fractional shares shall be rounded to the nearest whole share such that fractions of .50 and greater shall be rounded up to the next whole share and fractions of less than .50 shall be rounded down. 7. Registration Rights Agreement. TLC acknowledges and agrees that the TLC shares issuable to Speaker pursuant to this Agreement (a) shall be included as part of the shares that are subject to that certain Registration Rights Agreement dated concurrently herewith between TLC and the shareholders of 20/20 (the "Registration Rights Agreement"), and (b) shall be included in any obligation of TLC to register shares of former 20/20 shareholders on the Toronto Stock Exchange pursuant to the TLC Exchange Agreement. 8. Holdback Agreement. The parties acknowledge and agree that the TLC shares to which Speaker may be entitled pursuant to this Agreement are subject to the terms and conditions of that certain Holdback Agreement dated concurrently herewith between TLC and the shareholders of 20/20 (the "Holdback Agreement") and that any TLC shares issued to Speaker pursuant to this Agreement shall be subject to the terms and conditions of the Holdback Agreement. In the event TLC is entitled to indemnification under the Holdback Agreement prior to a time that Speaker has exercised all of his Options, then the exchange ratio set forth in paragraph 2 hereof shall be modified so that the number of TLC shares that Speaker receives pursuant to this Agreement upon exercise of an Option shall be adjusted so that upon the exercise of an Option, Speaker receives the number and class of shares of stock or other securities to which Speaker would have been entitled pursuant to the terms of the Holdback Agreement if, immediately prior to the exercise of such Options, Speaker had been the holder of record of the number and class of shares of common stock equal to the number and class of shares as to which he would be entitled under paragraph 2 hereof. Speaker acknowledges that he is an "Insider" for purposes of the Holdback Agreement. 9. Miscellaneous. This Agreement shall be governed by and construed under the laws of the State of Maryland. The titles of the sections and subsections of this Agreement are for convenience only and are not to be considered in construing this Agreement. This Agreement does not entitle -4- Speaker to any voting rights or other rights as a shareholder of TLC with respect to any shares that are the subject matter hereof prior to the exercise of the Options as provided for herein. All notices required or permitted to be given under this Agreement shall be in writing and shall be delivered in person, by telecopy, by express courier or by certified mail, return receipt requested, postage prepaid. IN WITNESS WHEREOF, the parties have signed this Agreement as of the date first set forth above. TLC: TLC The Laser Center, Inc. By: /s/ R.J. Kelly ---------------------------------- Ronald Kelly, Vice President SPEAKER: /s/ Mark Speaker, M.D. ---------------------------------- Mark Speaker, M.D. Acknowledged and Agreed To: 20/20 Laser Centers, Inc. By: /s/ Elizabeth A. Karmin --------------------------- -5- EX-4.(F) 7 STOCK OPTION AGEEMENT THE OPTIONS GRANTED BY THIS STOCK OPTION AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED, OR UNLESS SOLD PURSUANT TO RULE 144. 20/20 LASER CENTERS, INC. STOCK OPTION AGREEMENT 20/20 Laser Centers, Inc. (the "Company") hereby grants to Eric D. Donnenfeld, M.D. ("Optionee"), effective as of September 19, 1996, options (the "Options") to purchase shares of common stock, $.0.01 par value, of the Company (the "Option Shares") pursuant to (1) that certain letter agreement between the Company and Optionee dated November 9, 1995 regarding Optionee's guaranty of the Summit excimer laser purchased by the Company through DVI Financial (the "Laser Agreement"), and (2) that certain letter agreement (the "MPSO Agreement") from the Company to Optionee dated as of June 23, 1995 regarding Optionee's services as a Medical Practice Site Organizer and a City Organizer in the New York Metropolitan area (collectively, the "Service Agreements"). This Stock Option Agreement is intended to formalize the Options that Optionee has earned pursuant to the Service Agreements. The Options are subject to the terms and conditions set forth below. Capitalized terms not defined herein shall have the meaning as set forth in the Service Agreements. 1. Number of Option Shares: 115,000 shares (the "Option Shares") 2. Exercise Price: $0.01 per Option Share. 3. Type of Option: The Options shall not be considered as qualified stock options under Section 422 of the Internal Revenue Code. The Options are granted to Optionee's as compensation for personal services pursuant to Rule 701 under the Securities Exchange Act of 1933 (the "Act"). 4. Method of Exercise; Payment. (a) Subject to paragraph 5 hereof, the Options may be exercised by the Optionee, in whole or in part and from time to time, by tendering to the Company at its principal office a notice of exercise form attached hereto as Appendix A duly executed, together with the Stock Option Agreement and payment to the Company by check of an amount equal to the Exercise Price multiplied by the number of Option Shares purchased. (b) Promptly following receipt from the Optionee of the notices and instruments required for the Optionee to exercise the Options, including payment of the then applicable Exercise Price, the Company shall issue to the Optionee a certificate for the number of Option Shares acquired. If all of the Options are not exercised, the Company shall return the Stock Option Agreement to the Optionee, together with a written notice indicating the aggregate number of shares acquired upon the current and all prior exercises of the Options. 5. Expiration of Options: The Options will expire on March 1, 1999. If Optionee does not exercise the respective Options on or before such expiration date set forth above, then the Options will be null and void. 6. Acknowledgments of Optionee: The Options granted pursuant to this Stock Option Agreement are personal to the Optionee and, prior to exercising such Options, may not be assigned or transferred to any other person except by will or the laws of descent and distribution. The Optionee acknowledges that he was informed that the Option Shares are not currently registered under the Act. Even after the Options are exercised, unless the Company has registered the Option Shares under the Act at that time, the Option Shares may not be transferred or otherwise disposed of unless the Option Shares are subsequently registered under the Act or an exemption from such registration is available. The Optionee was informed that the Company is under no obligation to register the Option Shares under the Act or to comply with any other applicable exemption under the Act with respect to the Option Shares. However, the undersigned is aware that the Company has entered into a Share for Share Exchange Agreement (the "Share Exchange Agreement") dated December 15, 1996 with TLC The Laser Center, Inc. ("TLC") pursuant to which, if the transaction contemplated therein closes, TLC will have obligations to register TLC shares held by the Company's former shareholders under the circumstances described in the Share Exchange Agreement and other documents referenced therein. The undersigned will not sell or otherwise transfer the Option Shares, except by will or the laws of descent and distribution or except when such sale or transfer is made in compliance with the Act and all applicable federal, state and local laws. The Optionee accepts the Options described herein in full satisfaction of all stock options and rights to receive any stock compensation under the Service Agreements. 7. Restrictions on Transferability: The Option Shares granted upon exercise of the Options may not be transferred or assigned in whole or in part without compliance with applicable federal and state securities laws by the transferor and the transferee (including the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, if required by the Company). The Options Shares granted upon exercise of this the Options shall be imprinted with a legend in substantially the following form: "THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME." 8. Adjustment of Option Shares and Change in Capital Structure a. The existence of outstanding Options shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company's capital structure or its business, or any merger or consolidation of the Company, or any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise; provided, however that no action shall be taken to increase the par value of the Common Stock. b. If the Company shall effect a subdivision or consolidation of shares or other capital readjustment, the payment of a stock dividend, or other increase or reduction of the number of shares of the Common Stock outstanding, without receiving compensation therefor in money, services or property, then (1) the number, class, and per share price of shares of Common Stock subject to outstanding Options hereunder shall be appropriately adjusted in such a manner as to entitle the Optionee to receive upon exercise of an Option, for the same aggregate cash consideration, the same total number and class of shares as he would have received had the Optionee exercised his or her Option in full immediately prior to the event requiring the adjustment; and (2) the number and class of shares then reserved for issuance as a result of Options outstanding shall be adjusted by substituting for the total number and class of shares of Common Stock then reserved that number and class of shares of Common Stock that would have been received by the owner of an equal number of outstanding shares of each class of Common Stock as the result of the event requiring the adjustment. c. After a merger of one or more corporations with the Company or after a consolidation of the Company and one or more corporations, or the sale of all or substantially all of the Company's assets in a transaction where holders of the Common Stock of the Company shall be entitled to receive securities in exchange for their Common Stock, Optionee shall, at no additional cost, be entitled upon exercise of such Option to receive (subject to any required action by stockholders) in lieu of the number and class of shares as to which such Option shall then be so exercisable, the number and class of shares of stock or other securities to which Optionee would have been entitled pursuant to the terms of the agreement of merger or consolidation if, immediately prior to such merger or consolidation, Optionee had been the holder of record of the number and class of shares of Common Stock equal to the number and class of shares as to which such Option shall be so exercised. d. Except as previously expressly provided, neither the issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, nor the increase or decrease of the number of authorized shares of stock, nor the addition or deletion of classes of stock, shall affect, and no adjustment by reason thereof shall be made with respect to, the number, class or price of shares of Common Stock then subject to outstanding Options. e. Adjustment under the preceding provisions of this section will be made by the Board of Directors of the Company in good faith, whose determination as to what adjustments will be made and the extent thereof will be final, binding, and conclusive. 9. Authorization and Reservation of Shares. During the term of this Stock Option Agreement, the Company will at all times have authorized and reserved a sufficient number of shares of its Common Stock to provide for the exercise of the rights to purchase Common Stock as provided for herein. 10. No Fractional Share or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of the Optionee's rights to purchase Common Stock, but in lieu of such fractional shares the Company shall make a cash payment therefor upon the basis of the Exercise Price then in effect. 11. Registry. The Company shall maintain a registry showing the name and address of the registered Optionee of this Stock Option Agreement. 12. Miscellaneous. This Stock Option Agreement shall be governed by and construed under the laws of the State of Maryland. The titles of the sections and subsections of this Stock Option Agreement are for convenience only and are not to be considered in construing this Stock Option Agreement. All pronouns used in this Stock Option Agreement shall be deemed to include masculine, feminine or neuter forms. This Stock Option Agreement does not entitle the Optionee to any voting rights or other rights as a shareholder of the Company prior to the exercise of the Optionee's rights to purchase Common Stock as provided for herein. All notices required or permitted to be given under this Stock Option Agreement shall be in writing and shall be delivered in person, by telecopy, by express courier or by certified mail, return receipt requested, postage prepaid. The Company, by its duly authorized officer, agrees to the terms and conditions of this Stock Option Agreement. ATTEST: 20/20 LASER CENTERS, INC. By: /s/ Elizabeth A. Karmin By: /s/ Gary F. Jonas ------------------------- ------------------------------------- Secretary President and CEO The Optionee accepts the Options subject to the terms and conditions of this Stock Option Agreement and the MPSO Agreement. WITNESS: OPTIONEE: /s/ Eric D. Donnenfeld - ---------------------- ------------------------------------- Eric D. Donnenfeld, M.D. APPENDIX A NOTICE OF EXERICISE TO: 20/20 Laser Centers, Inc. 6701 Democracy Boulevard; Suite 200 Bethesda, Maryland 20817 1. The undersigned hereby elects to purchase ______ shares of the Common Stock of 20/20 Laser Centers, Inc. pursuant to the terms of the attached Stock Option Agreement, and tenders herewith payment of the purchase price of such shares in full. 2. The undersigned further acknowledges that the undersigned was informed as to and understands the circumstances under which the undersigned is required to hold the Option Shares pursuant to the requirements of the Securities Act of 1933 (the "Act") and other applicable state securities laws. 3. The undersigned acknowledges that the undersigned was informed that the Option Shares are not registered under the Act and may not be transferred or otherwise disposed of unless the Option Shares are subsequently registered under the Act or an exemption from such registration is available. The undersigned was informed that the Company is under no obligation to register the Option Shares under the Act or to comply with Regulations A or D or any other applicable exemption under the Act with respect to the Option Shares. 4. The Option Shares being purchased by the undersigned are solely for the undersigned's own account and are being acquired for investment only and not with a view to resale or distribution. No persons other than the undersigned will have any interest in the Option Shares being purchased by the undersigned. The undersigned will not sell or otherwise transfer the Option Shares, except when such sale or transfer is made in compliance with the Act and all state and local laws. 5. Please issue a certificate or certificates representing such shares of the Common Stock in the name of the undersigned or in such other name as is specified below. ------------------------- (Name) ------------------------- (Address) ------------------------- ------------------------- Taxpayer ID # - ----------------------------- ------------------------- (Date) (Signature) EX-4.(G) 8 STOCK EXCHANGE AGREEMENT STOCK EXCHANGE AGREEMENT THIS STOCK EXCHANGE AGREEMENT (this "Agreement") is entered into and is effective for all purposes as of the 10th day of February, 1997, by and between TLC The Laser Center, Inc., a corporation organized under the laws of Ontario ("TLC") and Eric Donnenfeld, M.D. ("Donnenfeld"). RECITALS WHEREAS, Donnenfeld is a shareholder of 20/20 Laser Centers, Inc., a Maryland corporation ("20/20") as well as a holder of certain options to purchase stock in 20/20 (the "Options"), pursuant to that certain Stock Option Agreement between 20/20 and Donnenfeld dated as of August 1, 1996 (the "Option Agreement"). WHEREAS, 20/20 and TLC have entered into a Share for Share Exchange Agreement dated as of December 15, 1996 (the "TLC Exchange Agreement") pursuant to which TLC is offering to purchase all of the outstanding shares of 20/20 from its existing shareholders. WHEREAS, Donnenfeld received his Options in consideration of personal services provided to 20/20 pursuant to that certain (a) letter of agreement dated June 23, 1995 (the "City Organizer Agreement") describing Donnenfeld's responsibilities and compensation in connection with being an M.D. City Organizer in the New York Metropolitan area, and (b) that certain Team Surgeon Agreement dated June 23, 1995 among Speaker, 20/20, and 20/20 Laser Vision Correction Associates, P.C. (the "Team Surgeon Agreement"). The City Organizer Agreement and the Team Surgeon Agreement shall be referred to herein collectively as the "Services Agreements". WHEREAS, it is in the best interests of 20/20 and TLC that Donnenfeld continue to provide his personal services under the existing Services Agreements. WHEREAS, Donnenfeld is willing to continue to provide services pursuant to the terms and conditions of the existing Service Agreements so long as TLC enters into this agreement concerning the exchange of shares at the time Donnenfeld exercises his outstanding options to purchase shares of 20/20, and TLC is willing to do so on the terms and conditions set forth below. -1- NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, agree to the following terms: 1. Ratification of Services Agreements. The parties hereto ratify and confirm the Services Agreements and acknowledge that they are in full force and effect. 2. Share Exchange. In the event Donnenfeld exercises his options to purchase 20/20 stock pursuant to the Option Agreement on or before March 1, 1999, then promptly after the exercise of such option, TLC agrees to issue TLC stock in exchange for the 20/20 stock purchased by Donnenfeld, at an exchange ratio of .37517 shares of TLC stock for each share of 20/20 stock and Donnenfeld agrees to accept such exchange of TLC stock, subject to the provisions of paragraphs 4 and 8 below. In the event any Options are not exercised on or before March 1, 1999, then the obligations of TLC and Donnenfeld under this paragraph 2 shall be null and void with respect to such Options. 3. Continuance of Services Agreements. Donnenfeld agrees not to give notice of termination of his Services Agreements with 20/20 prior to the earlier to occur of (i) the closing of the TLC stock exchange pursuant to the TLC Exchange Agreement, or (ii) the termination of the TLC Exchange Agreement. 4. Adjustment of Option Shares and Change in Capital Structure. a. This Agreement shall not affect in any way the right or power of TLC or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in TLC's capital structure or its business, or any merger or consolidation of TLC, or any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the common stock or the rights thereof, or the dissolution or liquidation of TLC, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. b. If TLC shall effect a subdivision or consolidation of shares or other capital readjustment, the payment of a stock dividend, or other increase or reduction of the number of shares of the common stock outstanding, without receiving compensation therefor in money, services or property, then (1) the number, class, and per share price of shares of common stock to be exchanged hereunder shall be appropriately adjusted in such a manner as to entitle Donnenfeld to receive upon exercise of an Option, for the same aggregate cash consideration, the same total number and class of shares as he would have received had Donnenfeld exercised his Option in full immediately prior to the event requiring the adjustment; -2- and (2) the number and class of shares then reserved for issuance hereunder as a result of Options outstanding shall be adjusted by substituting for the total number and class of shares of common stock then reserved that number and class of shares of common stock that would have been received by the owner of an equal number of outstanding shares of each class of common stock as the result of the event requiring the adjustment. c. After a merger of one or more corporations with TLC or after a consolidation of TLC and one or more corporations, Donnenfeld shall, at no additional cost, be entitled upon exercise of an Option to receive pursuant to this Agreement in lieu of the number and class of shares as to which he would be entitled to exchange pursuant to paragraph 2 hereof, the number and class of shares of stock or other securities to which Donnenfeld would have been entitled pursuant to the terms of the agreement of merger or consolidation if, immediately prior to such merger or consolidation, Donnenfeld had been the holder of record of the number and class of shares of common stock equal to the number and class of shares as to which he would be entitled under paragraph 2 hereof. d. Except as previously expressly provided, neither the issuance by TLC of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of TLC convertible into such shares or other securities, nor the increase or decrease of the number of authorized shares of stock, nor the addition or deletion of classes of stock, shall affect, and no adjustment by reason thereof shall be made with respect to, the number, class or price of shares of common stock then subject to this Agreement. e. Adjustment under the preceding provisions of this section will be made by the Board of Directors of TLC in good faith, whose determination as to what adjustments will be made and the extent thereof will be final, binding, and conclusive. 5. Authorization and Reservation of Shares. During the term of this Agreement, TLC will at all times have authorized and reserved a sufficient number of shares of its common stock to provide for the rights to exchange as provided for herein. TLC represents and warrants that (i) all stock issued to Donnenfeld in exchange for 20/20 stock shall be validly issued, fully paid and non-assessable, and (ii) such stock shall be free of restrictions on transferability imposed by TLC other than the provisions of paragraph 8 hereof and the terms and conditions of the Holdback Agreement (defined in paragraph 8), provided however, that, subject to the provisions of paragraph 7 hereof and the terms and conditions of the -3- Registration Rights Agreement (defined in paragraph 7), such stock may be subject to restrictions on transferability imposed by applicable law. 6. No Fractional Share or Scrip. No fractional shares or scrip representing fractional shares shall be issued hereunder. Any fractional shares shall be rounded to the nearest whole share such that fractions of .50 and greater shall be rounded up to the next whole share and fractions of less than .50 shall be rounded down. 7. Registration Rights Agreement. TLC acknowledges and agrees that the TLC shares issuable to Donnenfeld pursuant to this Agreement (a) shall be included as part of the shares that are subject to that certain Registration Rights Agreement dated concurrently herewith between TLC and the shareholders of 20/20 (the "Registration Rights Agreement"), and (b) shall be included in any obligation of TLC to register shares of former 20/20 shareholders on the Toronto Stock Exchange pursuant to the TLC Exchange Agreement. 8. Holdback Agreement. The parties acknowledge and agree that the TLC shares to which Donnenfeld may be entitled pursuant to this Agreement are subject to the terms and conditions of that certain Holdback Agreement dated concurrently herewith between TLC and the shareholders of 20/20 (the "Holdback Agreement") and that any TLC shares issued to Donnenfeld pursuant to this Agreement shall be subject to the terms and conditions of the Holdback Agreement. In the event TLC is entitled to indemnification under the Holdback Agreement prior to a time that Donnenfeld has exercised all of his Options, then the exchange ratio set forth in paragraph 2 hereof shall be modified so that the number of TLC shares that Donnenfeld receives pursuant to this Agreement upon exercise of an Option shall be adjusted so that upon the exercise of an Option, Donnenfeld receives the number and class of shares of stock or other securities to which Donnenfeld would have been entitled pursuant to the terms of the Holdback Agreement if, immediately prior to the exercise of such Options, Donnenfeld had been the holder of record of the number and class of shares of common stock equal to the number and class of shares as to which he would be entitled under paragraph 2 hereof. 9. Miscellaneous. This Agreement shall be governed by and construed under the laws of the State of Maryland. The titles of the sections and subsections of this Agreement are for convenience only and are not to be considered in construing this Agreement. This Agreement does not entitle -4- Donnenfeld to any voting rights or other rights as a shareholder of TLC with respect to any shares that are the subject matter hereof prior to the exercise of the Options as provided for herein. All notices required or permitted to be given under this Agreement shall be in writing and shall be delivered in person, by telecopy, by express courier or by certified mail, return receipt requested, postage prepaid. IN WITNESS WHEREOF, the parties have signed this Agreement as of the date first set forth above. TLC: TLC The Laser Center, Inc. By: /s/ R.J. Kelly ---------------------------------- Ronald Kelly, Vice President DONNENFELD: /s/ Eric Donnenfeld, M.D. ---------------------------------- Eric Donnenfeld, M.D. Acknowledged and Agreed To: 20/20 Laser Centers, Inc. By: /s/ Elizabeth A. Karmin ------------------------- EX-4.(H) 9 STOCK OPTION AGREEMENT THE OPTIONS GRANTED BY THIS STOCK OPTION AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED, OR UNLESS SOLD PURSUANT TO RULE 144. 20/20 LASER CENTERS, INC. STOCK OPTION AGREEMENT 20/20 Laser Centers, Inc. (the "Company") hereby grants to J. James Thimons, O.D. ("Optionee"), effective as of September 19, 1996, options (the "Options") to purchase shares of common stock, $.0.01 par value, of the Company (the "Option Shares") pursuant to that certain letter agreement between the Company and Optionee dated as of September 9, 1996 regarding Optionee's services as an O.D. City Organizer (the "Service Agreement"). This Stock Option Agreement is intended to formalize the Options that Optionee has earned pursuant to the Service Agreement. The Options are subject to the terms and conditions set forth below and in the Service Agreement, which are incorporated herein by reference and made a part hereof. Capitalized terms not defined herein shall have the meaning as set forth in the Service Agreement. 1. Number of Option Shares: 65,000 shares (the "Option Shares") 2. Exercise Price: $0.01 per Option Share. 3. Type of Option: The Options shall not be considered as qualified stock options under Section 422 of the Internal Revenue Code. The Options are granted to Optionee's as compensation for personal services pursuant to Rule 701 under the Securities Exchange Act of 1933 (the "Act"). 4. Method of Exercise; Payment. (a) Subject to paragraph 5 hereof, the Options may be exercised by the Optionee, in whole or in part and from time to time, by tendering to the Company at its principal office a notice of exercise form attached hereto as Appendix A duly executed, together with the Stock Option Agreement and payment to the Company by check of an amount equal to the Exercise Price multiplied by the number of Option Shares purchased. (b) Promptly following receipt from the Optionee of the notices and instruments required for the Optionee to exercise the Options, including payment of the then applicable Exercise Price, the Company shall issue to the Optionee a certificate for the number of Option Shares acquired. If all of the Options are not exercised, the Company shall return the Stock Option Agreement to the Optionee, together with a written notice indicating the aggregate number of shares acquired upon the current and all prior exercises of the Options. 5. Expiration of Options: The Options will expire on March 1, 1999. If Optionee does not exercise the respective Options on or before such expiration dates set forth above, then the applicable Options will be null and void. 6. Acknowledgments of Optionee: The Options granted pursuant to this Stock Option Agreement are personal to the Optionee and, prior to exercising such Options, may not be assigned or transferred to any other person except by will or the laws of descent and distribution. The Optionee acknowledges that he was informed that the Option Shares are not currently registered under the Act. Even after the Options are exercised, unless the Company has registered the Option Shares under the Act at that time, the Option Shares may not be transferred or otherwise disposed of unless the Option Shares are subsequently registered under the Act or an exemption from such registration is available. The Optionee was informed that the Company is under no obligation to register the Option Shares under the Act or to comply with any other applicable exemption under the Act with respect to the Option Shares. The undersigned will not sell or otherwise transfer the Option Shares, except by will or the laws of descent and distribution or except when such sale or transfer is made in compliance with the Act and all federal, state and local laws. The Optionee accepts the Options described herein in full satisfaction of all stock options and rights to receive any stock compensation under the Service Agreement. 7. Restrictions on Transferability: The Option Shares granted upon exercise of the Options may not be transferred or assigned in whole or in part without compliance with applicable federal and state securities laws by the transferor and the transferee (including the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, if required by the Company). The Options Shares granted upon exercise of this the Options shall be imprinted with a legend in substantially the following form: "THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME." 8. Adjustment of Option Shares and Change in Capital Structure a. The existence of outstanding Options shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company's capital structure or its business, or any merger or consolidation of the Company, or any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. b. If the Company shall effect a subdivision or consolidation of shares or other capital readjustment, the payment of a stock dividend, or other increase or reduction of the number of shares of the Common Stock outstanding, without receiving compensation therefor in money, services or property, then (1) the number, class, and per share price of shares of Common Stock subject to outstanding Options hereunder shall be appropriately adjusted in such a manner as to entitle the Optionee to receive upon exercise of an Option, for the same aggregate cash consideration, the same total number and class of shares as he would have received had the Optionee exercised his or her Option in full immediately prior to the event requiring the adjustment; and (2) the number and class of shares then reserved for issuance as a result of Options outstanding shall be adjusted by substituting for the total number and class of shares of Common Stock then reserved that number and class of shares of Common Stock that would have been received by the owner of an equal number of outstanding shares of each class of Common Stock as the result of the event requiring the adjustment. c. After a merger of one or more corporations with the Company or after a consolidation of the Company and one or more corporations, Optionee shall, at no additional cost, be entitled upon exercise of such Option to receive (subject to any required action by stockholders) in lieu of the number and class of shares as to which such Option shall then be so exercisable, the number and class of shares of stock or other securities to which Optionee would have been entitled pursuant to the terms of the agreement of merger or consolidation if, immediately prior to such merger or consolidation, Optionee had been the holder of record of the number and class of shares of Common Stock equal to the number and class of shares as to which such Option shall be so exercised. d. Except as previously expressly provided, neither the issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, nor the increase or decrease of the number of authorized shares of stock, nor the addition or deletion of classes of stock, shall affect, and no adjustment by reason thereof shall be made with respect to, the number, class or price of shares of Common Stock then subject to outstanding Options. e. Adjustment under the preceding provisions of this section will be made by the Board of Directors of the Company in good faith, whose determination as to what adjustments will be made and the extent thereof will be final, binding, and conclusive. 9. Authorization and Reservation of Shares. During the term of this Stock Option Agreement, the Company will at all times have authorized and reserved a sufficient number of shares of its Common Stock to provide for the exercise of the rights to purchase Common Stock as provided for herein. 10. No Fractional Share or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of the Optionee's rights to purchase Common Stock, but in lieu of such fractional shares the Company shall make a cash payment therefor upon the basis of the Exercise Price then in effect. 11. Registry. The Company shall maintain a registry showing the name and address of the registered Optionee of this Stock Option Agreement. 12. Miscellaneous. This Stock Option Agreement shall be governed by and construed under the laws of the State of Maryland. The titles of the sections and subsections of this Stock Option Agreement are for convenience only and are not to be considered in construing this Stock Option Agreement. All pronouns used in this Stock Option Agreement shall be deemed to include masculine, feminine or neuter forms. This Stock Option Agreement does not entitle the Optionee to any voting rights or other rights as a shareholder of the Company prior to the exercise of the Optionee's rights to purchase Common Stock as provided for herein. All notices required or permitted to be given under this Stock Option Agreement shall be in writing and shall be delivered in person, by telecopy, by express courier or by certified mail, return receipt requested, postage prepaid. The Company, by its duly authorized officer, agrees to the terms and conditions of this Stock Option Agreement. ATTEST: 20/20 LASER CENTERS, INC. By: /s/ Karen Levy By: /s/ Elizabeth A. Karmin --------------------- ---------------------------------------- Assistant Secretary Senior Vice President The Optionee accepts the Options subject to the terms and conditions of this Stock Option Agreement and the Services Agreement. WITNESS: OPTIONEE: /s/ J. James Thimons - ------------------ ---------------------------------------- J. James Thimons, O.D. APPENDIX A NOTICE OF EXERICISE TO: 20/20 Laser Centers, Inc. 6701 Democracy Boulevard; Suite 200 Bethesda, Maryland 20817 1. The undersigned hereby elects to purchase ______ shares of the Common Stock of 20/20 Laser Centers, Inc. pursuant to the terms of the attached Stock Option Agreement, and tenders herewith payment of the purchase price of such shares in full. 2. The undersigned further acknowledges that the undersigned was informed as to and understands the circumstances under which the undersigned is required to hold the Option Shares pursuant to the requirements of the Securities Act of 1933 (the "Act") and other applicable state securities laws. 3. The undersigned acknowledges that the undersigned was informed that the Option Shares are not registered under the Act and may not be transferred or otherwise disposed of unless the Option Shares are subsequently registered under the Act or an exemption from such registration is available. The undersigned was informed that the Company is under no obligation to register the Option Shares under the Act or to comply with Regulations A or D or any other applicable exemption under the Act with respect to the Option Shares. 4. The Option Shares being purchased by the undersigned are solely for the undersigned's own account and are being acquired for investment only and not with a view to resale or distribution. No persons other than the undersigned will have any interest in the Option Shares being purchased by the undersigned. The undersigned will not sell or otherwise transfer the Option Shares, except when such sale or transfer is made in compliance with the Act and all state and local laws. 5. Please issue a certificate or certificates representing such shares of the Common Stock in the name of the undersigned or in such other name as is specified below. ------------------------- (Name) ------------------------- (Address) ------------------------- ------------------------- Taxpayer ID # - ----------------------------- ------------------------- (Date) (Signature) EX-4.(I) 10 STOCK EXCHANGE AGREEMENT STOCK EXCHANGE AGREEMENT THIS STOCK EXCHANGE AGREEMENT (this "Agreement") is entered into and is effective for all purposes as of the 10th day of February, 1997, by and between TLC The Laser Center, Inc., a corporation organized under the laws of Ontario ("TLC") and J. James Thimons, O.D. ("Thimons"). RECITALS WHEREAS, Thimons is a shareholder of 20/20 Laser Centers, Inc., a Maryland corporation ("20/20") as well as a holder of certain options to purchase stock in 20/20 (the "Options"), pursuant to that certain Stock Option Agreement between 20/20 and Thimons dated as of August 1, 1996 (the "Option Agreement"). WHEREAS, 20/20 and TLC have entered into a Share for Share Exchange Agreement dated as of December 15, 1996 (the "TLC Exchange Agreement") pursuant to which TLC is offering to purchase all of the outstanding shares of 20/20 from its existing shareholders. WHEREAS, Thimons received his Options in consideration of personal services provided to 20/20 pursuant to that certain letter of agreement dated September 9, 1996 (the "City Organizer Agreement") describing Thimons's responsibilities and compensation in connection with being an O.D. City Organizer in the New York Metropolitan area. In addition, Thimons is a party to that certain Team Optometrist Agreement dated September 23, 1996 among Thimons, 20/20, and 20/20 Laser Vision Correction Associates, P.C. (the "Team Optometrist Agreement"). The City Organizer Agreement and the Team Optometrist Agreement shall be referred to herein collectively as the "Services Agreements". WHEREAS, it is in the best interests of 20/20 and TLC that Thimons continue to provide his personal services under the existing Services Agreements. WHEREAS, Thimons is willing to continue to provide services pursuant to the terms and conditions of the existing Service Agreements so long as TLC enters into this agreement concerning the exchange of shares at the time Thimons exercises his outstanding options to purchase shares of 20/20, and TLC is willing to do so on the terms and conditions set forth below. -1- NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, agree to the following terms: 1. Ratification of Services Agreements. The parties hereto ratify and confirm the Services Agreements and acknowledge that they are in full force and effect. 2. Share Exchange. In the event Thimons exercises his options to purchase 20/20 stock pursuant to the Option Agreement on or before March 1, 1999, then promptly after the exercise of such option, TLC agrees to issue TLC stock in exchange for the 20/20 stock purchased by Thimons, at an exchange ratio of .37517 shares of TLC stock for each share of 20/20 stock and Thimons agrees to accept such exchange of TLC stock, subject to the provisions of paragraphs 4 and 8 below. In the event any Options are not exercised on or before March 1, 1999, then the obligations of TLC and Thimons under this paragraph 2 shall be null and void with respect to such Options. 3. Continuance of Services Agreements. Thimons agrees not to give notice of termination of his Services Agreements with 20/20 prior to the earlier to occur of (i) the closing of the TLC stock exchange pursuant to the TLC Exchange Agreement, or (ii) the termination of the TLC Exchange Agreement. 4. Adjustment of Option Shares and Change in Capital Structure. a. This Agreement shall not affect in any way the right or power of TLC or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in TLC's capital structure or its business, or any merger or consolidation of TLC, or any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the common stock or the rights thereof, or the dissolution or liquidation of TLC, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. b. If TLC shall effect a subdivision or consolidation of shares or other capital readjustment, the payment of a stock dividend, or other increase or reduction of the number of shares of the common stock outstanding, without receiving compensation therefor in money, services or property, then (1) the number, class, and per share price of shares of common stock to be exchanged hereunder shall be appropriately adjusted in such a manner as to entitle Thimons to receive upon exercise of an Option, for the same aggregate cash consideration, the same total number and class of shares as he would have received had Thimons exercised his Option in full immediately prior to the event requiring the adjustment; and -2- (2) the number and class of shares then reserved for issuance hereunder as a result of Options outstanding shall be adjusted by substituting for the total number and class of shares of common stock then reserved that number and class of shares of common stock that would have been received by the owner of an equal number of outstanding shares of each class of common stock as the result of the event requiring the adjustment. c. After a merger of one or more corporations with TLC or after a consolidation of TLC and one or more corporations, Thimons shall, at no additional cost, be entitled upon exercise of an Option to receive pursuant to this Agreement in lieu of the number and class of shares as to which he would be entitled to exchange pursuant to paragraph 2 hereof, the number and class of shares of stock or other securities to which Thimons would have been entitled pursuant to the terms of the agreement of merger or consolidation if, immediately prior to such merger or consolidation, Thimons had been the holder of record of the number and class of shares of common stock equal to the number and class of shares as to which he would be entitled under paragraph 2 hereof. d. Except as previously expressly provided, neither the issuance by TLC of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of TLC convertible into such shares or other securities, nor the increase or decrease of the number of authorized shares of stock, nor the addition or deletion of classes of stock, shall affect, and no adjustment by reason thereof shall be made with respect to, the number, class or price of shares of common stock then subject to this Agreement. e. Adjustment under the preceding provisions of this section will be made by the Board of Directors of TLC in good faith, whose determination as to what adjustments will be made and the extent thereof will be final, binding, and conclusive. 5. Authorization and Reservation of Shares. During the term of this Agreement, TLC will at all times have authorized and reserved a sufficient number of shares of its common stock to provide for the rights to exchange as provided for herein. TLC represents and warrants that (i) all stock issued to Thimons in exchange for 20/20 stock shall be validly issued, fully paid and non-assessable, and (ii) such stock shall be free of restrictions on transferability imposed by TLC other than the provisions of paragraph 8 hereof and the terms and conditions of the Holdback Agreement (defined in paragraph 8), provided however, that, subject to the provisions of paragraph 7 hereof and the terms and conditions of the -3- Registration Rights Agreement (defined in paragraph 7), such stock may be subject to restrictions on transferability imposed by applicable law.. 6. No Fractional Share or Scrip. No fractional shares or scrip representing fractional shares shall be issued hereunder. Any fractional shares shall be rounded to the nearest whole share such that fractions of .50 and greater shall be rounded up to the next whole share and fractions of less than .50 shall be rounded down. 7. Registration Rights Agreement. TLC acknowledges and agrees that the TLC shares issuable to Thimons pursuant to this Agreement (a) shall be included as part of the shares that are subject to that certain Registration Rights Agreement dated concurrently herewith between TLC and the shareholders of 20/20 (the "Registration Rights Agreement"), and (b) shall be included in any obligation of TLC to register shares of former 20/20 shareholders on the Toronto Stock Exchange pursuant to the TLC Exchange Agreement. 8. Holdback Agreement. The parties acknowledge and agree that the TLC shares to which Thimons may be entitled pursuant to this Agreement are subject to the terms and conditions of that certain Holdback Agreement dated concurrently herewith between TLC and the shareholders of 20/20 (the "Holdback Agreement") and that any TLC shares issued to Thimons pursuant to this Agreement shall be subject to the terms and conditions of the Holdback Agreement. In the event TLC is entitled to indemnification under the Holdback Agreement prior to a time that Thimons has exercised all of his Options, then the exchange ratio set forth in paragraph 2 hereof shall be modified so that the number of TLC shares that Thimons receives pursuant to this Agreement upon exercise of an Option shall be adjusted so that upon the exercise of an Option, Thimons receives the number and class of shares of stock or other securities to which Thimons would have been entitled pursuant to the terms of the Holdback Agreement if, immediately prior to the exercise of such Options, Thimons had been the holder of record of the number and class of shares of common stock equal to the number and class of shares as to which he would be entitled under paragraph 2 hereof. Thimons acknowledges that he is an "Insider" for purposes of the Holdback Agreement. 9. Miscellaneous. This Agreement shall be governed by and construed under the laws of the State of Maryland. The titles of the sections and subsections of this Agreement are for convenience only and are not to be considered in construing this Agreement. This Agreement does not entitle Thimons to any voting rights or other rights as a shareholder of TLC with respect to any shares that are the subject matter hereof prior to the exercise of the Options as provided for herein. All notices required or permitted to be given under -4- this Agreement shall be in writing and shall be delivered in person, by telecopy, by express courier or by certified mail, return receipt requested, postage prepaid. IN WITNESS WHEREOF, the parties have signed this Agreement as of the date first set forth above. TLC: TLC The Laser Center, Inc. By: /s/ R.J. Kelly ---------------------------------- Ronald Kelly, Vice President THIMONS: /s/ J. James Thimons ---------------------------------- J. James Thimons, O.D. Acknowledged and Agreed To: 20/20 Laser Centers, Inc. By: /s/ Elizabeth A. Karmin ------------------------- -5- EX-5 11 STOCK OPTION PLAN Toronto Stock Exchange March 4, 1998 Page # September 1, 1998 The Board of Directors TLC The Laser Center Inc. 5600 Explorer Drive, Suite 301 Mississauga, Ontario L4W 4Y2 Dear Sirs: Re: TLC The Laser Center Inc.: 20/20 Laser Centers, Inc. Stock Option Plan and Individual Stock Option Agreements I am in-house General Counsel for TLC The Laser Center Inc. (the "Company") with respect to the Company's Registration Statement on Form S-8, filed by the Company with the U.S. Securities and Exchange Commission in connection with the registration under the Securities Act of 1933, as amended (the "Act"), of 584,668 common shares of the Company, no par value (the "Shares"). The Shares will be issued by the Company upon the exercise of certain stock option agreements under the 20/20 Laser Centers, Inc. 1995 Stock Option Plan and other individual stock option agreements (the "Stock Option Agreements"). As counsel to the Company, I have examined the Company's Certificate and Articles of Incorporation, as amended, and such records, certificates and other documents of the Company, as I have considered necessary or appropriate for the purpose of this opinion. I assume that, prior to the issuance of any Shares to which the Registration Statement relates, appropriate action will be taken to register and qualify such Shares for sale, to the extent necessary, under any state securities laws. My opinions are limited to the laws of the Province of Ontario, including the federal laws applicable therein, in each case as in effect on the date hereof. Based upon and subject to the foregoing, I am of the opinion that the 584,668 Shares issuable upon the exercise of options granted under Stock Option Agreements, when issued or delivered and paid for in accordance with the terms of the Stock Option Agreements, will be validly issued, fully paid and non-assessable shares. I hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to all references to this opinion in the Registration Statement. In giving this consent, I do not hereby admit that I come within the category of persons whose consent is required under section 7 of the Act, or the General Rules and Regulations thereunder. Yours very truly, /s/ Ronald J. Kelly -------------------- Ronald J. Kelly EX-23.(A) 12 CONSENT OF INDEPENDANT CHARTERED ACCOUNTANTS Consent of Independent Chartered Accountants We consent to the incorporation by reference in the Registration Statement on Form S-8 (filed with the SEC on September 3, 1998) of TLC The Laser Center Inc. of our report dated July 15, 1998, included in the 1998 Annual Report (Form 10-K) of TLC The Laser Center Inc. Toronto, Canada /s/ Ernst & Young September 3, 1998 Chartered Accountants -----END PRIVACY-ENHANCED MESSAGE-----