TLC VISION CORP
SUPPLEMENT EMPLOYMENT - JOHN J KLOBNAK
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<TYPE>EX-10.16
<SEQUENCE>9
<FILENAME>c71594exv10w16.txt
<DESCRIPTION>SUPPLEMENT EMPLOYMENT - JOHN J KLOBNAK
<TEXT>
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                                                                   EXHIBIT 10.16


                        SUPPLEMENTAL EMPLOYMENT AGREEMENT


         This Supplemental Employment Agreement ("Agreement") is made and
entered into on this 15th day of May 2002 by and between John J. Klobnak
("Executive") and TLC Vision Corporation ("TLC") and its subsidiary Laser Vision
Centers, Inc. ("Laser Vision") (such entities, along with any other subsidiaries
of TLC are collectively referred to hereinafter as the "Company"). In
consideration of the following promises, the parties agree as follows:

         1. Separation from Employment. Executive acknowledges that he will
separate from employment with the Company effective as of May 15, 2002 (the
"Effective Date"). The Company and Executive have agreed to settle all matters
relating to Executive's employment relationship with the Company and provide for
certain terms relating to Executive's services as Vice-Chairman of the Board of
Directors of TLC.

         2. Resignation of Executive. Executive voluntarily resigns from his
employment with Laser Vision effective as of the Effective Date. Such
resignation is hereby accepted by the Company.

         3. Executive's Duties and Obligations Owed to the Company After the
Effective Date. Executive shall serve as Vice-Chairman of the Board of Directors
of TLC for a period of one (1) year following the Effective Date. During such
period, Executive's duties and obligations owed to the Company and TLC shall
consist solely of the following:

         (a)      Executive shall aid the orderly transition of Executive's
                  former duties with the Company to his successor or successors
                  on the management team after the Effective Date;

         (b)      Executive shall introduce his successor or successors on the
                  management team after the Effective Date to outside business
                  associates of the Company; and

         (c)      Executive shall attend and participate in the meetings of the
                  Board of Directors of TLC.

         4. Reimbursement of Business Expenses. The Company agrees to reimburse
Executive for other reasonable out-of-pocket expenses incurred in connection
with his role as Vice-Chairman of the Board of Directors of TLC including,
without limitation, travel and accommodations for all authorized business trips,
provided vouchers therefor, or other supporting information as TLC may
reasonably require, are presented to the Company. The Company agrees to
reimburse Executive for all such expenses within ten (10) days of presentation.

         5. Cash Payments. In recognition of the termination of Executive's
employment with Laser Vision and his future services to TLC, on the Effective
Date, the Company shall pay Executive the following amounts in cash:


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         (a)      A payment equal to three (3) times Executive's current annual
                  salary with Laser Vision of $307,000, which is $921,000;

         (b)      A payment equal to three (3) times the average of Executive's
                  annual bonus from Laser Vision for the three (3) years
                  immediately preceding the Effective Date, which is $423,000 (3
                  times $141,000);

         (c)      A payment equal to $1,500,000, which is a success bonus for
                  the year which includes the Effective Date; and

         (d)      A payment equal to $35,424 which represents the cash
                  equivalent of Executive's vacation time which was accrued but
                  unused as of the Effective Date.

         Such amounts shall be subject to the minimum tax withholding rates
applicable to lump sum cash payments.

         6. Stock Options and Stock Warrants. On the Effective Date, all options
or warrants held by Executive, if any, to purchase shares of common stock of
Laser Vision shall be converted into options or warrants to purchase shares of
common stock of TLC in accordance with the terms of the Agreement and Plan of
Merger among Laser Vision, TLC Laser Eye Centers, Inc. and TLC Acquisition II
Corp. dated as of August 25, 2001 (the "Merger Agreement").

         As of the Effective Date, pursuant to the Merger Agreement, Executive's
options or warrants with an exercise price in excess of $8.688 per share shall
be re-priced at $8.688 per share.

         In addition, on the Effective Date, the Company shall grant Executive
options or warrants to purchase five hundred thousand (500,000) shares of common
stock of TLC. Such options or warrants shall be fully vested and exercisable
immediately upon the date(s) of grant of such options or warrants. Such options
or warrants shall have an exercise price equal to the closing price of a share
of common stock of TLC on the NASDAQ National Market on the Effective Date and
shall be exercisable by Executive at any time and from time to time over a term
of ten (10) years after the Effective Date.

         Notwithstanding any provision to the contrary contained in any stock
option or stock warrant agreement between Executive and Laser Vision or TLC, as
of the Effective Date, all outstanding stock options or stock warrants granted
to Executive by the Company or Laser Vision shall be fully vested and
exercisable immediately. In addition, such options or warrants shall continue to
be exercisable by Executive for their entire term without regard to any
provision contained in any such agreement that restricts or terminates his
exercise rights on account of termination of employment (including any provision
that accelerates the expiration of the term of such options or warrants).



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         Executive and the Company hereby acknowledge and agree that Executive's
options and warrants to purchase shares of common stock of TLC shall be subject
to the approval of The Toronto Stock Exchange and the shareholders of the
Company. In the event any such approval is not obtained, the Company shall
indemnify Executive on a mutually-acceptable basis (or if the parties so agree,
with a cash payment) for any losses resulting from such failure on an after-tax
basis.

         7. Certain Registration Rights. With respect to Executive's shares of
common stock of TLC, Executive shall have the registration rights set forth in
Exhibit A attached hereto to this Agreement.

         8. Premiums for Dental Coverage. Up to and including the year in which
Executive attains sixty-five(65),the Company shall pay the premiums necessary
for Executive, Executive's spouse (if any) and Executive's dependents (if any)
to maintain dental coverage no less generous than the Company's dental care plan
(as such plan may exist from time to time for actively employed executives of
the Company).

         9. Life Insurance Policy. The Company hereby assigns to Executive its
entire interest in the life insurance policy (Policy No. 2-133-472) currently in
force on Executive's life. Beginning in 2002, and for all years thereafter,
Executive shall be responsible for paying the entire premium(s) for such policy.
Executive shall be permitted to designate a beneficiary (including, without
limitation, his estate) to receive the benefits payable under such policy upon
Executive's death.

         10. Reimbursements for Premiums for Extended Health Care Coverage. Up
to and including the year in which Executive attains age sixty-five (65), the
Company shall provide health care coverage no less generous than the Company's
health care plan (as such plan may exist from time to time for actively employed
executives of the Company) for Executive, Executive's spouse (if any) and
Executive's dependents (if any). Executive shall pay the premiums at the
applicable COBRA rate that is charged to the Company's former Executives from
time to time. The Company agrees to reimburse Executive for such premiums plus
any additional "gross-up" amounts equal to any taxes (including, without
limitation, any income taxes) on such amounts.

         11. Office Space and Related Services. For the period during which
Executive serves as Vice-Chairman of the Board of Directors of TLC, the Company
shall provide Executive with an office space in the Company's corporate annex
(designated as Jim Tiffany's former office) in St. Louis, Missouri. In addition,
at its sole cost and expense, the Company shall pay for and provide Executive
with all related services including, without limitation, secretarial support,
phone service, a cell phone, and use of a computer. Executive shall not be
required to relocate from the St. Louis, Missouri metropolitan area in
connection with his duties as Vice-Chairman of the Board of Directors of TLC.



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         12. Option to Purchase Computers. Up to and including the date of the
one-year anniversary of the Effective Date, Executive shall have the option to
purchase from the Company any personal computer that is used by him at its
depreciated book value.

         13. Attendance at Professional Meetings. The Company agrees to
reimburse Executive for his reasonable expenses relating to Executive's
attendance at any ASCRS and AAO meetings following the Effective Date,
including, without limitation, expenses for airfares, accommodations, meals, and
registration fees; provided that vouchers therefor, or other supporting
information as the Company may reasonably require, are presented to the Company.
The Company agrees to reimburse Executive for all such expenses within ten (10)
days of presentation.

         14. Director Benefits. Up to and including the date of the first
anniversary of the Effective Date, in addition to the other cash payments
provided to Executive pursuant to this Agreement, the Company shall pay
Executive all fees and other benefits paid to the Company's outside directors.

         15. Free Refractive Surgery Services. The Company agrees to provide
Executive, his spouse, and any lineal descendents and their spouses with free
refractive surgery services with Dr. Richard Lindstrom and/or Dr. Steven Wexler
for a period of three (3) years following the Effective Date.

         16. Non-Solicitation Agreement.

         (a)      Executive shall not for a period of one (1) year after the
                  Effective Date:

                  (i)      directly or indirectly, either as an individual for
                           Executive's own account, or as a partner or joint
                           venturer, or as an advisor, consultant,
                           representative, Executive, officer, director or
                           shareholder of any corporation or other business
                           organization, or in any other capacity, engage in,
                           enter into or participate in any way in any business
                           or enterprise which competes with any business
                           conducted by the Company during the course of
                           Executive's employment as of the Effective Date. In
                           connection with the foregoing, Executive acknowledges
                           that the market for the Company's services is
                           international in scope and that the foregoing
                           covenant shall extend to any business or enterprise
                           which provides or intends to provide competing
                           services. It is expressly understood that the
                           foregoing covenant shall not prohibit Executive from
                           owning less than five (5%) percent of the equity of
                           any publicly held corporation;

                  (ii)     directly or indirectly hire away or attempt to hire
                           away or otherwise engage any Executive, key advisor,
                           or consultant of the Company; or

                  (iii)    directly or indirectly interfere or attempt to
                           interfere in any way with the Company's relationships
                           with any of its suppliers, including, without


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                           limitation, inducing or attempting to induce any
                           supplier of the Company to terminate or to change the
                           terms of its dealings with the Company.

         (b)      Executive shall not for a period of one (1) year after the
                  Effective Date:

                  (i)      divulge, or cause to be divulged, communicate or
                           cause to be communicated, publish or cause to be
                           published, or otherwise disclose or cause to be
                           disclosed to any person, firm, corporation,
                           association, or entity, any of the Company's systems,
                           designs, procedures, pricing and marketing
                           strategies, concepts, technical information, trade
                           secrets, know-how, customer lists, customer contacts,
                           customer prospects, fee schedules, business and
                           financial records and such other information regarded
                           by the Company as confidential and of a proprietary
                           nature (the "Proprietary Information"). For purposes
                           hereof, the term Proprietary Information shall not
                           include information which (x) at the time of
                           disclosure to or by Executive was generally known to
                           the relevant trade so as to no longer be a
                           protectable trade secret, or (y) was lawfully
                           received by Executive from a third party who
                           independently, without prompting or assistance by
                           Executive, developed or acquired such Proprietary
                           Information and was under no obligation, express or
                           implied, to the Company with respect thereto or (z)
                           at the time of disclosure was already properly in
                           Executive's possession or otherwise known by
                           Executive.

         (c)      Executive hereby acknowledges that the Company's remedy at law
                  for breach or threat of breach of the provisions of this
                  Section 16 is inadequate and that the Company shall have the
                  right to seek injunctive relief in the event of any such
                  breach or threatened breach, in addition to any other remedy
                  available. If any provision of this Section 16 shall be
                  invalid or unenforceable to any extent or in any application,
                  then the remainder of this Section and of such term and
                  condition, except to such extent or in such application shall
                  not be affected thereby, and each and every term and condition
                  of this Section shall be valid and enforced to the fullest
                  extent, and in the broadest application provided by law. If
                  the invalidity or unenforceability is due to the
                  unreasonableness of the time or scope or geographic extent of
                  any covenant and restriction, said covenant and restriction
                  shall nevertheless be effective for such a period of time or
                  within such scope or geographical area as may be determined to
                  be reasonable by a court of competent jurisdiction.

         17. Indemnification. The Company shall indemnify, hold harmless, and
defend Executive against claims arising against the Executive in connection with
the Executive's performance of his duties under this Agreement to the full
extent permitted by law but not with respect to any claims successfully resolved
against Executive that Executive engaged in any fraudulent, grossly negligent,
criminal, or ultra vires act.



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         18. Assignment. This Agreement and Executive's rights and obligations
hereunder may not be assigned by Executive. This Agreement may not be assigned
by the Company without Executive's written consent. This Agreement shall be
binding upon and inure to the benefit of the Company and its successors and
permitted assigns and shall be binding upon Executive, his heirs, executors and
administrators.

         19. Entire Agreement; Amendment. This Agreement constitutes the entire
Agreement among the parties with respect to the subject matter hereof and,
unless otherwise provided herein, supersedes all prior agreements or
understandings written or oral in respect thereof. This Agreement may be
amended, modified, superseded, cancelled, renewed, or extended, and the terms or
covenants hereof may be waived only by a written instrument signed by all the
parties hereto, or in the case of a waiver, by the party waiving compliance.

         20. Severability. If any provision of this Agreement shall be invalid
or unenforceable to any extent or in any application, then the remainder of this
Agreement and of such term and condition, except to such extent or in such
application, shall not be affected thereby and each and every term and condition
of this Agreement shall be valid and enforced to the fullest extent and in the
broadest application permitted by law.

         21. Construction and Interpretation. This Agreement, and all questions
arising in connection therewith, shall be governed by and construed in
accordance with the laws of the State of Missouri. In the event that Executive
or the Company commence litigation against the other party to enforce any
provision of this Agreement, venue shall at all times lie in the Circuit Court
of St. Louis County, St. Louis, Missouri. For any and all disputes between
Executive and the Company arising under this Agreement, each party shall be
responsible for its own legal fees and expenses, and neither party shall be
entitled to recover its legal fees and expenses from the other party.

         22. Headings. The section headings contained herein are for convenience
and reference only, and shall be given no effect in the interpretation of any
term or condition of this Agreement.



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         IN WITNESS WHEREOF, the undersigned parties have executed this
Supplemental Employment Agreement.

                                            TLC VISION CORPORATION


                                            By:
                                                --------------------------------
                                                 Name:
                                                 Title:


                                            LASER VISION CENTERS, INC


                                            By:
                                                --------------------------------
                                                 Name:
                                                 Title:



                                            ------------------------------------
                                            (Executive's Signature)

                                            Date:
                                                  ------------------------------


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