Exhibit 10.17

 

Candela Corporation

 

Executive Retention Agreement

With

Gerard E. Puorro

 

THIS EXECUTIVE RETENTION AGREEMENT (this “Agreement”), effective as of
November     , 2007 (the “Effective Date”) is made by and between Candela
Corporation, a Delaware corporation (the “Company”), and Gerard E. Puorro (the
“Executive”).

 

WHEREAS, the Company and the Executive have entered into that certain Amended
and Restated Employment Agreement, which restated agreement became effective on
the date hereof  (the “Employment Agreement”);

 

WHEREAS, the Company recognizes that, as is the case with many publicly-held
corporations, the possibility of a change in control of the Company exists and
that such possibility, and the uncertainty and questions which it may raise
among key personnel, may result in the departure or distraction of key personnel
to the detriment of the Company and its stockholders; and

 

WHEREAS, the Board of Directors of the Company (the “Board”) has identified key
positions within the Company (“Key Positions”) and determined that appropriate
steps should be taken to reinforce and encourage the continued employment and
dedication of those persons, including the Executive, who hold Key Positions
within the Company without distraction from the possibility of a change in
control of the Company and related events and circumstances;

 

NOW, THEREFORE, as an inducement for and in consideration of the Executive
remaining in its employ, the Company agrees that notwithstanding any severance
provisions contained in the Employment Agreement, the Executive shall receive
the severance benefits set forth in this Agreement in the event the Executive’s
employment with the Company is terminated under the circumstances described
below subsequent to a Change in Control (as defined in Section 1.1).

 

1                       KEY DEFINITIONS.

 

As used herein, the following terms shall have the following respective
meanings:

 

1.1                       “CHANGE IN CONTROL” MEANS AN EVENT OR OCCURRENCE SET
FORTH IN ANY ONE OR MORE OF SUBSECTIONS (A) THROUGH (D) BELOW (INCLUDING AN
EVENT OR OCCURRENCE THAT CONSTITUTES A CHANGE IN CONTROL UNDER ONE OF SUCH
SUBSECTIONS BUT IS SPECIFICALLY EXEMPTED FROM ANOTHER SUCH SUBSECTION):

 

A)                                      THE ACQUISITION BY AN INDIVIDUAL, ENTITY
OR GROUP (WITHIN THE MEANING OF SECTION 13(D)(3) OR 14(D)(2) OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED (THE “EXCHANGE ACT”)) (A “PERSON”) OF
BENEFICIAL OWNERSHIP OF ANY CAPITAL STOCK AND AS TO WHICH OWNERSHIP, SUCH PERSON
EITHER (I) SHALL HAVE FILED A FORM 13D IN RESPECT OF ITS OR THEIR HOLDINGS WITH
THE SECURITIES AND EXCHANGE COMMISSION (“SEC”), OR (II) IN THE REASONABLE
OPINION OF THE COMPANY, SUCH PERSON SHOULD HAVE FILED A FORM 13D WITH THE SEC IN
RESPECT OF ITS HOLDINGS AND ITS INTENTIONS (AND THE EXECUTIVE SHALL BE PERMITTED
TO REQUEST, AND THE COMPANY SHALL PROMPTLY FURNISH, AN INDICATION OF WHETHER THE
BOARD OF DIRECTORS HAS CONCLUDED THAT SUCH PERSON SHOULD HAVE SO FILED), OF THE
COMPANY IF, AFTER SUCH ACQUISITION, SUCH PERSON BENEFICIALLY OWNS (WITHIN THE
MEANING OF RULE 13D-3 PROMULGATED UNDER THE EXCHANGE ACT), 30% OR MORE OF EITHER
(X) THE THEN-OUTSTANDING SHARES OF COMMON STOCK OF THE COMPANY (THE “OUTSTANDING
COMPANY COMMON STOCK”) OR (Y) THE COMBINED VOTING POWER OF THE THEN-OUTSTANDING
SECURITIES OF THE COMPANY ENTITLED TO VOTE GENERALLY IN THE ELECTION OF
DIRECTORS (THE “OUTSTANDING COMPANY VOTING SECURITIES”); PROVIDED, HOWEVER, THAT
FOR PURPOSES OF THIS SUBSECTION (A), THE FOLLOWING ACQUISITIONS OF BENEFICIAL
OWNERSHIP OF OUTSTANDING COMPANY COMMON STOCK OR OUTSTANDING COMPANY VOTING
SECURITIES SHALL NOT CONSTITUTE A CHANGE IN

 

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CONTROL: (1) ANY ACQUISITION DIRECTLY FROM THE COMPANY (EXCLUDING AN ACQUISITION
PURSUANT TO THE EXERCISE, CONVERSION OR EXCHANGE OF ANY SECURITY EXERCISABLE
FOR, CONVERTIBLE INTO OR EXCHANGEABLE FOR COMMON STOCK OR VOTING SECURITIES OF
THE COMPANY, UNLESS THE PERSON EXERCISING, CONVERTING OR EXCHANGING SUCH
SECURITY ACQUIRED SUCH SECURITY DIRECTLY FROM THE COMPANY OR AN UNDERWRITER OR
AGENT OF THE COMPANY), (2) ANY ACQUISITION BY THE COMPANY, (3) ANY ACQUISITION
BY ANY EMPLOYEE BENEFIT PLAN (OR RELATED TRUST) SPONSORED OR MAINTAINED BY THE
COMPANY OR ANY CORPORATION CONTROLLED BY THE COMPANY, OR (4) ANY ACQUISITION BY
ANY CORPORATION PURSUANT TO A TRANSACTION WHICH COMPLIES WITH CLAUSES (I) AND
(II) OF SUBSECTION (C) OF THIS SECTION 1.1; OR

 

B)                                     SUCH TIME AS THE CONTINUING DIRECTORS (AS
DEFINED BELOW) DO NOT CONSTITUTE A MAJORITY OF THE BOARD (OR, IF APPLICABLE, THE
BOARD OF DIRECTORS OF A SUCCESSOR CORPORATION TO THE COMPANY), WHERE THE TERM
“CONTINUING DIRECTOR” MEANS AT ANY DATE A MEMBER OF THE BOARD (I) WHO WAS A
MEMBER OF THE BOARD ON THE DATE OF THE EXECUTION OF THIS AGREEMENT OR (II) WHO
WAS NOMINATED OR ELECTED SUBSEQUENT TO SUCH DATE BY AT LEAST A MAJORITY OF THE
DIRECTORS WHO WERE CONTINUING DIRECTORS AT THE TIME OF SUCH NOMINATION OR
ELECTION OR WHOSE ELECTION TO THE BOARD WAS RECOMMENDED OR ENDORSED BY AT LEAST
A MAJORITY OF THE DIRECTORS WHO WERE CONTINUING DIRECTORS AT THE TIME OF SUCH
NOMINATION OR ELECTION; PROVIDED, HOWEVER, THAT THERE SHALL BE EXCLUDED FROM
THIS CLAUSE (II) ANY INDIVIDUAL WHOSE INITIAL ASSUMPTION OF OFFICE OCCURRED AS A
RESULT OF AN ACTUAL OR THREATENED ELECTION CONTEST WITH RESPECT TO THE ELECTION
OR REMOVAL OF DIRECTORS OR OTHER ACTUAL OR THREATENED SOLICITATION OF PROXIES OR
CONSENTS, BY OR ON BEHALF OF A PERSON OTHER THAN THE BOARD; OR

 

C)                                      THE CONSUMMATION OF A MERGER,
CONSOLIDATION, REORGANIZATION, RECAPITALIZATION OR STATUTORY SHARE EXCHANGE
INVOLVING THE COMPANY OR A SALE OR OTHER DISPOSITION OF ALL OR SUBSTANTIALLY ALL
OF THE ASSETS OF THE COMPANY IN ONE OR A SERIES OF TRANSACTIONS (A “BUSINESS
COMBINATION”), UNLESS, IMMEDIATELY FOLLOWING SUCH BUSINESS COMBINATION, EACH OF
THE FOLLOWING TWO CONDITIONS IS SATISFIED: (I) ALL OR SUBSTANTIALLY ALL OF THE
INDIVIDUALS AND ENTITIES WHO WERE THE BENEFICIAL OWNERS OF THE OUTSTANDING
COMPANY COMMON STOCK AND OUTSTANDING COMPANY VOTING SECURITIES IMMEDIATELY PRIOR
TO SUCH BUSINESS COMBINATION BENEFICIALLY OWN, DIRECTLY OR INDIRECTLY, MORE THAN
50% OF THE THEN-OUTSTANDING SHARES OF COMMON STOCK AND THE COMBINED VOTING POWER
OF THE THEN-OUTSTANDING SECURITIES ENTITLED TO VOTE GENERALLY IN THE ELECTION OF
DIRECTORS, RESPECTIVELY, OF THE RESULTING OR ACQUIRING CORPORATION IN SUCH
BUSINESS COMBINATION (WHICH SHALL INCLUDE, WITHOUT LIMITATION, A CORPORATION
WHICH AS A RESULT OF SUCH TRANSACTION OWNS THE COMPANY OR SUBSTANTIALLY ALL OF
THE COMPANY’S ASSETS EITHER DIRECTLY OR THROUGH ONE OR MORE SUBSIDIARIES) (SUCH
RESULTING OR ACQUIRING CORPORATION IS REFERRED TO HEREIN AS THE “ACQUIRING
CORPORATION”) IN SUBSTANTIALLY THE SAME PROPORTIONS AS THEIR OWNERSHIP,
IMMEDIATELY PRIOR TO SUCH BUSINESS COMBINATION, OF THE OUTSTANDING COMPANY
COMMON STOCK AND OUTSTANDING COMPANY VOTING SECURITIES, RESPECTIVELY; AND
(II) NO PERSON (EXCLUDING THE ACQUIRING CORPORATION, ANY EMPLOYEE BENEFIT PLAN
(OR RELATED TRUST) MAINTAINED OR SPONSORED BY THE COMPANY OR BY THE ACQUIRING
CORPORATION OR ANY EXEMPT PERSON) WHICH HAS EITHER (X) FILED A FORM 13D IN
RESPECT OF ITS HOLDINGS WITH THE SEC, OR (Y) IN THE REASONABLE OPINION OF THE
COMPANY, SUCH PERSON SHOULD HAVE FILED A FORM 13D WITH THE SEC IN RESPECT OF ITS
HOLDINGS AND ITS INTENTIONS, BENEFICIALLY OWNS, DIRECTLY OR INDIRECTLY, 30% OR
MORE OF THE THEN OUTSTANDING SHARES OF COMMON STOCK OF THE ACQUIRING
CORPORATION, OR OF THE COMBINED VOTING POWER OF THE THEN-OUTSTANDING SECURITIES
OF SUCH CORPORATION ENTITLED TO VOTE GENERALLY IN THE ELECTION OF DIRECTORS
(EXCEPT TO THE EXTENT THAT SUCH OWNERSHIP EXISTED PRIOR TO THE BUSINESS
COMBINATION); OR

 

D)                                     APPROVAL BY THE STOCKHOLDERS OF THE
COMPANY OF A COMPLETE LIQUIDATION OR DISSOLUTION OF THE COMPANY (AS
DISTINGUISHED FROM A FILING MADE BY THE COMPANY UNDER CHAPTER 11 OF THE FEDERAL
BANKRUPTCY LAWS).

 

1.2                       “CHANGE IN CONTROL DATE” MEANS THE FIRST DATE DURING
THE TERM (AS DEFINED IN SECTION 2) ON WHICH A CHANGE IN CONTROL OCCURS. 
ANYTHING IN THIS AGREEMENT TO THE CONTRARY NOTWITHSTANDING, IF (A) A CHANGE IN
CONTROL OCCURS, (B)  THE EXECUTIVE’S EMPLOYMENT WITH THE COMPANY IS TERMINATED
PRIOR TO THE DATE ON WHICH THE CHANGE IN CONTROL OCCURS, AND (C) IT IS
REASONABLY DEMONSTRATED BY THE EXECUTIVE THAT SUCH TERMINATION OF EMPLOYMENT
(I) WAS AT THE REQUEST OF A THIRD PARTY WHO HAS TAKEN STEPS REASONABLY
CALCULATED TO EFFECT A CHANGE IN CONTROL OR (II) OTHERWISE AROSE IN CONNECTION
WITH

 

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OR IN ANTICIPATION OF A CHANGE IN CONTROL, THEN FOR ALL PURPOSES OF THIS
AGREEMENT THE “CHANGE IN CONTROL DATE” SHALL MEAN THE DATE IMMEDIATELY PRIOR TO
THE DATE OF SUCH TERMINATION OF EMPLOYMENT.

 

1.3                       “CAUSE” MEANS:

 

A)                                      THE EXECUTIVE’S ABJECT FAILURE TO WORK
COOPERATIVELY WITH THE COMPANY’S OTHER OFFICERS AND SENIOR EMPLOYEES, AS
DETERMINED IN GOOD FAITH BY THE BOARD OF DIRECTORS, FOLLOWING REASONABLE NOTICE
AND OPPORTUNITY TO CURE;

 

B)                                     THE EXECUTIVE’S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT IN PERFORMING ANY ACTION, OR NOT PERFORMING ANY ACTION, THAT
HAS HAD, OR COULD HAVE, ALONE OR IN THE AGGREGATE, A MATERIAL NEGATIVE IMPACT ON
THE COMPANY;

 

C)                                      THE EXECUTIVE’S THEFT, DISHONESTY,
WILLFUL MISCONDUCT, BREACH OF FIDUCIARY DUTY FOR PERSONAL PROFIT, OR
FALSIFICATION OF ANY COMPANY DOCUMENTS OR RECORDS;

 

D)                                     THE EXECUTIVE’S UNAUTHORIZED USE,
MISAPPROPRIATION, DESTRUCTION OR DIVERSION OF ANY MATERIAL ASSET OR CORPORATE
OPPORTUNITY OF THE COMPANY (INCLUDING, WITHOUT LIMITATION, THE EXECUTIVE’S
IMPROPER USE OR DISCLOSURE OF THE COMPANY’S CONFIDENTIAL OR PROPRIETARY
INFORMATION OR HIS FAILURE TO ABIDE BY COMPANY POLICIES RELATING TO
CONFIDENTIALITY);

 

E)                                      ANY INTENTIONAL ACT BY THE EXECUTIVE
WHICH HAS A MATERIAL DETRIMENTAL EFFECT ON THE COMPANY’S REPUTATION OR BUSINESS;

 

F)                                        ANY MATERIAL BREACH BY THE EXECUTIVE
OF THIS AGREEMENT AND ANY OTHER AGREEMENT BETWEEN THE COMPANY AND EXECUTIVE,
WHICH BREACH IS NOT CURED WITHIN FIFTEEN (15) DAYS AFTER EXECUTIVE RECEIVES
NOTICE FROM THE COMPANY SPECIFYING SUCH BREACH; OR

 

G)                                     THE EXECUTIVE’S CONVICTION (INCLUDING ANY
PLEA OF GUILTY OR NOLO CONTENDERE) OF ANY CRIMINAL ACT INVOLVING FRAUD,
DISHONESTY, MISAPPROPRIATION OR MORAL TURPITUDE, OR WHICH IMPAIRS THE EMPLOYEE’S
ABILITY TO PERFORM HIS DUTIES WITH THE COMPANY.

 

1.4                       “INVOLUNTARY TERMINATION” MEANS THE EXECUTIVE’S
VOLUNTARY RESIGNATION FROM HIS EMPLOYMENT WITHIN SIXTY (60) DAYS FOLLOWING
(I) ANY MATERIAL DIMINUTION IN THE EXECUTIVE’S AUTHORITY, DUTIES OR
RESPONSIBILITIES; PROVIDED, HOWEVER, THAT A CHANGE IN JOB POSITION (INCLUDING A
CHANGE IN TITLE) SHALL NOT BE DEEMED A “MATERIAL DIMINUTION” UNLESS THE
EXECUTIVE’S NEW AUTHORITY, DUTIES OR RESPONSIBILITIES ARE MATERIALLY REDUCED
FROM THE PRIOR AUTHORITY, DUTIES OR RESPONSIBILITIES, (II) ANY MATERIAL
DIMINUTION OF THE EXECUTIVE’S BASE COMPENSATION, (III) A MATERIAL DIMINUTION IN
THE AUTHORITY, DUTIES, OR RESPONSIBILITIES OF THE SUPERVISOR TO WHOM THE
EXECUTIVE IS REQUIRED TO REPORT, INCLUDING A REQUIREMENT THAT THE EXECUTIVE
REPORT TO A CORPORATE OFFICER OR EMPLOYEE INSTEAD OF REPORTING DIRECTLY TO THE
BOARD OF DIRECTORS OF THE CORPORATION, (IV) A MATERIAL CHANGE IN THE GEOGRAPHIC
LOCATION AT WHICH THE EXECUTIVE MUST PERFORM HIS DUTIES, WHICH IS MORE THAN 50
MILES FROM THE CURRENT LOCATION, OR (V) A MATERIAL BREACH BY THE COMPANY OF THE
TERMS OF THIS AGREEMENT, INCLUDING A FAILURE OF THE COMPANY TO OBTAIN AN
ASSUMPTION OF THIS AGREEMENT AT OR PRIOR TO THE EFFECTIVENESS OF ANY SUCCESSION
PURSUANT TO SECTION 6.1; PROVIDED THAT THE EXECUTIVE’S TERMINATION OF EMPLOYMENT
SHALL NOT BE DEEMED TO BE AN INVOLUNTARY TERMINATION UNLESS THE COMPANY OR THE
BOARD OF DIRECTORS ON BEHALF OF THE COMPANY SHALL HAVE BEEN PROVIDED WITH
ADVANCE NOTICE OF THE TERMINATION AND A PERIOD OF NOT LESS THAN 30 DAYS TO CURE
THE EVENT OR CONDITION DESCRIBED IN (I), (II), (III) OR (IV), AND SHALL HAVE
EITHER FAILED TO SO CURE THE EVENT OR WAIVED ITS RIGHT TO CURE THE EVENT.

 

Any dispute as to whether any action by the Company constitutes an “Involuntary
Termination” shall be resolved through the dispute procedures set forth in
Section 5 of this Agreement.

 

1.5                       “DISABILITY” MEANS THE EXECUTIVE’S ABSENCE FROM THE
FULL-TIME PERFORMANCE OF THE EXECUTIVE’S DUTIES WITH THE COMPANY FOR 180
CONSECUTIVE CALENDAR DAYS AS A RESULT OF INCAPACITY DUE TO MENTAL OR

 

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PHYSICAL ILLNESS WHICH IS DETERMINED TO BE TOTAL AND PERMANENT BY A PHYSICIAN
SELECTED BY THE COMPANY OR ITS INSURERS AND ACCEPTABLE TO THE EXECUTIVE OR THE
EXECUTIVE’S LEGAL REPRESENTATIVE.

 

2                       TERM OF AGREEMENT.  THIS AGREEMENT, AND ALL RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER, SHALL TAKE EFFECT UPON THE EFFECTIVE DATE
AND SHALL EXPIRE UPON THE FIRST TO OCCUR OF (A) THE EXPIRATION OF THE TERM (AS
DEFINED BELOW) IF A CHANGE IN CONTROL HAS NOT OCCURRED DURING THE TERM, (B) THE
DATE THE EXECUTIVE NO LONGER HOLDS A KEY POSITION IF NEGOTIATIONS RELATING TO A
CHANGE IN CONTROL HAVE NOT COMMENCED PRIOR THERETO, (C) THE DATE 24 MONTHS AFTER
THE CHANGE IN CONTROL DATE, IF THE EXECUTIVE IS STILL EMPLOYED BY THE COMPANY AS
OF SUCH LATER DATE, OR (D) THE FULFILLMENT BY THE COMPANY OF ALL OF ITS
OBLIGATIONS UNDER SECTIONS 4 AND 5.2 IF THE EXECUTIVE’S EMPLOYMENT WITH THE
COMPANY TERMINATES WITHIN TWENTY-FOUR (24) MONTHS FOLLOWING THE CHANGE IN
CONTROL DATE.  “TERM” SHALL MEAN THE PERIOD COMMENCING AS OF THE EFFECTIVE DATE
AND CONTINUING IN EFFECT THROUGH DECEMBER 31, 2009, PROVIDED, HOWEVER, THAT
COMMENCING ON JANUARY 1, 2010, AND EACH JANUARY 1 THEREAFTER, THE TERM SHALL BE
AUTOMATICALLY EXTENDED FOR ONE ADDITIONAL YEAR UNLESS, NOT LATER THAN 60 DAYS
PRIOR TO THE SCHEDULED EXPIRATION OF THE TERM (OR ANY EXTENSION THEREOF), THE
COMPANY SHALL HAVE GIVEN THE EXECUTIVE WRITTEN NOTICE THAT THE TERM WILL NOT BE
EXTENDED.

 

3                       EMPLOYMENT STATUS; TERMINATION FOLLOWING CHANGE IN
CONTROL.

 

3.1                       NOT AN EMPLOYMENT CONTRACT.  THE EXECUTIVE
ACKNOWLEDGES THAT THIS AGREEMENT DOES NOT CONSTITUTE A CONTRACT OF EMPLOYMENT OR
IMPOSE ON THE COMPANY OR THE BOARD OF DIRECTORS ANY OBLIGATION TO RETAIN THE
EXECUTIVE AS AN EMPLOYEE AND THAT THIS AGREEMENT DOES NOT PREVENT THE EXECUTIVE
FROM TERMINATING EMPLOYMENT AT ANY TIME.  EXCEPT AS OTHERWISE PROVIDED IN
SECTION 1.2, IF THE EXECUTIVE’S EMPLOYMENT WITH THE COMPANY TERMINATES FOR ANY
REASON AND SUBSEQUENTLY A CHANGE IN CONTROL SHALL OCCUR, THE EXECUTIVE SHALL NOT
BE ENTITLED TO ANY BENEFITS HEREUNDER.

 

3.2                       TERMINATION OF EMPLOYMENT.

 

A)                                      IF THE CHANGE IN CONTROL DATE OCCURS
DURING THE TERM, ANY TERMINATION OF THE EXECUTIVE’S EMPLOYMENT BY THE COMPANY,
THE BOARD OF DIRECTORS OR BY THE EXECUTIVE WITHIN 24 MONTHS FOLLOWING THE CHANGE
IN CONTROL DATE (OTHER THAN DUE TO THE DEATH OF THE EXECUTIVE) SHALL BE
COMMUNICATED BY A WRITTEN NOTICE TO THE OTHER PARTY HERETO (THE “NOTICE OF
TERMINATION”), GIVEN IN ACCORDANCE WITH SECTION 7.  ANY NOTICE OF TERMINATION
SHALL: (I) INDICATE THE SPECIFIC TERMINATION PROVISION (IF ANY) OF THIS
AGREEMENT RELIED UPON BY THE PARTY GIVING SUCH NOTICE, (II) TO THE EXTENT
APPLICABLE, SET FORTH IN REASONABLE DETAIL THE FACTS AND CIRCUMSTANCES CLAIMED
TO PROVIDE A BASIS FOR TERMINATION OF THE EXECUTIVE’S EMPLOYMENT UNDER THE
PROVISION SO INDICATED, AND (III) SPECIFY THE DATE OF TERMINATION (AS DEFINED
BELOW).  THE EFFECTIVE DATE OF AN EMPLOYMENT TERMINATION (THE “DATE OF
TERMINATION”) SHALL BE THE CLOSE OF BUSINESS ON THE DATE SPECIFIED IN THE NOTICE
OF TERMINATION (WHICH DATE MAY NOT BE LESS THAN 15 DAYS OR MORE THAN 120 DAYS
AFTER THE DATE OF DELIVERY OF SUCH NOTICE OF TERMINATION), IN THE CASE OF A
TERMINATION OTHER THAN ONE DUE TO THE EXECUTIVE’S DEATH, OR THE DATE OF THE
EXECUTIVE’S DEATH, AS THE CASE MAY BE.  IN THE EVENT THE COMPANY FAILS TO
SATISFY THE REQUIREMENTS OF SECTION 3.2(A) REGARDING A NOTICE OF TERMINATION,
THE PURPORTED TERMINATION OF THE EXECUTIVE’S EMPLOYMENT PURSUANT TO SUCH NOTICE
OF TERMINATION SHALL NOT BE EFFECTIVE FOR PURPOSES OF THIS AGREEMENT.

 

B)                                     THE FAILURE BY THE EXECUTIVE OR THE
COMPANY TO SET FORTH IN THE NOTICE OF TERMINATION ANY FACT OR CIRCUMSTANCE WHICH
CONTRIBUTES TO A SHOWING OF INVOLUNTARY TERMINATION OR CAUSE SHALL NOT WAIVE ANY
RIGHT OF THE EXECUTIVE OR THE COMPANY, RESPECTIVELY, HEREUNDER OR PRECLUDE THE
EXECUTIVE OR THE COMPANY, RESPECTIVELY, FROM ASSERTING ANY SUCH FACT OR
CIRCUMSTANCE IN ENFORCING THE EXECUTIVE’S OR THE COMPANY’S RIGHTS HEREUNDER.

 

C)                                      ANY NOTICE OF TERMINATION FOR CAUSE
GIVEN BY THE COMPANY MUST BE GIVEN WITHIN 90 DAYS OF THE OCCURRENCE OF THE
EVENT(S) OR CIRCUMSTANCE(S) WHICH CONSTITUTE(S) CAUSE.

 

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D)                                     ANY NOTICE OF INVOLUNTARY TERMINATION
GIVEN BY THE EXECUTIVE TO THE COMPANY MUST BE GIVEN WITHIN SIXTY (60) DAYS OF
THE OCCURRENCE OF THE EVENT(S) OR CIRCUMSTANCE(S) WHICH CONSTITUTE(S) AN
INVOLUNTARY TERMINATION.

 

4                       BENEFITS TO EXECUTIVE.

 

4.1                       STOCK ACCELERATION FOLLOWING A CHANGE IN CONTROL AND
UPON THE TERMINATION OF EXECUTIVE’S EMPLOYMENT.  IF A CHANGE IN CONTROL OCCURS
DURING THE TERM, THEN, FOLLOWING THE CHANGE IN CONTROL DATE AND EFFECTIVE UPON
AN INVOLUNTARY TERMINATION OF THE EXECUTIVE’S EMPLOYMENT OR TERMINATION OF THE
EXECUTIVE’S EMPLOYMENT BY THE COMPANY OR THE BOARD OF DIRECTORS ON BEHALF OF THE
COMPANY (OTHER THAN FOR CAUSE, DISABILITY OR DEATH), THEN, (A) EACH STOCK
APPRECIATION RIGHT (“SAR”) ISSUED BY THE COMPANY TO THE EXECUTIVE SHALL
IMMEDIATELY BECOME VESTED AND EXERCISABLE IN FULL; (B) EACH OUTSTANDING OPTION
TO PURCHASE SHARES OF COMMON STOCK OF THE COMPANY HELD BY THE EXECUTIVE SHALL
BECOME IMMEDIATELY EXERCISABLE IN FULL AND WILL NO LONGER BE SUBJECT TO A RIGHT
OF REPURCHASE, IF ANY, BY THE COMPANY; (C) EACH OUTSTANDING RESTRICTED STOCK
AWARD SHALL BE DEEMED TO BE FULLY VESTED AND WILL NO LONGER BE SUBJECT TO A
RIGHT OF REPURCHASE BY THE COMPANY, AND (D) NOTWITHSTANDING ANY PROVISION IN ANY
APPLICABLE STOCK OPTION OR OTHER EQUITY INSTRUMENT AGREEMENT TO THE CONTRARY,
EACH SUCH OPTION, SAR OR ALTERNATIVE EQUITY INSTRUMENT SHALL CONTINUE TO BE
EXERCISABLE BY THE EXECUTIVE (TO THE EXTENT SUCH OPTION WAS EXERCISABLE ON THE
DATE OF TERMINATION OR BECAME EXERCISABLE PURSUANT TO THIS SECTION 4.1) FOR THE
DURATION OF THE TERM SET FORTH IN THE STOCK OPTION AGREEMENT, SAR OR OTHER
EQUITY INSTRUMENT AGREEMENT APPLICABLE THERETO AS IF TERMINATION OF EMPLOYMENT
HAD NOT OCCURRED.

 

4.2                       COMPENSATION.  IF THE CHANGE IN CONTROL DATE OCCURS
DURING THE TERM AND THE EXECUTIVE’S EMPLOYMENT WITH THE COMPANY TERMINATES
WITHIN 24 MONTHS FOLLOWING THE CHANGE IN CONTROL DATE, THE EXECUTIVE SHALL BE
ENTITLED TO THE FOLLOWING BENEFITS:

 

A)                                      TERMINATION WITHOUT CAUSE OR INVOLUNTARY
TERMINATION.  IF THE EXECUTIVE’S EMPLOYMENT WITH THE COMPANY IS TERMINATED BY
THE COMPANY OR THE BOARD OF DIRECTORS ON BEHALF OF THE COMPANY (OTHER THAN FOR
CAUSE, DISABILITY OR DEATH) OR BY THE EXECUTIVE BECAUSE OF AN INVOLUNTARY
TERMINATION, IN EITHER CASE WITHIN 24 MONTHS FOLLOWING THE CHANGE IN CONTROL
DATE, THEN THE EXECUTIVE SHALL BE ENTITLED TO THE FOLLOWING BENEFITS:

 

(I)                                     THE COMPANY SHALL PAY TO THE EXECUTIVE
IN A LUMP SUM IN CASH WITHIN 30 DAYS AFTER THE DATE OF TERMINATION (OR, SUCH
LATER DATE AS MAY BE REQUIRED BY SECTION 4.2 (D)), THE SUM OF (A) THE
EXECUTIVE’S BASE SALARY THROUGH THE DATE OF TERMINATION, (B) THE PRODUCT OF
(X) THE EXECUTIVE’S TARGET ANNUAL BONUS (IRRESPECTIVE OF THE LEVEL OF ATTAINMENT
TO DATE OF ANY TARGET BONUS BENCHMARKS SUCH AS FIRM WIDE OR INDIVIDUAL
OBJECTIVES OR HURDLES) FOR THE FISCAL YEAR IN WHICH THE DATE OF TERMINATION
OCCURS AND (Y) A FRACTION, THE NUMERATOR OF WHICH IS THE NUMBER OF DAYS IN THE
CURRENT FISCAL YEAR THROUGH THE DATE OF TERMINATION, AND THE DENOMINATOR OF
WHICH IS 365, AND (C) ANY ACCRUED VACATION PAY, IN EACH CASE TO THE EXTENT NOT
PREVIOUSLY PAID (THE SUM OF THE AMOUNTS DESCRIBED IN CLAUSES (A), (B), AND
(C) SHALL BE HEREINAFTER REFERRED TO AS THE “ACCRUED OBLIGATIONS”);

 

(II)                                  THE EXECUTIVE SHALL RECEIVE REGULAR
MONTHLY INSTALLMENTS FOR A TWO-YEAR PERIOD EQUAL TO ONE TWENTY-FOURTH (1/24TH)
OF THE EXECUTIVE’S ANNUAL SALARY (AT THE RATE IN EFFECT WHEN THE CHANGE IN
CONTROL DATE OCCURS AND BEFORE REDUCTION FOR TAXES OR OTHER WITHHOLDINGS OR
DEDUCTIONS SUCH AS A 401(K) PLAN CONTRIBUTION OR LIKE PAYMENT) MULTIPLIED BY A
FACTOR OF THREE (3.0X) TIMES, WITH SUCH MONTHLY PAYMENTS COMMENCING ON THE
PAYROLL DATE NEXT FOLLOWING THE DATE OF TERMINATION OR SUCH LATER DATE AS MAY BE
REQUIRED BY SECTION 4.2(D);

 

(III)                               THE EXECUTIVE SHALL RECEIVE REGULAR MONTHLY
INSTALLMENTS FOR A TWO-YEAR PERIOD EQUAL TO ONE TWENTY-FOURTH (1/24TH) OF THE
EXECUTIVE’S TARGET ANNUAL BONUS (IRRESPECTIVE OF THE LEVEL OF ATTAINMENT TO DATE
OF ANY TARGET BONUS BENCH-MARKS, SUCH AS FIRM- WIDE OR INDIVIDUAL OBJECTIVES OR
HURDLES) FOR THE FISCAL YEAR IN WHICH THE CHANGE IN CONTROL DATE OCCURS AND
BEFORE REDUCTION FOR TAXES OR OTHER WITHHOLDINGS OR DEDUCTIONS SUCH AS A
401(K) PLAN

 

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CONTRIBUTION OR LIKE PAYMENT) , MULTIPLIED BY A FACTOR OF THREE (3.0X) TIMES,
WITH SUCH MONTHLY PAYMENTS COMMENCING ON THE PAYROLL DATE NEXT FOLLOWING THE
DATE OF TERMINATION OR SUCH LATER DATE AS MAY BE REQUIRED BY SECTION 4.2(D);

 

(IV)                              FOR 18 MONTHS AFTER THE DATE OF TERMINATION,
OR SUCH LONGER PERIOD AS MAY BE PROVIDED BY THE TERMS OF THE APPROPRIATE PLAN,
PROGRAM, PRACTICE OR POLICY, THE COMPANY SHALL CONTINUE TO PROVIDE BENEFITS TO
THE EXECUTIVE AND THE EXECUTIVE’S FAMILY AT LEAST EQUAL TO THOSE WHICH WOULD
HAVE BEEN PROVIDED TO THEM IF THE EXECUTIVE’S EMPLOYMENT HAD NOT BEEN
TERMINATED, IN ACCORDANCE WITH THE APPLICABLE BENEFIT PLANS IN EFFECT
IMMEDIATELY PRIOR TO THE CHANGE IN CONTROL DATE OR, IF MORE FAVORABLE TO THE
EXECUTIVE AND HIS FAMILY, IN EFFECT GENERALLY AT ANY TIME THEREAFTER WITH
RESPECT TO OTHER PEER EXECUTIVES OF THE COMPANY AND ITS AFFILIATED COMPANIES;
PROVIDED, HOWEVER, THAT IF THE EXECUTIVE BECOMES REEMPLOYED BY ANOTHER EMPLOYER
AND IS ELIGIBLE TO RECEIVE A PARTICULAR TYPE OF BENEFIT (E.G., HEALTH INSURANCE
BENEFITS) FROM SUCH EMPLOYER ON TERMS AT LEAST AS FAVORABLE TO THE EXECUTIVE AND
HIS FAMILY AS THOSE BEING PROVIDED BY THE COMPANY, THEN THE COMPANY SHALL NO
LONGER BE REQUIRED TO PROVIDE THOSE PARTICULAR BENEFITS TO THE EXECUTIVE AND HIS
FAMILY;

 

(V)                                 TO THE EXTENT NOT PREVIOUSLY PAID OR
PROVIDED, THE COMPANY SHALL PAY OR PROVIDE TO THE EXECUTIVE WHEN DUE, WITHOUT
ACCELERATING THE PAYMENT DATE OF ANY DEFERRED COMPENSATION, ANY OTHER AMOUNTS OR
BENEFITS REQUIRED TO BE PAID OR PROVIDED OR WHICH THE EXECUTIVE IS ELIGIBLE TO
RECEIVE FOLLOWING THE EXECUTIVE’S TERMINATION OF EMPLOYMENT UNDER ANY PLAN,
PROGRAM, POLICY, PRACTICE, CONTRACT OR AGREEMENT OF THE COMPANY AND ITS
AFFILIATED COMPANIES (SUCH OTHER AMOUNTS AND BENEFITS SHALL BE HEREINAFTER
REFERRED TO AS THE “OTHER BENEFITS”); AND

 

(VI)                              FROM AND AFTER HIS TERMINATION DATE, THE
COMPANY SHALL CONTINUE TO MAKE AVAILABLE TO THE EXECUTIVE, AND TO MAKE PAYMENTS
ON, ONE LEASED VEHICLE UNTIL THE END OF THE LEASE TERM, AT WHICH POINT THE
EXECUTIVE MAY EXERCISE THE PURCHASE OPTION IF THERE IS ONE.

 

B)                                     RESIGNATION; OR TERMINATION FOR DEATH OR
DISABILITY.  IF THE EXECUTIVE VOLUNTARILY RESIGNS FROM HIS EMPLOYMENT WITH THE
COMPANY WITHIN 24 MONTHS FOLLOWING THE CHANGE IN CONTROL DATE, EXCLUDING A
RESIGNATION BECAUSE OF AN INVOLUNTARY TERMINATION, OR IF THE EXECUTIVE’S
EMPLOYMENT WITH THE COMPANY IS TERMINATED BY REASON OF THE EXECUTIVE’S DEATH OR
DISABILITY WITHIN 24 MONTHS FOLLOWING THE CHANGE IN CONTROL DATE, THEN THE
COMPANY SHALL (I) PAY THE EXECUTIVE (OR HIS ESTATE, IF APPLICABLE), IN A LUMP
SUM IN CASH WITHIN 30 DAYS AFTER THE DATE OF TERMINATION, THE ACCRUED
OBLIGATIONS AND (II) TIMELY PAY OR PROVIDE TO THE EXECUTIVE THE OTHER BENEFITS. 
IF UPON A TERMINATION DESCRIBED IN THIS SECTION 4.2(B) THE EXECUTIVE IS ENTITLED
TO RECEIVE SEVERANCE PAYMENTS OR BENEFITS UNDER THE EMPLOYMENT AGREEMENT, THE
EXECUTIVE SHALL REMAIN ELIGIBLE TO RECEIVE SUCH SEVERANCE PAYMENTS OR BENEFITS
UNDER HIS EMPLOYMENT AGREEMENT, PROVIDED THERE IS NO DUPLICATION OF PAYMENTS OR
BENEFITS.

 

C)                                      TERMINATION FOR CAUSE.  IF THE COMPANY
OR THE BOARD OF DIRECTORS TERMINATES THE EXECUTIVE’S EMPLOYMENT WITH THE COMPANY
FOR CAUSE WITHIN 24 MONTHS FOLLOWING THE CHANGE IN CONTROL DATE, THEN THE
COMPANY SHALL (I) PAY THE EXECUTIVE, IN A LUMP SUM IN CASH WITHIN 30 DAYS AFTER
THE DATE OF TERMINATION, THE SUM OF (A) THE EXECUTIVE’S ANNUAL BASE SALARY
THROUGH THE DATE OF TERMINATION AND (B) THE AMOUNT OF ANY COMPENSATION
PREVIOUSLY DEFERRED BY THE EXECUTIVE, IN EACH CASE TO THE EXTENT NOT PREVIOUSLY
PAID, AND (II) TIMELY PAY OR PROVIDE TO THE EXECUTIVE THE OTHER BENEFITS.

 

D)                                     SECTION 409A MATTERS.  IT IS THE INTENT
OF THE PARTIES HERETO THAT, TO THE EXTENT PERMITTED, THE PAYMENTS AND BENEFITS
PROVIDED PURSUANT TO THIS AGREEMENT QUALIFY AS SHORT-TERM DEFERRALS, AS DEFINED
IN TREASURY REGULATION §1.409A-1(A)(4), SEPARATION PAY DUE TO AN INVOLUNTARY
SEPARATION FROM SERVICE UNDER TREASURY REGULATION §1.409A-1(B)(9)(III),
REIMBURSEMENT OF MEDICAL BENEFITS UNDER TREASURY REGULATION
§1.409A-1(B)(9)(V)(B), AND/OR LIMITED PAYMENTS, AS DEFINED IN TREASURY
REGULATION §1.409A-1(B)(9)(V)(D).  IF (A) IT IS DETERMINED THAT ANY PAYMENTS OR
BENEFITS PROVIDED PURSUANT TO THIS AGREEMENT THAT ARE PAID UPON “SEPARATION FROM
SERVICE” (AS THAT TERM IS USED IN SECTION 409A OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE “CODE”), AND ANY RELATED

 

6

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REGULATIONS OR OTHER APPLICABLE GUIDANCE PROMULGATED THEREUNDER (COLLECTIVELY,
“SECTION 409A”)) CONSTITUTE DEFERRED COMPENSATION FOR PURPOSES OF SECTION 409A
(AFTER TAKING INTO ACCOUNT THE EXCEPTIONS LISTED IN THE PRIOR SENTENCE AND/OR
ANY OTHER APPLICABLE EXCEPTIONS) AND (B) THE EXECUTIVE IS A “SPECIFIED EMPLOYEE”
(AS THAT TERM IS USED IN SECTION 409A) ON THE DATE ON WHICH THE SEPARATION FROM
SERVICE OCCURS, SUCH PAYMENTS OR BENEFITS (OR PORTIONS THEREOF) THAT CONSTITUTE
DEFERRED COMPENSATION AND THAT ARE TO BE PAID OR PROVIDED DURING THE SIX
(6) MONTH PERIOD FOLLOWING THE EXECUTIVE’S SEPARATION FROM SERVICE SHALL NOT BE
PAID OR PROVIDED UNTIL THE FIRST BUSINESS DAY AFTER THE DATE THAT IS SIX
(6) MONTHS FOLLOWING THE EXECUTIVE’S SEPARATION FROM SERVICE OR, IF THE
EXECUTIVE DIES DURING SUCH SIX (6) MONTH PERIOD, ON THE FIRST BUSINESS DAY AFTER
THE DATE OF THE EXECUTIVE’S DEATH.  THE PAYMENT THAT IS MADE PURSUANT TO THE
PRIOR SENTENCE SHALL INCLUDE THE CUMULATIVE AMOUNT OF ANY AMOUNTS THAT COULD NOT
BE PAID DURING THE SIX (6) MONTH PERIOD.  ALL OTHER PAYMENTS OR BENEFITS UNDER
THIS AGREEMENT SHALL BE PAID OR PROVIDED IN ACCORDANCE WITH THE APPLICABLE
PROVISION OF THIS AGREEMENT.  EACH INSTALLMENT PAYMENT UNDER THIS AGREEMENT
SHALL BE TREATED AS A SEPARATE PAYMENT AS DEFINED UNDER TREASURY REGULATION
§1.409A-2(B)(2).  FOR ALL PURPOSES UNDER THIS AGREEMENT, REFERENCES TO
TERMINATION OF THE EXECUTIVE’S EMPLOYMENT AND SIMILAR TERMS SHALL BE INTERPRETED
TO MEAN “SEPARATION FROM SERVICE,” AS THAT TERM IS USED IN SECTION 409A, AND THE
EXECUTIVE’S EMPLOYMENT SHALL NOT BE DEEMED TO HAVE TERMINATED FOR PURPOSES OF
SECTION 4 UNLESS AND UNTIL A SEPARATION FROM SERVICE SHALL HAVE OCCURRED FOR
PURPOSES OF SECTION 409A.

 

4.3                       TAXES.

 

A)                                      IN THE EVENT THAT THE COMPANY UNDERGOES
A “CHANGE IN OWNERSHIP OR CONTROL” (AS DEFINED BELOW), THE COMPANY SHALL, WITHIN
30 DAYS AFTER EACH DATE ON WHICH THE EXECUTIVE BECOMES ENTITLED TO RECEIVE
(WHETHER OR NOT THEN DUE) A CONTINGENT COMPENSATION PAYMENT (AS DEFINED BELOW)
RELATING TO SUCH CHANGE IN OWNERSHIP OR CONTROL, DETERMINE AND NOTIFY THE
EXECUTIVE (WITH REASONABLE DETAIL REGARDING THE BASIS FOR ITS DETERMINATIONS)
(I) WHICH OF THE PAYMENTS OR BENEFITS DUE TO THE EXECUTIVE (UNDER THIS AGREEMENT
OR OTHERWISE) FOLLOWING SUCH CHANGE IN OWNERSHIP OR CONTROL CONSTITUTE
CONTINGENT COMPENSATION PAYMENTS AND (II) THE AMOUNT, IF ANY, OF THE EXCISE TAX
(THE “EXCISE TAX”) WHICH WOULD BE PAYABLE BY THE EXECUTIVE PURSUANT TO
SECTION 4999 OF THE CODE, WITH RESPECT TO SUCH CONTINGENT COMPENSATION PAYMENT
BUT FOR THE OPERATION OF THIS SECTION 4.3.  IF IT IS DETERMINED BY THE COMPANY
AND THE EXECUTIVE THAT AN EXCISE TAX WOULD BE PAYABLE BY THE EXECUTIVE, THEN IN
SUCH INSTANCE EITHER (I) THE CONTINGENT COMPENSATION PAYMENTS SHALL BE SCALED
BACK (WITH THE LATEST-TO-BE-PAID OF SUCH PAYMENTS TO BE WITHHELD FOR THIS
PURPOSE) SUCH THAT THE CONTINGENT COMPENSATION PAYMENTS WOULD TRIGGER BENEFITS
WHICH, IN THE AGGREGATE, WOULD GENERATE $1.00 LESS THAN THE THRESHOLD WHICH
WOULD OTHERWISE CAUSE CONTINGENT COMPENSATION PAYMENTS TO BE SUBJECT TO THE
EXCISE TAX, OR (II) IF THE VALUE OF THE CONTINGENT COMPENSATION PAYMENTS IS SUCH
THAT, AFTER DEDUCTING ANY APPLICABLE EXCISE TAX, THERE WOULD BE AN AMOUNT OF
CONTINGENT COMPENSATION PAYMENTS REMAINING AVAILABLE TO HIM, SO THAT THE
EXECUTIVE WOULD RECEIVE A NET BENEFIT (AFTER DEDUCTING ALL EXCISE TAX) THAT IS
GREATER THAN THE BENEFIT THE EXECUTIVE WOULD HAVE RETAINED HAD HIS CONTINGENT
COMPENSATION PAYMENTS BEEN REDUCED TO AVOID THE EXCISE TAX, THERE SHALL BE NO
WITHHOLDING OR DEDUCTING CONTINGENT COMPENSATION PAYMENTS TO BE MADE TO THE
EXECUTIVE.

 

B)                                     FOR PURPOSES OF THIS SECTION 4.3, THE
FOLLOWING TERMS SHALL HAVE THE FOLLOWING RESPECTIVE MEANINGS:

 

(I)           “CHANGE IN OWNERSHIP OR CONTROL” SHALL MEAN A CHANGE IN THE
OWNERSHIP OR EFFECTIVE CONTROL OF THE COMPANY OR IN THE OWNERSHIP OF A
SUBSTANTIAL PORTION OF THE ASSETS OF THE COMPANY DETERMINED IN ACCORDANCE WITH
SECTION 280G(B)(2) OF THE CODE.

 

(II)          “CONTINGENT COMPENSATION PAYMENT” SHALL MEAN ANY PAYMENT (OR
BENEFIT) IN THE NATURE OF COMPENSATION THAT IS MADE OR MADE AVAILABLE (UNDER
THIS AGREEMENT OR OTHERWISE) TO A “DISQUALIFIED INDIVIDUAL” (AS DEFINED IN
SECTION 280G(C) OF THE CODE) AND THAT IS CONTINGENT (WITHIN THE MEANING OF
SECTION 280G(B)(2)(A)(I) OF THE CODE) ON A CHANGE IN OWNERSHIP OR CONTROL OF THE
COMPANY.

 

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C)                                      THE PROVISIONS OF THIS SECTION 4.3 ARE
INTENDED TO APPLY TO ANY AND ALL PAYMENTS OR BENEFITS AVAILABLE TO THE EXECUTIVE
UNDER THIS AGREEMENT OR ANY OTHER AGREEMENT OR PLAN OF THE COMPANY UNDER WHICH
THE EXECUTIVE RECEIVES CONTINGENT COMPENSATION PAYMENTS.

 

4.4                       MITIGATION.  THE EXECUTIVE SHALL NOT BE REQUIRED TO
MITIGATE THE AMOUNT OF ANY PAYMENT OR BENEFITS PROVIDED FOR IN THIS SECTION 4 BY
SEEKING OTHER EMPLOYMENT OR OTHERWISE. FURTHER, EXCEPT AS PROVIDED IN
SECTION 4.2(A)(III), THE AMOUNT OF ANY PAYMENT OR BENEFITS PROVIDED FOR IN THIS
SECTION 4 SHALL NOT BE REDUCED BY ANY COMPENSATION EARNED BY THE EXECUTIVE AS A
RESULT OF EMPLOYMENT BY ANOTHER EMPLOYER, BY RETIREMENT BENEFITS, BY OFFSET
AGAINST ANY AMOUNT CLAIMED TO BE OWED BY THE EXECUTIVE TO THE COMPANY, OR
OTHERWISE.

 

4.5                       OUTPLACEMENT SERVICES.  IN THE EVENT THE EXECUTIVE IS
TERMINATED BY THE COMPANY OR THE BOARD OF DIRECTORS ON BEHALF OF (OTHER THAN FOR
CAUSE, DISABILITY OR DEATH), OR THE EXECUTIVE TERMINATES EMPLOYMENT BECAUSE OF
AN INVOLUNTARY TERMINATION, WITHIN 24 MONTHS FOLLOWING THE CHANGE IN CONTROL
DATE, THE COMPANY SHALL PROVIDE OUTPLACEMENT SERVICES THROUGH ONE OR MORE
OUTSIDE FIRMS OF THE EXECUTIVE’S CHOOSING UP TO AN AGGREGATE OF $25,000, WITH
SUCH SERVICES TO EXTEND UNTIL THE EARLIER OF (I) 12 MONTHS FOLLOWING THE
TERMINATION OF EXECUTIVE’S EMPLOYMENT OR (II) THE DATE THE EXECUTIVE SECURES
FULL TIME EMPLOYMENT.

 

5                       DISPUTES.

 

5.1                       SETTLEMENT OF DISPUTES; ARBITRATION.  ALL CLAIMS BY
THE EXECUTIVE FOR BENEFITS UNDER THIS AGREEMENT OR TO RESOLVE OTHER DISPUTES
HEREUNDER SHALL BE DIRECTED TO THE GENERAL COUNSEL OF THE COMPANY AND SHALL BE
IN WRITING.  ANY DENIAL BY THE COMPANY OF A CLAIM FOR BENEFITS UNDER THIS
AGREEMENT SHALL BE DELIVERED TO THE EXECUTIVE IN WRITING AND SHALL SET FORTH THE
SPECIFIC REASONS FOR THE DENIAL AND THE SPECIFIC PROVISIONS OF THIS AGREEMENT
RELIED UPON.  THE COMPANY SHALL AFFORD A REASONABLE OPPORTUNITY TO THE EXECUTIVE
FOR A REVIEW OF THE DECISION DENYING A CLAIM.  ANY FURTHER DISPUTE OR
CONTROVERSY ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT SHALL BE SETTLED
EXCLUSIVELY BY ARBITRATION IN BOSTON, MASSACHUSETTS, WITHIN THIRTY (30) DAYS OF
BEING INTRODUCED INTO ARBITRATION, AND SHALL BE IN ACCORDANCE WITH THE RULES OF
THE AMERICAN ARBITRATION ASSOCIATION THEN IN EFFECT.  JUDGMENT MAY BE ENTERED ON
THE ARBITRATOR’S AWARD IN ANY COURT HAVING JURISDICTION.

 

5.2                       EXPENSES.  THE COMPANY AGREES TO PAY, AS INCURRED, TO
THE FULL EXTENT PERMITTED BY LAW, ALL LEGAL, ACCOUNTING AND OTHER FEES AND
EXPENSES WHICH THE EXECUTIVE MAY REASONABLY INCUR AS A RESULT OF ANY CLAIM OR
CONTEST (REGARDLESS OF THE OUTCOME THEREOF) BY THE COMPANY, THE EXECUTIVE OR
OTHERS REGARDING THE VALIDITY OR ENFORCEABILITY OF, OR LIABILITY UNDER, ANY
PROVISION OF THIS AGREEMENT OR ANY GUARANTEE OF PERFORMANCE THEREOF (INCLUDING
AS A RESULT OF ANY CONTEST BY THE EXECUTIVE REGARDING THE AMOUNT OF ANY PAYMENT
OR BENEFITS PURSUANT TO THIS AGREEMENT), PLUS IN EACH CASE INTEREST ON ANY
DELAYED PAYMENT AT THE APPLICABLE FEDERAL RATE PROVIDED FOR IN
SECTION 7872(F)(2)(A) OF THE CODE; PROVIDED, HOWEVER, THAT (A) THE AMOUNT OF
SUCH FEES AND EXPENSES PAID (OR REIMBURSED) BY THE COMPANY DURING ANY CALENDAR
YEAR MAY NOT AFFECT THE AMOUNT OF FEES AND EXPENSES PAID (OR REIMBURSED) BY THE
COMPANY IN ANY OTHER CALENDAR YEAR, (B) PAYMENT (OR REIMBURSEMENT) OF FEES AND
EXPENSES BY THE COMPANY SHALL BE MADE ON OR BEFORE THE LAST DAY OF THE CALENDAR
YEAR FOLLOWING THE CALENDAR YEAR IN WHICH THE FEES AND EXPENSES WERE INCURRED,
(C) THE EXECUTIVE’S RIGHT TO REASONABLE FEES AND EXPENSES IS NOT SUBJECT TO
LIQUIDATION OR EXCHANGE FOR ANOTHER BENEFIT AND (D) THIS OBLIGATION SHALL
SURVIVE THE TERMINATION OF THIS AGREEMENT AND SHALL REMAIN IN EFFECT UNTIL THE
APPLICABLE STATUTE OF LIMITATIONS HAS EXPIRED WITH RESPECT TO ANY LITIGATION TO
ENFORCE THE TERMS OF THIS AGREEMENT.

 

6                       SUCCESSORS.

 

6.1                       SUCCESSOR TO COMPANY.  THE COMPANY SHALL REQUIRE ANY
SUCCESSOR (WHETHER DIRECT OR INDIRECT, BY PURCHASE, MERGER, CONSOLIDATION OR
OTHERWISE) TO ALL OR SUBSTANTIALLY ALL OF THE BUSINESS OR ASSETS OF THE COMPANY
EXPRESSLY TO ASSUME AND AGREE TO PERFORM THIS AGREEMENT TO THE SAME EXTENT THAT
THE COMPANY WOULD BE REQUIRED TO PERFORM IT IF NO SUCH SUCCESSION HAD TAKEN
PLACE.  FAILURE OF THE COMPANY TO OBTAIN AN ASSUMPTION OF THIS AGREEMENT AT OR
PRIOR TO THE EFFECTIVENESS OF ANY

 

8

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SUCCESSION SHALL BE A BREACH OF THIS AGREEMENT AND SHALL CONSTITUTE INVOLUNTARY
TERMINATION IF THE EXECUTIVE ELECTS TO TERMINATE EMPLOYMENT, EXCEPT THAT FOR
PURPOSES OF IMPLEMENTING THE FOREGOING, THE DATE ON WHICH ANY SUCH SUCCESSION
BECOMES EFFECTIVE SHALL BE DEEMED THE DATE OF TERMINATION.  AS USED IN THIS
AGREEMENT, “COMPANY” SHALL MEAN THE COMPANY AS DEFINED ABOVE AND ANY SUCCESSOR
TO ITS BUSINESS OR ASSETS AS AFORESAID WHICH ASSUMES AND AGREES TO PERFORM THIS
AGREEMENT, BY OPERATION OF LAW OR OTHERWISE.

 

6.2                       SUCCESSOR TO EXECUTIVE.  THIS AGREEMENT SHALL INURE TO
THE BENEFIT OF AND BE ENFORCEABLE BY THE EXECUTIVE’S PERSONAL OR LEGAL
REPRESENTATIVES, EXECUTORS, ADMINISTRATORS, SUCCESSORS, HEIRS, DISTRIBUTEES,
DEVISEES AND LEGATEES.  IF THE EXECUTIVE SHOULD DIE WHILE ANY AMOUNT WOULD STILL
BE PAYABLE TO THE EXECUTIVE OR HIS FAMILY HEREUNDER IF THE EXECUTIVE HAD
CONTINUED TO LIVE, ALL SUCH AMOUNTS, UNLESS OTHERWISE PROVIDED HEREIN, SHALL BE
PAID IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT TO THE EXECUTORS, PERSONAL
REPRESENTATIVES OR ADMINISTRATORS OF THE EXECUTIVE’S ESTATE.

 

7                       AGREEMENT TO BE BINDING ON SUCCESSORS.  THE COMPANY
SHALL REQUIRE ANY SUCCESSOR (WHETHER DIRECT OR INDIRECT, BY PURCHASE, MERGER,
CONSOLIDATION, REORGANIZATION OR OTHERWISE) TO ALL OR SUBSTANTIALLY ALL OF THE
BUSINESS (INCLUDING PURSUANT TO ACQUISITION OF ALL OR SUBSTANTIALLY OF THE
COMMON STOCK OF THE COMPANY) OR ASSETS OF THE COMPANY (THE “ACQUISITION”), AS A
CONDITION PRECEDENT TO THE ACQUISITION, TO EXPRESSLY ASSUME AND AGREE IN
WRITING, WITH A COPY TO THE EXECUTIVE, TO PERFORM THIS AGREEMENT IN THE SAME
MANNER AND TO THE SAME EXTENT AS THE COMPANY WOULD BE REQUIRED TO PERFORM THIS
AGREEMENT AS IF NO SUCH SUCCESSION HAD TAKEN PLACE.  THE EXECUTIVE ACKNOWLEDGES
AND AGREES, AND THE COMPANY ACKNOWLEDGES AND AGREES, THAT, WITHOUT LIMITATION TO
ANY OTHER PROVISION OF THIS AGREEMENT WHICH IS ALSO “MATERIAL”, THIS PROVISION
IS A MATERIAL TERM OF THIS AGREEMENT AND AN IMPORTANT CLAUSE BENEFITING THE
EXECUTIVE, TO ASSURE THE EXECUTIVE THAT THE OBLIGATION OF THE COMPANY TO PROVIDE
THE EXECUTIVE WITH THE EXISTING BENEFITS MADE AVAILABLE UNDER THIS AGREEMENT IS
ADHERED TO BY ANY SUCCESSOR TO THE COMPANY, AND THE PROVISION ALSO BENEFITS THE
COMPANY IN THAT THE ASSURANCE TO YOU AFFORDED BY THIS PROVISION IS AN IMPORTANT
RETENTION INCENTIVE TO HAVE THE EXECUTIVE REMAIN IN THE EMPLOYMENT OF THE
COMPANY.

 

8                       NOTICE.  ALL NOTICES, INSTRUCTIONS AND OTHER
COMMUNICATIONS GIVEN HEREUNDER OR IN CONNECTION HEREWITH SHALL BE IN WRITING. 
ANY SUCH NOTICE, INSTRUCTION OR COMMUNICATION SHALL BE SENT EITHER (I) BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, OR
(II) PREPAID VIA A REPUTABLE NATIONWIDE OVERNIGHT COURIER SERVICE, IN EACH CASE
ADDRESSED TO THE COMPANY, AT CANDELA CORPORATION, ATTENTION OF GENERAL COUNSEL,
530 BOSTON POST ROAD, WAYLAND, MA 01778, AND TO THE EXECUTIVE AT
[                                            ](OR TO SUCH OTHER ADDRESS AS
EITHER THE COMPANY OR THE EXECUTIVE MAY HAVE FURNISHED TO THE OTHER IN WRITING
IN ACCORDANCE HEREWITH).  ANY SUCH NOTICE, INSTRUCTION OR COMMUNICATION SHALL BE
DEEMED TO HAVE BEEN DELIVERED 5 BUSINESS DAYS AFTER IT IS SENT BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, OR 1 BUSINESS DAY
AFTER IT IS SENT VIA A REPUTABLE NATIONWIDE OVERNIGHT COURIER SERVICE. EITHER
PARTY MAY GIVE ANY NOTICE, INSTRUCTION OR OTHER COMMUNICATION HEREUNDER USING
ANY OTHER MEANS, BUT NO SUCH NOTICE, INSTRUCTION OR OTHER COMMUNICATION SHALL BE
DEEMED TO HAVE BEEN DULY DELIVERED UNLESS AND UNTIL IT ACTUALLY IS RECEIVED BY
THE PARTY FOR WHOM IT IS INTENDED.

 

9                       MISCELLANEOUS.

 

9.1                       EMPLOYMENT BY SUBSIDIARY.  FOR PURPOSES OF THIS
AGREEMENT, THE EXECUTIVE’S EMPLOYMENT WITH THE COMPANY SHALL NOT BE DEEMED TO
HAVE TERMINATED SOLELY AS A RESULT OF THE EXECUTIVE CONTINUING TO BE EMPLOYED BY
A WHOLLY-OWNED SUBSIDIARY OF THE COMPANY.

 

9.2                       SEVERABILITY.  THE INVALIDITY OR UNENFORCEABILITY OF
ANY PROVISION OF THIS AGREEMENT SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY
OF ANY OTHER PROVISION OF THIS AGREEMENT, WHICH SHALL REMAIN IN FULL FORCE AND
EFFECT.

 

9.3                       INJUNCTIVE RELIEF.  THE COMPANY AND THE EXECUTIVE
AGREE THAT ANY BREACH OF THIS AGREEMENT BY THE COMPANY IS LIKELY TO CAUSE THE
EXECUTIVE SUBSTANTIAL AND IRREVOCABLE DAMAGE AND THEREFORE, IN THE

 

9

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EVENT OF ANY SUCH BREACH, IN ADDITION TO SUCH OTHER REMEDIES WHICH MAY BE
AVAILABLE, THE EXECUTIVE SHALL HAVE THE RIGHT TO SPECIFIC PERFORMANCE AND
INJUNCTIVE RELIEF.

 

9.4                       GOVERNING LAW.  THE VALIDITY, INTERPRETATION,
CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL
LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES.

 

9.5                       WAIVERS.  NO WAIVER BY THE EXECUTIVE AT ANY TIME OF
ANY BREACH OF, OR COMPLIANCE WITH, ANY PROVISION OF THIS AGREEMENT TO BE
PERFORMED BY THE COMPANY SHALL BE DEEMED A WAIVER OF THAT OR ANY OTHER PROVISION
AT ANY SUBSEQUENT TIME.

 

9.6                       COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN
COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED TO BE AN ORIGINAL BUT BOTH OF WHICH
TOGETHER SHALL CONSTITUTE ONE AND THE SAME INSTRUMENT.

 

9.7                       TAX WITHHOLDING.  ANY PAYMENTS PROVIDED FOR HEREUNDER
SHALL BE PAID NET OF ANY APPLICABLE TAX WITHHOLDING REQUIRED UNDER FEDERAL,
STATE OR LOCAL LAW.

 

9.8                       RELEASE OF CLAIMS.  THE COMPANY SHALL HAVE NO
OBLIGATION TO MAKE ANY PAYMENTS OR PROVIDE ANY BENEFITS PURSUANT TO THIS
AGREEMENT UNLESS (I) YOU AGREE TO SIGN AND DELIVER TO THE GENERAL COUNSEL OF THE
COMPANY A RELEASE OF CLAIMS IN SUBSTANTIALLY THE SAME FORM AS THE FORM ATTACHED
HERETO AS EXHIBIT A (THE “RELEASE”) AND (II) THE RELEASE HAS BECOME
NON-REVOCABLE BY THE SIXTIETH (60TH) DAY FOLLOWING THE DATE OF TERMINATION OF
YOUR EMPLOYMENT.

 

9.9                       ENTIRE AGREEMENT.  THIS AGREEMENT SETS FORTH THE
ENTIRE AGREEMENT OF THE PARTIES HERETO IN RESPECT OF THE SUBJECT MATTER
CONTAINED HEREIN AND SUPERSEDES ALL PRIOR AGREEMENTS, PROMISES, COVENANTS,
ARRANGEMENTS, COMMUNICATIONS, REPRESENTATIONS OR WARRANTIES, WHETHER ORAL OR
WRITTEN, BY ANY OFFICER, EMPLOYEE OR REPRESENTATIVE OF ANY PARTY HERETO IN
RESPECT OF THE SUBJECT MATTER CONTAINED HEREIN; AND ANY PRIOR AGREEMENT OF THE
PARTIES HERETO IN RESPECT OF THE SUBJECT MATTER CONTAINED HEREIN IS HEREBY
TERMINATED AND CANCELLED.  NOTWITHSTANDING THE FOREGOING, THE PROVISIONS OF THE
EXECUTIVE’S EMPLOYMENT AGREEMENT SHALL NOT BE SUPERCEDED BY, MODIFIED BY, OR
SUBJECT TO THE TERMS OF SECTION 4.3 OF THIS AGREEMENT; PROVIDED, HOWEVER, THAT
EXCEPT AS PROVIDED IN SECTION 4.2(B) OF THIS AGREEMENT, THE EXECUTIVE SHALL IN
NO EVENT BE ENTITLED TO RECEIVE SEVERANCE PAYMENTS OR BENEFITS UNDER THE
EMPLOYMENT AGREEMENT IF HE IS ENTITLED TO RECEIVE SEVERANCE PAYMENTS OR BENEFITS
UNDER THIS AGREEMENT.

 

9.10                 AMENDMENTS.  THIS AGREEMENT MAY BE AMENDED OR MODIFIED ONLY
BY A WRITTEN INSTRUMENT EXECUTED BY BOTH THE COMPANY AND THE EXECUTIVE.

 

[THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK.]

 

10

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Exhibit A: Form of Release of Claims

 

In consideration for receiving benefits pursuant to the Candela Corporation
Executive Retention Agreement dated November     , 2007 between you and Candela
Corporation. (the “Company”) (the “Agreement”), you, on behalf of yourself and
your representatives, agents, estate, heirs, successors and assigns, agree to
and do hereby forever waive, release and discharge the Company, and each of its
affiliated or related entities, parents, subsidiaries, predecessors, successors,
assigns, divisions, owners, stockholders, partners, directors, officers,
attorneys, insurers, benefit plans, employees and agents, whether previously or
hereinafter affiliated in any manner, as well as all persons or entities acting
by, through, or in concert with any of them (collectively, the “Released
Parties”), from any and all claims (other than “Excluded Claims” as hereinafter
defeined), debts, contracts, obligations, promises, controversies, agreements,
liabilities, demands, wage claims, expenses, charges of discrimination,
harassment or retaliation, disputes, agreements, damages, attorneys’ fees, or
complaints of any nature whatsoever, whether or not now known, suspected,
claimed, matured or unmatured, existing or contingent, from the beginning of
time until the moment you have signed this Agreement, against the Released
Parties (whether directly or indirectly), or any of them, by reason of any act,
event or omission concerning any matter, cause or thing, including, without
limiting the generality of the foregoing, any claims related to or arising out
of (i) your employment  or its termination, (ii) any contract or agreement
(express or implied) between you and any of the Released Parties, (iii) any tort
or tort-type claim, (iv) any federal, state or governmental constitution,
statute, regulation or ordinance, including but not limited to the U.S.
Constitution; Title VII of the Civil Rights Act of 1964, as amended; the Civil
Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as amended
(including the Older Workers Benefit Protection Act); the Equal Pay Act of 1963,
as amended; the Americans With Disabilities Act of 1990; the Family and Medical
Leave Act of 1993; the Worker Adjustment Retraining and Notification Act; the
Employee Retirement Income Security Act of 1974; the Fair Labor Standards Act;
any applicable Executive Order Programs; any similar state or local statutes or
laws; and any other federal, state, or local civil or human rights law, (v) any
public policy, contract or tort law, or under common law, (vi) any policies,
practices or procedures of the Company, (vii) any claim for wrongful discharge,
breach of contract, infliction of emotional distress, defamation, (vii) any
claim for costs, fees, or other expenses, including attorneys’ fees incurred in
these matters, (viii) any impairment of your ability to obtain subsequent
employment, and (ix) any permanent or temporary disability or loss of future
earnings.  It is acknowledged that you may be entitled to satisfaction by the
Company of claims you may presently have, or may in the future have, for
indemnification arising out of the performance of your duties as an officer of
the Company, pursuant to the terms of the Company’s charter, or its By-laws, or
pursuant to the provisions of one or more directors’ and officers’ (D&O)
polices.  Any such claim brought by you shall be considered an Excluded Claim,
but it shall not be presumed that any such claim is valid on its face.

 

For the purpose of implementing a full and complete release and discharge of the
Released Parties, you expressly acknowledge that this Agreement is intended to
include and does include in its effect, without limitation, all claims which you
do not know or suspect to exist in your favor against the Released Parties, or
any of them, at the moment of execution hereof, and that this Agreement
expressly contemplates the extinguishment of all such claims

 

BY SIGNING THIS GENERAL RELEASE, YOU REPRESENT AND AGREE THAT:

 

YOU UNDERSTAND ALL OF ITS TERMS AND KNOW THAT YOU ARE GIVING UP IMPORTANT
RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN
EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964,
AS AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF
1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED;

 

YOU HAVE HAD AT LEAST 21 DAYS: (A) FROM THE DATE OF YOUR RECEIPT OF THIS RELEASE
SUBSTANTIALLY IN ITS FINAL FORM ON                                    ,
          ; AND (B) TO CONSIDER IT AND THE CHANGES MADE SINCE THE
                                   ,            VERSION OF THIS RELEASE AND SUCH
CHANGES ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY PERIOD; AND

 

YOU UNDERSTAND THAT YOU HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO
REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL
THE REVOCATION PERIOD HAS EXPIRED.

 

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