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**UNITEDSTATES**

**SECURITIESAND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

 

**FORM 10-K/A**

 

**AmendmentNo. 1**

 
| ** ** | **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF  THE**** ****SECURITIES EXCHANGE ACT OF  1934** |
|------------|-------------------------------------------------------------------------------------------------------------------|

 

**For the fiscal year endedJune 27, 2009**

 

**Commissionfile number 000-14742**

 

**CANDELACORPORATION**

(Exact name ofregistrant as specified in its charter)

 

| **Delaware**                                                     | ** ** | **04-2477008**                        |
|------------------------------------------------------------------|------------|---------------------------------------|
| (State or other  jurisdiction of  incorporation or organization) |       | (I.R.S. Employer  Identification No.) |
| ** **                                                       | ** ** | ** **                            |
| **530  Boston Post Road, Wayland, Massachusetts**                | ** ** | **01778**                             |
| (Address of  principal executive offices)                        |       | (Zip Code)                            |

 

Registrant’stelephone number, including area code: **508-358-7400**

 

Securitiesregistered pursuant to Section 12(b) of the Act:

 

**CommonStock, $.01 par value per share**

(Title of Class)

 

Securitiesregistered pursuant to Section 12(g) of the Act: **None**

 

Indicate by check mark ifthe registrant is a well-known seasoned issuer, as defined in Rule 405 ofthe Securities Act.  Yes o  No x

 

Indicate by check mark ifthe registrant is not required to file reports pursuant to Section 13 or Section 15(d) ofthe Act.  Yes o  No x

 

Indicate by check markwhether the registrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period than the registrant was required to filesuch reports), and (2) has been subject to such filing requirements forthe past 90 days.  Yes x  No o

 

Indicate by check markwhether the registrant has submitted electronically and posted on its corporateWeb site, if any, every Interactive Data File required to be submitted andposted pursuant to Rule 405 of Regulation S-T during the preceding 12months (or for such shorter period that the registrant was required to submitand post such files).  Yes o  No o

 

Indicate by check mark ifdisclosure of delinquent filers pursuant to Item 405 of Regulation S-K is notcontained herein, and will not be contained, to the best of the registrant’sknowledge, in definitive proxy or information statements incorporated byreference in Part III of this Form 10-K or any amendment to this Form 10-K. x

 

Indicate by check markwhether the registrant is an large accelerated filer, an accelerated filer, ora non-accelerated filer, or a smaller reporting company.  See definitionsof “large accelerated filer,” “accelerated filer,” and “smaller reportingcompany” in Rule12b-2 of the Exchange Act.  (Check one):

 

| Large  accelerated filer o                     |   | Accelerated  filer o         |
|------------------------------------------------|--------|------------------------------|
| Non-accelerated  filer o                       |   | Smaller  reporting company x |
| (Do not check if  a smaller reporting company) |   |                         |

 

Indicate by check markwhether the registrant is a shell company (as defined in Rule12b-2 of theExchange Act)  Yes o  No x

 

The aggregate marketvalue of our voting stock held by non-affiliates was approximately $10,784,350on December 29, 2008 based on the last reported sale price of our commonstock on the NASDAQ Stock Market on that day.  As of September 30,2009, 22,913,036 shares of the registrant’s common stock, $.01 par value pershare, were issued and outstanding.

 

 

 

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**EXPLANATORYNOTE**

 

This amendment to theregistrant’s Annual Report on Form 10-K for the year ended June 27,2009, originally filed with the Securities and Exchange Commission (“SEC”)on October 1, 2009 (the “Original Filing”), is being filed solelyto amend Part III of the Original Filing.

 

This amendment does notreflect events occurring after the filing of the Original Filing, and is notintended to modify or update the disclosures therein or the exhibits filedtherewith in any way, except as set forth herein.

 

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**TABLEOF CONTENTS**

 
| **PART III** |                                                                                             |   |
|-------------------|--------------------------------------------------------------------------------------------------|--------|
|              |                                                                                             |   |
| Item 10.          | Directors, Executive  Officers and Corporate Governance                                          |   |
|              |                                                                                             |   |
| Item 11.          | Executive Compensation                                                                           |   |
|              |                                                                                             |   |
| Item 12.          | Security  Ownership of Certain Beneficial Owners and Management and Related Stockholder  Matters |   |
|              |                                                                                             |   |
| Item 13.          | Certain  Relationships and Related Transactions, and Director Independence                       |   |
|              |                                                                                             |   |
| Item 14.          | Principal  Accounting Fees and Services                                                          |   |

 

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**PART III**

 

**Item10.         Directors and ExecutiveOfficers and Corporate Governance.**

 

**DIRECTORS**

 

The following table setsforth the names, ages and positions held with Candela Corporation (the “Company”)of the current members of the Board of Directors (the “Board of Directors”) of the Company.  The Board of Directors has nominated such Directorsfor reelection as Directors of the Company at the next annual meeting of theCompany’s stockholders.  Each Director has indicated his or herwillingness to serve if reelected.

 
| **Name**                    | ** ** | **Age** | ** ** | **Position**                                     |
|-----------------------------|------------|---------|------------|--------------------------------------------------|
| George A. Abe (2)(3)        |       | 48      |       | Director                                         |
| Ben Bailey III (1)(3)       |       | 60      |       | Director                                         |
| Nancy E. Nager (1)(2)(3)    |       | 58      |       | Director                                         |
| Gerard E. Puorro (4)        |       | 62      |       | President, Chief  Executive Officer and Director |
| Kenneth D. Roberts  (1)(3)  |       | 76      |       | Chairman of the Board  of Directors              |
| Douglas W. Scott  (1)(2)(3) |       | 63      |       | Director                                         |

 

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| (1)    |   | Member of the Audit  Committee.          |
|--------|--------|------------------------------------------|
|   |   |                                     |
| (2)    |   | Member of the  Compensation Committee.   |
|   |   |                                     |
| (3)    |   | Member of the  Nominating Committee.     |
|   |   |                                     |
| (4)    |   | Member of the Option  and SAR Committee. |

 

Further information withrespect to the Board of Directors is set forth below.

 

**Mr. Abe** has been a Director of the Company sinceJanuary 2003.  Mr. Abe has been President and Chief ExecutiveOfficer of Cambridge Research and Instrumentation (“CRI”), a provider ofdiagnostic imaging solutions for life science and medical research, since June 2003. From February 2002 until June 2003, Mr. Abe was a Vice Presidentof CRI.  From May 1997 to November 2001, Mr. Abe held VicePresident positions in Strategy, Development and Marketing with Genuity(formerly GTE), an internet infrastructure service provider.  Prior tothat, Mr. Abe held several technical and management positions with BBNCorp, a high technology and services company.

 

**Mr. Bailey** has been a Director of the Company sinceJanuary 2003.  Mr. Bailey has been a Vice President ofMassachusetts Capital Resource Company, a source of risk capital forMassachusetts businesses, since May 1985.  From June 1976 until May 1985,Mr. Bailey held a number of positions (most recently as a Vice President)with the High Technology Lending Group at Bank of Boston.  From June 1974until June 1976, Mr. Bailey was employed at Chemical Bank in NewYork.  Mr. Bailey served on the National Science Foundation’sAdvisory Committee for Smaller Business Industrial Innovation (SBIR) from June 1995to April 2001.

 

**Ms. Nager** has been a Director of the Company sinceFebruary 1999. Ms. Nager has been the Principal and Chief ExecutiveOfficer of SBSC, Inc., formerly known as SBS Consulting, Inc. andSpecialized Health Management, Inc., a privately-held behavioralhealthcare and medical billing corporation, since 1990. From 1976 until 1990, Ms. Nagerheld a number of positions in nursing and hospital administration (mostrecently as Chief Operating Officer) with Charles River Hospital, a privatepsychiatric facility in Wellesley, Massachusetts. From 1990 until 1993, Ms. Nageralso provided corporate level consulting to Community Care Systems, Inc.,the parent company of Charles River Hospital.

 

**Mr. Puorro** has been a Director of the Company sinceSeptember 1991.  Mr. Puorro has been President and ChiefExecutive Officer of the Company since April 1993.  From December 1992until April 1993, Mr. Puorro was Senior Vice President, ChiefFinancial Officer and Chief Operating Officer of the Company, and from April 1989until December 1992, Mr. Puorro was Senior Vice President and ChiefFinancial Officer of the Company.  Prior to joining the Company, Mr. Puorrowas Vice President and Controller at Massachusetts Computer Corporation, amanufacturer of micro-supercomputers.

 

**Mr. Roberts** has been a Director of the Company sinceAugust 1989 and Chairman of the Board of Directors since November 1991. Mr. Roberts has been an independent management consultant since January 1989. From November 1992 until

 

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June 1995, Mr. Robertswas employed on a part-time basis as Vice President and Chief Financial Officerof Foster Miller, Inc., an engineering services company.  From July 1986until December 1988, Mr. Roberts was Vice President, Treasurer andChief Financial Officer of Massachusetts Computer Corporation, a manufacturerof micro-supercomputers.  Prior to that, Mr. Roberts was Senior VicePresident and Treasurer of Dynatech Corporation (now named ActernaCorporation), a provider of diversified high technology products and services.

 

**Mr. Scott** has been a Director of the Company sinceSeptember 1991.  Mr. Scott has been a partner at Phildius,Kenyon & Scott, a health care consulting and investment firm, since1985.  From 1989 until June 2008, Mr. Scott was the President,Chief Operating Officer and a Director of Avitar, Inc., a publicly-heldhealth care company.  From December 1989 until April 1991, Mr. Scottwas Chief Executive Officer of Avitar, Inc.

 

**EXECUTIVEOFFICERS**

 

The following table setsforth the names, ages and positions held with the Company of the currentexecutive officers of the Company.

 
| **Name**               | ** ** | **Age** | ** ** | **Position**                                                                                                             |
|------------------------|------------|---------|------------|--------------------------------------------------------------------------------------------------------------------------|
| Jay D. Caplan          |       | 47      |       | Chief Operating Officer                                                                                                  |
| Dennis S. Herman       |       | 59      |       | Senior Vice President,  North American Sales                                                                             |
| Dr. James C. Hsia |       | 63      |       | Chief Technical Officer                                                                                                  |
| Paul R. Lucchese       |       | 43      |       | Senior Vice President,  General Counsel, and Secretary                                                                   |
| Gerard E. Puorro       |       | 62      |       | President, Chief  Executive Officer, and Director                                                                        |
| Robert E. Quinn        |       | 55      |       | Senior Vice President,  Finance & Administration, Chief Financial Officer, Corporate  Controller, and Treasurer |

 

Executive officers areappointed to serve at the discretion of the Board of Directors.  There areno family relationships among any of the executive officers or Directors of theCompany.

 

**Mr. Caplan** was appointed Chief Operating Officer inNovember 2007.  Prior to joining the Company, Mr. Caplan wasChief Technology Officer of InfraReDx, Inc., a developer of photonic-basedmedical devices, from September 2001 to November 2007, and VicePresident of Operations at Thermo Cardiosystems, Inc., a supplier ofventricular devices for heart failure, from December 1999 to May 2001. From 1988 to 2000, Mr. Caplan held a number of positions (most recently asVice President of Operations) in marketing, finance, and international at theCompany.  Mr. Caplan holds a B.S. in Electrical Engineering from theMassachusetts Institute of Technology and an M.B.A., with distinction, from theWharton School of The University of Pennsylvania.  He is an inventor onboth issued and pending patents, and is the author of several peer-reviewedpublications in medical journals.

 

**Mr. Herman** was appointed Senior Vice President,North American Sales, in April 2004.  From October 2001 until April 2004,Mr. Herman was Vice President, North American Sales, of the Company andfrom February 1999 until October 2001, Mr. Herman was EasternRegional Sales Manager of the Company.  Prior to joining the Company, Mr. Hermanwas Vice President of Sales at Palomar Medical Technologies, Inc., amedical device company, from August 1997 to December 1998 andNational Sales Manager of Spectrum Medical Technologies, a medical devicecompany that was acquired by Palomar Medical Technologies, from March 1991to August 1997.

 

**Dr. Hsia** was appointed Chief Technology Officerin January 2004.  From March 2003 until January 2004, Dr. Hsiawas a Director of the Company.  Prior to joining the Company, Dr. Hsiawas President and Co-Founder of Lasersharp Corporation, a developer of fiberlaser products for the telecom and film industries, from July 2000 to January 2003. From 1985 until July 2000, Dr. Hsia was Senior Vice President ofResearch and Development of the Company.  Dr. Hsia has twenty-fiveyears of experience in photonics product development and medical devices. Dr. Hsia holds a B.S. in Physics and an M.S. and a Ph.D. in NuclearEngineering from the Massachusetts Institute of Technology, specializing inplasma physics and controlled fusion.

 

**Mr. Lucchese** was appointed Senior Vice President,General Counsel, and Secretary in July 2007.  From July 2006until July 2007, Mr. Lucchese was Vice President, General Counsel,and Secretary of the Company.  Prior to joining the Company, Mr. Lucchesewas the General Counsel of Aspect Software, Inc., a developer of customerinteraction management hardware and software, from December 1998 to November 2005. Mr. Lucchese holds a M.B.A. from Suffolk University, a J.D. from theUniversity of Dayton School of Law, and a B.A. from Providence College.

 

**Mr. Quinn** was appointed Senior Vice President,Finance & Administration, and Chief Financial Officer in June 2009and had served as our acting Chief Financial Officer since April 2007.From October 2003 until August 2008, Mr. Quinn was CorporateController and Treasurer of the Company.  Prior to joining the Company, Mr. Quinnwas Corporate Controller of Ezenia! Inc., a provider of real-timecollaboration, from December 1999 to June 2003, Vice President ofFinance of Vantage Travel, a provider of travel and tourism services, from April 1999to December 1999, a consultant to Gamma Graphix, a business specializingin color management, from

 

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September 1998 to April 1999,Director of Finance of Genus, Inc., a semiconductor capital equipmentmanufacturer, from February 1996 to September 1998, Vice Presidentand Chief Financial Officer of ACSYS, Inc., a provider of professionalstaffing solutions, from February 1994 to February 1996, and held thepositions of Vice President, Corporate Controller and Manager of Accounting andFinancial Systems at Atex Publishing Systems, a subsidiary of Kodak providingsoftware to the publishing industry, from November 1986 to February 1994.

 

**SECTION 16(a) BENEFICIALOWNERSHIP REPORTING COMPLIANCE**

 

Section 16(a) ofthe Securities Exchange Act of 1934, as amended, requires the Company’sDirectors, executive officers, and persons who own more than 10% of aregistered class of the Company’s equity securities (collectively, “ReportingPersons”) to file initial reports of ownership and reports of changes inownership with the SEC.  Reporting Persons are required by SEC regulationsto furnish the Company with copies of all such filings.  Based on itsreview of the copies of such filings, if any, and written representations fromcertain Reporting Persons received by it with respect to the fiscal year ended June 27,2009, the Company believes that all Reporting Persons complied with all Section 16(a) filingrequirements in the fiscal year ended June 27, 2009.

 

**CODE OFBUSINESS CONDUCT AND ETHICS**

 

The Company has adopted aCode of Business Conduct and Ethics that applies to all Directors, officers(including its Chief Executive Officer, Chief Financial Officer, ChiefAccounting Officer, and Controller), and employees of the Company.  TheCompany has posted its Code of Business Conduct and Ethics to the “InvestorRelations” section of its website at www.candelalaser.com.

 

**PROCEDURESBY WHICH STOCKHOLDERS MAY RECOMMEND NOMINEES TO THE BOARD OF DIRECTORS**

 

The Company has notchanged the procedures by which its stockholders may recommend nominees to theBoard of Directors since the Company last provided disclosure in response tothe requirements of Item 407(c)(2)(iv) or Item 407(C)(3) ofRegulation S-K.

 

Stockholders maycommunicate with the Board of Directors by sending proposals, recommendationsfor nomination and other communications (each a “Submission ”) to:

 

Candela Corporation

530 Boston Post Road

Wayland,Massachusetts  01778

Attention: Paul R.Lucchese, Secretary

 

Each Submission shouldbear a clear notation indicating that it is a “Stockholder – DirectorCommunication.”

 

The Secretary of theCompany will make copies of all such Submissions and circulate them to theBoard of Directors or the appropriate committee thereof.  In order toavoid uncertainty as to the date on which a Submission was received by theCompany, the Company suggests that proponents send Submissions by CertifiedMail — Return Receipt Requested.

 

**AUDITCOMMITTEE AND AUDIT COMMITTEE FINANCIAL EXPERT**

 

The Company has astanding Audit Committee, of which Mr. Roberts, Mr. Bailey, Mr. Scottand Ms. Nager are members.

 

The Audit Committeereviews all financial functions of the Company, including matters relating tothe appointment, compensation and activity of the Company’s independentregistered public accounting firm.  The Audit Committee met seven timesduring the fiscal year ended June 27, 2009.  The Board of Directorshas determined that Mr. Roberts and Mr. Bailey are audit committeefinancial experts and that all members of the Audit Committee are independentdirectors (as defined in NASDAQ Stock Market Rule 5605(a)(2)).  TheAudit Committee operates under a written charter adopted by the Board ofDirectors and amended at a meeting of the Audit Committee on January 26,2004.  The Company has posted the charter to the “Investor Relations”section of its website at www.candelalaser.com.

 

**Item11.         Executive Compensation.**

 

**SUMMARYCOMPENSATION TABLE**

 

The following tablesummarizes cash and non-cash compensation information with respect to servicesrendered to the Company, in all capacities, during the fiscal year ended June 27,2009 for (i) the individual who served as the Chief Executive Officer forthe fiscal year ended June 27, 2009 and (ii) each of the two othermost highly compensated executive officers who was serving in that capacity asof June 27, 2009.

 

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| **Name and Principal Position** | ** ** | **Fiscal********Year** | ** ** | **Salary********($)** | ** ** | **Bonus********($)** | ** ** | **Stock********Awards********($)********(1)** | ** ** | **Option /********SAR********Awards********($)********(2)** | ** ** | **Non-********Equity********Incentive********Plan********Compensation********($)********(3)** | ** ** | **Change in********Pension********Value and********Nonqualified********Deferred********Compensation********Earnings********($)** | ** ** | **All Other********Compensation********($)** | ** ** | **Total********($)** | ** ** |
|------------------------------------------------|------------|------------------------|------------|-----------------------|------------|----------------------|------------|-----------------------------------------------|------------|------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------------------|------------|----------------------|------------|
| Dennis S. Herman   Senior Vice President,      |       | 2009                   |       | 258,276               |       | —               |       | —                                        |       | 5,762                                                            |       | —                                                                                        |       | —                                                                                                                                     |       | 110,063                                           | (4)        | 374,101              |       |
| North  American Sales                          |       | 2008                   |       | 232,213               |       | —               |       | —                                        |       | 155,695                                                          |       | —                                                                                        |       | —                                                                                                                                     |       | 97,327                                            | (4)        | 485,235              |       |
| Gerard E. Puorro   President, Chief Executive  |       | 2009                   |       | 516,133               |       | —               |       | —                                        |       | 12,050                                                           |       | —                                                                                        |       | —                                                                                                                                     |       | 8,531                                             | (5)        | 536,714              |       |
| Officer  and Director                          |       | 2008                   |       | 499,200               |       | —               |       | —                                        |       | 454,225                                                          |       | —                                                                                        |       | —                                                                                                                                     |       | 14,487                                            | (5)        | 967,912              |       |
| Jay  D. Caplan                                 |       | 2009                   |       | 319,156               |       | —               |       | —                                        |       | 7,230                                                            |       | —                                                                                        |       | —                                                                                                                                     |       | 8,479                                             | (6)        | 334,865              |       |
| Chief  Operating Officer                       |       | 2008                   |       | 182,070               |       | —               |       | —                                        |       | 109,536                                                          |       | —                                                                                        |       | —                                                                                                                                     |       | 9,429                                             | (6)        | 301,035              |       |

 

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| (1)    | Equity incentive plan  compensation was granted under the Company’s 1998 Stock Plan or the Company’s  2008 Stock Plan. The amounts in this column are calculated based on FAS 123R  and equal the financial statement compensation cost for restricted stock  awards as reported in the Company’s consolidated statement of income for the  fiscal years ended June 28, 2008 and June 27, 2009. Under FAS 123R,  a pro-rata portion of the total expense at the time the restricted stock  award is granted is recognized over the applicable service period generally  corresponding with the vesting schedule of the grant.                                                                                                                                                                                                                                                                                                                                                                             |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (2)    | Equity incentive plan  compensation was granted under the Company’s 1998 Stock Plan or the Company’s  2008 Stock Plan. The amounts in this column are calculated based on FAS 123R  and equal the financial statement compensation cost for stock options and  SARs as reported in the Company’s consolidated statement of income for the  fiscal years ended June 28, 2008 and June 27, 2009. Under FAS 123R,  a pro-rata portion of the total expense at the time of grant is recognized  over the applicable service period generally corresponding with the vesting  schedule of the grant. The initial expense is based on the fair value of the  stock options or SARs grants as estimated using the Black-Scholes  option-pricing model. The assumptions used to arrive at the Black-Scholes  value are disclosed in Note 1 to the Company’s consolidated financial  statements included in the Company’s Annual Report on Form 10-K for the  fiscal year ended June 27, 2009. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (3)    | The amounts in this  column consist of annual bonus amounts earned under the Company’s Executive  Bonus Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (4)    | For fiscal 2009,  consists of $103,927 in commissions, $3,073 in matching contributions by the  Company pursuant to the Company’s 401(k) Plan and $3,063 for a Company  provided automobile. For fiscal 2008, consists of $87,100 in commissions,  $7,998 in matching contributions by the Company pursuant to the Company’s  401(k) Plan, and $2,229 for a Company provided automobile.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (5)    | For fiscal 2009,  consists of $2,564 in matching contributions by the Company pursuant to the  Company’s 401(k) Plan and $5,967 for a Company provided automobile. For  fiscal 2008, consists of $6,750 in matching contributions by the Company  pursuant to the Company’s 401(k) Plan and $7,737 for a Company provided  automobile.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (6)    | For fiscal 2009,  consists of $8,479 for a Company provided automobile. For fiscal 2008,  consists of $5,346 in matching contributions by the Company pursuant to the  Company’s 401(k) Plan and $4,083 for a Company provided automobile.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

 

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**NARRATIVEDISCLOSURE TO SUMMARY COMPENSATION TABLE**

 

**EmploymentAgreements and Arrangements and Potential Payments upon Termination orChange-in-Control**

 

***Executive Officers other than the Chief Executive Officer.***  On November 26, 2007, theCompany entered into Employment, Non-competition and Nondisclosure Agreements(the “Employment Agreements”) and Senior Officer Executive RetentionAgreements (the “Retention Agreements”) with each of Jay D. Caplan andDennis S. Herman.  The Employment Agreements and Retention Agreements wereapproved by the Compensation Committee on November 15, 2007.

 

Each Employment Agreementprovides that the executive officer:

 
| (i)    | is entitled to an  annual base salary;                                                                                                                                                                               |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                 |
| (ii)   | may be entitled to cash  bonuses as well as equity awards in the form of options, SARs, shares of  restricted stock, or such other equity grants as may be determined by the  Company’s Board of Directors; and |
|   |                                                                                                                                                                                                                 |
| (iii)  | is entitled to an  automobile leased by the Company for use by the executive officer.                                                                                                                                |

 

Each Employment Agreementalso generally provides for at-will employment.  If the executive officeris discharged without cause or is involuntarily terminated (as such term isused in the Employment Agreement), then

 
| (i)    | the executive officer  will be entitled to severance payments for a period of 12 months, the  aggregate amount of which will equal the executive officer’s salary for 12  months; |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                   |
| (ii)   | the Company will  continue to pay the executive officer’s premiums relating to health and  dental insurance for 12 months;                                                        |
|   |                                                                                                                                                                                   |
| (iii)  | the Company will make  two additional monthly payments on the automobile leased by the Company for  use by the executive officer; and                                                  |
|   |                                                                                                                                                                                   |
| (iv)   | the Company will  provide outplacement services with a value of up to $10,000 to the executive  officer.                                                                               |

 

Additionally, eachEmployment Agreement contains a covenant by the executive officer to protectthe Company’s intellectual property, to refrain from competing against theCompany, and to refrain from soliciting employees of the Company.

 

Each Retention Agreementprovides that the executive officer will be entitled to certain benefits in theevent that (i) a change in control occurs between November 26, 2007and December 31, 2009 (the “Term”) and (ii) the executiveofficer’s employment with the Company terminates under the conditions describedbelow within 24 months following the date of the change in control.  The Term renews automatically on January 1,2010, and each January 1 thereafter, for one year unless the Companyprovides written notice to the executive officer that the Term will not beextended at least 60 days prior to the end of the Term.

 

Under the existing termsof the Retention Agreements, if, within 24 months following a merger (whichwill include the proposed merger with Syneron), Candela or Candela’s successorin the merger terminates the executive officer’s employment without “cause” (asdefined in the Retention Agreements) or the executive officer terminates his employmentin connection with an “involuntary termination” (which includes (i) a material diminution in theexecutive officer’s authority, duties or responsibilities, (ii) a materialdiminution in the executive officer’s base compensation, (iii) a materialdiminution in the authority, duties or responsibilities of the supervisor towhom the executive officer is required to report, (iv) a change by more than 50miles in the geographic location at which the executive officer must performhis duties, or (v) a material breach of the terms of theexecutive officer’s Retention Agreement), then:

 
| (i)    | the executive officer  will be entitled to payments for a period of 12 months, the aggregate amount  of which will equal the executive officer’s annual base salary multiplied by  two;                                                                                         |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                 |
| (ii)   | the executive officer  will be entitled to payments for a period of 12 months, the aggregate amount  of which will equal the executive officer’s target annual bonus (irrespective  of the level of attainment to that date of any target bonus benchmarks)  multiplied by two; |
|   |                                                                                                                                                                                                                                                                                 |
| (iii)  | the executive officer  will be entitled to receive any accrued obligations owing to him by the  Company, including any unpaid base salary and prorated bonus (irrespective of  the level of attainment to that date of any target bonus benchmarks);                                 |
|   |                                                                                                                                                                                                                                                                                 |
| (iv)   | any then-unvested  equity awards shall immediately become exercisable and vested in full;                                                                                                                                                                                            |

 

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| (v)    | the executive officer  will be provided with benefits for 18 months following the executive  officer’s termination;                                                                                              |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                  |
| (vi)   | the Company will make a  one-time payment of $5,000 to the executive officer to cover some or all of  the lease payments remaining due on the automobile leased by the Company for  use by the executive officer; and |
|   |                                                                                                                                                                                                                  |
| (vii)  | the Company will  provide outplacement services with a value of up to $10,000 to the executive  officer.                                                                                                              |

 

If the executive officerresigns, is terminated due to death or disability, or is terminated for cause,in each case within 24 months of the change in control, then, pursuant to theRetention Agreement, the executive officer will be entitled to receive accruedobligations owing to him by the Company.

 

The severance paymentsand benefits payable under the Retention Agreements exceed the severancepayable to each executive officer under his existing Employment Agreement.  Accordingly, should a termination of employment(without cause or an involuntary termination) occur within 24 months of theclosing of the proposed merger with Syneron, severance payments will be madeunder the Retention Agreements, and not the Employment Agreements.

 

Pursuant to the RetentionAgreements, payments and benefits payable to the executive officers will bereduced to the extent necessary to avoid the application of the excise taximposed under Section 4999 of the Internal Revenue Code of 1986, asamended, if such reduction would result in the executive officer receiving ahigher net after-tax amount.

 

***Chief Executive Officer.***  On November 27, 2007, the Company enteredinto an Amended and Restated Employment Agreement (the “Puorro EmploymentAgreement”) and an Executive Retention Agreement (the “Puorro RetentionAgreement”) with Gerard E. Puorro, the Company’s President and ChiefExecutive Officer.  The Puorro Employment Agreement and Puorro RetentionAgreement were approved by the Compensation Committee on November 15,2007.

 

The Puorro EmploymentAgreement is generally similar to the Employment Agreements with the otherexecutive officers, which are described above.  However, Mr. Puorromay terminate his employment for any reason at any time upon at least 60 days’prior written notice; if Mr. Puorro terminates his employment at hisoption, either Mr. Puorro or the Company can elect, prior to theexpiration of the sixty (60) day notice period, that Mr. Puorro receiveseverance payments (which shall cause the non-compete provisions applicable to Mr. Puorroto become activated).

 

The Puorro EmploymentAgreement generally provides for at-will employment.  If Mr. Puorrovoluntarily resigns or is terminated without cause, then Mr. Puorro willbe entitled to severance payments for a period of 24 months.  For thefirst 12 months of the severance period, Mr. Puorro will receive 100% ofhis monthly salary in effect at the time of his resignation ortermination.  For the second 12 months of the severance period, if asuccessor Chief Executive Officer was hired prior to Mr. Puorro’stermination date, then Mr. Puorro will receive 100% of his monthly salaryin effect at the time of his resignation or termination, otherwise Mr. Puorrowill receive 50% of his monthly salary in effect at the time of his resignationor termination.  In addition, for the full severance period, the Companywill pay 100% of Mr. Puorro’s premium payments for health and dentalinsurance continuation coverage.  The Company will also provideoutplacement services with a value of up to $25,000 to Mr. Puorro.

 

The Puorro RetentionAgreement provides that Mr. Puorro will be entitled to certain benefits inthe event that (i) a change in control occurs between November 26,2007 and December 31, 2009 (the “Term”) and (ii) Mr. Puorro’semployment with the Company terminates under the conditions described below within24 months following the date of the change in control.  The Term renews automatically on January 1,2010, and each January 1 thereafter, for one year unless the Companyprovides written notice to Mr. Puorro that the Term will not be extendedat least 60 days prior to the end of the Term.

 

Under the existing termsof the Puorro Retention Agreement, if, within 24 months of a change in control (whichwill include the proposed merger with Syneron), Candela or Candela’s successorterminates Mr. Puorro’s employment without “cause” (as defined in the PuorroRetention Agreement) or Mr. Puorro elects to terminate his employment in connection withan “involuntary termination” (which includes (i) a material diminution in Mr. Puorro’s authority, dutiesor responsibilities, (ii) a material diminution in Mr. Puorro’s basecompensation, (iii) a material diminution in the authority, duties orresponsibilities of the supervisor to whom Mr. Puorro is required to report,including a requirement that Mr. Puorro report to a corporate officer oremployee instead of Candela’s board of directors, (iv) a change by more than 50miles in the geographic location at which Mr. Puorro must perform his duties,or (v) a material breach of the terms of the Puorro Retention Agreement), then:

 
| (i)    | Mr. Puorro will be  entitled to monthly payments for a period of 24 months, with the amount of  each monthly payment equal to one-twenty-fourth (1/24) of his annual base  salary multiplied by three;                                                                                         |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                |
| (ii)   | Mr. Puorro will be  entitled to monthly payments for a period of 24 months, with the amount of  each monthly payment equal to one-twenty-fourth (1/24) of his target annual  bonus (irrespective of the level of attainment to that date of any target  bonus benchmarks) multiplied by three; |
|   |                                                                                                                                                                                                                                                                                                |
| (iii)  | Mr. Puorro will be  entitled to receive any accrued obligations owing to him by the Company,  including any unpaid base salary and prorated bonus (irrespective of the  level of attainment to that date of any target bonus benchmarks);                                                      |
|   |                                                                                                                                                                                                                                                                                                |
| (iv)   | any then-unvested  equity awards shall immediately become exercisable and vested in full;                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                |
| (v)    | Mr. Puorro will be  provided with benefits for 18 months following his termination;                                                                                                                                                                                                            |

 

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| (vi)   | the Company will make  payments to Mr. Puorro to cover all of the lease payments remaining due  on the automobile leased by the Company for use by Mr. Puorro, at which  point Mr. Puorro may exercise the purchase option on the automobile  should one exist; and |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                               |
| (vii)  | the Company will  provide outplacement services with a value of up to $25,000 to  Mr. Puorro.                                                                                                                                                                                 |

 

Pursuant to the RetentionAgreement, if Mr. Puorro resigns, is terminated due to death ordisability, or is terminated for cause, in each case within 24 months of thechange in control, then he (or his estate) will be entitled to receive accruedobligations owing to him by the Company.

 

The severance paymentsand benefits payable under the Puorro Retention Agreement exceed the severancepayable under the Puorro Employment Agreement. Accordingly, should a termination of Mr. Puorro’s employment (withoutcause or an involuntary termination) occur within 24 months of the closing ofthe proposed merger with Syneron, severance payments will be made under thePuorro Retention Agreement, and not the Puorro Employment Agreement.

 

Each of the executiveofficers is subject to nonsolicitation and noncompetition provisions for theperiod during which he or she receives severance payments.  Upon achange-in-control, options and SARs held by the executive officers and allother employees will fully vest.

 

The Company’s pendingtransaction with Syneron Medical Ltd. would be considered a change in controlunder the Retention Agreements and the Puorro Retention Agreement.

 

Pursuant to the PuorroRetention Agreement, payments and benefits payable to the executive officerswill be reduced to the extent necessary to avoid the application of the excisetax imposed under Section 4999 of the Internal Revenue Code of 1986, asamended, if such reduction would result in Mr. Puorro receiving a highernet after-tax amount.

 

The following table setsforth the estimated incremental payments and benefits, beyond existingcompensation and benefit entitlements described in this Annual Report on Form 10-Kthat are not contingent upon a termination or change in control, payable toeach Named Executive Officer upon a change in control of the Company ortermination of such Named Executive Officer’s employment, in each case assumingthat the triggering event occurred on June 27, 2009.

 
| ** **            | ** ** | **Change in Control** | ** ** | **Termination**                             | ** ** | **Resignation**     | ** ** |
|-----------------------|------------|---------------------------------|------------|---------------------------------------------|------------|---------------------|------------|
| **Name**              | ** ** | **Without********Termination**  | ** ** | **Termination********Without********Cause** | ** ** | **With Cause** | ** ** | **Without********Cause** | ** ** | **For Good********Reason** | ** ** | **Death,********Disability, or********Otherwise** | ** ** |
| Dennis  S. Herman     |       | —                          |       | $                                           | 668,777    |                | —     |   | $ | 272,018 |   | $ | 272,018 |   | — |   |
| Gerard  E. Puorro (1) |       | —                          |       | 2,060,366                                   |       | —              |       | 954,156 |   | 954,156 |   | $ | 954,156 |   |
| Jay  D. Caplan        |       | —                          |       | 823,166                                     |       | —              |       | 330,276 |   | 330,276 |   | — |   |
|                       |            |                                 |            |                                             |            |                     |            |  |  |  |  |  |  |  |  |  |  |

 

----

| *      | Excludes information  with respect to contracts, agreements, plans or arrangements that do not  discriminate in scope, terms or operation in favor of the Company’s executive  officers and that are available generally to all salaried employees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (1)    | As discussed above, if  Mr. Puorro voluntarily resigns or is terminated without cause, then  Mr. Puorro will be entitled to severance payments for a period of 24  months. For the first 12 months of the severance period, Mr. Puorro will  receive 100% of his monthly salary in effect at the time of his resignation  or termination. For the second 12 months of the severance period, if a  successor Chief Executive Officer was hired prior to Mr. Puorro’s  termination date, then Mr. Puorro will receive 100% of his monthly salary  in effect at the time of his resignation or termination, otherwise  Mr. Puorro will receive 50% of his monthly salary in effect at the time  of his resignation or termination. |

 

**Non-EquityIncentive Plan Awards**

 

In fiscal 2009, allnon-equity plan-based awards were granted under an Executive Bonus Plan (the “ExecutiveBonus Plan”) established by the Compensation Committee of the Company toprovide participating executive officers with the opportunity to earn bonuscompensation upon the achievement of certain performance objectives.  TheCompensation Committee selects participants in the Executive Bonus Plan andestablishes their performance objectives and target bonus compensationannually.

 

In fiscal 2009, eachparticipant’s performance objectives were tied to the achievement of (i) targetlevels of consolidated pre-tax profits (“Target Profits”) and (ii) individualmetrics.  The Compensation Committee established a Target Profits goal that itbelieved could be achieved only with significant operational success for theCompany.  The individual metrics for theparticipants are primarily related to individual development goals ordepartment specific goals, subject to discretionary adjustments that theCompensation Committee deems appropriate. The Compensation Committeeestablished individual metrics for each participant that it believed could beachieved only with significant effort by the participant.  The Company does not pay any bonuses toparticipants unless the participant achieves a threshold level of 81% of TargetProfits.  In fiscal 2009, the Company did not achieve this threshold andtherefore none of its named executive officers earned any bonus compensation.

 

10

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**EquityIncentive Plan Awards**

 

In fiscal 2009, equityplan-based awards were granted under either the Company’s 1998 Stock Plan orthe Company’s 2008 Stock Plan.  In fiscal 2009, the Compensation Committeegranted equity awards in the form of Common Stock-settled SARs to executiveofficers.  The exercise price per share of the Common Stock underlyingeach SAR is not less than the last reported sale price per share of the CommonStock on the NASDAQ Global Select Market on the date of grant.  Each SARgranted under the Company’s 1998 Stock Plan generally vests over four years inequal installments of 25% of the total number of shares of Common Stockunderlying such SAR on each anniversary of the date of grant.  Each SARgranted under the Company’s 2008 Stock Plan generally vests over two years inequal installments of 50% of the total number of shares of Common Stockunderlying such SAR on each anniversary of the date of grant  The Compensation Committee has the right toaccelerate the date of exercise of any installment of such SAR.  Inaddition, upon certain acquisitions, such SAR shall become fully vested. SARs may be exercised from time to time, in whole or in part, up to the totalnumber of shares with respect to which the SAR is then exercisable.  EachSAR generally expires 10 years after the date of grant.  SARs are subjectto early termination in certain circumstances.

 

**OUTSTANDINGEQUITY AWARDS AT FISCAL YEAR-END**

 

The following tablesummarizes the unexercised options and SARs for each Named Executive Officeroutstanding as of June 27, 2009.  Other than as set forth below, noNamed Executive Officer had any unvested stock or other equity incentive planawards as of June 27, 2009.

 
| **Name**          | ** ** | **Number of Securities********Underlying********Unexercised Options /********SARs********(Exercisable)********(#)** | ** ** | **Number of Securities********Underlying********Unexercised Options /********SARs********(Unexercisable)********(#)** | ** ** | **Option / SAR********Exercise Price********($)** | ** ** | **Option / SAR********Expiration Date** | ** ** |
|-------------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------|------------|------------------------------------------------------------------|------------|--------------------------------------------------------|------------|
| Dennis  S. Herman |       | 15,000                                                                                                                                  |       | —                                                                                                                                    |       | 4.67                                                             |       | 04/29/2013                                             |       |
|              |       | 5,158                                                                                                                                   |       | —                                                                                                                                    |       | 11.98                                                            |       | 01/29/2014                                             |       |
|              |       | 9,842                                                                                                                                   |       | —                                                                                                                                    |       | 11.98                                                            |       | 01/29/2014                                             |       |
|              |       | 5,000                                                                                                                                   |       | —                                                                                                                                    |       | 9.50                                                             |       | 02/11/2015                                             |       |
|              |       | 22,500                                                                                                                                  |       | 7,500                                                                                                                                     |       | 15.33                                                            |       | 01/30/2016                                             |       |
|              |       | 15,000                                                                                                                                  |       | 15,000                                                                                                                                    |       | 11.53                                                            |       | 04/03/2017                                             |       |
|              |       | 15,000                                                                                                                                  |       | 45,000                                                                                                                                    |       | 4.29                                                             |       | 01/25/2018                                             |       |
|              |       | —                                                                                                                                  |       | 23,909                                                                                                                                    |       | 0.41                                                             |       | 01/19/2019                                             |       |
| Gerard  E. Puorro |       | 9,150                                                                                                                                   |       | —                                                                                                                                    |       | 11.96                                                            |       | 01/26/2014                                             |       |
|              |       | 20,850                                                                                                                                  |       | —                                                                                                                                    |       | 11.96                                                            |       | 01/26/2014                                             |       |
|              |       | 858                                                                                                                                     |       | —                                                                                                                                    |       | 11.98                                                            |       | 01/29/2014                                             |       |
|              |       | 29,142                                                                                                                                  |       | —                                                                                                                                    |       | 11.98                                                            |       | 01/29/2014                                             |       |
|              |       | 8                                                                                                                                       |       | —                                                                                                                                    |       | 10.35                                                            |       | 08/23/2014                                             |       |
|              |       | 69,992                                                                                                                                  |       | —                                                                                                                                    |       | 10.35                                                            |       | 08/23/2014                                             |       |
|              |       | 5,000                                                                                                                                   |       | —                                                                                                                                    |       | 9.50                                                             |       | 02/11/2015                                             |       |
|              |       | 15,000                                                                                                                                  |       | —                                                                                                                                    |       | 9.50                                                             |       | 02/11/2015                                             |       |
|              |       | 60,000                                                                                                                                  |       | 20,000                                                                                                                                    |       | 15.33                                                            |       | 01/30/2016                                             |       |
|              |       | 50,000                                                                                                                                  |       | 50,000                                                                                                                                    |       | 11.53                                                            |       | 04/03/2017                                             |       |
|              |       | 30,000                                                                                                                                  |       | 90,000                                                                                                                                    |       | 4.29                                                             |       | 01/25/2018                                             |       |
|              |       | —                                                                                                                                  |       | 50,000                                                                                                                                    |       | 0.41                                                             |       | 01/19/2019                                             |       |
| Jay  D. Caplan    |       | 25,000                                                                                                                                  |       | 75,000                                                                                                                                    |       | 6.26                                                             |       | 11/26/2017                                             |       |
|              |       | —                                                                                                                                  |       | 30,000                                                                                                                                    |       | 0.41                                                             |       | 01/19/2019                                             |       |

 

**DIRECTORCOMPENSATION**

 

The Compensation Committeeregularly reviews the compensation for Directors who are not employees of theCompany (“Non-Employee Directors”).  The following table summarizescash and non-cash compensation information with respect to the compensation ofNon-Employee Directors during the fiscal year ended June 27, 2009.

 

11

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| **Name**                | ** ** | **Fees********Earned or********Paid in********Cash********($)** | ** ** | **Stock********Awards********($)** | ** ** | **Option /********SAR********Awards********($)** | ** ** | **Non-********Equity********Incentive********Plan********Compensation********($)** | ** ** | **Change in********Pension********Value and********Nonqualified********Deferred********Compensation********Earnings********($)** | ** ** | **All Other********Compensation********($) (1)** | ** ** | **Total********($)** | ** ** |
|-------------------------|------------|---------------------------------------------------------------------------|------------|------------------------------------|------------|-------------------------------------------------------|------------|------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------|------------|------------------------------------------------------------|------------|----------------------|------------|
| George  A. Abe (2)      |       | 27,500                                                                    |       | —                             |       | —                                                |       | —                                                                             |       | —                                                                                                                                     |       | —                                                     |       | 27,500               |       |
| Ben  Bailey III (3)     |       | 45,000                                                                    |       | —                             |       | —                                                |       | —                                                                             |       | —                                                                                                                                     |       | 1,158                                                      |       | 46,158               |       |
| Nancy  E. Nager (4)     |       | 32,000                                                                    |       | —                             |       | —                                                |       | —                                                                             |       | —                                                                                                                                     |       | 756                                                        |       | 32,756               |       |
| Kenneth  D. Roberts (5) |       | 34,750                                                                    |       | —                             |       | —                                                |       | —                                                                             |       | —                                                                                                                                     |       | 3,011                                                      |       | 37,761               |       |
| Douglas  W. Scott (6)   |       | 33,875                                                                    |       | —                             |       | —                                                |       | —                                                                             |       | —                                                                                                                                     |       | 1,013                                                      |       | 34,888               |       |

 

----

| (1)    | Reflects amounts paid  as premiums for long-term care insurance.                                                                                                                                          |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                      |
| (2)    | Mr. Abe had an  aggregate of 130,000 option / SAR awards outstanding as of June 27,  2009. The grant date fair value of such awards, computed in accordance with  FAS 123R, was $961,630.       |
|   |                                                                                                                                                                                                      |
| (3)    | Mr. Bailey had an  aggregate of 70,000 option / SAR awards outstanding as of June 27, 2009.  The grant date fair value of such awards, computed in accordance with FAS  123R, was $610,877.     |
|   |                                                                                                                                                                                                      |
| (4)    | Ms. Nager had an  aggregate of 85,000 option / SAR awards outstanding as of June 27, 2009.  The grant date fair value of such awards, computed in accordance with FAS  123R, was $710,247.      |
|   |                                                                                                                                                                                                      |
| (5)    | Mr. Roberts had an  aggregate of 205,000 option / SAR awards outstanding as of June 27,  2009. The grant date fair value of such awards, computed in accordance with FAS  123R, was $1,119,479. |
|   |                                                                                                                                                                                                      |
| (6)    | Mr. Scott had an  aggregate of 130,000 option / SAR awards outstanding as of June 27,  2009. The grant date fair value of such awards, computed in accordance with  FAS 123R, was $961,507.     |

 

During the fiscal yearended June 27, 2009, Non-Employee Directors received (i) an annualretainer of $15,000; (ii) an additional annual retainer of $3,750 for theChair of the Board of Directors; (iii) an additional annual retainer of $3,750for the Chair of the Audit Committee (unless such person is also Chair of theBoard of Directors); (iv) an additional annual retainer of $1,875 for theChair of the Compensation Committee; (v) a fee of $1,500 per meeting ofthe Board of Directors that such Non-Employee Director attends in person; (vi) afee of $1,000 per meeting of the Board of Directors that such Non-EmployeeDirector attends by telephone; (vii) a fee of $1,000 per committeemeeting, that takes place on a day other than a day on which there is aregularly scheduled meeting of the Board of Directors, and that suchNon-Employee Director attends in person; and (viii) a fee of $500 percommittee meeting, that takes place on a day other than a day on which there isa regularly scheduled meeting of the Board of Directors, and that such Non-EmployeeDirector attends by telephone.  In addition, commencing September 1,2006 and ending with the final payment made December 30, 2008, Mr. Baileyreceived a retainer of $3,000 per month relating to his liaising withmanagement on behalf of the Board of Directors relating to certain litigationmatters.

 

Directors who areemployees of the Company receive no additional compensation for their serviceas a Director.

 

**Item 12.****                                                 ****Security Ownership ofCertain Beneficial Owners and Management and Related Stockholder Matters.**

 

**SECURITYOWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT**

 

The followingtable sets forth certain information with respect to the beneficial ownershipof Candela’s common stock as of September 30, 2009, by:

 
| · | each person known to  Candela to be the beneficial owner of more than 5% of its common stock; |
|--------|-----------------------------------------------------------------------------------------------|
|   |                                                                                          |
| · | each director, or  nominee for director, of Candela;                                          |
|   |                                                                                          |
| · | each named executive  officer of Candela; and                                            |
|   |                                                                                          |
| · | all directors, nominees  for director and executive officers of Candela as a group.           |

 

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Except as otherwiseindicated in the footnotes to the table, to Candela’s knowledge, the beneficialowners listed in the table below have sole voting and sole investment power(subject to community property laws where applicable) as to all sharesbeneficially owned by them.  The addressof each of Candela’s directors and executive officers is c/o Candela Corporation,530 Boston Post Road, Wayland, Massachusetts 01778.

 

| ** **                                                                   | ** ** | **Amount  and Nature of Beneficial Ownership** | ** ** | ** **     | ** ** |
|------------------------------------------------------------------------------|------------|------------------------------------------------|------------|----------------|------------|
| **Name and Address of  Beneficial Owner**                                    | ** ** | **Common  Stock**                              | ** ** | **Options(1)** | ** ** | **Stock  Appreciation  Rights(1)** | ** ** | **Total** | ** ** | **Percent  of  Class(2)** | ** ** |
| Frank Russell Company(3)  909 A. Street  Tacoma, Washington 98402            |       | 1,664,716                                      |       | 0              |       | 0 |   | 1,664,716 |   | 7.3 | % |
| JPMorgan  Chase & Co.(4)  270 Park Avenue  New York, New York 10017 |       | 1,149,239                                      |       | 0              |       | 0 |   | 1,149,239 |   | 5.0 | % |
| Gerard  E. Puorro(5)                                                         |       | 242,000                                        |       | 150,000        |       | 140,000 |   | 532,000 |   | 2.3 | % |
| George  A. Abe                                                               |       | 0                                              |       | 60,000         |       | 50,000 |   | 110,000 |   | * |   |
| Ben  Bailey III(6)                                                           |       | 1,000                                          |       | 0              |       | 50,000 |   | 51,000 |   | * |   |
| Nancy  E. Nager                                                              |       | 2,000                                          |       | 15,000         |       | 50,000 |   | 67,000 |   | * |   |
| Kenneth  D. Roberts                                                          |       | 77,400                                         |       | 105,000        |       | 50,000 |   | 232,400 |   | 1.0 | % |
| Douglas  W. Scott(7)                                                         |       | 7,500                                          |       | 60,000         |       | 50,000 |   | 117,500 |   | * |   |
| Dennis  S. Herman                                                            |       | 102,312                                        |       | 35,000         |       | 52,500 |   | 189,812 |   | * |   |
| Jay  D. Caplan(8)                                                            |       | 100,000                                        |       | 0              |       | 50,000 |   | 150,000 |   | * |   |
| All  Directors, Nominees and Executive Officers as a Group (11 persons)(9)   |       | 714,212                                        |       | 530,000        |       | 615,000 |   | 1,859,212 |   | 7.7 | % |

 

----

| *      | Represents less than 1%  of Candela’s outstanding common stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (1)    | Pursuant to the  rules of the SEC, the number of shares of Candela’s common stock deemed  beneficially owned includes, for each person or group referred to in the  table, shares issuable pursuant to options and shares underlying stock  appreciation rights held by the respective person or group that are currently  exercisable or will become exercisable within 60 days of September 30,  2009, the most recent practicable date for this proxy statement/prospectus.                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (2)    | Applicable percentage  of ownership is based upon 22,913,036 shares of Candela’s common stock  outstanding as of September 30, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (3)    | Information obtained  from the Schedule 13G filed by Frank Russell Company with the SEC on  February 17, 2009. Frank Russell Company is the beneficial owner of  1,664,716 shares of Candela’s common stock, of which it has sole voting power  and shared dispositive power as to all of such shares, and shared voting  power and sole dispositive power as to none of such shares. Certain indirect  clients that are advised by Frank Russell Company have the right to receive  and the ultimate power to direct the receipt of dividends from, or the  proceeds of the sale of such securities. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (4)    | Information obtained  from the Schedule 13G/A filed by JPMorgan Chase & Co. on behalf of  itself, J.P. Morgan Securities Inc., JPMorgan Chase Funding Inc. (f/k/a J.P.  Morgan Ventures Corporation) and The Bear Stearns Companies LLC with the SEC  on November 10, 2008. JPMorgan Chase & Co. is the beneficial owner  of 1,149,239 shares of Candela’s common stock, of which it has sole voting  power and sole dispositive power as to all of such shares, and shared voting  power and shared dispositive power as to none of such shares.                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (5)    | The 242,000 shares of  Candela common stock beneficially owned by Mr. Puorro are owned jointly  with his spouse, with whom Mr. Puorro shares voting and investment power  over such shares.                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (6)    | Does not include  300,000 shares of Candela common stock owned by Massachusetts Capital Resource  Company, where Mr. Bailey serves as Vice President, as to which  Mr. Bailey disclaims beneficial ownership.                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (7)    | Includes 3,750 shares  owned by Mr. Scott’s spouse, as to which Mr. Scott has shared  voting and shared dispositive power.                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (8)    | The 100,000 shares of  Candela common stock beneficially owned by Mr. Caplan are owned jointly  with his spouse, with whom Mr. Caplan shares voting and investment power  over such shares.                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| (9)    | See Notes 5, 6, 7 and  8.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

 

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**EQUITY COMPENSATION PLAN INFORMATION**

 

Thefollowing table sets forth a summary of the equity compensation plans offeredby Candela as of June 27, 2009:

 
| ** **                                                  | ** ** | **As of June 27, 2009**                                                                                                                                 | ** ** |
|-------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
| **Plan category**                                      | ** ** | **Number of securities to  be issued upon exercise  of outstanding options,  warrants and rights  (a) (1) (2)** | ** ** | **Weighted-average  exercise price of  outstanding options,  warrants and rights  (b) (1)** | ** ** | **Number of securities  remaining available for  future issuance under  equity compensation  plans (excluding  securities reflected in  column (a))  (c) (3)** | ** ** |
| Equity compensation plans approved by security  holders (4) |       | 1,480,566                                                                                                                                                                   |       | 4.66 |   | 962,582 |   |
| Equity Compensation plans not approved by security  holders |       | —                                                                                                                                                                      |       | — |   | — |   |
| **Total**                                                   |       | 1,480,566                                                                                                                                                                   |       | 4.66 |   | 962,582 |   |

 

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| (1)    | Represents the  number of shares of Candela common stock that would have been issued if all  outstanding Candela options, warrants, and rights had been exercised on  June 27, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | As of June 27,  2009, there were 5,060,623 shares of Candela common stock underlying all  outstanding options, warrants, and rights. This consisted of (i) 983,487  shares of Candela common stock underlying outstanding options and  (ii) 4,077,136 shares of Candela common stock underlying outstanding  stock appreciation rights. If all such Candela options had been exercised on  June 27, 2009, then 983,487 shares of Candela common stock would have  been issued. If all such Candela stock appreciation rights had been exercised  on June 27, 2009, then an additional 497,079 shares of Candela common  stock would have been issued. In calculating the number of shares of Candela  common stock issuable upon the exercise of outstanding stock appreciation  rights, Candela used the fair market value of its common stock as reported on  the NASDAQ Global Select Market on June 26, 2009 ($0.87 per share), the  last trading date prior to Candela’s fiscal year end. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (2)    | Does not include  purchase rights accruing under Candela’s 1990 Employee Stock Purchase Plan,  as amended, because the purchase price (and therefore the number of shares to  be purchased) will not be determined until the end of the purchase period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (3)    | Of the 962,582  shares of Candela common stock available for future issuance under Candela’s  equity compensation plans, 602,710 shares remain available for issuance under  the terms of Candela’s 1990 Employee Stock Purchase Plan, as amended.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| (4)    | The equity  compensation plans approved by security holders are the 1998 Stock Plan,  which expired pursuant to its terms on September 18, 2008, the 2008  Stock Plan, which was adopted by Candela’s board of directors on  October 27, 2008 and approved by Candela’s stockholders on  December 12, 2008 and the 1990 Employee Stock Purchase Plan, which was initially  adopted by Candela’s board of directors on May 10, 1990 and approved by  Candela’s stockholders on November 13, 1990.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

 

**Item 13.****                ****Certain Relationshipsand Related Transactions and Director Independence.**

 

**CERTAINRELATIONSHIPS AND RELATED TRANSACTIONS**

 

During fiscal 2009, theCompany did not engage in any transaction that would require disclosure underItem 404(a) of Regulation S-K.

 

The Company maintainspolicies and procedures for the review, approval, or ratification oftransactions in which (i) the Company was or is to be a participant andthe amount involved exceeds $120,000 and (ii) any related person (as suchterm is defined in Item 404(a) of Regulation S-K) had or will have adirect or indirect material interest (a “Related Person Transaction ”).

 

As a general matter, theCompany prefers to avoid Related Person Transactions.  Nevertheless, theCompany recognizes that there are situations where Related Person Transactionsmay be in, or may not be inconsistent with, the best interests of the Companyand its stockholders, including but not limited to situations where the Companymay obtain products or services of a nature, quantity or quality, or on otherterms, that are not readily available from alternative sources or when theCompany provides products or services to related persons on an arm’s lengthbasis on terms comparable to those provided to unrelated third parties.

 

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Related PersonTransactions that are identified as such prior to the consummation thereof oramendment thereto shall be consummated or amended only if the following stepsare taken:

 

·                         Prior to entering into the Related PersonTransaction (a) the related person, (b) the director, executiveofficer, nominee or beneficial owner who is an immediate family member of therelated person, or (c) the business unit or function/department leaderresponsible for the potential Related Person Transaction shall provide noticeto the Company’s General Counsel of the facts and circumstances of the proposedRelated Person Transaction.

·                         The proposed Related Person Transactionshall be submitted to the Audit Committee for consideration at the next AuditCommittee meeting.

·                         The Audit Committee shall consider all ofthe relevant facts and circumstances available to the Audit Committee,including (if applicable) but not limited to:  (i) the benefits tothe Company; (ii) the impact on a director’s independence in the event therelated person is a director, an immediately family member of a director or anentity in which a director is a partner, shareholder or executive officer; (iii) theavailability of other sources for comparable products or services; (iv) theterms of the transaction; and (v) the terms available to unrelated thirdparties or to employees generally.   No member of the Audit Committeeshall participate in any review, consideration or approval of any RelatedPerson Transaction with respect to which such member or any of his or herimmediate family members is the related person.  The Audit Committee shallapprove only those Related Person Transactions that are in, or are notinconsistent with, the best interests of the Company and its stockholders, asthe Audit Committee determines in good faith.

 

In the event the Company’sChief Executive Officer, Chief Financial Officer or General Counsel becomesaware of a Related Person Transaction that has not been previously approved orpreviously ratified:

 

·                         If the transaction is pending or ongoing,it will be promptly submitted to the Audit Committee, and the Audit Committeeshall consider all of the relevant facts and circumstances available to theAudit Committee, including (if applicable) but not limited to:  (i) thebenefits to the Company; (ii) the impact on a director’s independence inthe event the related person is a director, an immediately family member of adirector or an entity in which a director is a partner, shareholder orexecutive officer; (iii) the availability of other sources for comparableproducts or services; (iv) the terms of the transaction; and (v) theterms available to unrelated third parties or to employees generally. Based on the conclusions reached, the Audit Committee shall evaluate alloptions, including but not limited to ratification, amendment or termination ofthe Related Person Transaction.

·                         If the transaction is completed, theAudit Committee shall evaluate the transaction, taking into account the samefactors described above, to determine if rescission of the transaction isappropriate.

 

**DIRECTORINDEPENDENCE**

 

The Board of Directorshas determined that a majority of members of the Board of Directors areindependent directors (as defined in NASDAQ Stock Market Rule 5605(a)(2))and that Mr. Roberts, Mr. Abe, Mr. Bailey, Ms. Nager and Mr. Scottare independent directors.

 

**Item 14.****                ****Principal AccountantFees and Services.**

 

**ACCOUNTINGFEES**

 

The Audit Committee hasconsidered whether the Company’s independent registered public accounting firm’sprovision of non-audit services to the Company and the fees charged for them,as set forth below, are compatible with the independent registered publicaccounting firm’s independence and believes such services are compatible withthe independent registered public accounting firm’s independence.

 

***Audit Fees.***  The aggregate fees billed by BDO Seidman, LLPfor professional services rendered for the audit of the Company’s annualfinancial statements for fiscal 2009, for the reviews of the financialstatements included in the Company’s Forms 10-Q for fiscal 2009 and for theindependent audit of the Company’s internal control over financial reportingrequired under the Sarbanes-Oxley Act of 2002 for fiscal 2009 were $392,098. The aggregate fees billed by BDO Seidman, LLP for professional servicesrendered for the audit of the Company’s annual financial statements for fiscal2008, for the reviews of the financial statements included in the Company’sForms 10-Q for fiscal 2008 and for the independent audit of the Company’sinternal control over financial reporting required under the Sarbanes-Oxley Actof 2002 for fiscal 2008 were $781,490.

 

***Audit-Related Fees.***  There were no fees billed by BDO Seidman, LLPfor assurance and related services that were reasonably related to theperformance of the audit of the Company’s annual financial statements forfiscal 2009 and 2008 or reviews of the financial statements included in theCompany’s Forms 10-Q for fiscal 2009 and 2008.

 

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***Tax Fees.***  There were no fees billed by BDO Seidman, LLPfor professional services rendered for tax compliance, tax advice and taxplanning for fiscal 2009 and 2008.

 

***All Other Fees.***  There were no fees billed by BDO Seidman, LLPfor products and services provided other than those described above for fiscal2009 and 2008.

 

**AUDITCOMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES**

 

The Company’s AuditCommittee has adopted a Pre-Approval Policy for Audit and Non-Audit Services inorder to assure that such services do not impair the independent registeredpublic accounting firm’s independence.  Pursuant to this policy, the AuditCommittee annually reviews and pre-approves the independent registered publicaccounting firm’s year-end audit and quarterly reviews, as well as other knownor anticipated audit or non-audit services. During the course of the year, theAudit Committee (or its delegatee) may pre-approve additional non-auditservices that have not been pre-approved at the annual review.

 

100% of the servicesdescribed under the caption “Accounting Fees” above were approved by the AuditCommittee pursuant to 17 CFR 210.2-02(c)(7)(i)(C).

 

**Item 15.****                ****Exhibits, FinancialStatement Schedules.**

 

(a)           Documents Filed as Part of this Annual Report on Form 10-K/A

 

(1)       Consolidated Financial Statements:

 

Previously Filed

 

(2)       Consolidated Financial Statement Schedules:

 

Previously Filed

 

(3)                    Exhibits:

 

The following exhibitsare filed as part of this Annual Report on Form 10-K/A.:

 
| **Exhibit** | ** ** | **Footnote** | ** ** | **Description**                                                              |
|-------------|------------|--------------|------------|------------------------------------------------------------------------------|
| ** **  | ** ** | ** **   | ** ** | ** **                                                                   |
| 31.1*       |       |         |       | Rule 13a-14(a)/15d-14(a) Certification  of Chief Executive Officer |
|        |       |         |       |                                                                         |
| 31.2*       |       |         |       | Rule 13a-14(a)/15d-14(a) Certification  of Chief Financial Officer |
|        |       |         |       |                                                                         |
| 32.1*       |       |         |       | Section 1350  Certification of Chief Executive Officer                  |
|        |       |         |       |                                                                         |
| 32.2*       |       |         |       | Section 1350  Certification of Chief Financial Officer                  |

 

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*                      Filed herewith

 

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**SIGNATURES**

 

Pursuant to therequirements of Section 13 or 15(d) of the Securities Exchange Act of1934, the registrant has duly caused this report to be signed on its behalf bythe undersigned, thereunto duly authorized, on October 26, 2009.

 

 
|   | CANDELA CORPORATION |
|--------|---------------------|
|   |                |
|   | By:                 | /s/ Gerard E. Puorro |
|   | Name:               | Gerard E. Puorro |
|   | Title:              | President, Chief  Executive Officer and Director |

 

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**EXHIBITINDEX**

 
| **Exhibit** | ** ** | **Footnote** | ** ** | **Description**                                                              |
|-------------|------------|--------------|------------|------------------------------------------------------------------------------|
|        |       |         |       |                                                                         |
| 31.1        |       |         |       | Rule 13a-14(a)/15d-14(a) Certification  of Chief Executive Officer |
|        |       |         |       |                                                                         |
| 31.2        |       |         |       | Rule 13a-14(a)/15d-14(a) Certification  of Chief Financial Officer |
|        |       |         |       |                                                                         |
| 32.1        |       |         |       | Section 1350  Certification of Chief Executive Officer                  |
|        |       |         |       |                                                                         |
| 32.2        |       |         |       | Section 1350  Certification of Chief Financial Officer                  |

 

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