**Exhibit 10.15**

 

**CandelaCorporation**

 

Senior OfficerExecutive Retention Agreement

 

THIS EXECUTIVE RETENTION AGREEMENT (this “Agreement”),effective as of November,     2007 (the “EffectiveDate”) is made by and between Candela Corporation, a Delaware corporation(the “Company”), and[                        ](the “Executive”).

 

WHEREAS, the Company and the Executivehave entered into that certain Employment, Non-competition and Non-DisclosureAgreement, effective as of[                  ](the “Employment Agreement”);

 

WHEREAS, the Company recognizes that, asis the case with many publicly-held corporations, the possibility of a changein control of the Company exists and that such possibility, and the uncertaintyand questions which it may raise among key personnel, may result in thedeparture or distraction of key personnel to the detriment of the Company andits stockholders; and

 

WHEREAS, the Board of Directors of theCompany (the “Board”) has identified key positions within the Company (“KeyPositions”) and determined that appropriate steps should be taken toreinforce and encourage the continued employment and dedication of thosepersons, including the Executive, who hold Key Positions within the Companywithout distraction from the possibility of a change in control of the Companyand related events and circumstances;

 

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

 

# 1.     KeyDefinitions. As used herein, the following termsshall have the following respective meanings:

 

# 1.1.    “Change inControl” means an event or occurrence set forth in any one or moreof subsections (a) through (d) below (including an event oroccurrence that constitutes a Change in Control under one of such subsectionsbut is specifically exempted from another such subsection):

 

#### **(a)**   the acquisition by anindividual, entity or group (within the meaning of Section 13(d)(3) or14(d)(2) of the Securities Exchange Act of 1934, as amended (the “ExchangeAct”)) (a “Person”), of beneficial ownership of any capital stock of theCompany and as to which ownership, such Person either (i) shall have fileda Form 13D in respect of its or their holdings with the Securities andExchange Commission (“SEC”), or (ii) in the reasonable opinion of theCompany, such person should have filed a Form 13D with the SEC in respectof its holdings and its intentions (and the Executive shall be permitted torequest, and the Company shall promptly furnish, an indication of whether theBoard of Directors has concluded that such person should have so filed) if,after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3promulgated under the Exchange Act), 30% or more of either (X) thethen-outstanding shares of common stock of the Company (the “OutstandingCompany Common Stock”) or (Y) the combined voting power of thethen-outstanding securities of the Company entitled to vote generally in theelection of directors (the “Outstanding Company Voting Securities”); provided,however, that for purposes of this subsection (a), the following acquisitionsof beneficial ownership of Outstanding Company Common Stock or OutstandingCompany Voting Securities shall not constitute a Change in Control: (1) anyacquisition directly from the Company (excluding an acquisition pursuant to theexercise, conversion or exchange of any security exercisable for, convertibleinto or exchangeable for common stock or voting securities of the Company,unless the Person exercising, converting or exchanging such security acquiredsuch security directly from the Company or an underwriter or agent of theCompany), (2) any acquisition by the Company, (3) any acquisition byany employee benefit plan (or related trust) sponsored or maintained by theCompany or any corporation controlled by the Company, or (4) anyacquisition by any corporation pursuant to a transaction which complies withclauses (i) and (ii) of subsection (c) of this Section 1.1;  or

 

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#### **(b)**   such time as theContinuing Directors (as defined below) do not constitute a majority of theBoard (or, if applicable, the Board of Directors of a successor corporation tothe Company), where the term “Continuing Director” means at any date a memberof the Board (i) who was a member of the Board on the date of theexecution of this Agreement or (ii) who was nominated or electedsubsequent to such date by at least a majority of the directors who wereContinuing Directors at the time of such nomination or election or whoseelection to the Board was recommended or endorsed by at least a majority of thedirectors who were Continuing Directors at the time of such nomination orelection; provided, however, that there shall be excluded from this clause (ii) anyindividual whose initial assumption of office occurred as a result of an actualor threatened election contest with respect to the election or removal ofdirectors or other actual or threatened solicitation of proxies or consents, byor on behalf of a person other than the Board; or

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#### **(c)**   the consummation of amerger, consolidation, reorganization, recapitalization or statutory shareexchange involving the Company or a sale or other disposition of all orsubstantially all of the assets of the Company in one or a series oftransactions (a “Business Combination”), unless, immediately following suchBusiness Combination, each of the following two conditions is satisfied: (i) allor substantially all of the individuals and entities who were the beneficialowners of the Outstanding Company Common Stock and Outstanding Company VotingSecurities immediately prior to such Business Combination beneficially own,directly or indirectly, more than 50% of the then-outstanding shares of commonstock and the combined voting power of the then-outstanding securities entitledto vote generally in the election of directors, respectively, of the resultingor acquiring corporation in such Business Combination (which shall include,without limitation, a corporation which as a result of such transaction ownsthe Company or substantially all of the Company’s assets either directly orthrough one or more subsidiaries) (such resulting or acquiring corporation isreferred to herein as the “Acquiring Corporation”) in substantially the sameproportions as their ownership, immediately prior to such Business Combination,of the Outstanding Company Common Stock and Outstanding Company VotingSecurities, respectively; and (ii) no Person (excluding the AcquiringCorporation, any employee benefit plan (or related trust) maintained orsponsored by the Company or by the Acquiring Corporation or any Exempt Person)which has either (x) filed a Form 13D in respect of its holdings withthe SEC, or (y) in the reasonable opinion of the Company, should havefiled a Form 13D with the SEC in respect of its holdings and itsintentions, beneficially owns, directly or indirectly, 30% or more of the thenoutstanding shares of common stock of the Acquiring Corporation, or of thecombined voting power of the then-outstanding securities of such corporationentitled to vote generally in the election of directors (except to the extentthat such ownership existed prior to the Business Combination); or

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#### **(d)**   approval by thestockholders of the Company of a complete liquidation or dissolution of theCompany (as distinguished from a filing made by the Company under Chapter 11 ofthe Federal Bankruptcy laws).

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#### **1.2**     “Change in ControlDate” means the first date during the Term (as defined in Section 2)on which a Change in Control occurs. Anything in this Agreement to the contrary notwithstanding, if (a) aChange in Control occurs, (b)  the Executive’s employment with the Companyis terminated prior to the date on which the Change in Control occurs, and (c) itis reasonably demonstrated by the Executive that such termination of employment(i) was at the request of a third party who has taken steps reasonablycalculated to effect a Change in Control or (ii) otherwise arose inconnection with or in anticipation of a Change in Control, then for allpurposes of this Agreement the “Change in Control Date” shall mean the dateimmediately prior to the date of such termination of employment.

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#### **1.3**   “Cause” means:

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#### **(a)**   the Executive’s abjectfailure to work cooperatively with the Company’s other officers and senioremployees, as determined in good faith by the CEO, following reasonable noticeand opportunity to cure;

 

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#### **(b)**   the Executive’s grossnegligence or willful misconduct in performing any action, or not performingany action, that has had, or could have, alone or in the aggregate, a materialnegative impact on the Company;

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#### **(c)**   the Executive’s theft,dishonesty, willful misconduct, breach of fiduciary duty for personal profit,or falsification of any Company documents or records;

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#### **(d)**   the Executive’sunauthorized use, misappropriation, destruction or diversion of any materialasset or corporate opportunity of the Company (including, without limitation,the Executive’s improper use or disclosure of the Company’s confidential orproprietary information or his failure to abide by Company policies relating toconfidentiality);

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#### **(e)**   any intentional act bythe Executive which has a material detrimental effect on the Company’sreputation or business;

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#### **(f)**    any material breach bythe Executive of this Agreement and any other agreement between the Company andExecutive, which breach is not cured within fifteen (15) days after Executivereceives notice from the Company specifying such breach; or

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#### **(g)**   the Executive’sconviction (including any plea of guilty or *nolocontendere*) of any criminal act involving fraud, dishonesty,misappropriation or moral turpitude, or which impairs the Employee’s ability toperform his duties with the Company.

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## **1.4**     “InvoluntaryTermination” means the Executive’s voluntary resignation from hisemployment within sixty (60) days following (i) a material diminution inthe Executive’s authority, duties or responsibilities; provided, however, thata change in job position (including a change in title) shall not be deemed a “materialdiminution” unless the Executive’s new authority, duties or responsibilitiesare materially reduced from the prior authority, duties or responsibilities, (ii) amaterial diminution in the Executive’s base compensation, (iii) a materialdiminution in the authority, duties, or responsibilities of the supervisor towhom the Executive is required to report, (iv) a material change in the geographiclocation at which the Executive must perform his duties, which is more than 50miles from the current location, or (v) a material breach by the Companyof the terms of this Agreement, including a failure of the Company to obtain anassumption of this Agreement at or prior to the effectiveness of any successionpursuant to Section 6.1; provided that the Executive’s termination ofemployment shall not be deemed to be an Involuntary Termination unless theCompany shall have been provided with advance notice of the termination and aperiod of not less than 30 days to cure the event or condition described in(i), (ii), (iii) or (iv), and shall have either failed to so cure theevent or waived its right to cure the event.

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

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## **1.5**     “Disability”means the Executive’s absence from the full-time performance of the Executive’sduties with the Company for 180 consecutive calendar days as a result ofincapacity due to mental or physical illness which is determined to be totaland permanent by a physician selected by the Company or its insurers andacceptable to the Executive or the Executive’s legal representative.

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# 2.     Term ofAgreement.  This Agreement, andall rights and obligations of the parties hereunder, shall take effect upon theEffective Date and shall expire upon the first to occur of (a) theexpiration of the Term (as defined below) if a Change in Control has notoccurred during the Term, (b) the date the Executive no longer holds a KeyPosition if negotiations relating to a Change in Control have not commencedprior thereto, (c) the date 24 months after the Change in Control Date, ifthe Executive is still employed by the Company as of such later date, or (d) thefulfillment by the Company of all of its obligations under Sections 4 and5.2 if the Executive’s employment with the Company terminates withintwenty-four (24) months following the Change in Control Date.  “Term” shall mean the period commencing as ofthe Effective Date and continuing in effect through December 31, 2009,provided, however, that commencing on January 1, 2010 and each January 1thereafter, the Term shall be

 

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# automatically extended for one additional yearunless, not later than 60 days prior to the scheduled expiration of the Term(or any extension thereof), the Company shall have given the Executive writtennotice that the Term will not be extended.

 

# 3.     EmploymentStatus; Termination Following Change in Control.

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## **3.1.**    Not an EmploymentContract. The Executive acknowledges that this Agreement does not constitute acontract of employment or impose on the Company any obligation to retain theExecutive as an employee and that this Agreement does not prevent the Executivefrom terminating employment at any time. Except as otherwise provided in Section 1.2, if the Executive’semployment with the Company terminates for any reason and subsequently a Changein Control shall occur, the Executive shall not be entitled to any benefitshereunder.

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## **3.2.**    Termination ofEmployment.

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#### **(a)**   If the Change inControl Date occurs during the Term, any termination of the Executive’semployment by the Company or by the Executive within 24 months following theChange in Control Date (other than due to the death of the Executive) shall becommunicated by a written notice to the other party hereto (the “Notice ofTermination”), given in accordance with Section 7.  Any Notice of Termination shall: (i) indicatethe specific termination provision (if any) of this Agreement relied upon bythe party giving such notice, (ii) to the extent applicable, set forth inreasonable detail the facts and circumstances claimed to provide a basis fortermination of the Executive’s employment under the provision so indicated, and(iii) specify the Date of Termination (as defined below).  The effective date of an employmenttermination (the “Date of Termination”) shall be the close of business on thedate specified in the Notice of Termination (which date may not be less than 15days or more than 120 days after the date of delivery of such Notice ofTermination), in the case of a termination other than one due to the Executive’sdeath, or the date of the Executive’s death, as the case may be.  In the event the Company fails to satisfy therequirements of Section 3.2(a) regarding a Notice of Termination, thepurported termination of the Executive’s employment pursuant to such Notice ofTermination shall not be effective for purposes of this Agreement.

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#### **(b)**   The failure by theExecutive or the Company to set forth in the Notice of Termination any fact orcircumstance which contributes to a showing of Involuntary Termination or Causeshall not waive any right of the Executive or the Company, respectively,hereunder or preclude the Executive or the Company, respectively, fromasserting any such fact or circumstance in enforcing the Executive’s or theCompany’s rights hereunder.

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#### **(c)**   Any Notice ofTermination for Cause given by the Company must be given within 90 days of theoccurrence of the event(s) or circumstance(s) which constitute(s) Cause.

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#### **(d)**   Any Notice ofInvoluntary Termination given by the Executive to the Company must be givenwithin sixty (60) days of the occurrence of the event(s) or circumstance(s) whichconstitute(s) an Involuntary Termination.

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#### **4.**     Benefits to Executive.

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## **4.1.**    Stock Accelerationfollowing a Change in Control and upon the Termination of Executive’sEmployment.  If a Change in Control occurs during theTerm, then, following the Change in Control Date and effective upon anInvoluntary Termination of the Executive’s employment or termination of theExecutive’s employment by the Company (other than for Cause, Disability ordeath) then, (a) each Stock Appreciation Right (“SAR”) issued by theCompany to the Executive shall immediately become vested and exercisable infull; (b) each outstanding option to purchase shares of Common Stock ofthe Company held by the Executive shall become immediately exercisable in fulland will no longer be subject to a right of repurchase, if any, by the Company;(c) each outstanding restricted stock award shall be deemed to be fullyvested and will no longer be subject to a right of repurchase by the Company,and (d) notwithstanding any provision in any applicable stock option orother equity instrument agreement to the contrary, each such option, SAR oralternative equity instrument shall continue to be exercisable by the Executive(to the extent such option was exercisable on the Date of Termination or becameexercisable pursuant

 

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## **to this Section 4.1) for the duration of the term setforth in the stock option agreement, SAR or other equity instrument agreementapplicable thereto  as if termination ofemployment had not occurred.**

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## **4.2.**    Compensation.  If the Change in Control Dateoccurs during the Term and the Executive’s employment with the Companyterminates within 24 months following the Change in Control Date, then theExecutive shall be entitled to the following benefits:

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#### **(a)**   Termination WithoutCause or Involuntary Termination.  If the Executive’s employment with theCompany is terminated by the Company (other than for Cause, Disability ordeath) or by the Executive because of an Involuntary Termination, in eithercase within 24 months following the Change in Control Date, then the Executiveshall be entitled to the following benefits:

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##### **(i)**            the Company shall pay to the Executive in a lump sum incash within 30 days after the Date of Termination (or such later date as may berequired by Section 4.2 (d)) the sum of (A) the Executive’s basesalary through the Date of Termination, (B) the product of (x) the Executive’starget annual bonus (irrespective of the level of attainment to date of anytarget bonus benchmarks such as firm wide or individual objectives or hurdles)for the fiscal year in which the Date of Termination occurs and (y) afraction, the numerator of which is the number of days in the current fiscalyear through the Date of Termination, and the denominator of which is 365, and (C) anyaccrued vacation pay, in each case to the extent not previously paid (the sumof the amounts described in clauses (A), (B), and (C) shall be hereinafterreferred to as the “Accrued Obligations”);

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##### **(ii)**           the Executive shall receive regular monthly installmentsfor a one-year period equal to one twelfth (1/12th) of the Executive’sannual salary (at the rate in effect when the Change in Control Date occurs andbefore reduction of taxes or other withholdings or deductions such as a 401(k) Plancontribution or like payment) multiplied by a factor of two (2.0x) times, withsuch monthly payments commencing on the first regular monthly payroll date nextfollowing the date of termination or such later date as may be required by Section 4.2(d);and

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##### **(iii)**          the Executive shall receive regular monthly installmentsfor a one-year period equal to one twelfth (1/12th) of the Executive’starget annual bonus (irrespective of the level of attainment to date of anytarget bonus benchmarks, such as firm-wide or individual objectives or hurdles)for the fiscal year in which the Change in Control Date occurs and beforereduction of taxes or other withholdings or deductions such as a 401(k) Plancontribution or like payment) multiplied by a factor of two (2.0x) times, withsuch monthly payments commencing on the payroll date next following the date oftermination or such later date as may be required by Section 4.2(d);

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##### **(iv)**          for 18 months after the Date of Termination, or such longerperiod as may be provided by the terms of the appropriate plan, program,practice or policy, the Company shall continue to provide benefits to theExecutive and the Executive’s family at least equal to those which would havebeen provided to them if the Executive’s employment had not been terminated, inaccordance with the applicable Benefit Plans in effect immediately prior to theChange in Control Date or, if more favorable to the Executive and his family,in effect generally at any time thereafter with respect to other peerexecutives of the Company and its affiliated companies; provided, however,that if the Executive becomes reemployed by another employer and is eligible toreceive a particular type of benefit (e.g., health insurance benefits) fromsuch employer on terms at least as favorable to the Executive and his family asthose being provided by the Company, then the Company shall no longer berequired to provide those particular benefits to the Executive and his family;

 

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##### **(v)**           to the extent not previously paid or provided, the Companyshall pay or provide to the Executive when due, without accelerating the paymentdate of any deferred compensation, any other amounts or benefits required to bepaid or provided or which the Executive is eligible to receive following theExecutive’s termination of employment under any plan, program, policy,practice, contract or agreement of the Company and its affiliated companies(such other amounts and benefits shall be hereinafter referred to as the “OtherBenefits”); and

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##### **(vi)**          the Company shall make a one-time payment to the Executiveof $5,000 to cover some or all of the lease payments remaining due on theExecutive’s leased vehicle;

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#### **(b)**   Resignation; orTermination for Death or Disability.  If the Executive voluntarilyresigns from his employment with the Company within 24 months following theChange in Control Date, excluding a resignation because of an InvoluntaryTermination, or if the Executive’s employment with the Company is terminated byreason of the Executive’s death or Disability within 24 months following theChange in Control Date, then the Company shall (i) pay the Executive (orhis estate, if applicable), in a lump sum in cash within 30 days after the Dateof Termination, the Accrued Obligations and (ii) timely pay or provide tothe Executive the Other Benefits.

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#### **(c)**   Termination for Cause.  If the Company terminates theExecutive’s employment with the Company for Cause within 24 months followingthe Change in Control Date, then the Company shall (i) pay the Executive,in a lump sum in cash within 30 days after the Date of Termination, the sum of (A) theExecutive’s annual base salary through the Date of Termination and (B) theamount of any compensation previously deferred by the Executive, in each caseto the extent not previously paid, and (ii) timely pay or provide to theExecutive the Other Benefits.

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#### **(d)**   Section 409AMatters. It is the intent of the parties hereto that, to the extent permitted,all payments and benefits provided pursuant to this Agreement qualify asshort-term deferrals, as defined in Treasury Regulation §1.409A-1(a)(4),separation pay due to an involuntary separation from service under TreasuryRegulation §1.409A-1(b)(9)(iii), reimbursement of medical benefits underTreasury Regulation §1.409A-1(b)(9)(v)(B), and/or limited payments, as definedin Treasury Regulation §1.409A-1(b)(9)(v)(D). If (a) it is determined that any payments or benefits providedpursuant to this Agreement that are paid upon “separation from service” (asthat term is used in Section 409A of the Internal Revenue Code of 1986, asamended (the “Code”), and any related regulations or other applicable guidancepromulgated thereunder (collectively, “Section 409A”)) constitute deferredcompensation for purposes of Section 409A (after taking into account theexceptions listed in the prior sentence and/or any other applicable exceptions)and (b) the Executive is a “specified employee” (as that term is used in Section 409A)on the date on which the separation from service occurs, such payments orbenefits (or portions thereof) that constitute deferred compensation and thatare to be paid or provided during the six (6) month period following theExecutive’s separation from service shall not be paid or provided until thefirst business day after the date that is six (6) months following theExecutive’s separation from service or, if the Executive dies during such six (6) monthperiod, on the first business day after the date of the Executive’s death.  The payment that is made pursuant to theprior sentence shall include the cumulative amount of any amounts that couldnot be paid during the six (6) month period.  All other payments or benefits under thisAgreement shall be paid or provided in accordance with the applicable provisionof this Agreement.  Each installment paymentunder this Agreement shall be treated as a separate payment as defined underTreasury Regulation §1.409A-2(b)(2).  Forall purposes under this Agreement, references to termination of the Executive’semployment and similar terms shall be interpreted to mean “separation fromservice,” as that term is used in Section 409A, and the Executive’semployment shall not be deemed to have terminated for purposes of Section 4unless and until a separation from service shall have occurred for purposes of Section 409A.

 

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## **4.3**     Taxes.

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# a)             In the eventthat the Company undergoes a “Change in Ownership or Control” (as definedbelow), the Company shall, within 30 days after each date on which theExecutive becomes entitled to receive (whether or not then due) a ContingentCompensation Payment (as defined below) relating to such Change in Ownership orControl, determine and notify the Executive (with reasonable detail regardingthe basis for its determinations) (i) which of the payments or benefitsdue to the Executive (under this Agreement or otherwise) following such Changein Ownership or Control constitute Contingent Compensation Payments and (ii) theamount, if any, of the excise tax (the “Excise Tax”) which would be payable bythe Executive pursuant to Section 4999 of the Code, with respect to suchContingent Compensation Payment but for the operation of this Section 4.3.  If it is determined by the Company and theExecutive that an Excise Tax would be payable by the Executive, then in suchinstance either (i) the Contingent Compensation Payments shall be scaledback (with the latest-to-be-paid of such Payments to be withheld for thispurpose) such that the Contingent Compensation Payments would trigger benefitswhich, in the aggregate, would generate $1.00 less than the threshold which wouldotherwise cause Contingent Compensation Payments to be subject to the ExciseTax, or (ii) if the value of the Contingent Compensation Payments is suchthat, after deducting any applicable Excise Tax, there would be an amount ofContingent Compensation Payments remaining available to him, so that theExecutive would receive a net benefit (after deducting all Excise Tax) that isgreater than the benefit the Executive would have retained had his ContingentCompensation Payments been reduced to avoid the Excise Tax, there shall be nowithholding or deducting Contingent Compensation Payments to be made to theExecutive.

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# b)            For purposesof this Section 4.3, the following terms shall have the followingrespective meanings:

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## **(i)**            “Change in Ownership or Control” shall mean a change in the ownershipor effective control of the Company or in the ownership of a substantialportion of the assets of the Company determined in accordance with Section 280G(b)(2) ofthe Code.

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## **(ii)**           “Contingent Compensation Payment” shall mean any payment (or benefit)in the nature of compensation that is made or made available (under thisAgreement or otherwise) to a “disqualified individual” (as defined in Section 280G(c) ofthe Code) and that is contingent (within the meaning of Section 280G(b)(2)(A)(i) ofthe Code) on a Change in Ownership or Control of the Company.

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## **c)**                 The provisions of this Section 4.3 are intendedto apply to any and all payments or benefits available to the Executive underthis Agreement or any other agreement or plan of the Company under which the Executive receives Contingent Compensation Payments.

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## **4.4**     Mitigation.  The Executive shall not be required tomitigate the amount of any payment or benefits provided for in this Section 4by seeking other employment or otherwise. Further, except as provided in Section 4.2(a)(iii),the amount of any payment or benefits provided for in this Section 4 shallnot be reduced by any compensation earned by the Executive as a result ofemployment by another employer, by retirement benefits, by offset against anyamount claimed to be owed by the Executive to the Company, or otherwise.

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## **4.5**     Outplacement Services,and Payment in Lieu of Continuing Lease Payments on Company Car.

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## **(a)**   In the event theExecutive is terminated by the Company (other than for Cause, Disability ordeath), or the Executive terminates employment because of an InvoluntaryTermination, within 24 months following the Change in Control Date, the Companyshall provide outplacement services through one or more outside firms of theExecutive’s choosing up to an aggregate of $10,000, with such services toextend until the earlier of (i) 12 months following the termination ofExecutive’s employment or (ii) the date the Executive secures full timeemployment.

 

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## **(b)**   The Company shall makea one-time payment to the Executive of $5,000.00 to cover some or all of thelease payments remaining due on the Executive’s leased vehicle.  The Executive may retain possession of theleased vehicle to the end of the lease term provided that the Executive shallpay any lease payments due in excess of $5,000.

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## **5.**     Disputes.

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## **5.1.**    Settlement ofDisputes; Arbitration.  All claims by the Executive for benefitsunder this Agreement or to resolve other disputes hereunder shall be directedto the General Counsel of the Company and shall be in writing.  Any denial by the Company of a claim forbenefits under this Agreement shall be delivered to the Executive in writingand shall set forth the specific reasons for the denial and the specificprovisions of this Agreement relied upon. The Company shall afford a reasonable opportunity to the Executive for areview of the decision denying a claim. Any further dispute or controversy arising under or in connection withthis Agreement shall be settled exclusively by arbitration in Boston,Massachusetts, within thirty (30) days of being introduced into arbitration,and shall be in accordance with the rules of the American ArbitrationAssociation then in effect.  Judgment maybe entered on the arbitrator’s award in any court having jurisdiction.

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## **5.2.**    Expenses.  The Company agrees to pay, asincurred, to the full extent permitted by law, all legal, accounting and otherfees and expenses which the Executive may reasonably incur as a result of anyclaim or contest (regardless of the outcome thereof) by the Company, theExecutive or others regarding the validity or enforceability of, or liabilityunder, any provision of this Agreement or any guarantee of performance thereof(including as a result of any contest by the Executive regarding the amount ofany payment or benefits pursuant to this Agreement), plus in each case intereston any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) ofthe Code; provided, however, that (a) the amount of such fees and expensespaid (or reimbursed) by the Company during any calendar year may not affect theamount of fees and expenses paid (or reimbursed) by the Company in any othercalendar year, (b) payment (or reimbursement) of fees and expenses by theCompany shall be made on or before the last day of the calendar year followingthe calendar year in which the fees and expenses were incurred, (c) theExecutive’s right to reasonable fees and expenses is not subject to liquidationor exchange for another benefit and (d) this obligation shall survive thetermination of this Agreement and shall remain in effect until the applicablestatute of limitations has expired with respect to any litigation to enforce theterms of this Agreement.

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# 6.     Successors.

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## **6.1.**    Successor to Company.  The Company shall require anysuccessor (whether direct or indirect, by purchase, merger, consolidation orotherwise) to all or substantially all of the business (including pursuant toacquisition of all or substantially all of the Common Stock of the Company) orassets of the Company expressly to assume and agree to perform this Agreementto the same extent that the Company would be required to perform it if no suchsuccession had taken place.  Failure ofthe Company to obtain an assumption of this Agreement at or prior to theeffectiveness of any succession shall be a breach of this Agreement and shallconstitute Involuntary Termination if the Executive elects to terminateemployment, except that for purposes of implementing the foregoing, the date onwhich any such succession becomes effective shall be deemed the Date ofTermination.  As used in this Agreement, “Company”shall mean the Company as defined above and any successor to its business orassets as aforesaid which assumes and agrees to perform this Agreement, byoperation of law or otherwise.

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## **6.2.**    Successor to Executive.  This Agreement shall inure tothe benefit of and be enforceable by the Executive’s personal or legal representatives,executors, administrators, successors, heirs, distributees, devisees andlegatees.  If the Executive should diewhile any amount would still be payable to the Executive or his familyhereunder if the Executive had continued to live, all such amounts, unlessotherwise provided herein, shall be paid in accordance with the terms of thisAgreement to the executors, personal representatives or administrators of theExecutive’s estate.

 

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# 7.     Agreement tobe Binding on Successor. The Company shall require any successor (whether direct orindirect, by purchase, merger, consolidation, reorganization or otherwise) toall or substantially all of the business or assets of the Company (the “Acquisition”), as acondition precedent to the Acquisition, to expressly assume andagree  in writing, with a copy to you, to perform this Agreementin the same manner and to the same extent as the Company would be required toperform this Agreement as if no such succession had takenplace.  You acknowledge and agree, and the Company acknowledges andagrees, that, without limitation to any other provision of this Agreementwhich is also “material”, this provision is a materialterm of this Agreement and an important clause benefiting you,to assure you that the obligation of Candela to provide you with theexisting benefits made available under this Agreement, areadhered to by any successor to the Company, and the provision also benefits theCompany in that the assurance to you afforded by this provision is an importantretention incentive to have you remain in the employment of the Company.

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# 8.     Notice.  All notices, instructions and othercommunications given hereunder or in connection herewith shall be inwriting.  Any such notice, instruction orcommunication shall be sent either (i) by registered or certified mail,return receipt requested, postage prepaid, or (ii) prepaid via a reputablenationwide overnight courier service, in each case addressed to the Company, atCandela Corporation, Attention of General Counsel, 530 Boston Post Road,Wayland, MA 01778, and to the Executive at[                                   ](or to such other address as either the Company or the Executive may havefurnished to the other in writing in accordance herewith).  Any such notice, instruction or communicationshall be deemed to have been delivered five business days after it is sent byregistered or certified mail, return receipt requested, postage prepaid, or onebusiness day after it is sent via a reputable nationwide overnight courierservice. Either party may give any notice, instruction or other communicationhereunder using any other means, but no such notice, instruction or othercommunication shall be deemed to have been duly delivered unless and until itactually is received by the party for whom it is intended.

#  

# 9.     Miscellaneous.

#  

## **9.1.**    Employment bySubsidiary.  For purposes of this Agreement, the Executive’semployment with the Company shall not be deemed to have terminated solely as aresult of the Executive continuing to be employed by a wholly-owned subsidiaryof the Company.

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## **9.2.**    Severability.  The invalidity orunenforceability of any provision of this Agreement shall not affect thevalidity or enforceability of any other provision of this Agreement, whichshall remain in full force and effect.

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## **9.3.**    Injunctive Relief.  The Company and the Executiveagree that any breach of this Agreement by the Company is likely to cause theExecutive substantial and irrevocable damage and therefore, in the event of anysuch breach, in addition to such other remedies which may be available, theExecutive shall have the right to specific performance and injunctive relief.

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## **9.4.**    Governing Law.  The validity, interpretation,construction and performance of this Agreement shall be governed by theinternal laws of the Commonwealth of Massachusetts, without regard to conflictsof law principles.

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## **9.5.**    Waivers.  No waiver by the Executive atany time of any breach of, or compliance with, any provision of this Agreementto be performed by the Company shall be deemed a waiver of that or any otherprovision at any subsequent time.

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## **9.6.**    Counterparts.  This Agreement may be executedin counterparts, each of which shall be deemed to be an original but both ofwhich together shall constitute one and the same instrument.

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## **9.7.**    Tax Withholding.  Any payments provided forhereunder shall be paid net of any applicable tax withholding required underfederal, state or local law.

## ** **

## **9.8.**    Release of Claims.  The Company shall have noobligation to make any payments or provide any benefits pursuant to thisAgreement unless (i) you agree to sign and deliver to the General Counselof the Company a release of claims in substantially the same form attachedhereto as

 

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## **Exhibit A** or Exhibit B, as applicable (the “Release”) and (ii) theRelease has become non-revocable by the sixtieth (60th) dayfollowing the date of termination of your employment.

## ** **

## **9.9.**    Entire Agreement.  This Agreement sets forth theentire agreement of the parties hereto in respect of the subject mattercontained herein and supersedes all prior agreements, promises, covenants,arrangements, communications, representations or warranties, whether oral orwritten, by any officer, employee or representative of any party hereto inrespect of the subject matter contained herein; and any prior agreement of theparties hereto in respect of the subject matter contained herein is herebyterminated and cancelled. Notwithstanding the foregoing, the provisions of theExecutive’s Employment Agreement shall not be superceded by, modified by, orsubject to the terms of Section 4.3 of, this Agreement; provided, however,that the Executive shall in no event be entitled to receive severance paymentsor benefits under the Employment Agreement if he is entitled to receiveseverance payments or benefits under this Agreement.

## ** **

## **9.10.**                Amendments.  This Agreement may be amended or modifiedonly by a written instrument executed by both the Company and the Executive.

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## **[*The rest of this page intentionally left blank.*]**

 

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**Form ofRelease of Claims**

 

**(Exhibit A:For Residents of States Other than California)**

 

In consideration for receiving benefitspursuant to the Candela Corporation Senior Officer Executive RetentionAgreement dated [                              ]between you and Candela Corporation. (the “Company”) (the “Agreement”), you, onbehalf of yourself and your representatives, agents, estate, heirs, successorsand assigns, agree to and do hereby forever waive, release and discharge theCompany, and each of its affiliated or related entities, parents, subsidiaries,predecessors, successors, assigns, divisions, owners, stockholders, partners,directors, officers, attorneys, insurers, benefit plans, employees and agents,whether previously or hereinafter affiliated in any manner, as well as allpersons or entities acting by, through, or in concert with any of them(collectively, the “Released Parties”), from any and all claims (other than “ExcludedClaims” as hereinafter defined), debts, contracts, obligations, promises,controversies, agreements, liabilities, demands, wage claims, expenses, chargesof discrimination, harassment or retaliation, disputes, agreements, damages,attorneys’ fees, or complaints of any nature whatsoever, whether or not nowknown, suspected, claimed, matured or unmatured, existing or contingent, fromthe beginning of time until the moment you have signed this Agreement, againstthe Released Parties (whether directly or indirectly), or any of them, byreason of any act, event or omission concerning any matter, cause or thing,including, without limiting the generality of the foregoing, any claims relatedto or arising out of (i) your employment or its termination, (ii) any contract or agreement (express orimplied) between you and any of the Released Parties, (iii) any tort ortort-type claim, (iv) any federal, state or governmental constitution,statute, regulation or ordinance, including but not limited to the U.S.Constitution; Title VII of the Civil Rights Act of 1964, as amended; theCivil Rights Act of 1991; the Age Discrimination in Employment Act of 1967, asamended (including the Older Workers Benefit Protection Act); the Equal Pay Actof 1963, as amended; the Americans With Disabilities Act of 1990; the Familyand Medical Leave Act of 1993; the Worker Adjustment Retraining andNotification Act; the Employee Retirement Income Security Act of 1974; the FairLabor Standards Act; any applicable Executive Order Programs; any similar stateor local statutes or laws; and any other federal, state, or local civil orhuman rights law, (v) any public policy, contract or tort law, or undercommon law, (vi) any policies, practices or procedures of the Company, (vii) anyclaim for wrongful discharge, breach of contract, infliction of emotionaldistress, defamation, (vii) any claim for costs, fees, or other expenses,including attorneys’ fees incurred in these matters, (viii) any impairmentof your ability to obtain subsequent employment, and (ix) any permanent ortemporary disability or loss of future earnings.  It is acknowledged that you may be entitledto satisfaction by the Company of claims you may presently have, or may in thefuture have, from indemnification arising out of the performance of your dutiesas an officer of the Company, pursuant to the terms of the Company’s charter,or its By-laws, or pursuant to the provisions of one or more directors’ andofficers’ insurance (D&O) policies. Any such claim brought by you shall be considered an Excluded Claim, butit shall not be presumed that any such claim is valid on its face.

 

For the purpose of implementing a full and complete release anddischarge of the Released Parties, you expressly acknowledge that thisAgreement is intended to include and does include in its effect, withoutlimitation, all claims which you do not know or suspect to exist in your favoragainst the Released Parties, or any of them, at the moment of executionhereof, and that this Agreement expressly contemplates the extinguishment ofall such claims.

 

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**Form ofRelease of Claims**

 

**(Exhibit B:For California Residents)**

 

In consideration for receiving benefitspursuant to the Candela Corporation Senior Officer Executive RetentionAgreement dated [                            ]between you and Candela Corporation. (the “Company”) (the “Agreement”), you, onbehalf of yourself and your representatives, agents, estate, heirs, successorsand assigns, agree to and do hereby forever waive, release and discharge theCompany, and each of its affiliated or related entities, parents, subsidiaries,predecessors, successors, assigns, divisions, owners, stockholders, partners,directors, officers, attorneys, insurers, benefit plans, employees and agents,whether previously or hereinafter affiliated in any manner, as well as allpersons or entities acting by, through, or in concert with any of them(collectively, the “Released Parties”), from any and all claims (other than “ExcludedClaims” as hereinafter defined), debts, contracts, obligations, promises,controversies, agreements, liabilities, demands, wage claims, expenses, chargesof discrimination, harassment or retaliation, disputes, agreements, damages,attorneys’ fees, or complaints of any nature whatsoever, whether or not nowknown, suspected, claimed, matured or unmatured, existing or contingent, fromthe beginning of time until the moment you have signed this Agreement, againstthe Released Parties (whether directly or indirectly), or any of them, byreason of any act, event or omission concerning any matter, cause or thing,including, without limiting the generality of the foregoing, any claims relatedto or arising out of (i) your employment or its termination, (ii) any contract or agreement (express orimplied) between you and any of the Released Parties, (iii) any tort ortort-type claim, (iv) any federal, state or governmental constitution,statute, regulation or ordinance, including but not limited to the U.S.Constitution; Title VII of the Civil Rights Act of 1964, as amended; theCivil Rights Act of 1991; the Age Discrimination in Employment Act of 1967, asamended (including the Older Workers Benefit Protection Act); the Equal Pay Actof 1963, as amended; the Americans With Disabilities Act of 1990; the Familyand Medical Leave Act of 1993; the Worker Adjustment Retraining andNotification Act; the Employee Retirement Income Security Act of 1974; the FairLabor Standards Act; any applicable Executive Order Programs; any similar stateor local statutes or laws; and any other federal, state, or local civil orhuman rights law, (v) any public policy, contract or tort law, or undercommon law, (vi) any policies, practices or procedures of the Company, (vii) anyclaim for wrongful discharge, breach of contract, infliction of emotionaldistress, defamation, (vii) any claim for costs, fees, or other expenses,including attorneys’ fees incurred in these matters, (viii) any impairmentof your ability to obtain subsequent employment, and (ix) any permanent ortemporary disability or loss of future earnings.  It is acknowledged that you may be entitledto satisfaction by the Company of claims you may presently have, or may in thefuture have, from indemnification arising out of the performance of your dutiesas an officer of the Company, pursuant to the terms of the Company’s charter,or its By-laws, or pursuant to the provisions of one or more directors’ andofficers’ insurance (D&O) policies. Any such claim brought by you shall be considered an Excluded Claim, butit shall not be presumed that any such claim is valid on its face.

 

This Agreement includes a waiver of anyrights you may have under Section 1542 of the California Civil Code, orany other similar state statutes or laws, regarding the waiver of unknownclaims.

 

Section 1542 states:

 

“A GENERAL RELEASE DOESNOT EXTEND TO CLAIMS WHICH THE EMPLOYEE DOES NOT KNOW OR SUSPECT TO EXIST INHIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVEMATERIALLY AFFECTED HIS SETTLEMENT WITH THE EMPLOYER.”

 

Notwithstanding theprovisions of Section 1542, or any similar state statutes or laws, and forthe purpose of implementing a full and complete release and discharge of theReleased Parties, you expressly acknowledge that this Agreement is intended toinclude and does include in its effect, without limitation, all claims whichyou do not know or suspect to exist in your favor against the Released Parties,or any of them, at the moment  ofexecution hereof, and that this Agreement expressly contemplates theextinguishment of all such claims.

 

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