##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K/A
 (Amendment No. 1)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended June 30, 2008
Commission File Number 0-20127
 Escalon Medical Corp.
 (Exact name of registrant as specified in its charter)
 Pennsylvania
    
    33-0272839(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 435 Devon Park Drive, Building 100, Wayne, PA 19087
(Address of principal executive offices, including zip code)
 (610) 688-6830
(Registrants telephone number, including area code)
 Securities Registered Pursuant to Section 12(b) of the Act:
 Common Stock, par value $0.001
    
    NASDAQ Capital Market(Title of class)
    
    (Name of each exchangeon which registered)
 Securities Registered Pursuant to Section 12(g) of the Act: NONE
 o þ
 o þ
 þ o
 þ o
  Large accelerated filer
o

    

  Accelerated filer
o

    

    Non-accelerated filer o
(Do not check if a smaller reporting company)

  

    Smaller reporting company
þ
 o þ




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TABLE OF CONTENTS  Part III.Item 10. Directors and Executive Officers and Corporate GovernanceItem 11. Executive CompensationITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersItem 13. Certain Relationships and Related Transactions, and Director Independence.ITEM 14. Principal Accounting Fees and ServicesSignaturesEXHIBIT 31.1EXHIBIT 31.2    Table of Contents  
 Part III.
 
 Item 10. Directors and Executive Officers and Corporate Governance
 DIRECTORS AND EXECUTIVE OFFICERS
  Name
    
    Age
    
    PositionRichard J. DePiano
    
    
    67
    
    
    Chairman and Chief Executive OfficerRichard J. DePiano, Jr.
    
    
    42
    
    
    President and General CounselRobert M. OConnor
    
    
    47
    
    
    Chief Financial OfficerMark G. Wallace
    
    
    39
    
    
    Chief Operating OfficerAnthony J. Coppola
    
    
    71
    
    
    DirectorJay L. Federman
    
    
    70
    
    
    DirectorWilliam L.G. Kwan
    
    
    67
    
    
    DirectorLisa A. Napolitano
    
    
    45
    
    
    DirectorFred G. Choate
    
    
    62
    
    
    Director
     2




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Section 16(a) Beneficial Ownership Reporting Compliance
  3




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Code of Conduct and Ethics
  Audit Committee Members and Financial Expert
  
 Item 11. Executive Compensation
 COMPENSATION DISCUSSION AND ANALYSIS
 Introduction
    Objectives of Compensation Program
   4




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What Our Compensation Program is Designed to Reward
   Elements of Companys Compensation Plan and How Each Element Relates to Objectives
  Base Salaries
  Bonus
  Long-Term Incentives
  5
    Table of Contents    How Amounts Were Selected for Each Element of an Executives Compensation
    Accounting and Tax Considerations
   Overview of Executive Employment Agreements and 2008 Equity-Based Awards
  6




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
    
    If Mr. DePiano retires at age 65 or older, we are obligated to pay the executive $8,000
per month for life, with payments commencing the month after retirement. If Mr. DePiano
were to die within a period of three years after such retirement, we would be obligated to
continue making such payments until a minimum of 36 monthly payments have been made to the
covered executive and his beneficiaries in the aggregate.
    
    If Mr. DePiano dies before his retirement, while employed by us, we would be obligated
to make 36 monthly payments to his beneficiaries of $8,000 per month commencing in the
month after his death.
    
    If Mr. DePiano were to become permanently disabled while employed by us, we would be
obligated to pay the executive $8,000 per month for life, with payments commencing the
month after he suffers such disability. If Mr. DePiano were to die within three years
after suffering such disability, we would be obligated to continue making such payments
until a minimum of 36 monthly payments have been made to the covered executive and his
beneficiaries in the aggregate.
    
    If Mr. DePianos employment with us is terminated by the Company, prior to him
attaining age 65 or if he terminates his employment with us for good reason, as defined in
the agreement, we would be obligated to pay him $8,000 per month for life. If Mr. DePiano
were to die within a period of three years after such termination, we would be obligated
to continue making such payments until a minimum of 36 monthly payments have been made to
him and his beneficiaries in the aggregate.
   7




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Compensation of Named Executive Officers
 Summary Compensation Table
  Pension Valueand NonqualifiedName and
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-Equity
    
    DeferredPrincipal
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock
    
    Option
    
    Incentive Plan
    
    Compensation
    
    All OtherPosition
    
    Year
    
    Salary
    
    Bonus
    
    Awards
    
    Awards(1)
    
    Compensation
    
    Earnings
    
    Compensation (2)
    
    TotalRichard J. DePianoChairman and
    
    
    2008
    
    
    $
    336,343
    
    
    $
    
    
    
    $
    
    
    
    $
    57,653
    
    
    $
    
    
    
    $
    
    
    
    $
    19,816
    
    
    $
    413,812Chief Executive Officer
    
    
    2007
    
    
    $
    317,700
    
    
    $
    250,000
    
    
    $
    
    
    
    $
    23,207
    
    
    $
    
    
    
    $
    
    
    
    $
    9,600
    
    
    $
    600,507Richard J. DePiano, Jr.President and
    
    
    2008
    
    
    $
    180,000
    
    
    $
    
    
    
    $
    
    
    
    $
    18,448
    
    
    $
    
    
    
    $
    
    
    
    $
    9,600
    
    
    $
    208,048General Counsel
    
    
    2007
    
    
    $
    127,200
    
    
    $
    80,000
    
    
    $
    
    
    
    $
    7,425
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    214,625Robert M. OConnor
    
    
    2008
    
    
    $
    205,400
    
    
    $
    
    
    
    $
    
    
    
    $
    8,547
    
    
    $
    
    
    
    $
    
    
    
    $
    9,600
    
    
    $
    223,547Chief Financial Officer
    
    
    2007
    
    
    $
    200,000
    
    
    $
    25,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    225,000Mark Wallace
    
    
    2008
    
    
    $
    93,246
    
    
    $
    60,000
    
    
    $
    
    
    
    $
    2,849
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    156,095Chief Operating Officer
 (1)
    
    Represents the dollar amount recognized for financial statement reporting
purposes for the fiscal year ended June 30, 2008, in accordance with FAS 123(R).
Assumptions used in the calculation of these amounts are included in Note 2 to the
Consolidated Financial Statements. There were no forfeitures during 2008. The options
granted to Mr. DePiano, Sr. vest over a two-year period; options granted to Mr. DePiano,
Jr., Mr. OConnor and Mr. Wallace vest over a five-year period years (see Long-Term
Incentives under Compensation Discussion and Analysis). There were no options
exercised by the named executives during the year ended June 30, 2008.(2)
    
    Includes payment of, (a) an automobile allowance and (b) insurance premiums paid
for life and health insurance. 8




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Plan-Based Awards
  Grants of Plan-Based AwardsEstimated Future
    
    Estimated FuturePayouts Under
    
    Payouts UnderNon-Equity Incentive
    
    Equity Incentive
    
    All Other
    
    All OtherPlan Awards
    
    Plan Awards
    
    Stock Awards
    
    Option AwardsGrant DateNumber of
    
    Number of
    
    Exercise or
    
    Fair ValueShares of
    
    Securities
    
    Base Price
    
    of StockGrant
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock or
    
    Underlying
    
    of Option
    
    and OptionName
    
    Date
    
    Threshold
    
    Target
    
    Maximum
    
    Threshold
    
    Target
    
    Maximum
    
    Units
    
    Options
    
    Awards
    
    Award (1)Richard J. DePiano
    
    
    11/13/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,000
    
    
    $
    3.05
    
    
    $
    71,227Richard J. DePiano, Jr.
    
    
    11/13/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,000
    
    
    $
    3.05
    
    
    $
    56,981Robert M. OConnor
    
    
    11/13/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,000
    
    
    $
    3.05
    
    
    $
    56,981Mark Wallace
    
    
    11/13/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    $
    3.05
    
    
    $
    14,245
 
 (1)
    
    Represents the fair value on date of grant in accordance with FAS 123(R). Assumptions
used in the calculation of these amounts are included in Note 2 to the Consolidated Financial
Statements. There were no forfeitures during 2008. The options granted to Mr. DePiano, Sr.
vest over a two-year period; options granted to Mr. DePiano, Jr., Mr. OConnor and Mr. Wallace
vest over a five-year period years (see Long-Term Incentives under Compensation Discussion
and Analysis). There were no options exercised by the named executives during the year ended
June 30, 2008. 9




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Outstanding Equity Awards at Fiscal Year-End2008
  Option AwardsEquityIncentivePlan Awards:Number ofNumber of
    
    Number of
    
    SecuritiesSecurities
    
    Securities
    
    UnderlyingUnderlying
    
    Underlying
    
    Unexercised
    
    Option
    
    OptionUnexercised
    
    Unexercised
    
    Unearned
    
    Exercise
    
    ExpirationName
    
    Options
    
    Options
    
    Options
    
    Price
    
    DateExercisable
    
    UnexercisableRichard J. DePiano
    
    
    41,480
    
    
    
    
    
    
    
    
    
    
    $
    2.13
    
    
    
    4/19/200945,000
    
    
    
    
    
    
    
    
    
    
    $
    2.38
    
    
    
    11/1/201050,000
    
    
    
    
    
    
    
    
    
    
    $
    2.77
    
    
    
    11/1/201110,417
    
    
    
    
    
    
    
    
    
    
    $
    1.45
    
    
    
    8/13/211225,000
    
    
    
    
    
    
    
    
    
    
    $
    6.94
    
    
    
    11/10/201325,000
    
    
    
    
    
    
    
    
    
    
    $
    6.19
    
    
    
    8/17/201440,000
    
    
    
    
    
    
    
    
    
    
    $
    8.06
    
    
    
    8/16/201515,200
    
    
    
    4,800
    
    
    
    4,800
    
    
    $
    2.65
    
    
    
    11/9/20167,293
    
    
    
    17,707
    
    
    
    17,707
    
    
    $
    3.05
    
    
    
    11/13/2017Richard J. DePiano, Jr.
    
    
    700
    
    
    
    
    
    
    
    
    
    
    $
    2.38
    
    
    
    11/1/20101,100
    
    
    
    
    
    
    
    
    
    
    $
    2.77
    
    
    
    11/1/20113,567
    
    
    
    
    
    
    
    
    
    
    $
    1.45
    
    
    
    8/13/211210,000
    
    
    
    
    
    
    
    
    
    
    $
    6.94
    
    
    
    11/10/201325,000
    
    
    
    
    
    
    
    
    
    
    $
    6.19
    
    
    
    8/17/201420,000
    
    
    
    
    
    
    
    
    
    
    $
    8.06
    
    
    
    8/16/20156,334
    
    
    
    13,666
    
    
    
    13,666
    
    
    $
    2.65
    
    
    
    11/9/20162,334
    
    
    
    17,666
    
    
    
    17,666
    
    
    $
    3.05
    
    
    
    11/13/2017Robert M. OConnor
    
    
    60,000
    
    
    
    
    
    
    
    
    
    
    $
    5.05
    
    
    
    6/29/20166,334
    
    
    
    13,666
    
    
    
    13,666
    
    
    $
    3.05
    
    
    
    11/13/2017Mark Wallace
    
    
    584
    
    
    
    4,416
    
    
    
    4,416
    
    
    $
    3.05
    
    
    
    11/13/2017
 (1)
    
    These options were granted under our 1999 Equity Incentive Plan and
have a term of ten years, subject to earlier termination in certain
events. The options granted to Mr. DePiano, Sr. vest over a two-year
period. Options granted to Mr. DePiano, Jr., Mr. OConnor and Mr.
Wallace vest over a five-year period. There were no options exercised
by the named executives during the year ended June 30, 2008. Potential Payments upon Termination or Change-in-Control
  10




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Compensation Committee Report on Executive Compensation
  
 Compensation of Directors
  Compensation Committee Interlocks and Insider Participation
  Director Compensation2008
  EquityIncentivePlan Awards:Number ofSecuritiesUnderlyingNon-Equity
    
    UnexercisedFees Earned or
    
    Stock
    
    Option
    
    Incentive Plan
    
    Unearned
    
    All OtherName
    
    Paid in Cash
    
    Awards
    
    Awards (1)
    
    Compensation
    
    Options
    
    Compensation
    
    TotalAnthony Coppola
    
    $
    
    
    
    $
    
    
    
    $
    24,754
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    24,754Jay L. Federman
    
    $
    
    
    
    $
    
    
    
    $
    24,754
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    24,754William L.G. Kwan
    
    $
    
    
    
    $
    
    
    
    $
    24,754
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    24,754Lisa Napolitano
    
    $
    
    
    
    $
    
    
    
    $
    24,754
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    24,754Fred Choate
    
    $
    
    
    
    $
    
    
    
    $
    24,754
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    24,754
 
 (1)
    
    Represents the dollar amount recognized for financial statement reporting purposes
for the fiscal year ended June 30, 2008, in accordance with FAS 123(R). Assumptions used
in the calculation of these amounts are included in Note 2 to the Consolidated Financial
Statements. There were no forfeitures during 2008. The table below sets forth the
aggregate number of stock options held by each of our non-employee directors who own
options to purchase shares of the Companys common stock as of 11




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June 30, 2008. Options
granted to non-employee directors vest on the date of grant and expire after ten years. Name
    
    Stock OptionsAnthony Coppola
    
    
    45,000Jay L. Federman
    
    
    65,000William L.G. Kwan
    
    
    80,000Lisa Napolitano
    
    
    42,000Fred Choate
    
    
    30,000
 
 ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
 Security Ownership of Certain Beneficial Owners and Management
  Beneficial Ownership TableAmount of
    
    
    
    
    
    Amount ofBeneficial
    
    
    
    
    
    BeneficialOwnership
    
    
    
    
    
    Ownership of
    
    Amount ofof
    
    
    
    
    
    Shares
    
    Aggregate
    
    AggregateOutstanding
    
    Percent
    
    Underlying
    
    Beneficial
    
    Percent ofName
    
    Shares (1)
    
    of Class
    
    Options
    
    Ownership
    
    ClassRichard J. DePiano
    
    
    144,278
    
    
    
    2.2
    %
    
    
    286,897
    
    
    
    431,175
    
    
    
    6.7
    %Richard J. DePiano, Jr.
    
    
    206
    
    
    
    0.0
    %
    
    
    100,367
    
    
    
    100,573
    
    
    
    1.6
    %Robert OConnor
    
    
    
    
    
    
    0.0
    %
    
    
    100,000
    
    
    
    100,000
    
    
    
    1.6
    %Mark Wallace
    
    
    
    
    
    
    0.0
    %
    
    
    47,467
    
    
    
    47,467
    
    
    
    *William L.G. Kwan
    
    
    
    
    
    
    0.0
    %
    
    
    80,000
    
    
    
    80,000
    
    
    
    1.2
    %Jay L. Federman
    
    
    12,072
    
    
    
    0.2
    %
    
    
    65,000
    
    
    
    77,072
    
    
    
    1.2
    %Anthony J. Coppola
    
    
    
    
    
    
    0.0
    %
    
    
    45,000
    
    
    
    45,000
    
    
    
    *Lisa Napolitano
    
    
    
    
    
    
    0.0
    %
    
    
    42,000
    
    
    
    42,000
    
    
    
    *Fred Choate
    
    
    
    
    
    
    0.0
    %
    
    
    30,000
    
    
    
    30,000
    
    
    
    *All Directors and Executive Officers
as a group (9 persons)
    
    
    156,556
    
    
    
    2.4
    %
    
    
    796,731
    
    
    
    953,287
    
    
    
    14.9
    %
 
 (*)
    
    Less than on percent(1)
    
    Information furnished by each individual named. This table includes shares that are owned
jointly, in whole or in part with the persons spouse, or individually by his or her spouse.
No shares held by board members or named executive officers are pledged as collateral. Equity Compensation Plan Information
  12




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Number of securities remainingavailable for future issuanceNumber of Shares to be
    
    Weighted-average exercise
    
    under equity compensation plansissued upon exercise of
    
    price of outstanding stock
    
    (excluding securities reflected inoutstanding stock options
    
    options
    
    column a))Plan Category
    
    (a)
    
    (b)
    
    (c)Equity Compensation
plans approved by
stockholders
    
    
    892,010
    
    
    $
    3.05
    
    
    
    284,070Equity Compensation
plans not approved by
stockholders
    
    
    
    
    
    
    
    
    
    
    892,010
    
    
    $
    3.05
    
    
    
    284,070
 
 Item 13. Certain Relationships and Related Transactions, and Director Independence.
 Related Person Transactions
   Director Independence
  
 ITEM 14. Principal Accounting Fees and Services
  13




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For the years endedJune 30,2008
    
    2007Audit Fees
    
    $
    175,000
    
    
    $
    147,500Audit-Related Fees
    
    $
    
    
    
    $
    Tax Fees
    
    $
    
    
    
    $
    All Other Fees
    
    $
    
    
    
    $
    Total Fees
    
    $
    175,000
    
    
    $
    147,500
   14




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Signatures
  Escalon Medical Corp.
(Registrant)By:
    /s/  Richard J. DePianoRichard J. DePianoChairman and Chief Executive Officer  15