Exhibit 10.6


 


RELIANT TECHNOLOGIES, INC.

NON-EMPLOYEE DIRECTOR COMPENSATION POLICY


 


APPROVED BY THE BOARD:  OCTOBER 12, 2007


 


ARTICLE I



DEFINITIONS


 


1.1                               “Board” will mean the Board of
Directors of the Company.


 


1.2                               “Change in Control”
means any of the following: (a) the date that any one person or persons acting
as a group acquires ownership of Company stock constituting more than fifty
percent (50%) of the total fair market value or total voting power of the stock
of the Company; (b) the date that any one person or persons acting as a group
acquires (or has acquired during the 12-month period ending on the date of the
most recent acquisition by such person or persons) ownership of the stock of
the Company possessing fifty percent (50%) or more of the total voting power of
the stock of the Company; (c) the date that a majority of members of the Board
is replaced during any 12-month period by directors whose appointment or
election is not endorsed by a majority of the members of the Board before the
date of the appointment or election; or (d) the date that any one person or
persons acting as a group acquires assets (or has acquired during the 12-month
period ending on the date of the most recent acquisition by such person or
persons) from the Company that have a total gross fair market value equal to or
more than eighty percent (80%) of the total gross fair market value of all of
the assets of the Company immediately prior to such acquisition or acquisitions.
The determination of whether an event constitutes a Change of Control for
purposes of this Policy will be made in accordance with its definition under
Section 409A of the Code and the regulations and other guidance thereunder, and
will not involve the exercise of any discretionary authority by the Board.


 


1.3                               “Code” will mean the Internal Revenue
Code of 1986, as amended.


 


1.4                               “Common Stock” will mean the common stock
of the Company.


 


1.5                               “Company” means Reliant Technologies,
Inc., a Delaware corporation.


 


1.6                               “Director” will mean a member of the
Board who is not an employee of the Company or any of its subsidiaries. Director
shall also refer to any individual who formerly served as a Director and in
respect of such service was credited with, and continues to have rights
pursuant to, a Stock Account hereunder.


 


1.7                               “Exchange Act” means the Securities
Exchange Act of 1934, as amended.


 


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1.8                               “Fair Market Value Per Share” will
mean the Market Value Per Share, or, if there has been no Public Offering, the
fair market value of the Common Stock as determined in the good faith
discretion of the Board.


 


1.9                               “Fees” will mean amounts earned,
whether in cash or shares of Common Stock, for serving as a member of the
Board, including any committees of the Board, as set forth on Exhibit A hereto
(as such Exhibit A is amended from time to time by the Board). Fees will not
include reimbursement for expenses and will not include any other amounts
earned by a Director for service with the Company or is affiliates.


 


1.10                        “He”, “Him”,
or “His” will apply equally to male and
female members of the Board.


 


1.11                        “Market Value Per Share” will mean,
for any given day, the price per share equal to (i) the last sale price of the
Common Stock on such day on the principal stock exchange on which the Common
Stock may at the time be listed or, (ii) if there will have been no sales on
such exchange on such day, the average of the closing bid and asked prices of
the Common Stock on such exchange on such day or, (iii) if there is no such bid
and asked price on such day, the average of the closing bid and asked prices of
the Common Stock on the next preceding date when such bid and asked price
occurred or, (iv) if the Common Stock will not be so listed, the closing sales
price of the Common Stock as reported by NASDAQ on such day in the
over-the-counter market.


 


1.12                        “Policy” will mean the Reliant
Technologies, Inc. Non-Employee Director Compensation Policy, as it may be
amended from time to time.


 


1.13                        “Public Offering” will mean the sale
of shares of Common Stock to the public subsequent to the date hereof pursuant
to a registration statement under the Securities Act of 1933, as amended, and
the rules and regulations in effect thereunder, which has been declared
effective by the Securities Exchange Commission (other than a registration
statement on Form S-4, Form S-8 or any other similar form).


 


1.14                        “Service” will have the meaning set
forth in Section 409A(a)(2)(A)(i) of the
Code and related guidance thereunder.


 


1.15                        “Specified Employee” will have the
meaning set forth Section
409A(a)(2)(B)(i) of the Code.


 


1.16                        “Stock Account” will mean the
bookkeeping account created by the Company pursuant to Article III of this Policy
in accordance with an election by a Director to receive stock compensation
under Article II hereof.


 


1.17                        “Unforeseeable Emergency” means any severe financial
hardship to a Director resulting from a sudden and unexpected illness or
accident of the Director or a Director’s dependent (as defined in Section
152(a) of the Code), loss of the Director’s property due to casualty, or other
similar extraordinary and unforeseen circumstances arising as a result of
events beyond the control of the Director.


 


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1.18                        “Year” will mean a calendar year.


 


ARTICLE II



ELECTION TO DEFER


 


2.1                               This
Policy will become effective on the date of the underwriting agreement between
the Company and the underwriter(s) managing the Public Offering pursuant to
which the Common Stock is priced for the Public Offering. No Director will be
eligible to participate in the Policy prior to such date.


 


2.2                               From
time to time, the Company shall determine the Fees to be paid to a Director for
serving as a member of the Board, including any committees of the Board. These
Fees will be set forth on Exhibit A hereto (as such Exhibit A is amended from
time to time by the Board).


 


2.3                               A
Director may elect, on or before December 31 of any Year, to defer payment of
all or a specified part of the Fees to be earned during the Year following the
Year in which such election occurs and succeeding Years (until the Director
ceases to be a Director or changes his election pursuant to Section 2.5 herein),
subject to any limitations imposed on the deferral of Fees from time to time as
set forth on Exhibit A; provided, however,
that with respect to the first Year in which a Director becomes eligible to
participate in the Policy, the Director may make an initial election within
thirty (30) days after the date the Director becomes so eligible to defer payment
of all or a specified part of such Fees earned following the date on which such
initial election is made during the remainder of such Year and for any
succeeding Years.


 


2.4                               The
election to participate in the Policy and manner of payment will be designated
by submitting a letter in the form attached hereto as Appendix A (as amended
from time to time by the Board) to the Secretary of the Company.


 


2.5                               The
election will continue from Year to Year and will become irrevocable on December
31 of each Year as to the application of such election as to the immediately
following Year. A Director may change or terminate his election for future
Years by written request in the form attached hereto as Appendix A (as amended
form time to time by the Board) delivered to the Secretary of the Company prior
to December 31 of the Year preceding the commencement of the Year for which the
change or termination is first effective. Any other attempt to change or
terminate the election will be effective only to the extent expressly approved
in writing by the Board and only to the extent such attempt is determined by
the Board to comply with the provisions of Section 409A of the Code and all
other applicable laws.


 


ARTICLE III



DEFERRED COMPENSATION ACCOUNTS


 


3.1                               The
Company will maintain separate Stock Accounts for the Fees deferred by each
Director. The Company will be under no obligation to acquire or hold any Common
Stock or any other securities or specific assets by reason of the credits made
to Director’s Stock Account.


 


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3.2                               The
Company will credit, on the date Fees otherwise would be issued or payable, the
Stock Account of each Director with a number of shares of Common Stock which is
equal to the deferred portion of any Fee due the Director as to which a proper
election under the Policy has been made.


 


(a)                                  With
respect to any Fees that would otherwise be paid in cash, the number of shares
of Common Stock credited to the Director’s Stock Account will be equal to the
dollar value of such cash Fees divided by the Fair Market Value Per Share
determined as of the date such Fees would otherwise have been paid. Such
amounts credited to the Stock Account will be fully vested and non-forfeitable
at all times.


 


(b)                                  With
respect to any Fees that would otherwise be issued in unvested and/or
restricted shares of Common Stock, the shares of Common Stock credited to the
Director’s Stock Account will be subject to the same vesting and other
restrictions to which the foregone restricted stock grant would have been
subject. If and to the extent a Director would forfeit his rights to receive
the forgone restricted stock grant, the Director shall similarly forfeit, and
have no further right, title or interest in or to the amounts credited to his Stock
Account in respect of such forgone restricted stock.


 


(c)                                  The
amounts credited to a Director’s Stock Account will not be reduced for any
income or employment tax withholding (except to the extent required by law).


 


3.3                               The
Company will credit the Stock Account of each Director with the number of
shares of Common Stock equal to any cash dividends (or the fair market value of
dividends paid in property other than dividends payable in Common Stock, as
such fair market value is determined in the sole discretion of the Board)
payable on the number of shares of Common Stock represented in each Director’s
Stock Account, divided by the Fair Market Value Per Share on the applicable
dividend payment date. Dividends payable in Common Stock in respect of the
number of shares of Common Stock represented in each Director’s Stock Account will
be credited to each Director’s Stock Account in the form of the right to
receive such Common Stock. Any dividends credited to the Stock Account in
respect of unvested and forfeitable shares of Common Stock shall be subject to
the same vesting and forfeiture restrictions as such original shares of Common
Stock in respect of which they are being paid.


 


3.4                               If
adjustments are made to the outstanding shares of Common Stock as a result of
split-ups, recapitalizations, mergers, consolidations and the like, an
appropriate adjustment will be made, on the terms provided under the 2007
Equity Incentive Plan, in the number of shares of Common Stock credited to the
Director’s Stock Account in order to prevent enlargement or dilution of the
Director’s rights under such Stock Account. Any shares of Common Stock or other
property so credited to a Director’s Stock Account in respect of unvested and
forfeitable shares of Common Stock shall be subject to the same vesting and
forfeiture terms and conditions applicable to the original shares of Common
Stock from which they are derived.


 


3.5                               All
calculations made under the Policy will be computed to three decimal places. However,
no fractional shares will be issued under the Policy. Any fractional share
credited to a Stock Account that becomes due and payable to a Director will be
paid in cash. The Stock Account of a Director will only be a bookkeeping
account. Shares of Common Stock as to


 


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which a Director is entitled
under this Policy will be granted and issued from, and be subject to the terms
of, the Company’s 2007 Equity Incentive Plan. As a condition to participation
in the Policy, the Director agrees to execute the standard form of stock award
agreement (which may be in the form of a restricted stock unit award agreement)
under the 2007 Equity Incentive Plan in respect of the shares of Common Stock
issued under the Policy to the extent determined necessary or appropriate by
the Company.


 


3.6                               Except
to the extent set forth in the Company’s 2007 Equity Incentive Plan, the right
to receive Common Stock at a later date will not entitle any person to rights
of a stockholder with respect to such Common Stock, other than the rights to
receive dividends as provided in Section 3.3 above, unless and until shares of
Common Stock have been issued to such person pursuant to Article IV hereof.


 


3.7                               Each
Director will receive an annual statement in such form as the Company deems
desirable setting forth the balance standing to the credit of the Director’s
Stock Account.


 


3.8                               Nothing
contained herein will be deemed to create a trust of any kind or any fiduciary
relationship. To the extent that any person acquires a right to receive
payments from the Company under the Policy, such right will be no greater than
the right of any unsecured general creditor of the Company. The Policy will be
unfunded for federal tax purposes.


 


ARTICLE IV



PAYMENT OF DEFERRED COMPENSATION


 


4.1                               Subject
to the other provisions of this Article IV, amounts credited to a Director’s
Stock Account will be distributed as provided in the Director’s election under
the Policy in respect of such amounts. Distributions will be paid in Common
Stock in a lump sum on the applicable date specified in the Director’s
applicable election. It is intended that the payment of all amounts deferred by
a specific Director pursuant to an election made under this Policy shall be
considered a separate “payment” (as defined under Treasury Regulations Section
1.409A-2(b)(2)) from payments made in respect of other amounts deferred under
this Policy by that Director pursuant to an different election made by the
Director.


 


(a)                                  Notwithstanding
the foregoing, if the Board determines that the issuance of shares credited to
the Director’s Stock Account on the scheduled date of distribution pursuant to
the Director’s election (the “Original Distribution Date”)
cannot be completed because such distribution would violate the terms of the Company’s
policy regarding insider trading (including as a result of the Director’s need
to engage in a sale of those shares in order to pay applicable withholding
taxes), then the shares that would otherwise be delivered on the Original
Distribution Date shall not be delivered on such date and shall instead be
delivered on the earliest to occur of (i) the first business day on which such
delivery would not violate the terms of the Company’s policy on insider
trading, (ii) December 31st of the same calendar year of the Original
Distribution Date, or (iii) the 15th day of the third calendar month following
the Original Distribution Date. In addition, if the Board determines that the
issuance of shares credited to the Director’s Stock Account on the Original Distribution
Date cannot be completed because such distribution would violate Federal
securities laws or other applicable laws, then, as


 


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permitted under Treasury
Regulations Section 1.409A-2(b)(7)(ii), the shares that would otherwise be
delivered on the Original Distribution Date shall not be delivered on such date
and shall instead be delivered on the earliest date at which the Board
reasonably anticipates that the issuance of the shares will not cause such
violation. For purposes of determining the application of the prior sentence,
in accordance with Treasury Regulations Section 1.409A-2(b)(7)(ii) as in effect
on the date hereof, if the issuance of the shares would cause inclusion of
amounts in gross income or the application of any penalty provision or other
provision of the Internal Revenue Code, such adverse consequences alone are not
treated as a violation of applicable law.


 


4.2                               Each
Director will have the right to designate one or more beneficiaries to succeed
to his right to receive payments hereunder in the event of his death. Each
designated beneficiary will receive payments in the same manner as the Director
if he had lived. In case of a failure of designation or the death of all
designated beneficiaries without any designated successors, the balance of the
amounts credited to the Director’s Stock Account will be payable in accordance
with Section 4.1 to the Director’s estate in full. No beneficiary designation will
be valid unless it is in writing on the form attached hereto as Appendix B (or
any successor form designated by the Company), signed by the Director (and his
or her spouse to the extent required by applicable law) and filed with the
Secretary of the Company.


 


4.3                               Upon
application by a Director, the Company may direct the distribution in a lump
sum of all or a portion of the vested amounts credited to a Director’s Stock
Account in the event of an Unforeseeable Emergency. Any such application must
set forth the circumstances constituting such Unforeseeable Emergency. Notwithstanding
the foregoing, the Company may not direct the distribution of any such amounts
to the extent that such Unforeseeable Emergency is or may be relieved (a)
through reimbursement or compensation by insurance or otherwise; (b) by
liquidation of the Director’s assets, to the extent that such liquidation would
itself not cause severe financial hardship; or (c) by cessation of deferrals
under the Policy. Any distribution due to an Unforeseeable Emergency shall only
be permitted to the extent reasonably needed to satisfy such hardship, and
shall be made in the sole discretion of the Company both with respect to the
determination as to whether an Unforeseeable Emergency exists and as to the
amount distributable. Any distribution allowed in the event of an Unforeseeable
Emergency will be paid on the tenth (10th) day following the date
such distribution is approved by the Company.


 


ARTICLE V



ADMINISTRATION


 


5.1                               Except
as expressly provided herein, the Company will be the administrator of the Policy
and will do so at its expense. As administrator, the Company will interpret,
construe and apply the Policy’s provisions in accordance with its terms. The
Company will further establish, adopt or revise such rules and regulations as it
may deem necessary or advisable for the administration of the Policy. All
determinations and interpretations made by the Company in good faith shall not
be subject to review by any person and shall be final, binding and conclusive
on all persons.


 


5.2                               Except
to the extent required by law, the right of any Director or any beneficiary to
any benefit or to any payment hereunder will not be subject in any manner to
attachment or


 


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other legal process for the debts
of such Director or beneficiary; and any such benefit or payment will not be
subject to alienation, sale, transfer, assignment or encumbrance.


 


ARTICLE VI



AMENDMENT OF PROGRAM; GOVERNING LAW; SECTION 409A.


 


6.1                               The
Policy may be amended, suspended or terminated in whole or in part from time to
time by the Board except that no amendment, suspension, or termination will adversely
affect the payment of any amounts previously credited to a Director’s Stock
Account without that Director’s written consent.


 


6.2                               The
Policy will be governed by and construed and enforced in accordance with the
laws of the State of Delaware, without regard to principles of conflict of law.
In the event any provision of this Policy is held invalid, void or
unenforceable, the same shall not affect, in any respect whatsoever, the
validity of any other provisions of this Policy.


 


6.3                               This
Policy will not be deemed to constitute a contract of employment or service
between the Company and any Director. Nothing contained in this Policy shall be
deemed to give any Director the right to be retained in the service of the
Company or to interfere with the right of the Company or the Board to discharge
any Director at any time regardless of the effect which such discharge shall
have upon such individual as a Director in the Policy.


 


6.4                               Any
controversy or claim arising out of relating to this Policy shall be settled by
binding arbitration in San Francisco, California, in accordance with the
Arbitration Rules and Procedures of the Judicial Arbitration and Mediation
Service (“JAMS”). The parties shall seek to agree upon appointment of the
arbitrator and the arbitration procedures. If the parties are unable to reach
such agreement, a single arbitrator shall be appointed pursuant to the JAMS
Arbitration Rules and Procedures, and the arbitrator shall determine the
arbitration procedures. Any award pursuant to such arbitration shall be
included in a written decision which shall state the legal and factual reasons
upon which the award was based, including all the elements involved in the
calculation of any award of damages. Any such award shall be deemed final and
binding and may be entered and enforced in any state or federal court of
competent jurisdiction. The arbitrator shall interpret the Policy in accordance
with the laws of Delaware. Each party shall pay its own fees and expenses
incurred in any arbitration under this Policy, but the expenses of the
arbitration shall be paid by the Company.


 


6.5                               This
Policy shall be binding upon the Company and its successors and assigns.


 


6.6                               Notwithstanding
any other provision of the Policy, this Policy is intended to comply with
Section 409A of the Code and will at all times be interpreted in accordance
with such intent such that amounts credited to Directors’ accounts will not be
taxable to Directors until such amounts are paid to Directors in accordance
with the terms of the Policy. In furtherance thereof, no payments may be
accelerated under the Policy other than to the extent permitted under Section
409A of the Code. To the extent that any provision of the Policy violates
Section 409A of the Code such that amounts would be taxable to a Director prior
to payment or would otherwise subject a Director to a penalty tax under Section
409A of the Code,


 


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such provision will be
automatically reformed or stricken to preserve the intent hereof. To the extent
that the Company determines that Directors may be given greater flexibility
than provided herein to modify or revoke deferral elections under the Policy in
a manner consistent with Section 409A of the Code, the Board may (but will not
be obligated to) amend the Policy to provide for such greater flexibility. Notwithstanding anything to the contrary
contained herein, neither the Company nor any of its affiliates will be
responsible for, or required to reimburse or otherwise make any Director whole
for, any tax or penalty imposed on, or losses incurred by, any Director that
arises in connection with the potential or actual application of Section 409A of
the Code to the Policy and the Stock
Accounts hereunder.


 


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EXHIBIT A


 


Reliant Technologies, Inc.

Non-Employee Director Compensation Policy, Post-Public Offering


 


Annual Board Compensation


 


1.                                       $75,000 in
restricted stock granted on February 15th of each year (valued at
the Fair Market Value Per Share on grant date). Shares vest quarterly on May 15th,
August 15th, November 15th, and February 15th,
with 100% vesting on the one (1) year anniversary of the grant date.


 


2.                                       $12,500 cash
($50,000 in aggregate), paid each quarter on February 15th, May 15th,
August 15th, and November 15th.


 


If a Director joins the Board at a time other than on February 15th,
each of the restricted stock and cash amounts above would be reduced on a pro
rata basis, based on the portion of the 12 month period remaining prior to the
next February 15th. The cash fees shall be vested upon payment.


 


Committee Compensation


 


1.                                       $25,000 in cash
annually to any non-employee Chairman of the Board.


 


2.                                       $10,000 in cash
annually to the Audit Committee Chairman.


 


3.                                       $5,000 in cash
annually to the Chairman of any other committees, including Compensation
Committee and Governance Committee.


 


Each committee amount shall be paid quarterly on same schedule as
annual board cash compensation (as described above) and shall be in addition to
other Board compensation. No meeting fees shall be paid for attendance at
meetings of the Board or any standing committee. The cash fees will be vested
upon payment.


 


Initial Director Grant


 


Each Director who joins the Board shall be entitled to receive a stock
option with a value of $100,000 (using the then current Black-Scholes value as
determined for purposes of the Company’s most recently completed quarter prior
to the date of the grant), with 100% vesting on the one (1) year anniversary of
the grant date.


 


Directors may not make a deferral election under the Policy with
respect to the stock option.


 


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APPENDIX A


 


[Date]


 


Reliant Technologies, Inc.


464 Ellis Street


Mountain View, CA 94043


 


Attention Corporate
Secretary:


 


I hereby make the elections set forth below pursuant
to the Reliant Technologies, Inc. Non-Employee Director Compensation Policy (the
“Policy”).


 


No Deferral - Receipt of Cash
Fees in Stock. I hereby elect to receive all of the Fees
to which I may become in respect of 2007 and succeeding Years as and when they
become issuable and payable. I also hereby elect to receive the following
percentage of the Fees that I would otherwise receive in cash in the form of
shares of Common Stock (indicate a percentage from 0% to 100%):


 


% of the Fees otherwise payable in cash will be paid
in shares of Common Stock. The number of shares of Common Stock that I will
receive will be equal to the dollar value of the cash Fees so elected divided
by the Fair Market Value Per Share, determined as of the date such Fees would
otherwise have been paid. Such shares of Common Stock will be fully vested and
non-forfeitable and will be issued to me, pursuant to the terms of the 2007
Equity Incentive Plan, as soon as reasonably practicable on or after the
applicable date on which the cash Fees would otherwise have been paid. I agree
to enter into the applicable form of stock award agreement under the 2007
Equity Incentive Plan in respect of such shares.


 


Initial Deferral Election.
I hereby elect to defer receipt of all or a portion of the Fees to which I may
become entitled in respect of 2007 and succeeding Years as follows (fill in
appropriate percentages):


 


% of the Fees otherwise
payable in cash will be credited to my Stock Account as provided for in the Policy.


 


% of the Fees
otherwise payable as restricted stock will be credited to my Stock Account as
provided for in the Policy.


 


Timing of Distributions.
I hereby elect to have my Stock Account payable on the earliest to occur of (indicate
yes/no to one or more of the following, and the desired year, if applicable):


 


 the first business day after the thirtieth (30th)
day following the date of the termination of my Service on the Board. Notwithstanding
the foregoing, if I am a Specified Employee as of the date of the termination
of my Service, then the payment of my Stock Account will be made on the date
that is the first business day after the date that six (6) months after my
termination date.


 


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the effective date of a Change in Control.


 


February 15 of the year 20     
(or, if February 15 of such year is not a business day, the first business day
thereafter).


 


I
understand and agree that my elections set forth herein are irrevocable and
will remain in effect unless and until I change my election for Fees that
become issuable and payable in succeeding years pursuant to the terms of the
Policy.


 


Very truly yours,


 


[Name]


 


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APPENDIX B


 


[Date]


 


Reliant Technologies,
Inc.


464 Ellis Street


Mountain View, CA 94043


 


Attention Corporate
Secretary:


 


 


In the event of my death prior to receipt of all or
any amount of the balance of my Stock Account so accumulated, I designate          
                   
 as my beneficiary to receive the funds
so accumulated, but unpaid.


 


 


	
   

  	
   

  
	
  [NAME]

  
	
   

  
	
   

  
	
   

  	
   

  
	
  [SPOUSE’S NAME]

  



 


 


Witnessed this          
 day of          
, 20    .


 


 


	
   

  	
   

  
	
  [WITNESS]

  



 


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