Document:

EX-10.72

STAAR SURGICAL COMPANY

2003 OMNIBUS EQUITY INCENTIVE PLAN, AS AMENDED

STAAR Surgical Company, a Delaware corporation (the “Company”), by action of its Board of
Directors, hereby adopts the STAAR Surgical Company 2003 Omnibus Equity Incentive Plan (the
“Plan”), as amended, with the following provisions:

1.    Purpose and Scope.

(a)  Purpose.    The purpose of the Plan is to promote and advance the interests of the
Company and its stockholders by enabling the Company and its Affiliates to attract, retain and
motivate officers, directors, employees and independent contractors by providing for
performance-based benefits, and to strengthen the mutuality of interests between such persons
and the Company’s stockholders. The Plan is designed to meet this intent by offering
performance-based stock and cash incentives and other equity-based incentive awards, thereby
providing a proprietary interest in pursuing the long-term growth, profitability and financial
success of the Company.

(b)  Scope.    The Plan amends, restates and replaces in their entirety the following
outstanding plans of the Company (the “Restated Plans”): 1991 Stock Option Plan of STAAR
Surgical Company, the 1995 STAAR Surgical Company Consultant Stock Plan, the 1996 STAAR
Surgical Company Non-Qualified Stock Plan, the 1998 STAAR Surgical Company Stock Plan and the
STARR Surgical Company Stock Option Plan and Agreement for Chief Executive Officer. Each award
or grant outstanding under a Restated Plan shall continue to be governed by the terms of that
Restated Plan. Any shares of Common Stock available for Awards under the Restated Plans,
included shares that become available pursuant to Section 4(b)(iii) of the Plan, shall be
treated as part of the pool of shares of Common Stock available for Awards under the Plan.

2.    Definitions.    For purposes of this Plan, the following terms shall have the meanings
set forth below:

“Affiliate” means any parent or subsidiary (as defined in Sections 424(e) and (f) of the Code)
of the Company, and that qualifies as an eligible issuer of service recipient stock, as that term
is defined in Treasury Regulations section 1.409A-1(b)(5)(iii)(E).

“APB 25” means Opinion 25 of the Accounting Principles Board, as amended, and any successor
thereof.

“Award” means an award or grant made to a Participant under Sections 6 through 10, inclusive,
of the Plan.

“Board” means the Board of Directors of the Company.

“Change in Control” means the occurrence of any one (or more) of the following events:

(i)  Any person, including a group as defined in Section 13(d)(3) of the Exchange Act,
becomes the beneficial owner of stock of the Company with respect to which twenty-five percent
(25%) or more of the total number of votes for the election of the Board may be cast;

(ii)  As a result of, or in connection with, any cash tender offer, exchange offer,
merger or other business combination, sale of assets or contested election, or combination of
the foregoing, persons who were directors of the Company just prior to such event shall cease
to constitute a majority of the Board;

(iii)  The stockholders of the Company shall approve an agreement providing either for a
transaction in which the Company will cease to be an independent publicly owned corporation or
for a sale or other disposition of all or substantially all the assets of the Company; or

(iv)  acquisition in a single or series of related transactions, including without
limitation a tender offer or exchange offer, by any person or related group of persons (other
than the Company or by a Company-sponsored employee benefit plan), of beneficial ownership
(within the meaning of Rule 13d-3 of the

	 	 	 
	 

	 	Exchange Act) of securities possessing more than fifty percent

(50%) of the total combined voting power of the Company’s outstanding

securities.

 

Notwithstanding the foregoing, the formation of a holding company for the Company in
which the stockholdings of the holding company after its formation are substantially the same as
for the Company prior to the holding company formation does not constitute a Change in Control for
purposes of this Plan.

“Code” means the Internal Revenue Code of 1986, as amended and in effect from time to time, or
any successor thereto, together with rules, regulations and authoritative interpretations
promulgated thereunder.

“Committee” means the committee of the Board that is provided for in Section 3 of the Plan.

“Common Stock” means the common stock of the Company or any security of the Company issued in
substitution, exchange or lieu thereof.

“Company” means STAAR Surgical Company, a Delaware corporation.

“Consultant” means any natural person who performs bona fide services for the Company or an
Affiliate as a consultant or advisor, excluding Employees and Non-Employee Directors.

“Date of Grant” means the effective date as of which the Committee (or the Board, as the case
may be) grants an Award to a Participant.

“Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code.

“Employee” means any individual who is a common-law employee of the Company or an Affiliate.

“Exchange Act” means the Securities Exchange Act of 1934, as amended and in effect from time
to time, or any successor thereto, together with rules, regulations and authoritative
interpretations promulgated thereunder.

“Fair Market Value” means the fair market value of the Common Stock determined in accordance
with Treasury Regulations section 1.409A-1(b)(5)(iv), and to the extent permitted under such
Regulations shall be on any given date, the closing price for the Common Stock on such date, or, if
the Common Stock was not traded on such date, on the next preceding day on which the Common Stock
was traded, determined in accordance with the following rules:

(i)  If the Common Stock is admitted to trading or listing on a national securities
exchange registered under the Exchange Act, the closing price for any day shall be the last
reported sale price, or in the case no such reported sale takes place on such date, the
average of the last reported bid and ask prices, in either case on the principal national
securities exchange on which the Common Stock is admitted to trading or listed;

(ii)  If not listed or admitted to trading on any national securities exchange, the last
sale price of the Common Stock on the National Association of Securities Dealers Automated
Quotation National Market System (“NMS”) or, in the case no such reported sale takes place,
the average of the closing bid and ask prices on such date;

(iii)  If not quoted on the NMS, the average of the closing bid and ask prices of the
Common Stock on the National Association of Securities Dealers Automated Quotation System
(“NASDAQ”) or any comparable system; or

(iv)  If the Common Stock is not listed on NASDAQ or any comparable system, the closing
bid and ask prices as furnished by any member of the National Association of Securities
Dealers, Inc., selected from time to time by the Committee for that purpose.

“FASB” means the Financial Accounting Standards Board.

“Incentive Stock Option” means any Stock Option granted pursuant to the provisions of Section
6 of the Plan that is intended to be and is specifically designated as an “incentive stock option”
within the meaning of Section 422 of the Code.

“Mature Shares” shall mean Shares that had been held by the Optionee for a meaningful period
of time such as six months or such other period of time that is consistent with FASB’s
interpretation of APB 25.

“Non-Employee Director” means a non-Employee member of the Board.

“Non-Qualified Stock Option” means any Stock Option granted pursuant to the provisions of
Section 6 of the Plan that is not an Incentive Stock Option.

“Optioned Stock” means the shares of Common Stock that are subject to a Stock Option.

“Participant” means an Employee, Non-Employee Director, or Consultant of the Company or an
Affiliate who is granted an Award under the Plan.

“Performance Award” means an Award granted pursuant to the provisions of Section 9 of the
Plan, the vesting of which is contingent on the attainment of specified performance criteria.

“Performance Share Grant” means an Award of units representing shares of Common Stock granted
pursuant to the provisions of Section 9 of the Plan.

“Performance Unit Grant” means an Award of monetary units granted pursuant to the provisions
of Section 9 of the Plan.

“Plan” means this STAAR Surgical Company 2003 Omnibus Equity Incentive Plan, as set forth
herein and as it may be hereafter amended and from time to time in effect.

“Qualified Note” means a recourse note, with a market rate of interest, that may, at the
discretion of the Committee, be secured by the Optioned Stock or otherwise.

“Restricted Award” means an Award granted pursuant to the provisions of Section 8 of the Plan.

“Restricted Stock Grant” means an Award of shares of Common Stock granted pursuant to the
provisions of Section 8 of the Plan.

“Restricted Unit Grant” means an Award of units representing shares of Common Stock granted
pursuant to the provisions of Section 8 of the Plan.

“Service” means the performance of services for the Company (or any Affiliate) by an Employee,
Non-Employee Director, or Consultant, as determined by the Committee in its sole discretion.
Service shall not be considered interrupted in the case of (i) any leave of absence approved by the
Company or (ii) transfers between locations of the Company or between the Company and any
Affiliate, or any successor. A leave of absence approved by the Company shall include sick leave,
military leave, or any other personal leave approved by an authorized representative of the
Company. For purposes of Incentive Stock Options, no such leave may exceed ninety (90) days, unless
reemployment upon expiration of such leave is guaranteed by statute or contract, including Company
policies. If reemployment upon expiration of a leave of absence approved by the Company is not so
guaranteed, on the ninety-first (91st) day of such leave any Incentive Stock Option held by the
Optionee shall cease to be treated as an Incentive Stock Option and shall be treated for tax
purposes as a Non-Qualified Stock Option.

  

“Stock Appreciation Right” means an Award to benefit from the appreciation of Common
Stock granted pursuant to the provisions of Section 7 of the Plan.

“Stock Option” means an Award to purchase shares of Common Stock granted pursuant to the
provisions of Section 6 of the Plan.

“Subsidiary” means any corporation or entity which is a subsidiary of the Company within the
meaning of Section 424(f) of the Code and that qualifies as an eligible issuer of service recipient
stock, as that term is defined in Treasury Regulations section 1.409A-1(b)(5)(iii)(E).

“Ten Percent Stockholder” means a person who owns stock (after taking into account the
constructive ownership rules of Section 424(d) of the Code) possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company (or any Affiliate).

“Termination Date” means the date on which a Participant’s Service terminates, as determined
by the Committee in its sole discretion.

3.    Administration.

(a)  The Plan shall be administered by a committee appointed by the Board. The Committee
shall be comprised solely of not less than two persons who are “outside directors” within the
meaning of Section 162(m)(4)(C) of the Code and “non-employee directors” within the meaning of
Rule 16b-3 of the Exchange Act. Members of the Committee shall serve at the pleasure of the
Board and the Board may from time to time remove members from, or add members to, the
Committee. No person who is not an “outside director” within the meaning of Section
162(m)(4)(C) of the Code and a “non-employee director” within the meaning of Rule 16b-3 of the
Exchange Act may serve on the Committee. Appointment to the Committee of any person who is not
an “outside director” and a “non-employee director” shall automatically be null and void, and
any person on the Committee who ceases to be an “outside director” and a “non-employee
director” shall automatically and without further action cease to be a member of the
Committee.

(b)  A majority of the members of the Committee shall constitute a quorum for the
transaction of business. Action approved in writing by a majority of the members of the
Committee then serving shall be as effective as if the action had been taken by unanimous vote
at a meeting duly called and held.

(c)  The Committee is authorized to construe and interpret the Plan, to promulgate,
amend, and rescind rules and procedures relating to the implementation of the Plan, and to
make all other determinations necessary or advisable for the administration of the Plan. Any
determination, decision, or action of the Committee in connection with the construction,
interpretation, administration, or application of the Plan shall be binding upon all
Participants and any person claiming under or through any Participant. Although the Committee
is anticipated to make certain Awards that constitute “qualified performance-based
compensation” within the meaning of Section 162(m)(4)(C) of the Code and Treasury Regulation
Section 1.162-27(e), the Committee is also expressly authorized to make Awards that do not
constitute “qualified performance-based compensation” within the meaning of those provisions.
By way of example, and not by way of limitation, the Committee, in its sole and absolute
discretion, may issue an Award that is not based on a performance goal, as set forth in (i)
below, but is based solely on continued service to the Company.

(d)  The Committee may employ or retain persons other than members of the Committee to
assist the Committee to carry out its responsibilities under such conditions and limitations
as it may prescribe, except that the Committee may not delegate its authority with regard to
selection for participation in and the granting of Awards to persons subject to Section 16 of
the Exchange Act or with regard to any of its duties under Section 162(m) of the Code
necessary for awards under this Plan to constitute “qualified performance-based compensation”
within the meaning of Section 162(m)(4)(C) of the Code and Treasury Regulation Section
1.162-27(e).

(e)  The Committee is expressly authorized to make such modifications to the Plan as are
necessary to effectuate the intent of the Plan as a result of any changes in the income tax,
accounting, or securities law treatment of Participants and the Plan.

(f)  The Company shall effect the granting of Awards under the Plan in accordance with
the determinations made by the Committee, by execution of instruments in writing in such form
as approved by the Committee.

(g)  The Committee may not increase an Award once granted, although it may grant
additional Awards to the same Participant.

(h)  The Committee shall keep the Board informed as to its actions and make available to
the Board its books and records. Although the Committee has the authority to establish and
administer the Plan, the Board reserves the right at any time to abolish the Committee and
administer the Plan itself.

(i)  In the case of an Award that is intended to constitute “qualified performance-based
compensation” within the meaning of Section 162(m)(4)(C) of the Code and Treasury Regulation
Section 1.162-27(e), the Committee shall establish in writing at the time of making the Award
the business criterion or criteria that must be satisfied for payment pursuant to the Award
and the amount payable upon satisfaction of those standards. Those standards are also referred
to herein as performance goals. Such criterion or criteria shall be established prior to the
Participant rendering the services to which they relate and while the outcome is substantially
uncertain or at such other time permitted under Treasury Regulations Section 1.162-27(e)(2).
In carrying out these duties, the Committee shall use objective written standards for
establishing both the performance goal and the amount of compensation such that a third party
with knowledge of the relevant facts would be able to determine whether and to what extent the
goal has been satisfied and the amount of compensation payable. The Committee shall provide a
copy the document setting forth such standards to the affected Participant and shall retain
such written material in its permanent books and records.

(j)  In the case of remuneration that is intended to constitute “qualified
performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code and
Treasury Regulation Section 1.162-27(e), the Committee and the Board shall disclose to the
stockholders of the Company the material terms under which such remuneration is to be paid
under the Plan, and shall seek approval of the stockholders by a majority vote in a separate
stockholder vote before payment of such remuneration. For these purposes, the material terms
include the individuals (or class of individuals) eligible to receive such compensation, a
description of the business criterion or criteria on which the performance goal is based,
either the maximum amount of the compensation to be paid thereunder or the formula used to
calculate the amount of compensation if the performance goal is attained, and such other terms
as required under Code Section 162(m)(4)(C) and the Treasury Regulations promulgated
thereunder, determined from time to time. The foregoing actions shall be undertaken in
conformity with the rules of Code Section 162(m)(4)(C)(ii) and Treasury Regulations
promulgated thereunder. Such remuneration shall not be payable under this Plan in the absence
of such an approving stockholder vote. In the case of remuneration that is not intended to
constitute “qualified performance-based compensation” within the meaning of Section
162(m)(4)(C) of the Code and Treasury Regulation Section 1.162-27(e), the Committee and the
Board shall make such disclosures to and seek such approval from the stockholders of the
Company as they reasonably determine are required by law.

(k)  To the extent required under Code Section 162(m)(4)(C) and the regulations
promulgated thereunder, before any payment of remuneration under this Plan, the Committee must
certify in writing that the performance goals and any other material terms of the Award were
in fact satisfied. Such certification shall be kept with the permanent books and records of
the Committee, and the Committee shall provide the affected Participant with a copy of such
certification.

(l)  The Committee shall use its good faith best efforts to comply with the requirements
of Section 162(m)(4)(C) of the Code and the regulations promulgated thereunder for Awards that
are intended  to constitute “qualified performance-based compensation,” but shall
have no liability to the Company or any recipient in the event one or more Awards do not so
qualify.

4.    Duration of and Common Stock Subject to the Plan.

(a)  Term.    The Plan shall become effective as of May 14, 2003, the date of its
adoption by the Board, subject to ratification by the stockholders of the Company within
twelve (12) months after the effective date. In the event that the stockholders of the Company
do not ratify the Plan within twelve (12) months after the effective date, any Awards granted
pursuant to the Plan shall be rescinded automatically. Unless sooner terminated by the Board,
the Plan shall continue until May 13, 2013, one day prior to the tenth (10th) anniversary of
the Plan’s effective date, when it shall terminate and no Awards may be granted under the Plan
thereafter. The termination of the Plan shall not affect the Awards that are outstanding on
the termination date.

(b)  Shares of Common Stock Subject to the Plan.    The maximum total number of shares of
Common Stock with respect to which aggregate stock Awards may be granted under the Plan
(including shares of Common Stock subject to outstanding Awards under the Restated Plans)
shall be four million, nine hundred thirteen thousand, six hundred twenty-nine (4,913,629),
plus the additional number of shares of Common Stock provided for in the following sentence.
During the term of the Plan, on each January 1, the maximum total number of shares of Common
Stock with respect to which aggregate stock Awards may be granted under the Plan shall
automatically increase by the number of shares equal to two percent (2%) of the total number
of shares of Common Stock outstanding on the immediately preceding December 31. For
illustrative purposes only, if the number of shares of Common Stock outstanding as of December
31, 2003 is one million (1,000,000), then the number of shares available for purposes of the
Plan will be increased as of January 1, 2004 by an additional twenty thousand (20,000) shares
of Common Stock. Notwithstanding the foregoing, the annual automatic increases described above
shall add a maximum of 1,586,371 shares of Common Stock to the shares available for purposes
of the Plan. The maximum number of shares of Common Stock which may be issued pursuant to
Incentive Stock Options under this Plan may not exceed six million, five hundred thousand
(6,500,000).

(i)  All of the amounts stated in this Paragraph (b) are subject to adjustment as
provided in Section 15 below.

(ii)  For the purpose of computing the total number of shares of Common Stock available
for Awards under the Plan, there shall be counted against the foregoing limitations the
number of shares of Common Stock subject to issuance upon exercise or used for payment or
settlement of Awards.

(iii)  If any Awards are forfeited, terminated, expire unexercised, settled or paid in
cash in lieu of stock or exchanged for other Awards, the shares of Common Stock which were
theretofore subject to such Awards shall again be available for Awards under the Plan to the
extent of such forfeiture or expiration of such Awards.

(c)  Source of Common Stock.    Common Stock which may be issued under the Plan may be
either authorized and unissued stock or issued stock that has been reacquired by the Company.
No fractional shares of Common Stock shall be issued under the Plan.

5.    Eligibility.    Incentive Stock Options may only be granted to Employees of the Company
or a Subsidiary. Employees, Non-Employee Directors, and Consultants of the Company or a Subsidiary
are eligible to receive Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Awards,
Performance Awards and other Awards under the Plan.

6.    Stock Options.    Stock options granted under the Plan may be in the form of Incentive
Stock Options or Non-Qualified Stock Options (collectively referred to as “Stock Options”). Stock
Options shall be subject to the

terms and conditions set forth below. Each written Stock Option agreement shall contain such
additional terms and conditions, not inconsistent with the express provisions of the Plan, as the
Committee shall deem desirable.

(a)  Grant.    Stock Options shall be granted under the Plan on such terms and conditions
not inconsistent with the provisions of the Plan and pursuant to written agreements with the
Participant in such form as the Committee may from time to time approve in its sole and
absolute discretion. The terms of individual Stock Option agreements need not be identical.
Each Stock Option agreement shall state specifically whether it is intended to be an Incentive
Stock Option agreement or a Non-Qualified Stock Option agreement. Stock Options may be granted
alone or in addition to other Awards under the Plan. No person may be granted (in any calendar
year) options to purchase more than two hundred thousand (200,000) shares of Common Stock
(subject to adjustment pursuant to Section 15 below). The foregoing sentence is an annual
limitation on grants and not a cumulative limitation. Any Stock Option repriced during a year
shall count against this annual limitation.

(b)  Exercise Price.    Except as otherwise provided for in Paragraph (f) below, the
exercise price per share of Common Stock purchasable under a Stock Option shall be determined
by the Committee at the time of grant but shall not be less than one hundred percent (100%) of
the Fair Market Value of the stock subject to the option on the date the option is granted.

(c)  Option Term.    The term of each Stock Option shall be fixed by the Committee.
However, the term of any Stock Option shall not exceed ten (10) years after the Date of Grant
of such Stock Option.

(d)  Exercisability.    A Stock Option shall be exercisable at such time or times and
subject to such terms and conditions as shall be determined by the Committee at the Date of
Grant and set forth in the written Stock Option agreement. A written Stock Option agreement
may, if permitted pursuant to its terms, become exercisable in full upon the occurrence of
events selected by the Committee that are beyond the control of the Participant (including,
but not limited to, a Change in Control).

(e)  Method of Exercise.    A Stock Option may be exercised, in whole or in part, by
giving written notice of exercise to the Committee specifying the number of shares of Common
Stock to be purchased. Such notice shall be accompanied by payment in full of the exercise
price (i) in cash or (ii) if acceptable to the Committee, in shares of Common Stock already
owned by the Participant or a Qualified Note. The Committee may also permit Participants,
either on a selective or aggregate basis, to simultaneously exercise Stock Options and sell
the shares of Common Stock thereby acquired, pursuant to a brokerage or similar arrangement,
approved in advance by the Committee, and use the proceeds from such sale as payment of part
or all of the exercise price of such shares; provided, that such payment would not cause the
Company to recognize compensation expense for financial reporting purposes or to violate
Section 402 of the Sarbanes-Oxley Act of 2002, as determined by the Committee in its sole
discretion.

(f)  Special Rules for Incentive Stock Options.    The terms specified below shall be
applicable to all Incentive Stock Options. Stock Options which are specifically designated as
Non-Qualified Stock Options when issued under the Plan shall not be subject to the terms of
this Paragraph.

(i)  Exercise Price.    In the case of an Incentive Stock Option, the exercise price of
such Stock Option may not be less than one hundred percent (100%) of the Fair Market Value
of the Common Stock on the Date of the Grant of such Stock Option.

(ii)  Ten Percent Stockholder.    If any Employee to whom an Incentive Stock Option is
granted is a Ten Percent Stockholder, then the exercise price of the Incentive Stock Option
shall not be less than one hundred and ten percent (110%) of the Fair Market Value of the
Common Stock on the Date of Grant of such Incentive Stock Option, and the term of the
Incentive Stock Option shall not exceed five (5) years measured from the Date of Grant of
such option.

(iii)  Dollar Limitation.    In the case of an Incentive Stock Option, the aggregate
Fair Market Value of the Optioned Stock (determined as of the Date of Grant of each Stock
Option) with respect to Stock Options granted to any Employee under the Plan (or any other
option plan of the Company or any Affiliate) that may for the first time become exercisable
as Incentive Stock Options during any one calendar year shall not exceed the sum of one
hundred thousand dollars ($100,000). To the extent the Employee holds two or more such Stock
Options which become exercisable for the first time in the same calendar year, the foregoing
limitation on the exercisability of such Stock Options as Incentive Stock Options shall be
applied on the basis of the order in which such Stock Options are granted. Any Stock Options
in excess of such limitation shall automatically be treated as Non-Qualified Stock Options.

7.    Stock Appreciation Rights.    The grant of Stock Appreciation Rights under the Plan
shall be subject to the following terms and conditions. Furthermore, the Stock Appreciation Rights
shall contain such additional terms and conditions, not inconsistent with the express terms of the
Plan, as the Committee shall deem desirable. The terms of each Stock Appreciation Right granted
shall be set forth in a written agreement between the Company and the Participant receiving such
grant. The terms of such agreements need not be identical.

(a)  Stock Appreciation Rights.    A Stock Appreciation Right is an Award determined by
the Committee entitling a Participant to receive an amount equal to the excess of the Fair
Market Value of a share of Common Stock on a fixed date, which shall be the date concluding a
measuring period set by the Committee upon granting the Stock Appreciation Right, over the
Fair Market Value of a share of Common Stock on the Date of Grant of the Stock Appreciation
Right, multiplied by the number of shares of Common Stock subject to the Stock Appreciation
Right. No Stock Appreciation Rights granted in any calendar year to any person may be measured
by an amount of shares of Common Stock in excess of two hundred thousand (200,000) shares,
subject to adjustment under Section 15 below. The foregoing sentence is an annual limitation
on grants and not a cumulative limitation.

(b)  Grant.    A Stock Appreciation Right may be granted in addition to or completely
independently of any other Award under the Plan. Upon grant of a Stock Appreciation Right, the
Committee shall select and inform the Participant regarding the number of shares of Common
Stock subject to the Stock Appreciation Right and the date that constitutes the close of the
measuring period.

(c)  Measuring Period.    A Stock Appreciation Right shall accrue in value from the Date
of Grant over a time period established by the Committee. In the written Stock Appreciation
Right agreement, the Committee may also provide (but is not required to provide) that a Stock
Appreciation Right shall be automatically payable on one or more specified dates prior to the
normal end of the measuring period upon the occurrence of events selected by the Committee
(including, but not limited to, a Change in Control) that are beyond the control of the
Participant. The Committee may provide (but is not required to provide) in the Stock
Appreciation Right agreement that in the case of a cash payment such acceleration in payment
shall also be subject to discounting of the payment to reasonably reflect the time value of
money using any reasonable discount rate selected by the Committee in accordance with Treasury
Regulations under Code Section 162(m).

(d)  Form of Payment.    Payment pursuant to a Stock Appreciation Right may be made (i)
in cash, (ii) in shares of Common Stock or (iii) in any combination of the above, as the
Committee shall determine in its sole and absolute discretion. The Committee may elect to make
this determination either at the time the Stock Appreciation Right is granted, at the time of
payment or at any time in between such dates. However, any Stock Appreciation Right paid upon
or subsequent to the occurrence of a Change in Control shall be paid in cash.

8.    Restricted Awards.    Restricted Awards granted under the Plan may be in the form of
either Restricted Stock Grants or Restricted Unit Grants. Restricted Awards shall be subject to the
following terms and conditions. Furthermore, the Restricted Awards shall be pursuant to a written
agreement executed both by the Company and

the Participant, which agreement shall contain such additional terms and conditions, not
inconsistent with the express provisions of the Plan, as the Committee shall deem desirable in its
sole and absolute discretion and that are in compliance with Code section 409A and the applicable
Treasury Regulations promulgated thereunder. The terms of such written agreements need not be
identical.

(a)  Restricted Stock Grants.    A Restricted Stock Grant is an Award of shares of Common
Stock transferred to a Participant subject to such terms and conditions as the Committee deems
appropriate, as set forth in Paragraph (d) below.

(b)  Restricted Unit Grants.    A Restricted Unit Grant is an Award of units (with each
unit having a value equivalent to one share of Common Stock) granted to a Participant subject
to such terms and conditions as the Committee deems appropriate, including, without
limitation, the requirement that the Participant forfeit all or a portion of such units upon
termination of Service for specified reasons within a specified period of time, and
restrictions on the sale, assignment, transfer or other disposition of such units.

(c)  Grants of Awards.    Restricted Awards may be granted under the Plan in such form
and on such terms and conditions as the Committee may from time to time approve. Restricted
Awards may be granted alone or in addition to other Awards under the Plan. Subject to the
terms of the Plan, the Committee shall determine the number of Restricted Awards to be granted
to a Participant and the Committee may impose different terms and conditions (including
performance goals) on any particular Restricted Award made to any Participant. Each
Participant receiving a Restricted Stock Grant shall be issued a stock certificate in respect
of such shares of Common Stock. Such certificate shall be registered in the name of such
Participant, shall be accompanied by a stock power duly executed by such Participant, and
shall bear an appropriate legend referring to the terms, conditions and restrictions
applicable to such Award. The certificate evidencing the shares shall be held in custody by
the Company until the restrictions imposed thereon shall have lapsed or been removed.

(d)  Restriction Period.    Restricted Awards shall provide that in order for a
Participant to vest in such Awards, the Participant must continuously provide Services,
subject to relief for specified reasons, for such period as the Committee may designate at the
time of the Award (“Restriction Period”). If the Committee so provides in the written
agreement with the Participant, a Restricted Award may also be subject to satisfaction of such
performance goals as are set forth in such agreement. During the Restriction Period, a
Participant may not sell, assign, transfer, pledge, encumber, or otherwise dispose of shares
of Common Stock received under a Restricted Stock Grant. The Committee, in its sole
discretion, may provide for the lapse of restrictions during the Restriction Period upon the
occurrence of events selected by the Committee that are beyond the control of the Participant
(including, but not limited to, a Change in Control or, if necessary to comply with Code
section 409A, an event described in 409A(a)(2)(A)(v)). The Committee may provide (but is not
required to provide) in the written agreement with the Participant that in the case of a cash
payment such acceleration in payment shall also be subject to discounting of the payment to
reasonably reflect the time value of money using any reasonable discount rate selected by the
Committee in accordance with Treasury Regulations under Code Section 162(m). Upon expiration
of the applicable Restriction Period (or lapse of restrictions during the Restriction Period
where the restrictions lapse in installments or by action of the Committee), the Participant
shall be entitled to receive his or her Restricted Award or portion thereof, as the case may
be.

(e)  Payment of Awards.    A Participant who receives a Restricted Stock Grant shall be
paid solely by release of the restricted stock at the termination of the Restriction Period
(whether in one payment, in installments or otherwise). A Participant shall be entitled to
receive payment for a Restricted Unit Grant (or portion thereof) in an amount equal to the
aggregate Fair Market Value of the shares of Common Stock covered by such Award upon the
expiration of the applicable Restriction Period. Payment in settlement of a Restricted Unit
Grant shall be made as soon as practicable following the conclusion of the specified
Restriction Period (i) in cash, (ii) in shares of Common Stock equal to the number of units
granted under the Restricted Unit Grant with respect to which such payment is made, or (iii)
in any combination of the above, as the Committee shall determine in its sole and absolute
discretion. The Committee may elect to make this determination either at the time the Award is
granted, at the time of payment or at any time in between such dates. 

(f)  Rights as a Stockholder.    A Participant shall have, with respect to the
            shares of Common Stock received under a Restricted Stock Grant, all of the rights of a
stockholder of the Company, including the right to vote the stock, and the right to receive
any cash dividends. Such cash dividends shall be withheld, however, until their release upon
lapse of the restrictions under the Restricted Award. Stock dividends issued with respect to
the shares covered by a Restricted Stock Grant shall be treated as additional shares under the
Restricted Stock Grant and shall be subject to the same restrictions and other terms and
conditions that apply to shares under the Restricted Stock Grant with respect to which the
dividends are issued.

9.    Performance Awards.    Performance Awards granted under the Plan may be in the form of
either Performance Share Grants or Performance Unit Grants. Performance Awards shall be subject to
the terms and conditions set forth below. Furthermore, the Performance Awards shall be subject to
written agreements which shall contain such additional terms and conditions, not inconsistent with
the express provisions of the Plan, as the Committee shall deem desirable in its sole and absolute
discretion and that are in compliance with Code section 409A and the applicable Treasury
Regulations promulgated thereunder. Such agreements need not be identical.

(a)  Performance Share Grants.    A Performance Share Grant is an Award of units (with
each unit equivalent in value to one share of Common Stock) granted to a Participant subject
to such terms and conditions as the Committee deems appropriate, including, without
limitation, the requirement that the Participant forfeit such units (or a portion of such
units) in the event certain performance criteria are not met within a designated period of
time.

(b)  Performance Unit Grants.    A Performance Unit Grant is an Award of units (with each
unit representing such monetary amount as designated by the Committee) granted to a
Participant subject to such terms and conditions as the Committee deems appropriate,
including, without limitation, the requirement that the Participant forfeit such units (or a
portion of such units) in the event certain performance criteria are not met within a
designated period of time.

(c)  Grants of Awards.    Performance Awards shall be granted under the Plan pursuant to
written agreements with the Participant in such form as the Committee may from time to time
approve. Performance Awards may be granted alone or in addition to other Awards under the
Plan. Subject to the terms of the Plan, the Committee shall determine the number of
Performance Awards to be granted to a Participant and the Committee may impose different terms
and conditions on any particular Performance Award made to any Participant.

(d)  Performance Goals and Performance Periods.    Performance Awards shall provide that,
in order for a Participant to vest in such Awards, the Company must achieve certain
performance goals (“Performance Goals”) over a designated performance period selected by the
Committee (“Performance Period”). The Performance Goals and Performance Period shall be
established by the Committee, in its sole and absolute discretion. The Committee shall
establish Performance Goals for each Performance Period before the commencement of the
Performance Period and while the outcome is substantially uncertain or at such other time
permitted under Treasury Regulations Section 1.162-27(e)(2). The Committee shall also
establish a schedule or schedules for such Performance Period setting forth the portion of the
Performance Award which will be earned or forfeited based on the degree of achievement of the
Performance Goals actually achieved or exceeded. In setting Performance Goals, the Committee
may use such measures as return on equity, earnings growth, revenue growth, comparisons to
peer companies, or such other measure or measures of performance in such manner as it deems
appropriate.

(e)  Payment of Awards.    In the case of a Performance Share Grant, the Participant
shall be entitled to receive payment for each unit earned in an amount equal to the aggregate
Fair Market Value of the shares of Common Stock covered by such Award as of the end of the
Performance Period. In the case of a Performance Unit Grant, the Participant shall be entitled
to receive payment for each unit earned in an amount equal to the dollar value of each unit
times the number of units earned. The Committee, pursuant to the written agreement with the
Participant, may make such Performance Awards payable in whole or in part upon the occurrence
of events selected by the Committee that are beyond the control of the Participant (including,
but not limited to, a Change in Control or, if necessary to comply with Code section 409A, an
event described in 409A(a)(2)(A)(v)). The Committee may provide (but is not required to
provide) in the written agreement with the Participant that, in the case of a cash payment,
acceleration in payment of a Performance Award shall also be subject to discounting to
reasonably reflect the time value of money using any reasonable discount rate selected by the
Committee in accordance with Treasury Regulations under Code Section 162(m). Payment in
settlement of a Performance Award shall be made as soon as practicable following the
conclusion of the Performance Period (i) in cash, (ii) in shares of Common Stock, or (iii) in
any combination of the above, as the Committee may determine in its sole and absolute
discretion. The Committee may elect to make this determination either at the time the Award is
granted, at the time of payment, or at any time in between such dates.

10.    Other Stock-Based and Combination Awards.

(a)  Subject to compliance with Code section 409A, the Committee may grant other Awards
under the Plan pursuant to which Common Stock is or may in the future be acquired, or Awards
denominated in stock units, including ones valued using measures other than market value. Such
other stock-based grants may be granted either alone or in addition to any other type of Award
granted under the Plan.

(b)  The Committee may also grant Awards under the Plan in combination with other Awards
or in exchange of Awards, or in combination with or as alternatives to grants or rights under
any other employee plan of the Company, including the plan of any acquired entity.

(c)  Subject to the provisions of the Plan, the Committee shall have authority to
determine the individuals to whom and the time or times at which the Awards shall be made, the
number of shares of Common Stock to be granted or covered pursuant to such Awards, and any and
all other conditions and/or terms of the Awards.

11.    Deferral Elections.    Subject to compliance with Code section 409A (and in particular,
Code section 409A(a)(4)), the Committee may permit a Participant to elect to defer his or her
receipt of the payment of cash or the delivery of shares of Common Stock that would otherwise be
due to such Participant by virtue of the exercise, earn out or vesting of an Award made under the
Plan. If any such election is permitted, the Committee shall establish rules and procedures for
such payment deferrals, including the possible (a) payment or crediting of reasonable interest on
such deferred amounts credited in cash, and (b) the payment or crediting of dividend equivalents in
respect of deferrals credited in units of Common Stock. The Company and the Committee shall not be
responsible to any person in the event that the payment deferral does not result in deferral of
income for tax purposes.

12.    Dividend Equivalents.    Awards of Stock Options, Stock Appreciation Rights, Restricted
Unit Grants, Performance Share Grants, and other stock-based Awards may, in the sole and absolute
discretion of the Committee, earn dividend equivalents. In respect of any such Award which is
outstanding on a dividend record date for Common Stock, the Participant may be credited with an
amount equal to the amount of cash or stock dividends that would have been paid on the shares of
Common Stock covered by such Award had such shares been issued and outstanding on such dividend
record date. Subject to compliance with Code section 409A, the Committee shall establish such rules
and procedures governing the crediting of dividend equivalents, including the timing, form of
payment, and payment contingencies of such dividend equivalents, as it deems appropriate or
necessary.

13.    Termination of Service.    Subject to compliance with Code section 409A, the terms and
conditions under which an Award may be exercised after a Participant’s termination of Service shall
be determined by the Committee and reflected in the written agreement with the Participant
concerning the Award.

14.    Non-Transferability of Awards.    No Award under the Plan, and no rights or interest
therein, shall be assignable or transferable by a Participant except by will or the laws of descent
and distribution. Subject to the foregoing, during the lifetime of a Participant, Awards are
exercisable only by, and payments in settlement of Awards will be payable only to, the Participant
or his or her legal representative if the Participant is Disabled.

15.    Adjustments Upon Changes in Capitalization, Etc.

(a)  The existence of the Plan and the Awards granted hereunder shall not affect or
restrict in any way the right or power of the Board or the stockholders of the Company to make
or authorize any adjustment, recapitalization, reorganization or other change in the Company’s
capital structure or its business, any merger or consolidation of the Company, any issue of
bonds, debentures, preferred or prior preference stocks ahead of or affecting the Common Stock
or the rights thereof, the dissolution or liquidation of the Company, or any sale or transfer
of all or any part of its assets or business, or any other corporate act or proceeding.

(b)  In the event of any change in capitalization affecting the Common Stock after the
effective date of this Plan, such as a stock dividend, stock split, recapitalization, merger,
consolidation, split-up, combination, exchange of stock, other form of reorganization, or any
other change affecting the Common Stock, such proportionate adjustments, if any, as the
Committee in its discretion may deem appropriate to reflect such change shall be made with
respect to (i) the aggregate number of shares of Common Stock for which Awards in respect
thereof may be granted under the Plan, (ii) the maximum number of shares of Common Stock which
may be sold or awarded to any Participant, (iii) the number of shares of Common Stock covered
by each outstanding Award, and (iv) the price per share in respect of outstanding Awards. Such
adjustments shall be made by the Committee so that the adjustments shall not result in an
accounting consequence under APB 25 and FASB Interpretation No. 44, as amended, and any
successor thereof. The Committee’s determination with respect to the adjustments shall be
final, binding, and conclusive.

(c)  The Committee may also make such adjustments in the number of shares covered by, and
the price or other value of any outstanding Awards in the event of a spin-off or other
distribution (other than normal cash dividends) of Company assets to stockholders.

16.    Change in Control.    To the extent that the Committee, in its sole discretion,
determines that the payments provided in Subsection (a) through (d) below do not constitute an
“excess parachute payment” under Code Section 280G and do not violate Code section 409A, and except
as the Committee may in its discretion otherwise provide in any Award agreement, to provide for
compliance with Code section 409A or otherwise, in the event of a Change in Control:

(c)  All outstanding Stock Options shall vest in their entirety and become exercisable
immediately prior to the specified effective date of the Change in Control (and remain
exercisable until the time of termination specified in the relevant Award Agreement), unless
such Stock Options are either (i) assumed by the successor corporation or its parent company
pursuant to options providing substantially equal value and having substantially equivalent
provisions as the Stock Options granted under this Plan or (ii) the Stock Options are affirmed
by the Company;

(d)  Notwithstanding paragraph (a) above, all Stock Options issued to non-employee
directors shall vest in their entirety and become exercisable immediately prior to the
specified effective date of the Change in Control (and remain exercisable until the time of
termination specified in the relevant Award Agreement) irrespective of whether such Stock
Options are assumed by the successor corporation or its parent company or are affirmed by the
Company;

(e)  All restrictions and conditions of the Restricted Stock Grants and Restricted Unit
Grants then outstanding shall be deemed satisfied as of the date of the Change in Control; and

(f)  The Performance Share Grants and Performance Unit Grants shall be deemed to have
been fully earned as of the date of the Change in Control.

17.    Amendment and Termination.    Without further approval of the stockholders, the Board
may at any time terminate the Plan, or may amend it from time to time in such respects as the Board
may deem advisable. However, the Board may not, without approval of the stockholders, make any
amendment which would (a) increase the aggregate number of shares of Common Stock which may be
issued under the Plan (except for adjustments pursuant to Section 15 above), (b) materially modify
the requirements as to eligibility for participation in the Plan, or (c) materially increase the
benefits accruing to Participants under the Plan. Notwithstanding the above, the Board may amend
the Plan to take into account changes in applicable securities laws, federal income tax laws and
other applicable laws. Further, should the provisions of Rule 16b-3, or any successor rule, under
the Exchange Act be amended, the Board may amend the Plan in accordance with any modifications to
that rule without the need for stockholder approval. Notwithstanding the foregoing, the Plan may
not be amended more than once every six months other than to comply with the changes in the Code.

18.    Miscellaneous Matters.

(a)  Tax Withholding.

(i)  The Company’s obligation to deliver Common Stock and/or pay any amount under the
Plan shall be subject to the satisfaction of all applicable federal, state, local, and
foreign tax withholding requirements.

(ii)  The Committee may, in its discretion, provide the Participants or their
successors with the right to use previously vested Common Stock in satisfaction of all or
part of the taxes incurred by such Participants in connection with the Plan; provided,
however, that this form of payment shall be limited to the withholding amount calculated
using the minimum applicable statutory rates. Such right may be provided to any such holder
in either or both of the following formats.

1.    Stock Withholding:    The election to have the Company withhold, from the Common Stock
otherwise issuable under the Plan, a portion of the Common Stock with an aggregate Fair Market
Value equal to the taxes calculated using the minimum applicable statutory rates.

2.    Stock Delivery:    The election to deliver to the Company, at the time the taxes are
required to be withheld, one or more shares of Common Stock previously acquired by the Participant
or his or her successor with an aggregate Fair Market Value equal to the taxes calculated using the
minimum statutory rates.

(b)  Not an Employment or Service Contract.    Neither the adoption of the Plan nor the
granting of any Award shall confer upon any Participant any right to continue in the Service
of the Company or an Affiliate, as the case may be, nor shall it interfere in any way with the
right of the Company or an Affiliate to terminate the Services of any of its Employees,
Non-Employee Directors, or Consultants at any time, with or without cause.

(c)  Unfunded Plan.    The Plan shall be unfunded and the Company shall not be required
to segregate any assets that may at any time be represented by Awards under the Plan. Any
liability of the Company to any person with respect to any Award under the Plan shall be based
solely upon any written contractual obligations that may be effected pursuant to the Plan. No
such obligation of the Company shall be deemed to be secured by any pledge of, or other
encumbrance on, any property of the Company.

(d)  Annulment of Awards.    The grant of any Award under the Plan payable in cash is
provisional until cash is paid in settlement thereof. The grant of any Award payable in Common
Stock is provisional until the Participant becomes entitled to the certificate in settlement
thereof. Payment under any Awards granted pursuant to the Plan is wholly contingent upon
stockholder approval of the Plan. Where approval for an Award sought pursuant to Section
162(m)(4)(C)(ii) of the Code is not granted by the Company’s stockholders, the Award shall be
annulled automatically. In the event the Service of a Participant is terminated for cause (as
defined below), any Award which is provisional shall be annulled as of the date of such
termination for cause. For purposes of the Plan, the term “terminated for cause” means any
discharge because of personal dishonesty, willful misconduct, breach of fiduciary duty
involving personal profit, continuing intentional or habitual failure to perform stated
duties, violation of any law (other than minor traffic violations or similar misdemeanor
offenses not involving moral turpitude), or material breach of any provision of an employment
or independent contractor agreement with the Company.

(e)  Other Company Benefit and Compensation Programs.    Payments and other benefits
received by a Participant under an Award made pursuant to the Plan shall not be deemed a part
of a Participant’s regular, recurring compensation for purposes of the termination indemnity
or severance pay law of any state. Furthermore, such benefits shall not be included in, nor
have any effect on, the determination of benefits under any other employee benefit plan or
similar arrangement provided by the Company or a Subsidiary unless expressly so provided by
such other plan or arrangement, or except where the Committee expressly determines that
inclusion of an Award or portion of an Award should be included. Awards under the Plan may be
made in combination with or in addition to, or as alternatives to, grants, awards or payments
under any other Company or Subsidiary plans. The Company or any Subsidiary may adopt such
other compensation programs and additional compensation arrangements (in addition to this
Plan) as it deems necessary to attract, retain, and motivate officers, directors, employees or
independent contractors for their service with the Company and its Subsidiaries.

(f)  Securities Law Restrictions.    No shares of Common Stock shall be issued under the
Plan unless counsel for the Company shall be satisfied that such issuance will be in
compliance with applicable federal and state securities laws. Certificates for shares of
Common Stock delivered under the Plan may be subject to such stock-transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon which the
Common Stock is then listed, and any applicable federal or state securities law. The Committee
may cause a legend or legends to be put on any such certificates to make appropriate reference
to such restrictions.

(g)  Award Agreement.    Each Participant receiving an Award under the Plan shall enter
into a written agreement with the Company in a form specified by the Committee agreeing to the
terms and conditions of the Award and such related matters as the Committee shall, in its sole
and absolute discretion, determine.

(h)  Costs of Plan.    The costs and expenses of administering the Plan shall be borne by
the Company.

(i)  Governing Law.    The Plan and all actions taken thereunder shall be governed by and
construed in accordance with the laws of the State of Delaware.

(j)  Compliance with Section 409A of the Code. It is the Company’s intent that the Plan
comply in all respects with Code section 409A and the applicable regulations promulgated
thereunder. If any provision of the Plan is found not to be in compliance with Code section
409A and the applicable regulations promulgated thereunder, that provision shall be deemed to
have been amended or deleted as and to the extent necessary to comply with Code section 409A
and the applicable regulations promulgated thereunder, and the remaining provisions of the
Plan shall continue in full force and effect, without change. All transactions under the Plan
shall be executed in accordance with the requirements of Code section 409A and the applicable
regulations promulgated thereunder.

 

STAAR SURGICAL COMPANY,

a Delaware corporation

By:

/s/Charles Kaufman 

Charles Kaufman

Secretary

 

Date: December 31, 2008EX-10.1

December 31, 2008

Richard Smith

Re: Transition Employment Agreement

Dear Rick,

This letter (our “Agreement”) will confirm our understanding with respect to your termination
as an employee of Deerfield Capital Management LLC (the “Company”) as a result of a reduction in
force. You acknowledge that this Agreement is intended only to resolve matters relating to your
employment with the Company and is not an admission of fault or liability on the part of you or the
Company. Subject to your continuing to comply with the terms of this Agreement, you and the
Company agree as follows:

1. As part of the Company’s reduction in force, you are scheduled to be terminated effective
December 31, 2008. The Company is offering you a choice in terms of severance arrangements as
follows (please initial the option you choose):

     X     Option 1: The Company is offering you the opportunity, in consideration
of your entering into this Agreement, to remain a Company employee from the date hereof
until February 25, 2009 or your earlier resignation (the “Transition Period”), at your
current salary and benefits and subject to the terms of this Agreement; or

If you do not wish to remain a Company employee after December 31, 2008, in
consideration of your entering into this Agreement, you may choose either of the following:

     Option 2: Although you will no longer be an employee, you may choose to receive
periodic payments through February 16, 2009 equivalent in amount and payment date to the
salary you would have received through that date if you had remained a Company employee
through that date; or

     Option 3: Receive a lump sum payment of $26,538.00. If you choose this option, all
salary payments will cease as of December 31, 2008. The lump sum payment will be made to
you promptly after the Effective Date, as defined in Paragraph 17 below, in accordance with
the Company’s normal payroll policies.

You have until December 31, 2008 to notify the Company of your intention to select one of the
above options. If you choose either Option 2 or Option 3, you would have no further employment
duties, access to the Company’s offices, or rights after your termination date.

2. Regardless of which of the above options you choose, you will also receive a separate lump
sum payment, representing your discretionary bonus for the 2008 calendar year, of $125,000.00, in
accordance with the Company’s standard bonus payment policy, which in any event will be no later
than March 31, 2009. You acknowledge that you are not otherwise entitled to the benefits that are
described in this paragraph and in Paragraph 1.

3. In accordance with your employment letter dated December 13, 2005, we agree to pay you the
2 remaining $30,000 payments payable on the third and fourth anniversary of your starting date of
employment (February 1, 2006) or at the Company’s discretion.

4. You agree that, in addition to complying with the terms of this Agreement, effective upon
the end of your Transition Period (if you choose Option 1 above), you will execute a release in the
form attached hereto as Exhibit A, which will release the Company from any claims that may have
arisen during the Transition Period (the “Second Release”). In consideration of this Second
Release, the Company will pay you an additional one week of salary at the rate of your current
annual salary, upon the expiration of the 7-day revocation period contained in the Second Release
in accordance with the Company’s normal payroll policies. You acknowledge that you are not
otherwise entitled to the benefits that are described in this paragraph. Notwithstanding anything
contained in this agreement, the Company retains the right to terminate you for cause during the
Transition Period and concurrently rescind its obligation to pay you the amounts set forth in
Paragraph 1 and Paragraph 2.

5. During the Transition Period (if you choose Option 1 above), you may make reasonable use of
the Company’s facilities for the purpose of seeking new employment and may, upon prior notice to
your supervisor, be absent from the Company’s premises for reasonable periods of time for the
purpose of seeking new employment.

6. Upon your execution of this Agreement or the Second Release, as applicable, the Company
agrees that it will not contest any claim for unemployment insurance benefits you may file with the
Illinois Department of Employment Security.

7. You, on behalf of your heirs, executors, administrators, assigns, successors and legal
representatives, release and forever discharge the Company, its affiliates, parent or subsidiary
entities or corporations, and its and their officers, directors, shareholders, employees, agents,
representatives, insurers, successors and assigns (“Company Affiliates”), from any and all claims,
liabilities, demands, sums of money, agreements, promises, damages, sums of money, costs or
expenses, attorneys fees, causes of action and liabilities of any kind or character whatsoever,
including all known and unknown claims, arising on or before the Effective Date (as hereafter
defined) which you now have or may hereafter have against the Company or any Company Affiliate
(other than the obligations described in this Agreement). You agree that the severance payments
described in Paragraphs 1 and 2 hereof, and the Company’s promises in Paragraphs 4 and 5 hereof,
represent full and complete consideration for the release you are providing and for any other
promises you are making in this Agreement. Nothing in this Agreement shall constitute a release of
any of your rights to any vested benefits or rights to indemnification under the Company’s
insurance policies, bylaws or other applicable agreements.

8. Your release includes any claims or causes of action you might have under any local,
federal or state law, including the Illinois Human Rights Act, the Federal Age Discrimination in
Employment Act of 1967, as amended, the Civil Rights Act of 1964, as amended; the Americans with
Disabilities Act; the Equal Pay Act; the Employee Retirement Income Security Act of 1974, as
amended; the Family and Medical Leave Act of 1993; the Civil Rights Act of April 9, 1866; the
Federal Occupation Safety and Health Act; and the Chicago Human Rights Ordinance.

9. (a) You represent that you have not filed any complaints or charges or lawsuits against
the Company or Company Affiliates in any court or before any government agency except for a claim
for unemployment insurance benefits. You further represent that you have advised the Company of
any potential claims you may have regarding your employment with the Company as of the date you
sign this Agreement.

(b) The Company represents that it has not filed any complaints or charges or lawsuits
against you in any court or before any government agency. The Company further represents that it
has advised you that it is not aware of any potential claims it may have regarding your employment
with the Company as of the date you sign this Agreement.

(c) You agree to cooperate with the Company and any of its affiliates with respect to any
litigation, administrative proceedings or investigation relating to the activities of the Company
or any of its affiliates during the period of your employment with the Company including being
available for depositions and to be a witness at any trial or proceedings, help in preparation of
any legal documentation and providing affidavits and any advice or support that the Company or its
affiliate may request of you in connection with such litigation, proceeding or investigation and
the Company agrees to pay your reasonable costs and expenses (including attorney’s fees incurred by
a law firm approved by the Company in writing) relating thereto.

10. You agree that you will not make any disparaging or untrue statements concerning the
Company or Company Affiliates.

11. The Company agrees that in response to appropriate inquiries, in accordance with its
standard policy, it will provide a neutral reference concerning your employment with the Company.

12. Other than to carry out its terms, the Agreement shall not be used or offered by any
person for any purpose, including as an admission of liability or wrongdoing or the validity or
invalidity of any claims which were or could have been asserted by either you or the Company.

13. This Agreement embodies the sole and entire Agreement between you and the Company
concerning the resolution of all matters concerning your employment with the Company, and
supersedes any and all prior agreements, arrangements and understandings you or the Company may
have regarding your employment or compensation, except for your obligations under your
Confidentiality Agreement with the Company which shall remain in full force and effect after your
employment with the Company terminates.

14. The provisions of this Agreement may be modified only by the written agreement of you and
the Company.

15. In executing this Agreement, you represent that you are not relying on any inducements,
promises or representations of the Company or Company Affiliates other than expressly set forth in
this Agreement.

16. If any provision of this Agreement shall be deemed invalid under applicable law, such
provision shall be deemed omitted, but the remaining provisions of this Agreement shall remain in
full force and effect.

17. You agree and acknowledge that this Agreement will be disclosed publicly in a Form 8-K to
be filed by the Company with the Securities and Exchange Commission.

18. All disputes arising in connection with this Agreement or any rights arising pursuant to
this Agreement shall be resolved by binding arbitration in accordance with the applicable rules of
the American Arbitration Association. The arbitration shall be held in Cook County, Illinois
before a single arbitrator selected in accordance with Section 11 of the American Arbitration
Association Commercial Arbitration Rules who shall have (i) substantial business experience in the
investment advisory industry, and shall otherwise be conducted in accordance with the American
Arbitration Association Commercial Arbitration Rules and (ii) the right to award to any party any
right or remedy that is available under applicable law. The award of the arbitrator shall be final
and binding and may be entered and enforced in any court of competent jurisdiction.

19. This agreement is binding upon the Company and its successors and assigns.

20. You agree not to discuss or disclose any of the terms of this Agreement, except to your
immediate family, attorney, financial advisor or tax preparer or as required by law.

21. If this Agreement correctly reflects the understanding reached between you and the
Company, please sign and return the two enclosed copies of this Agreement. You should consult with
an attorney before you sign this Agreement, and you have forty-five (45) calendar days in which to
consider whether to sign. You may waive this 45 day consideration period. After you sign this
Agreement, you have seven (7) calendar days during which you may revoke this Agreement, and this
Agreement will not become effective until this seven day period has expired (the “Effective Date”).

22. We have attached to this Agreement a schedule containing the job titles and ages of all
employees affected by this reduction in force, and the ages of all individuals with the same job
classification not affected by this reduction in force.

The Company anticipates your cooperation during your Transition Period, and wishes you good
luck in your future endeavors thereafter.

DEERFIELD CAPITAL MANAGEMENT LLC

	 	 	 
	By:

	 	/s/ Robert A. Contreras
	
 
	 	 
	Its:

	 	Robert A. Contreras

General Counsel

PLEASE READ CAREFULLY BEFORE SIGNING. THIS AGREEMENT AND GENERAL RELEASE INCLUDES A RELEASE OF ALL

KNOWN AND UNKNOWN CLAIMS YOU MAY HAVE AGAINST THE COMPANY.

Approved and Accepted this 31st

day of December, 2008.

/s/ Richard Smith

Richard Smith

1

EXHIBIT A

SECOND RELEASE

In consideration of the payments specified in Option 1 of Paragraph 1 of my Transition
Employment Agreement of      with the Company (the “Agreement”), upon the Effective
Date as defined below, I, on behalf of myself and my heirs, executors, administrators, assigns,
successors and legal representatives, release and forever discharge the Company, its affiliates,
parent or subsidiary entities or corporations, and its and their officers, directors, shareholders,
employees, agents, representatives, insurers, successors and assigns (“Company Affiliates”), from
any and all claims, liabilities, demands, sums of money, agreements, promises, damages, sums of
money, costs or expenses, attorneys fees, causes of action and liabilities of any kind or character
whatsoever, including all known and unknown claims, arising after the date of the Agreement and
before the Effective Date (as hereafter defined), which I now have or may hereafter have against
the Company or any Company Affiliate (other than the obligations described in the Agreement).

My release includes any claims or causes of action I might have under any local, federal or
state law, including the Illinois Human Rights Act; the Federal Age Discrimination in Employment
Act of 1967, as amended; the Civil Rights Act of 1964, as amended; the Americans with Disabilities
Act; the Equal Pay Act; the Employee Retirement Income Security Act of 1974, as amended; the Family
and Medical Leave Act of 1993; the Civil Rights Act of April 9, 1866; the Federal Occupation Safety
and Health Act; and the Chicago Human Rights Ordinance.

I understand that I may revoke this Second Release by sending written notice to the Company,
Attention: General Counsel, within seven days of the date I sign the Agreement. This Second
Release will not become effective until this seven day period has expired (the “Effective Date”).

	 	 	 
	Approved and Accepted this_____

	day of

	 	, 2008.

Richard Smith

2

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