Document:

Exhibit 10.15

 

Candela
Corporation

 

Senior Officer
Executive Retention Agreement

 

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

 

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

 

WHEREAS, the Company recognizes that, as
is the case with many publicly-held corporations, the possibility of a change
in control of the Company exists and that such possibility, and the uncertainty
and questions which it may raise among key personnel, may result in the
departure or distraction of key personnel to the detriment of the Company and
its stockholders; and

 

WHEREAS, the Board of Directors of the
Company (the “Board”) has identified key positions within the Company (“Key
Positions”) and determined that appropriate steps should be taken to
reinforce and encourage the continued employment and dedication of those
persons, including the Executive, who hold Key Positions within the Company
without distraction from the possibility of a change in control of the Company
and related events and circumstances;

 

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

 

1.     Key
Definitions. As used herein, the following terms
shall have the following respective meanings:

 

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

 

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

 

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

 

(c)   the consummation of a
merger, consolidation, reorganization, recapitalization or statutory share
exchange involving the Company or a sale or other disposition of all or
substantially all of the assets of the Company in one or a series of
transactions (a “Business Combination”), unless, immediately following such
Business Combination, each of the following two conditions is satisfied: (i) all
or substantially all of the individuals and entities who were the beneficial
owners of the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of the then-outstanding shares of common
stock and the combined voting power of the then-outstanding securities entitled
to vote generally in the election of directors, respectively, of the resulting
or acquiring corporation in such Business Combination (which shall include,
without limitation, a corporation which as a result of such transaction owns
the Company or substantially all of the Company’s assets either directly or
through one or more subsidiaries) (such resulting or acquiring corporation is
referred to herein as the “Acquiring Corporation”) in substantially the same
proportions as their ownership, immediately prior to such Business Combination,
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities, respectively; and (ii) no Person (excluding the Acquiring
Corporation, any employee benefit plan (or related trust) maintained or
sponsored by the Company or by the Acquiring Corporation or any Exempt Person)
which has either (x) filed a Form 13D in respect of its holdings with
the SEC, or (y) in the reasonable opinion of the Company, should have
filed a Form 13D with the SEC in respect of its holdings and its
intentions, beneficially owns, directly or indirectly, 30% or more of the then
outstanding shares of common stock of the Acquiring Corporation, or of the
combined voting power of the then-outstanding securities of such corporation
entitled to vote generally in the election of directors (except to the extent
that such ownership existed prior to the Business Combination); or

 

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

 

1.2     “Change in Control
Date” means the first date during the Term (as defined in Section 2)
on which a Change in Control occurs. 
Anything in this Agreement to the contrary notwithstanding, if (a) a
Change in Control occurs, (b)  the Executive’s employment with the Company
is terminated prior to the date on which the Change in Control occurs, and (c) it
is reasonably demonstrated by the Executive that such termination of employment
(i) was at the request of a third party who has taken steps reasonably
calculated to effect a Change in Control or (ii) otherwise arose in
connection with or in anticipation of a Change in Control, then for all
purposes of this Agreement the “Change in Control Date” shall mean the date
immediately prior to the date of such termination of employment.

 

1.3   “Cause” means:

 

(a)   the Executive’s abject
failure to work cooperatively with the Company’s other officers and senior
employees, as determined in good faith by the CEO, following reasonable notice
and opportunity to cure;

 

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(b)   the Executive’s gross
negligence or willful misconduct in performing any action, or not performing
any action, that has had, or could have, alone or in the aggregate, a material
negative impact on the Company;

 

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

 

(d)   the Executive’s
unauthorized use, misappropriation, destruction or diversion of any material
asset or corporate opportunity of the Company (including, without limitation,
the Executive’s improper use or disclosure of the Company’s confidential or
proprietary information or his failure to abide by Company policies relating to
confidentiality);

 

(e)   any intentional act by
the Executive which has a material detrimental effect on the Company’s
reputation or business;

 

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

 

(g)   the Executive’s
conviction (including any plea of guilty or nolo
contendere) of any criminal act involving fraud, dishonesty,
misappropriation or moral turpitude, or which impairs the Employee’s ability to
perform his duties with the Company.

 

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

 

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

 

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

 

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

 

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

 

3.     Employment
Status; Termination Following Change in Control.

 

3.1.    Not an Employment
Contract. 
The Executive acknowledges that this Agreement does not constitute a
contract of employment or impose on the Company any obligation to retain the
Executive as an employee and that this Agreement does not prevent the Executive
from terminating employment at any time. 
Except as otherwise provided in Section 1.2, if the Executive’s
employment with the Company terminates for any reason and subsequently a Change
in Control shall occur, the Executive shall not be entitled to any benefits
hereunder.

 

3.2.    Termination of
Employment.

 

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

 

(b)   The failure by the
Executive or the Company to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Involuntary Termination or Cause
shall not waive any right of the Executive or the Company, respectively,
hereunder or preclude the Executive or the Company, respectively, from
asserting any such fact or circumstance in enforcing the Executive’s or the
Company’s rights hereunder.

 

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

 

(d)   Any Notice of
Involuntary Termination given by the Executive to the Company must be given
within sixty (60) days of the occurrence of the event(s) or circumstance(s) which
constitute(s) an Involuntary Termination.

 

4.     Benefits to Executive.

 

4.1.    Stock Acceleration
following a Change in Control and upon the Termination of Executive’s
Employment.  If a Change in Control occurs during the
Term, then, following the Change in Control Date and effective upon an
Involuntary Termination of the Executive’s employment or termination of the
Executive’s employment by the Company (other than for Cause, Disability or
death) then, (a) each Stock Appreciation Right (“SAR”) issued by the
Company to the Executive shall immediately become vested and exercisable in
full; (b) each outstanding option to purchase shares of Common Stock of
the Company held by the Executive shall become immediately exercisable in full
and will no longer be subject to a right of repurchase, if any, by the Company;
(c) each outstanding restricted stock award shall be deemed to be fully
vested and will no longer be subject to a right of repurchase by the Company,
and (d) notwithstanding any provision in any applicable stock option or
other equity instrument agreement to the contrary, each such option, SAR or
alternative equity instrument shall continue to be exercisable by the Executive
(to the extent such option was exercisable on the Date of Termination or became
exercisable pursuant

 

4

 

to this Section 4.1) for the duration of the term set
forth in the stock option agreement, SAR or other equity instrument agreement
applicable thereto  as if termination of
employment had not occurred.

 

4.2.    Compensation.  If the Change in Control Date
occurs during the Term and the Executive’s employment with the Company
terminates within 24 months following the Change in Control Date, then the
Executive shall be entitled to the following benefits:

 

(a)   Termination Without
Cause or Involuntary Termination.  If the Executive’s employment with the
Company is terminated by the Company (other than for Cause, Disability or
death) or by the Executive because of an Involuntary Termination, in either
case within 24 months following the Change in Control Date, then the Executive
shall be entitled to the following benefits:

 

(i)            the Company shall pay to the Executive in a lump sum in
cash within 30 days after the Date of Termination (or such later date as may be
required by Section 4.2 (d)) the sum of (A) the Executive’s base
salary through the Date of Termination, (B) the product of (x) the Executive’s
target annual bonus (irrespective of the level of attainment to date of any
target bonus benchmarks such as firm wide or individual objectives or hurdles)
for the fiscal year in which the Date of Termination occurs and (y) a
fraction, the numerator of which is the number of days in the current fiscal
year through the Date of Termination, and the denominator of which is 365, and (C) any
accrued vacation pay, in each case to the extent not previously paid (the sum
of the amounts described in clauses (A), (B), and (C) shall be hereinafter
referred to as the “Accrued Obligations”);

 

(ii)           the Executive shall receive regular monthly installments
for a one-year period equal to one twelfth (1/12th) of the Executive’s
annual salary (at the rate in effect when the Change in Control Date occurs and
before reduction of taxes or other withholdings or deductions such as a 401(k) Plan
contribution or like payment) multiplied by a factor of two (2.0x) times, with
such monthly payments commencing on the first regular monthly payroll date next
following the date of termination or such later date as may be required by Section 4.2(d);
and

 

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

 

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

 

5

 

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

 

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

 

(b)   Resignation; or
Termination for Death or Disability.  If the Executive voluntarily
resigns from his employment with the Company within 24 months following the
Change in Control Date, excluding a resignation because of an Involuntary
Termination, or if the Executive’s employment with the Company is terminated by
reason of the Executive’s death or Disability within 24 months following the
Change in Control Date, then the Company shall (i) pay the Executive (or
his estate, if applicable), in a lump sum in cash within 30 days after the Date
of Termination, the Accrued Obligations and (ii) timely pay or provide to
the Executive the Other Benefits.

 

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

 

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

 

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4.3     Taxes.

 

a)             In the event
that the Company undergoes a “Change in Ownership or Control” (as defined
below), the Company shall, within 30 days after each date on which the
Executive becomes entitled to receive (whether or not then due) a Contingent
Compensation Payment (as defined below) relating to such Change in Ownership or
Control, determine and notify the Executive (with reasonable detail regarding
the basis for its determinations) (i) which of the payments or benefits
due to the Executive (under this Agreement or otherwise) following such Change
in Ownership or Control constitute Contingent Compensation Payments and (ii) the
amount, if any, of the excise tax (the “Excise Tax”) which would be payable by
the Executive pursuant to Section 4999 of the Code, with respect to such
Contingent Compensation Payment but for the operation of this Section 4.3.  If it is determined by the Company and the
Executive that an Excise Tax would be payable by the Executive, then in such
instance either (i) the Contingent Compensation Payments shall be scaled
back (with the latest-to-be-paid of such Payments to be withheld for this
purpose) such that the Contingent Compensation Payments would trigger benefits
which, in the aggregate, would generate $1.00 less than the threshold which would
otherwise cause Contingent Compensation Payments to be subject to the Excise
Tax, or (ii) if the value of the Contingent Compensation Payments is such
that, after deducting any applicable Excise Tax, there would be an amount of
Contingent Compensation Payments remaining available to him, so that the
Executive would receive a net benefit (after deducting all Excise Tax) that is
greater than the benefit the Executive would have retained had his Contingent
Compensation Payments been reduced to avoid the Excise Tax, there shall be no
withholding or deducting Contingent Compensation Payments to be made to the
Executive.

 

b)            For purposes
of this Section 4.3, the following terms shall have the following
respective meanings:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5.     Disputes.

 

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

 

5.2.    Expenses.  The Company agrees to pay, as
incurred, to the full extent permitted by law, all legal, accounting and other
fees and expenses which the Executive may reasonably incur as a result of any
claim or contest (regardless of the outcome thereof) by the Company, the
Executive or others regarding the validity or enforceability of, or liability
under, any provision of this Agreement or any guarantee of performance thereof
(including as a result of any contest by the Executive regarding the amount of
any payment or benefits pursuant to this Agreement), plus in each case interest
on any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of
the Code; provided, however, that (a) the amount of such fees and expenses
paid (or reimbursed) by the Company during any calendar year may not affect the
amount of fees and expenses paid (or reimbursed) by the Company in any other
calendar year, (b) payment (or reimbursement) of fees and expenses by the
Company shall be made on or before the last day of the calendar year following
the calendar year in which the fees and expenses were incurred, (c) the
Executive’s right to reasonable fees and expenses is not subject to liquidation
or exchange for another benefit and (d) this obligation shall survive the
termination of this Agreement and shall remain in effect until the applicable
statute of limitations has expired with respect to any litigation to enforce the
terms of this Agreement.

 

6.     Successors.

 

6.1.    Successor to Company.  The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business (including pursuant to
acquisition of all or substantially all of the Common Stock of the Company) or
assets of the Company expressly to assume and agree to perform this Agreement
to the same extent that the Company would be required to perform it if no such
succession had taken place.  Failure of
the Company to obtain an assumption of this Agreement at or prior to the
effectiveness of any succession shall be a breach of this Agreement and shall
constitute Involuntary Termination if the Executive elects to terminate
employment, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Date of
Termination.  As used in this Agreement, “Company”
shall mean the Company as defined above and any successor to its business or
assets as aforesaid which assumes and agrees to perform this Agreement, by
operation of law or otherwise.

 

6.2.    Successor to Executive.  This Agreement shall inure to
the benefit of and be enforceable by the Executive’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.  If the Executive should die
while any amount would still be payable to the Executive or his family
hereunder if the Executive had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the executors, personal representatives or administrators of the
Executive’s estate.

 

8

 

7.     Agreement to
be Binding on Successor. 
The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation, reorganization or otherwise) to
all or substantially all of the business or assets of the Company (the “Acquisition”), as a
condition precedent to the Acquisition, to expressly assume and
agree  in writing, with a copy to you, to perform this Agreement
in the same manner and to the same extent as the Company would be required to
perform this Agreement as if no such succession had taken
place.  You acknowledge and agree, and the Company acknowledges and
agrees, that, without limitation to any other provision of this Agreement
which is also “material”, this provision is a material
term of this Agreement and an important clause benefiting you,
to assure you that the obligation of Candela to provide you with the
existing benefits made available under this Agreement, are
adhered to by any successor to the Company, and the provision also benefits the
Company in that the assurance to you afforded by this provision is an important
retention incentive to have you remain in the employment of the Company.

 

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

 

9.     Miscellaneous.

 

9.1.    Employment by
Subsidiary.  For purposes of this Agreement, the Executive’s
employment with the Company shall not be deemed to have terminated solely as a
result of the Executive continuing to be employed by a wholly-owned subsidiary
of the Company.

 

9.2.    Severability.  The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which
shall remain in full force and effect.

 

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

 

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

 

9.5.    Waivers.  No waiver by the Executive at
any time of any breach of, or compliance with, any provision of this Agreement
to be performed by the Company shall be deemed a waiver of that or any other
provision at any subsequent time.

 

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

 

9.7.    Tax Withholding.  Any payments provided for
hereunder shall be paid net of any applicable tax withholding required under
federal, state or local law.

 

9.8.    Release of Claims.  The Company shall have no
obligation to make any payments or provide any benefits pursuant to this
Agreement unless (i) you agree to sign and deliver to the General Counsel
of the Company a release of claims in substantially the same form attached
hereto as

 

9

 

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

 

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

 

9.10.                Amendments.  This Agreement may be amended or modified
only by a written instrument executed by both the Company and the Executive.

 

[The rest of this page intentionally left blank.]

 

10

 

Form of
Release of Claims

 

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

 

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

 

For the purpose of implementing a full and complete release and
discharge of the Released Parties, you expressly acknowledge that this
Agreement is intended to include and does include in its effect, without
limitation, all claims which you do not know or suspect to exist in your favor
against the Released Parties, or any of them, at the moment of execution
hereof, and that this Agreement expressly contemplates the extinguishment of
all such claims.

 

11

 

Form of
Release of Claims

 

(Exhibit B:
For California Residents)

 

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

 

This Agreement includes a waiver of any
rights you may have under Section 1542 of the California Civil Code, or
any other similar state statutes or laws, regarding the waiver of unknown
claims.

 

Section 1542 states:

 

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

 

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

 

12Exhibit 10.16

 

Candela
Corporation

 

Amended
and Restated Employment Agreement

 

AGREEMENT made as of the
     day of November, 2007, by and between Candela
Corporation, a Delaware corporation (the “Company”), and Gerard E. Puorro
(“Puorro” or the “Employee”).

 

WHEREAS, the Company desires to employ Puorro
and Puorro desires to be employed by the Company on the terms and conditions
contained herein;

 

WHEREAS, the Company and the Employee
originally executed prior versions of this Agreement on August 4, 1994, March 10,
1999, and April 5, 2007, which agreement is presently in full force and
effect, and the parties wish and hereby intend to rescind the August 4,
1994 Agreement, the March 10, 1999 Agreement and the April 5, 2007
Amended and Restated Employment Agreement, and replace them with the terms and
provisions of this Agreement;

 

NOW, THEREFORE, in consideration of the
mutual covenants and obligations herein contained, it is mutually agreed
between the parties hereto as follows:

 

1.   Employment
and Term.  The Company hereby agrees to continue to
employ the Employee and the Employee hereby agrees to serve as President and
Chief Executive Officer of the Company. 
This Agreement, and all rights and obligations of the parties hereunder,
shall take effect upon the date first above written and shall expire on December 31,
2009 (the “Term”); provided however, that commencing on January 1, 2010
and each January 1 thereafter, the Term shall be automatically extended
for one additional year unless, not later than 60 days prior to the scheduled
expiration of the Term (or any extension thereof), the Company shall have given
the Employee written notice that the Term will not be extended.  During the Term, both the Employee and the
Company shall have the right to terminate the Employee’s employment at any time
upon notice to the other party as provided in Paragraph 3 hereof subject to the
Company’s obligation to pay termination benefits under certain circumstances as
provided in Paragraphs 3.E and 3.F.

 

2.   Compensation.

 

A.             Salary.  In consideration of all of the services to be
rendered by the Employee to the Company, the Company will pay the Employee a
base salary at the rate per annum approved by the Compensation Committee or the
full Board of Directors from time to time.

 

B.            Benefits.  The Employee will be entitled to continue to
participate on the same basis with all other employees of the Company in the
Company’s standard benefit package generally available to all other employees
of the Company, including the Company’s group health, disability, vacation
accrual, long-term care and life insurance programs.  The Employee will also be entitled to
continue to participate in any officer-level life insurance program that he is
currently participating in, on at least as favorable terms as his current
polices provide for.

 

C.            Company Car.  The Employee will be entitled to the use of a
company car, leased by the Company, in a price range approved by the
Compensation Committee from time to time. 
In the event that the Employee’s employment is terminated at any time by
the Company for reasons other than For Just Cause, the Company will continue to
make monthly lease payments on the vehicle past the Employee’s date of
termination and until the end of the lease term, and thereafter provide the
Employee with the option to purchase the vehicle at the end of the lease,
provided there is a purchase option as part of the original vehicle lease.

 

3.   Termination
and Severance.  The Employee’s employment may be terminated
as follows:

 

1

 

A.             At the Employee’s Option. 
Subject to the Company’s right to terminate the Employee pursuant to
Paragraphs 3.B, 3.C and 3.D below, the Employee may terminate his employment
hereunder for any reason at any time upon at least sixty (60) days’ prior
written notice.  In the event the
Employee terminates his employment pursuant to this Paragraph 3.A, either the
Employee or the Company can elect, prior to the expiration of the sixty (60)
day notice period provided above, that the Employee receive severance payments
pursuant to Paragraph 3.E hereof, which election by either party will also
cause the provisions of Paragraph 4 hereof to become operable.  If no such election is made, the Employee
shall not be entitled to any severance payments pursuant to Paragraph 3.E
hereof.  A form of election that can be
used by the Employee or the Company is appended as Exhibit B.

 

B.            Upon Disability of Employee.  If the Employee becomes
disabled for such period of time and under circumstances which entitle him to
receive disability benefits under the terms of any disability policy now
maintained or to be purchased for the Employee by the Company, then the Board
of Directors of the Company, in its discretion, may elect to terminate the Employee’s
employment by reason of such disability. 
In the event of such termination the Employee shall be entitled to
severance payments pursuant to Paragraph 3.E hereof, less the “before income
tax” value of disability benefits received under said disability policy.

 

C.            At the Election of the Company for Just Cause.  Notwithstanding Paragraph 3.A,
the Company may, immediately and unilaterally, terminate the Employee’s
employment for just cause at any time during the Term of this Agreement by
notice to the Employee.  Termination of
the Employee’s employment by the Company shall constitute a termination for
just cause if such termination is for one or more of the following
reasons:  (i) Employee’s conviction
in a court of law of any felony, which conviction makes him unfit for
continuing employment, prevents him from effective management of the Company or
materially adversely affects the reputation or business activities of the
Company; (ii) the commission by the Employee of any act of fraud or
embezzlement, or the misappropriation by the Employee of any money or other
assets or property (tangible or intangible) of the Company; or (iii) dishonesty
or willful misconduct which adversely affects the reputation or business
activities of the Company, or misappropriation of funds.

 

D.              At the Election of the Company for Reasons Other than Just Cause.  Notwithstanding Paragraph 3.A,
the Company may, immediately and unilaterally, terminate the Employee’s
employment at any time without just cause by giving written notice to the
Employee of the Company’s election so to terminate.  In the event that the Company exercises its
right to terminate under this Paragraph 3.D, the Employee shall be entitled to
receive severance payments and benefits from the Company as determined in
accordance with Paragraphs 3.E and 3.F, respectively.

 

E.             Severance Payments.  In the event that the Employee’s employment
with the Company is terminated either (i) at the Employee’s option and
either the Employee or the Company elects for the Employee to receive severance
payments pursuant to paragraph 3.A, or (ii) at the Company’s option
pursuant to paragraph 3.D, the Employee shall be entitled to receive severance
payments from the Company during the period beginning on the date of the
Employee’s termination and ending two (2) years from the date of
termination (the “Severance Period”); provided, however, that if the Employee
is a “specified employee” (as that term is used in Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”)) on the date of his
termination of employment, the monthly payments (or portions thereof) that are
to be paid or provided during the first six (6) month period following the
Employee’s termination of employment shall not be paid or provided until the
first business day after the date that is six (6) months following the
Employee’s termination of employment or, if the Employee dies during such six (6) month
period, on the first business day after the date of the Employee’s death.  Any delayed payment pursuant to the prior
sentence shall include the cumulative amount of any amounts that could not be
paid during the six (6) month period following the Employee’s termination
of employment.

 

The
remaining monthly payments in the first year of the Severance Period shall be
paid in accordance with the Company’s then current payroll practice following
such six (6) month period.  During
the first year of the Severance Period, the monthly severance payments shall be
equal to one-hundred percent (100%) of the Employee’s monthly salary as of the
date of termination.  During the second
year of the Severance Period, severance payments shall be equal to fifty
percent (50%) of the Employee’s

 

2

 

monthly salary as of the date
of termination; provided, however,
that if the Board of Directors of the Company has voted to elect an individual
to serve as President and Chief Executive Officer of the Company immediately
succeeding the Employee’s performance of duties as President and CEO, and such
designation of successor is made prior to the Employee’s date of termination
and cessation of service as CEO, then in such event, during the second year of
the Severance Period, the monthly severance payments shall be equal to
one-hundred percent (100%) of the Employee’s monthly salary as of the date of
termination.  All severance payments
shall be made in accordance with the Company’s then current payroll practices
and will be subject to all applicable federal, local and state withholding,
payroll and other taxes.

 

F.             Benefits Continuation.  The Employee’s eligibility for participation
in the Company’s health plan or plans terminates as of the Termination Date and
the parties agree that the Termination Date shall constitute the “qualifying
event” under the Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”).  However, the Employee may
elect in accordance with COBRA to continue coverage under the Company’s health
plans which are available to active employees of the Company.  In the event that the Employee’s employment
with the Company is terminated either (i) at the Employee’s option and
either the Employee or the Company elects for the Employee to receive severance
payments pursuant to paragraph 3.A, or (ii) at the Company’s option
pursuant to paragraph 3.D, then in the event Employee elects continuation of
coverage under COBRA, the Company shall, during the Severance Period, pay 100%
of the premium payments for health and dental insurance continuation coverage,
and after the expiration of the Severance Period, health insurance coverage
shall be continued only to the extent required by COBRA and only to the extent
that Employee timely pays the premium payments for such continuation of health
insurance coverage.  In addition, the
Company shall pay up to $25,000 for outplacement services to advise the
Employee.

 

G.            Suspension of Payments and Benefits.  The Company may, in its
discretion, suspend and cause to be forfeited any or all of the foregoing
severance payments and benefits in the event Employee materially breaches the
provisions of this Agreement or the provisions of the Invention Disclosure and
Confidentiality Agreement referred to in Paragraph 5 hereof.

 

4.   Non-Competition
and Non-Solicitation.

 

A.             Non-Competition.  During the term of Employee’s employment with
the Company and, provided the Employee or the Company has elected for the
Employee to receive severance payments pursuant to Section 3.E, in which
case then until the expiration of the Severance Period, if any, (the
“Non-Compete Period”), the Employee will not, without the Company’s prior
written consent, alone or as a partner, joint venturer, officer, director,
employee, consultant, agent, independent contractor or stockholder of any
company or business, engage in any business activity which is or plans to be in
competition in the United States with any of the products or services marketed,
distributed, sold or otherwise provided by the Company at such time.  The ownership by the Employee of not more
than one percent of the shares of stock of any corporation having a class of
equity securities actively traded on a national securities exchange or on
NASDAQ shall not be deemed, in and of itself, to violate the prohibitions of
this paragraph.

 

B.            Non-Solicitation.  During the Non-Compete Period, the Employee
will not, directly or indirectly, employ any person who is employed by the
Company at any time during the Term hereof, or in any manner seek to induce any
such person to leave his or her employment with the Company.  In addition, the Employee will not knowingly
permit any company or business organization in which the Employee is an officer
of director or which is directly or indirectly controlled by the Employee, to
employ or in any manner seek to induce any such person to leave his or her
employment with the Company.

 

C.            Irreparable Harm.  The Employee agrees that the breach of this
provision by the Employee will cause irreparable damage to the Company and that
in the event of such breach the Company shall have, in addition to any and all
remedies of law, the right to an injunction, specific performance or other
equitable relief to prevent the violation of the Employee’s obligations
hereunder.

 

3

 

D.              Survival.  The Employee hereby agrees and understands
that the Employee’s obligations under this Agreement shall survive the
termination of the Employee’s employment regardless of the manner of such
termination and shall be binding upon the Employee’s heirs, executors,
administrators and legal representatives.

 

5.   Invention
Disclosure and Confidentiality Agreement.  The Employee acknowledges that he entered
into the Invention Disclosure and Confidentiality Agreement in the form
attached hereto as Appendix A effective as of April 10, 1989, and that
such Agreement is binding upon him and remains in full force and effect.

 

6.   Successor
to Employee.  This Agreement shall inure to the benefit of
and be enforceable by the Employee’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.  If the Employee should die
while any amount would still be payable to the Employee or his family hereunder
if the Employee had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement
to the executors, personal representatives or administrators of the Employee’s
estate.

 

7.   General
Provisions.  This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of
Massachusetts.  This Agreement and the
Invention Disclosure and Confidentiality Agreement constitute the entire
agreement between the parties concerning the subject matter hereof and
supersede any prior negotiations, understandings or agreements concerning the
subject matter hereof and thereof, whether oral or written, including the
Agreements between the Employee and the Company dated April 10, 1989, August 4,
1994, the letter agreement between the Employee and the Company dated September 12,
1996, March 10, 1999, and April 5, 2007.  Notwithstanding the foregoing, this Agreement
shall not affect the Executive’s rights under the Candela Corporation Executive
Retention Agreement dated [        ],
2007, as may be amended from time to time (the “Retention Agreement”).  Except as provided in Section 4.2(b) of
the Retention Agreement, the Executive shall in no event be entitled to receive
severance payments or benefits under this Agreement if he is entitled to
receive severance payments or benefits under the Retention Agreement.  This Agreement may be modified, and the
rights and remedies of any provision hereof may be waived, only in writing,
signed by both the Company and the Employee. 
The invalidity or unenforceability of any provision of this Agreement
shall not affect the other provisions of this Agreement but this Agreement
shall be construed and reformed to the fullest extent possible.  If one or more of the provisions contained in
this Agreement shall for any reason be held to be excessively broad as to
scope, activity, subject or otherwise so as to be unenforceable at law, such
provision shall be construed by the appropriate judicial body by limiting or
reducing it or them, so as to be enforceable to the maximum extent compatible
with applicable law as it shall then appear. 
The language of all parts of this Agreement shall in all cases be
construed as a whole according to its fair meaning and not strictly for or
against either of the parties.  Nothing
in this Agreement shall be construed as a contract of employment for a specific
term or create any obligation on the part of the Company or any other person or
entity to continue Employee’s employment with the Company.  Employee may not assign any of his rights and
obligations under this Agreement except by will or by the laws of descent and
distribution; the rights and obligations of the Company under this Agreement
shall inure to the benefit of, and shall be binding upon, the successors and
assigns of the Company.  This Agreement
may be executed in any number of counterparts, all of which taken together
shall constitute one and the same instrument. 
For all purposes under this Agreement, references to termination of the
Employee’s employment and similar terms shall be interpreted to mean
“separation from service,” as that term is used in Section 409A of the
Code, and the Employee’s employment shall not be deemed to have terminated for
purposes of Paragraph 3.D or 3.E unless and until a separation from service
shall have occurred for purposes of Section 409A of the Code.

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

 

4

 

Appendix A

 

INVENTION
DISCLOSURE AND

CONFIDENTIALITY
AGREEMENT

FOR EXECUTIVE
OFFICERS

 

CANDELA
CORPORATION

530 Boston Post
Road

Wayland, Massachusetts
01778

 

RECITALS

 

A.            CANDELA CORPORATION
(the “Company”) is involved in an extremely competitive industry in which
confidentiality is a valuable asset.

 

B.            This Agreement
addresses the issues of disclosure and assignment of inventions and copyrightable
material, and nondisclosure of confidential information and trade secrets.

 

C.            This Agreement was
made available to me several days prior to the date hereof so as to provide me
with an adequate amount of time in which to read the entire Agreement and
review its provisions with my counsel and advisors.

 

D.            The importance of the
matters that are the subject of this Agreement was explained to me by the
Company.

 

E.             The Company has given
me the opportunity to inquire as to the meaning of the provisions of this
Agreement and has adequately answered all questions I have posed to the
Company.

 

F.             I understand the
meaning and effect of the terms of this Agreement.

 

NOW, THEREFORE, in
consideration of the covenants herein and for other good and valuable consideration
including my employment by the Company or continuation of such employment, or
the receipt of compensation including: 
salary, increase in salary, bonuses or stock options, I hereby covenant
and agree with the Company (which term shall include any parent, subsidiary or
successor to CANDELA CORPORATION) as follows:

 

ARTICLE I

 

Disclosure of
Inventions

 

I agree that I will
communicate in writing to the Board of Directors of the Company, or such
officer or individual as the Board of Directors of the Company may from time to
time designate, promptly after being requested, a full and complete disclosure
of any and all research and other information, inventions, discoveries and
improvements made, developed and/or conceived and/or reduced to practice by me alone
or jointly with others (i) while in the employ of the Company and (ii) during
a one (1) year period following the termination of my employment or other
association with the Company but as a direct result of such employment.

 

This provision shall only
apply to products or improvements to such products sold or contemplated to be
sold by the Company.

 

5

 

ARTICLE II

 

Assignment of
Inventions

 

2.1           I agree to, and hereby
do, assign and transfer to the Company, or its nominee or designee (without any
separate remuneration or compensation to me other than the wages and/or salary
received, or compensation assigned to me from time to time in the course of my
aforesaid employment), all my right, title and interest throughout the world in
and to any research and other information, inventions, discoveries and
improvements, together with the right to file and/or own wholly and without
restriction applications for United States and foreign patents and trademarks
and any patent and trademark issued or issuing thereon.  I will promptly disclose to the Company the
research and other information, inventions, discoveries and improvements
specified thereon, (i) while in the employ of the Company and (ii) during
a one (1) year period following the termination of my employment or other
association with the Company but as a direct result of such employment.  I agree to execute all appropriate patent
applications for securing all United States and foreign patents on all such
inventions, discoveries and improvements and to do, execute and deliver any and
all acts and instruments that may be necessary or proper to vest all such
inventions, discoveries and improvements and patents (both United States and
foreign) in the Company, or its nominee or designee, and to enable the Company,
or its nominee or designee, to obtain all such letters patent; and that I will
render to the Company, or its nominee or designee, all such assistance as it
may require in the prosecution of all such patent applications and applications
for the reissue of such patents, but the expense of all such assignments and
patent applications or all other proceedings referred to hereinabove, shall not
be a charge upon me.  I will execute,
upon request. documents which secure to the Company the interests here
conveyed, provided that all fees or payments connected with the execution of
the documents shall not be a charge upon me.

 

2.2           1 will assist, upon
request, in locating writings and other physical evidence of the making of my
inventions and provide unrecorded information relating to them, and give
testimony in any proceeding in which any of my inventions of any application or
patent directed thereto may be involved provided that compensation shall be
paid for such services.  To the extent
reasonably feasible, the Company will use its best efforts to request such
assistance at times and places as will least interfere with any other
employment of mine.

 

2.3           Any invention relating
to the Company’s business disclosed by me within one (1) year following
the termination of my employment shall be deemed to be a “Company” or “other”
invention, unless proved to have been conceived after such termination.

 

2.4           I agree that there are
no inventions excluded by this Agreement except those I have enumerated and
described in Exhibit A of this Agreement.

 

6

 

ARTICLE III

 

Unauthorized
Disclosure

 

3.1           I agree that I will
not, without first obtaining the written approval of the Board of Directors of
the Company, or of such officer or individual as the Board of Directors of the
Company may from time to time designate, divulge or disclose to anyone outside
the Company, whether by private communications or by public address or
publication, or otherwise, any information not already lawfully available to
the public concerning any inventions, developments, specifications, technical
and engineering data, methods or reports relating to the business of the
Company, or any other corporation, firm or person for whom the Company is
conducting or shall conduct research services or is providing, or shall provide
other services, whether supplied by the Company, or such other corporation,
firm or person, or whether made, developed and/or conceived by me or by others
in the employ of the Company.  All
originals and copies of any such specifications, technical and engineering
data, methods of reports, or other written materials relating to the business
of the Company, however and whenever produced, shall be the sole property of
the Company, not to be removed from the premises or custody of the Company
without in each instance first obtaining written consent or authorization of
the Board of Directors or of such officer or individual as the Board of
Directors of the Company may from time to time designate, and shall be
surrendered to the Company upon termination of my employment.

 

3.2           In addition, I agree
that I will not directly or indirectly publish or cause to be published any
article containing or disclosing any information about the Company or reported
or received by the Company from any corporation, firm or person with whom the
Company shall be under contract to provide research service, without the prior
written authorization of the Board of Directors of the Company or of such
officer or individual as the Board of Directors may from time to time
designees.

 

3.3           I acknowledge that the
Company from time to time may have agreements with other persons or with the
United States government or agencies thereof, which impose obligations or
restrictions on the Company regarding inventions made during the course of work
thereunder or regarding the confidential nature of such work.  I agree to be bound by all such obligations
and restrictions and to take all action necessary to discharge the Company’s
obligations.

 

ARTICLE IV

 

Copyright

 

I will promptly disclose
to the Company all copyrightable material which I produce, compose or write,
individually or in collaboration with others, which arises out of work
delegated to me by the Company; and, at the expense of the Company, I will
assign to it all my interest in such copyrightable material and will sign all
papers and do all other acts necessary to assist the Company to obtain
copyright on such material in any and all countries.

 

7

 

ARTICLE V

 

Trade Secrets

 

5.1           I will not during my
employment by the Company or afterwards, disclose to others or use for my own
benefit any trade secrets acquired by me from the Company, its customers, suppliers,
consultants or affiliates, except to the extent that the disclosure of such
trade secrets is necessary to perform my duties and fulfill my responsibilities
as an employee to the Company.  (A trade
secret is information not generally known to the trade which gives the Company
an advantage over its competitors.  Trade
Secrets can include, by way of example only, products under development,
production methods and processes, sources of supply materials used in manufacture,
customer lists, cost of parts and materials, marketing plans and strategies,
price lists, information concerning the filing or pendency of patent
applications, and documents marked “confidential”.)

 

5.2           I represent that my
performance of all the terms of this Agreement and as an employee of the
Company does not and will not breach any agreement to keep confidential
proprietary information, knowledge or data acquired by me in confidence or in
trust prior to my employment with the Company, and I will not disclose to the
Company, or induce the Company to use, any confidential or proprietary
information or material belonging to any previous employer or others.  I agree not to enter into any agreement
either written or oral in conflict herewith.

 

ARTICLE VI

 

Former Employers

 

6.1           I represent and warrant
that my employment by the Company will not conflict with and will not be
constrained by any prior or current employment, consulting agreement or
relationship whether oral or written.  I
represent and warrant that I do not possess confidential information arising
out of such employment, consulting agreement or relationship which, in my best
judgment, would be utilized in connection with my employment by the Company.

 

6.2           If I should find that
confidential information belonging to any other person or entity might be
usable in connection with the Company’s business, I will not intentionally
disclose to the Company any confidential information belonging to any of my
former employers; but during my employment by the Company I will use in the
performance of my duties all information which is generally known and used by
persons with training and experience comparable to my own all information which
is common knowledge in the industry or otherwise legally in the public domain.

 

ARTICLE VII

 

Arbitration

 

Any controversy, dispute
or claim arising out of or relating to this Agreement or the breach thereof, if
not earlier resolved by the parties hereto, shall be settled by arbitration in
accordance with the rules then in force of the American Arbitration Association.  This Agreement to arbitrate shall be
enforceable and judgment upon any award rendered by all or a majority of the
arbitrators may be entered in any court having jurisdiction.  The arbitration shall be held in Boston,
Massachusetts.  This agreement shall be
governed by and enforced in accordance with the laws of Massachusetts.

 

[Remainder of Page Intentionally
Left Blank]

 

8

 

Exhibit A

 

Description of
Inventions Excluded from this Agreement. (If none, write “none”.)

 

	
  Name
  of Invention

  	
   

  	
  Description

  
	
  1. NONE

  	
   

  	
   

  
	
  2.

  	
   

  	
   

  
	
  3.

  	
   

  	
   

  

 

9

 

EXHIBIT
B

 

Form of
Election For Use by

Either the
Employee or the Company

 

Pursuant to Section 3.A
of that certain Amended and Restated Employment Agreement (the “Agreement”)
dated November     , 2007, between Gerard E. Puorro
(the “Employee”) and Candela Corporation (the “Company”), the
Employer has provided at least sixty (60) days’ prior written notice
(the “Notice Period”) that the Employee has elected to terminate his
employment with the Company.  Therefore,

 

EITHER:

 

A.            The
Employee hereby elects, prior to the expiration of the Notice Period mentioned
above, that the Employee shall receive severance payments pursuant to the Agreement.  This Notice is to be delivered to the Company
prior to the end of the Notice Period.

 

 

	
   

  	
  Employee:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

OR:

 

B.            The
Company hereby elects, prior to the expiration of the Notice Period mentioned
above, that the Employee shall receive severance payments pursuant to the
Agreement.  This Notice is to be
delivered to the Company prior to the end of the Notice Period.

 

 

	
   

  	
  Candela
  Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  

 

 

IF NEITHER THE EMPLOYEE
NOR THE COMPANY EXECUTES AN ELECTION, AND DELIVERS SAME TO THE OTHER PARTY, THE
EMPLOYEE SHALL
NOT BE ENTITLED TO ANY SEVERAND PAYMENTS PURSUANT TO PARAGRAPH
3.E OF THE AGREEMENT.

 

10

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