Table
of Contents
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 10-K/A
Amendment
No. 1
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF
1934
|
For the fiscal year ended
June 27, 2009
Commission
file number 000-14742
CANDELA
CORPORATION
(Exact name of
registrant as specified in its charter)
Delaware
|
|
04-2477008
|
(State or other
jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
530
Boston Post Road, Wayland, Massachusetts
|
|
01778
|
(Address of
principal executive offices)
|
|
(Zip Code)
|
Registrants
telephone number, including area code:
508-358-7400
Securities
registered pursuant to Section 12(b) of the Act:
Common
Stock, $.01 par value per share
(Title of Class)
Securities
registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if
the registrant is a well-known seasoned issuer, as defined in Rule 405 of
the Securities Act. Yes
o
No
x
Indicate by check mark if
the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of
the Act. Yes
o
No
x
Indicate by check mark
whether the registrant (1) has filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period than the registrant was required to file
such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes
x
No
o
Indicate by check mark
whether the registrant has submitted electronically and posted on its corporate
Web site, if any, every Interactive Data File required to be submitted and
posted pursuant to Rule 405 of Regulation S-T during the preceding 12
months (or for such shorter period that the registrant was required to submit
and post such files). Yes
o
No
o
Indicate by check mark if
disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of the registrants
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K.
x
Indicate by check mark
whether the registrant is an large accelerated filer, an accelerated filer, or
a non-accelerated filer, or a smaller reporting company. See definitions
of large accelerated filer, accelerated filer, and smaller reporting
company in Rule12b-2 of the Exchange Act. (Check one):
Large
accelerated filer
o
|
|
Accelerated
filer
o
|
Non-accelerated
filer
o
|
|
Smaller
reporting company
x
|
(Do not check if
a smaller reporting company)
|
|
|
Indicate by check mark
whether the registrant is a shell company (as defined in Rule12b-2 of the
Exchange Act) Yes
o
No
x
The aggregate market
value of our voting stock held by non-affiliates was approximately $10,784,350
on December 29, 2008 based on the last reported sale price of our common
stock on the NASDAQ Stock Market on that day. As of September 30,
2009, 22,913,036 shares of the registrants common stock, $.01 par value per
share, were issued and outstanding.
Table of Contents
EXPLANATORY
NOTE
This amendment to the
registrants Annual Report on Form 10-K for the year ended June 27,
2009, originally filed with the Securities and Exchange Commission (
SEC
)
on October 1, 2009 (the
Original Filing
), is being filed solely
to amend Part III of the Original Filing.
This amendment does not
reflect events occurring after the filing of the Original Filing, and is not
intended to modify or update the disclosures therein or the exhibits filed
therewith in any way, except as set forth herein.
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PART III
Item
10. Directors and Executive
Officers and Corporate Governance.
DIRECTORS
The following table sets
forth the names, ages and positions held with Candela Corporation (the
Company
)
of the current members of the Board of Directors (the
Board of Directors
) of the Company. The Board of Directors has nominated such Directors
for reelection as Directors of the Company at the next annual meeting of the
Companys stockholders. Each Director has indicated his or her
willingness to serve if reelected.
Name
|
|
Age
|
|
Position
|
George A. Abe (2)(3)
|
|
48
|
|
Director
|
Ben Bailey III (1)(3)
|
|
60
|
|
Director
|
Nancy E. Nager (1)(2)(3)
|
|
58
|
|
Director
|
Gerard E. Puorro (4)
|
|
62
|
|
President, Chief
Executive Officer and Director
|
Kenneth D. Roberts
(1)(3)
|
|
76
|
|
Chairman of the Board
of Directors
|
Douglas W. Scott
(1)(2)(3)
|
|
63
|
|
Director
|
(1)
|
|
Member of the Audit
Committee.
|
|
|
|
(2)
|
|
Member of the
Compensation Committee.
|
|
|
|
(3)
|
|
Member of the
Nominating Committee.
|
|
|
|
(4)
|
|
Member of the Option
and SAR Committee.
|
Further information with
respect to the Board of Directors is set forth below.
Mr. Abe
has been a Director of the Company since
January 2003. Mr. Abe has been President and Chief Executive
Officer of Cambridge Research and Instrumentation (
CRI
), a provider of
diagnostic imaging solutions for life science and medical research, since June 2003.
From February 2002 until June 2003, Mr. Abe was a Vice President
of CRI. From May 1997 to November 2001, Mr. Abe held Vice
President positions in Strategy, Development and Marketing with Genuity
(formerly GTE), an internet infrastructure service provider. Prior to
that, Mr. Abe held several technical and management positions with BBN
Corp, a high technology and services company.
Mr. Bailey
has been a Director of the Company since
January 2003. Mr. Bailey has been a Vice President of
Massachusetts Capital Resource Company, a source of risk capital for
Massachusetts businesses, since May 1985. From June 1976 until May 1985,
Mr. Bailey held a number of positions (most recently as a Vice President)
with the High Technology Lending Group at Bank of Boston. From June 1974
until June 1976, Mr. Bailey was employed at Chemical Bank in New
York. Mr. Bailey served on the National Science Foundations
Advisory Committee for Smaller Business Industrial Innovation (SBIR) from June 1995
to April 2001.
Ms. Nager
has been a Director of the Company since
February 1999. Ms. Nager has been the Principal and Chief Executive
Officer of SBSC, Inc., formerly known as SBS Consulting, Inc. and
Specialized Health Management, Inc., a privately-held behavioral
healthcare and medical billing corporation, since 1990. From 1976 until 1990, Ms. Nager
held a number of positions in nursing and hospital administration (most
recently as Chief Operating Officer) with Charles River Hospital, a private
psychiatric facility in Wellesley, Massachusetts. From 1990 until 1993, Ms. Nager
also provided corporate level consulting to Community Care Systems, Inc.,
the parent company of Charles River Hospital.
Mr. Puorro
has been a Director of the Company since
September 1991. Mr. Puorro has been President and Chief
Executive Officer of the Company since April 1993. From December 1992
until April 1993, Mr. Puorro was Senior Vice President, Chief
Financial Officer and Chief Operating Officer of the Company, and from April 1989
until December 1992, Mr. Puorro was Senior Vice President and Chief
Financial Officer of the Company. Prior to joining the Company, Mr. Puorro
was Vice President and Controller at Massachusetts Computer Corporation, a
manufacturer of micro-supercomputers.
Mr. Roberts
has been a Director of the Company since
August 1989 and Chairman of the Board of Directors since November 1991.
Mr. Roberts has been an independent management consultant since January 1989.
From November 1992 until
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June 1995, Mr. Roberts
was employed on a part-time basis as Vice President and Chief Financial Officer
of Foster Miller, Inc., an engineering services company. From July 1986
until December 1988, Mr. Roberts was Vice President, Treasurer and
Chief Financial Officer of Massachusetts Computer Corporation, a manufacturer
of micro-supercomputers. Prior to that, Mr. Roberts was Senior Vice
President and Treasurer of Dynatech Corporation (now named Acterna
Corporation), a provider of diversified high technology products and services.
Mr. Scott
has been a Director of the Company since
September 1991. Mr. Scott has been a partner at Phildius,
Kenyon & Scott, a health care consulting and investment firm, since
1985. From 1989 until June 2008, Mr. Scott was the President,
Chief Operating Officer and a Director of Avitar, Inc., a publicly-held
health care company. From December 1989 until April 1991, Mr. Scott
was Chief Executive Officer of Avitar, Inc.
EXECUTIVE
OFFICERS
The following table sets
forth the names, ages and positions held with the Company of the current
executive officers of the Company.
Name
|
|
Age
|
|
Position
|
Jay D. Caplan
|
|
47
|
|
Chief Operating Officer
|
Dennis S. Herman
|
|
59
|
|
Senior Vice President,
North American Sales
|
Dr. James C. Hsia
|
|
63
|
|
Chief Technical Officer
|
Paul R. Lucchese
|
|
43
|
|
Senior Vice President,
General Counsel, and Secretary
|
Gerard E. Puorro
|
|
62
|
|
President, Chief
Executive Officer, and Director
|
Robert E. Quinn
|
|
55
|
|
Senior Vice President,
Finance & Administration, Chief Financial Officer, Corporate
Controller, and Treasurer
|
Executive officers are
appointed to serve at the discretion of the Board of Directors. There are
no family relationships among any of the executive officers or Directors of the
Company.
Mr. Caplan
was appointed Chief Operating Officer in
November 2007. Prior to joining the Company, Mr. Caplan was
Chief Technology Officer of InfraReDx, Inc., a developer of photonic-based
medical devices, from September 2001 to November 2007, and Vice
President of Operations at Thermo Cardiosystems, Inc., a supplier of
ventricular devices for heart failure, from December 1999 to May 2001.
From 1988 to 2000, Mr. Caplan held a number of positions (most recently as
Vice President of Operations) in marketing, finance, and international at the
Company. Mr. Caplan holds a B.S. in Electrical Engineering from the
Massachusetts Institute of Technology and an M.B.A., with distinction, from the
Wharton School of The University of Pennsylvania. He is an inventor on
both issued and pending patents, and is the author of several peer-reviewed
publications in medical journals.
Mr. Herman
was appointed Senior Vice President,
North American Sales, in April 2004. From October 2001 until April 2004,
Mr. Herman was Vice President, North American Sales, of the Company and
from February 1999 until October 2001, Mr. Herman was Eastern
Regional Sales Manager of the Company. Prior to joining the Company, Mr. Herman
was Vice President of Sales at Palomar Medical Technologies, Inc., a
medical device company, from August 1997 to December 1998 and
National Sales Manager of Spectrum Medical Technologies, a medical device
company that was acquired by Palomar Medical Technologies, from March 1991
to August 1997.
Dr. Hsia
was appointed Chief Technology Officer
in January 2004. From March 2003 until January 2004, Dr. Hsia
was a Director of the Company. Prior to joining the Company, Dr. Hsia
was President and Co-Founder of Lasersharp Corporation, a developer of fiber
laser products for the telecom and film industries, from July 2000 to January 2003.
From 1985 until July 2000, Dr. Hsia was Senior Vice President of
Research and Development of the Company. Dr. Hsia has twenty-five
years of experience in photonics product development and medical devices.
Dr. Hsia holds a B.S. in Physics and an M.S. and a Ph.D. in Nuclear
Engineering from the Massachusetts Institute of Technology, specializing in
plasma physics and controlled fusion.
Mr. Lucchese
was appointed Senior Vice President,
General Counsel, and Secretary in July 2007. From July 2006
until July 2007, Mr. Lucchese was Vice President, General Counsel,
and Secretary of the Company. Prior to joining the Company, Mr. Lucchese
was the General Counsel of Aspect Software, Inc., a developer of customer
interaction management hardware and software, from December 1998 to November 2005.
Mr. Lucchese holds a M.B.A. from Suffolk University, a J.D. from the
University of Dayton School of Law, and a B.A. from Providence College.
Mr. Quinn
was appointed Senior Vice President,
Finance & Administration, and Chief Financial Officer in June 2009
and had served as our acting Chief Financial Officer since April 2007.
From October 2003 until August 2008, Mr. Quinn was Corporate
Controller and Treasurer of the Company. Prior to joining the Company, Mr. Quinn
was Corporate Controller of Ezenia! Inc., a provider of real-time
collaboration, from December 1999 to June 2003, Vice President of
Finance of Vantage Travel, a provider of travel and tourism services, from April 1999
to December 1999, a consultant to Gamma Graphix, a business specializing
in color management, from
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September 1998 to April 1999,
Director of Finance of Genus, Inc., a semiconductor capital equipment
manufacturer, from February 1996 to September 1998, Vice President
and Chief Financial Officer of ACSYS, Inc., a provider of professional
staffing solutions, from February 1994 to February 1996, and held the
positions of Vice President, Corporate Controller and Manager of Accounting and
Financial Systems at Atex Publishing Systems, a subsidiary of Kodak providing
software to the publishing industry, from November 1986 to February 1994.
SECTION 16(a) BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of
the Securities Exchange Act of 1934, as amended, requires the Companys
Directors, executive officers, and persons who own more than 10% of a
registered class of the Companys equity securities (collectively,
Reporting
Persons
) to file initial reports of ownership and reports of changes in
ownership with the SEC. Reporting Persons are required by SEC regulations
to furnish the Company with copies of all such filings. Based on its
review of the copies of such filings, if any, and written representations from
certain Reporting Persons received by it with respect to the fiscal year ended June 27,
2009, the Company believes that all Reporting Persons complied with all Section 16(a) filing
requirements in the fiscal year ended June 27, 2009.
CODE OF
BUSINESS CONDUCT AND ETHICS
The Company has adopted a
Code of Business Conduct and Ethics that applies to all Directors, officers
(including its Chief Executive Officer, Chief Financial Officer, Chief
Accounting Officer, and Controller), and employees of the Company. The
Company has posted its Code of Business Conduct and Ethics to the Investor
Relations section of its website at www.candelalaser.com.
PROCEDURES
BY WHICH STOCKHOLDERS MAY RECOMMEND NOMINEES TO THE BOARD OF DIRECTORS
The Company has not
changed the procedures by which its stockholders may recommend nominees to the
Board of Directors since the Company last provided disclosure in response to
the requirements of Item 407(c)(2)(iv) or Item 407(C)(3) of
Regulation S-K.
Stockholders may
communicate with the Board of Directors by sending proposals, recommendations
for nomination and other communications (each a
Submission
) to:
Candela Corporation
530 Boston Post Road
Wayland,
Massachusetts 01778
Attention: Paul R.
Lucchese, Secretary
Each Submission should
bear a clear notation indicating that it is a Stockholder Director
Communication.
The Secretary of the
Company will make copies of all such Submissions and circulate them to the
Board of Directors or the appropriate committee thereof. In order to
avoid uncertainty as to the date on which a Submission was received by the
Company, the Company suggests that proponents send Submissions by Certified
Mail Return Receipt Requested.
AUDIT
COMMITTEE AND AUDIT COMMITTEE FINANCIAL EXPERT
The Company has a
standing Audit Committee, of which Mr. Roberts, Mr. Bailey, Mr. Scott
and Ms. Nager are members.
The Audit Committee
reviews all financial functions of the Company, including matters relating to
the appointment, compensation and activity of the Companys independent
registered public accounting firm. The Audit Committee met seven times
during the fiscal year ended June 27, 2009. The Board of Directors
has determined that Mr. Roberts and Mr. Bailey are audit committee
financial experts and that all members of the Audit Committee are independent
directors (as defined in NASDAQ Stock Market Rule 5605(a)(2)). The
Audit Committee operates under a written charter adopted by the Board of
Directors and amended at a meeting of the Audit Committee on January 26,
2004. The Company has posted the charter to the Investor Relations
section of its website at www.candelalaser.com.
Item
11. Executive Compensation.
SUMMARY
COMPENSATION TABLE
The following table
summarizes cash and non-cash compensation information with respect to services
rendered to the Company, in all capacities, during the fiscal year ended June 27,
2009 for (i) the individual who served as the Chief Executive Officer for
the fiscal year ended June 27, 2009 and (ii) each of the two other
most highly compensated executive officers who was serving in that capacity as
of June 27, 2009.
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Name and Principal Position
|
|
Fiscal
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Stock
Awards
($)
(1)
|
|
Option /
SAR
Awards
($)
(2)
|
|
Non-
Equity
Incentive
Plan
Compensation
($)
(3)
|
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
|
|
All Other
Compensation
($)
|
|
Total
($)
|
|
Dennis S. Herman
Senior Vice President,
|
|
2009
|
|
258,276
|
|
|
|
|
|
5,762
|
|
|
|
|
|
110,063
|
(4)
|
374,101
|
|
North
American Sales
|
|
2008
|
|
232,213
|
|
|
|
|
|
155,695
|
|
|
|
|
|
97,327
|
(4)
|
485,235
|
|
Gerard E. Puorro
President, Chief Executive
|
|
2009
|
|
516,133
|
|
|
|
|
|
12,050
|
|
|
|
|
|
8,531
|
(5)
|
536,714
|
|
Officer
and Director
|
|
2008
|
|
499,200
|
|
|
|
|
|
454,225
|
|
|
|
|
|
14,487
|
(5)
|
967,912
|
|
Jay
D. Caplan
|
|
2009
|
|
319,156
|
|
|
|
|
|
7,230
|
|
|
|
|
|
8,479
|
(6)
|
334,865
|
|
Chief
Operating Officer
|
|
2008
|
|
182,070
|
|
|
|
|
|
109,536
|
|
|
|
|
|
9,429
|
(6)
|
301,035
|
|
(1)
|
Equity incentive plan
compensation was granted under the Companys 1998 Stock Plan or the Companys
2008 Stock Plan. The amounts in this column are calculated based on FAS 123R
and equal the financial statement compensation cost for restricted stock
awards as reported in the Companys consolidated statement of income for the
fiscal years ended June 28, 2008 and June 27, 2009. Under FAS 123R,
a pro-rata portion of the total expense at the time the restricted stock
award is granted is recognized over the applicable service period generally
corresponding with the vesting schedule of the grant.
|
|
|
(2)
|
Equity incentive plan
compensation was granted under the Companys 1998 Stock Plan or the Companys
2008 Stock Plan. The amounts in this column are calculated based on FAS 123R
and equal the financial statement compensation cost for stock options and
SARs as reported in the Companys consolidated statement of income for the
fiscal years ended June 28, 2008 and June 27, 2009. Under FAS 123R,
a pro-rata portion of the total expense at the time of grant is recognized
over the applicable service period generally corresponding with the vesting
schedule of the grant. The initial expense is based on the fair value of the
stock options or SARs grants as estimated using the Black-Scholes
option-pricing model. The assumptions used to arrive at the Black-Scholes
value are disclosed in Note 1 to the Companys consolidated financial
statements included in the Companys Annual Report on Form 10-K for the
fiscal year ended June 27, 2009.
|
|
|
(3)
|
The amounts in this
column consist of annual bonus amounts earned under the Companys Executive
Bonus Plan.
|
|
|
(4)
|
For fiscal 2009,
consists of $103,927 in commissions, $3,073 in matching contributions by the
Company pursuant to the Companys 401(k) Plan and $3,063 for a Company
provided automobile. For fiscal 2008, consists of $87,100 in commissions,
$7,998 in matching contributions by the Company pursuant to the Companys
401(k) Plan, and $2,229 for a Company provided automobile.
|
|
|
(5)
|
For fiscal 2009,
consists of $2,564 in matching contributions by the Company pursuant to the
Companys 401(k) Plan and $5,967 for a Company provided automobile. For
fiscal 2008, consists of $6,750 in matching contributions by the Company
pursuant to the Companys 401(k) Plan and $7,737 for a Company provided
automobile.
|
|
|
(6)
|
For fiscal 2009,
consists of $8,479 for a Company provided automobile. For fiscal 2008,
consists of $5,346 in matching contributions by the Company pursuant to the
Companys 401(k) Plan and $4,083 for a Company provided automobile.
|
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NARRATIVE
DISCLOSURE TO SUMMARY COMPENSATION TABLE
Employment
Agreements and Arrangements and Potential Payments upon Termination or
Change-in-Control
Executive Officers other than the Chief Executive Officer.
On November 26, 2007, the
Company entered into Employment, Non-competition and Nondisclosure Agreements
(the
Employment Agreements
) and Senior Officer Executive Retention
Agreements (the
Retention Agreements
) with each of Jay D. Caplan and
Dennis S. Herman. The Employment Agreements and Retention Agreements were
approved by the Compensation Committee on November 15, 2007.
Each Employment Agreement
provides that the executive officer:
(i)
|
is entitled to an
annual base salary;
|
|
|
(ii)
|
may be entitled to cash
bonuses as well as equity awards in the form of options, SARs, shares of
restricted stock, or such other equity grants as may be determined by the
Companys Board of Directors; and
|
|
|
(iii)
|
is entitled to an
automobile leased by the Company for use by the executive officer.
|
Each Employment Agreement
also generally provides for at-will employment. If the executive officer
is discharged without cause or is involuntarily terminated (as such term is
used in the Employment Agreement), then
(i)
|
the executive officer
will be entitled to severance payments for a period of 12 months, the
aggregate amount of which will equal the executive officers salary for 12
months;
|
|
|
(ii)
|
the Company will
continue to pay the executive officers premiums relating to health and
dental insurance for 12 months;
|
|
|
(iii)
|
the Company will make
two additional monthly payments on the automobile leased by the Company for
use by the executive officer; and
|
|
|
(iv)
|
the Company will
provide outplacement services with a value of up to $10,000 to the executive
officer.
|
Additionally, each
Employment Agreement contains a covenant by the executive officer to protect
the Companys intellectual property, to refrain from competing against the
Company, and to refrain from soliciting employees of the Company.
Each Retention Agreement
provides that the executive officer will be entitled to certain benefits in the
event that (i) a change in control occurs between November 26, 2007
and December 31, 2009 (the
Term
) and (ii) the executive
officers employment with the Company terminates under the conditions described
below within 24 months following the date of the change in control. The Term renews automatically on January 1,
2010, and each January 1 thereafter, for one year unless the Company
provides written notice to the executive officer that the Term will not be
extended at least 60 days prior to the end of the Term.
Under the existing terms
of the Retention Agreements, if, within 24 months following a merger (which
will include the proposed merger with Syneron), Candela or Candelas successor
in the merger terminates the executive officers employment without cause (as
defined in the Retention Agreements) or the executive officer
terminates
his employment
in connection with an involuntary termination (which includes
(i) a material diminution in the
executive officers authority, duties or responsibilities, (ii) a material
diminution in the executive officers base compensation, (iii) a material
diminution in the authority, duties or responsibilities of the supervisor to
whom the executive officer is required to report, (iv) a change by more than 50
miles in the geographic location at which the executive officer must perform
his duties
, or (v) a material breach of the terms of the
executive officers Retention Agreement), then:
(i)
|
the executive officer
will be entitled to payments for a period of 12 months, the aggregate amount
of which will equal the executive officers annual base salary multiplied by
two;
|
|
|
(ii)
|
the executive officer
will be entitled to payments for a period of 12 months, the aggregate amount
of which will equal the executive officers target annual bonus (irrespective
of the level of attainment to that date of any target bonus benchmarks)
multiplied by two;
|
|
|
(iii)
|
the executive officer
will be entitled to receive any accrued obligations owing to him by the
Company, including any unpaid base salary and prorated bonus (irrespective of
the level of attainment to that date of any target bonus benchmarks);
|
|
|
(iv)
|
any then-unvested
equity awards shall immediately become exercisable and vested in full;
|
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(v)
|
the executive officer
will be provided with benefits for 18 months following the executive
officers termination;
|
|
|
(vi)
|
the Company will make a
one-time payment of $5,000 to the executive officer to cover some or all of
the lease payments remaining due on the automobile leased by the Company for
use by the executive officer; and
|
|
|
(vii)
|
the Company will
provide outplacement services with a value of up to $10,000 to the executive
officer.
|
If the executive officer
resigns, is terminated due to death or disability, or is terminated for cause,
in each case within 24 months of the change in control, then, pursuant to the
Retention Agreement, the executive officer will be entitled to receive accrued
obligations owing to him by the Company.
The severance payments
and benefits payable under the Retention Agreements exceed the severance
payable to each executive officer under his existing Employment Agreement. Accordingly, should a termination of employment
(without cause or an involuntary termination) occur within 24 months of the
closing of the proposed merger with Syneron, severance payments will be made
under the Retention Agreements, and not the Employment Agreements.
Pursuant to the Retention
Agreements, payments and benefits payable to the executive officers will be
reduced to the extent necessary to avoid the application of the excise tax
imposed under Section 4999 of the Internal Revenue Code of 1986, as
amended, if such reduction would result in the executive officer receiving a
higher net after-tax amount.
Chief Executive Officer.
On November 27, 2007, the Company entered
into an Amended and Restated Employment Agreement (the
Puorro Employment
Agreement
) and an Executive Retention Agreement (the
Puorro Retention
Agreement
) with Gerard E. Puorro, the Companys President and Chief
Executive Officer. The Puorro Employment Agreement and Puorro Retention
Agreement were approved by the Compensation Committee on November 15,
2007.
The Puorro Employment
Agreement is generally similar to the Employment Agreements with the other
executive officers, which are described above. However, Mr. Puorro
may terminate his employment for any reason at any time upon at least 60 days
prior written notice; if Mr. Puorro terminates his employment at his
option, either Mr. Puorro or the Company can elect, prior to the
expiration of the sixty (60) day notice period, that Mr. Puorro receive
severance payments (which shall cause the non-compete provisions applicable to Mr. Puorro
to become activated).
The Puorro Employment
Agreement generally provides for at-will employment. If Mr. Puorro
voluntarily resigns or is terminated without cause, then Mr. Puorro will
be entitled to severance payments for a period of 24 months. For the
first 12 months of the severance period, Mr. Puorro will receive 100% of
his monthly salary in effect at the time of his resignation or
termination. For the second 12 months of the severance period, if a
successor Chief Executive Officer was hired prior to Mr. Puorros
termination date, then Mr. Puorro will receive 100% of his monthly salary
in effect at the time of his resignation or termination, otherwise Mr. Puorro
will receive 50% of his monthly salary in effect at the time of his resignation
or termination. In addition, for the full severance period, the Company
will pay 100% of Mr. Puorros premium payments for health and dental
insurance continuation coverage. The Company will also provide
outplacement services with a value of up to $25,000 to Mr. Puorro.
The Puorro Retention
Agreement provides that Mr. Puorro will be entitled to certain benefits in
the event that (i) a change in control occurs between November 26,
2007 and December 31, 2009 (the
Term
) and (ii) Mr. Puorros
employment with the Company terminates under the conditions described below within
24 months following the date of the change in control. The Term renews automatically on January 1,
2010, and each January 1 thereafter, for one year unless the Company
provides written notice to Mr. Puorro that the Term will not be extended
at least 60 days prior to the end of the Term.
Under the existing terms
of the Puorro Retention Agreement, if, within 24 months of a change in control (which
will include the proposed merger with Syneron), Candela or Candelas successor
terminates Mr. Puorros employment without cause (as defined in the Puorro
Retention Agreement) or Mr. Puorro elects to
terminate
his employment in connection with
an involuntary termination (which includes
(i) a material diminution in Mr. Puorros authority, duties
or responsibilities, (ii) a material diminution in Mr. Puorros base
compensation, (iii) a material diminution in the authority, duties or
responsibilities of the supervisor to whom Mr. Puorro is required to report,
including a requirement that Mr. Puorro report to a corporate officer or
employee instead of Candelas board of directors, (iv) a change by more than 50
miles in the geographic location at which Mr. Puorro must perform his duties
,
or (v) a material breach of the terms of the Puorro Retention Agreement), then:
(i)
|
Mr. Puorro will be
entitled to monthly payments for a period of 24 months, with the amount of
each monthly payment equal to one-twenty-fourth (1/24) of his annual base
salary multiplied by three;
|
|
|
(ii)
|
Mr. Puorro will be
entitled to monthly payments for a period of 24 months, with the amount of
each monthly payment equal to one-twenty-fourth (1/24) of his target annual
bonus (irrespective of the level of attainment to that date of any target
bonus benchmarks) multiplied by three;
|
|
|
(iii)
|
Mr. Puorro will be
entitled to receive any accrued obligations owing to him by the Company,
including any unpaid base salary and prorated bonus (irrespective of the
level of attainment to that date of any target bonus benchmarks);
|
|
|
(iv)
|
any then-unvested
equity awards shall immediately become exercisable and vested in full;
|
|
|
(v)
|
Mr. Puorro will be
provided with benefits for 18 months following his termination;
|
9
Table of Contents
(vi)
|
the Company will make
payments to Mr. Puorro to cover all of the lease payments remaining due
on the automobile leased by the Company for use by Mr. Puorro, at which
point Mr. Puorro may exercise the purchase option on the automobile
should one exist; and
|
|
|
(vii)
|
the Company will
provide outplacement services with a value of up to $25,000 to
Mr. Puorro.
|
Pursuant to the Retention
Agreement, if Mr. Puorro resigns, is terminated due to death or
disability, or is terminated for cause, in each case within 24 months of the
change in control, then he (or his estate) will be entitled to receive accrued
obligations owing to him by the Company.
The severance payments
and benefits payable under the Puorro Retention Agreement exceed the severance
payable under the Puorro Employment Agreement.
Accordingly, should a termination of Mr. Puorros employment (without
cause or an involuntary termination) occur within 24 months of the closing of
the proposed merger with Syneron, severance payments will be made under the
Puorro Retention Agreement, and not the Puorro Employment Agreement.
Each of the executive
officers is subject to nonsolicitation and noncompetition provisions for the
period during which he or she receives severance payments. Upon a
change-in-control, options and SARs held by the executive officers and all
other employees will fully vest.
The Companys pending
transaction with Syneron Medical Ltd. would be considered a change in control
under the Retention Agreements and the Puorro Retention Agreement.
Pursuant to the Puorro
Retention Agreement, payments and benefits payable to the executive officers
will be reduced to the extent necessary to avoid the application of the excise
tax imposed under Section 4999 of the Internal Revenue Code of 1986, as
amended, if such reduction would result in Mr. Puorro receiving a higher
net after-tax amount.
The following table sets
forth the estimated incremental payments and benefits, beyond existing
compensation and benefit entitlements described in this Annual Report on Form 10-K
that are not contingent upon a termination or change in control, payable to
each Named Executive Officer upon a change in control of the Company or
termination of such Named Executive Officers employment, in each case assuming
that the triggering event occurred on June 27, 2009.
|
|
Change in Control
|
|
Termination
|
|
Resignation
|
|
Name
|
|
Without
Termination
|
|
Termination
Without
Cause
|
|
With Cause
|
|
Without
Cause
|
|
For Good
Reason
|
|
Death,
Disability, or
Otherwise
|
|
Dennis
S. Herman
|
|
|
|
$
|
668,777
|
|
|
|
$
|
272,018
|
|
$
|
272,018
|
|
|
|
Gerard
E. Puorro (1)
|
|
|
|
2,060,366
|
|
|
|
954,156
|
|
954,156
|
|
$
|
954,156
|
|
Jay
D. Caplan
|
|
|
|
823,166
|
|
|
|
330,276
|
|
330,276
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Excludes information
with respect to contracts, agreements, plans or arrangements that do not
discriminate in scope, terms or operation in favor of the Companys executive
officers and that are available generally to all salaried employees.
|
|
|
(1)
|
As discussed above, if
Mr. Puorro voluntarily resigns or is terminated without cause, then
Mr. Puorro will be entitled to severance payments for a period of 24
months. For the first 12 months of the severance period, Mr. Puorro will
receive 100% of his monthly salary in effect at the time of his resignation
or termination. For the second 12 months of the severance period, if a
successor Chief Executive Officer was hired prior to Mr. Puorros
termination date, then Mr. Puorro will receive 100% of his monthly salary
in effect at the time of his resignation or termination, otherwise
Mr. Puorro will receive 50% of his monthly salary in effect at the time
of his resignation or termination.
|
Non-Equity
Incentive Plan Awards
In fiscal 2009, all
non-equity plan-based awards were granted under an Executive Bonus Plan (the
Executive
Bonus Plan
) established by the Compensation Committee of the Company to
provide participating executive officers with the opportunity to earn bonus
compensation upon the achievement of certain performance objectives. The
Compensation Committee selects participants in the Executive Bonus Plan and
establishes their performance objectives and target bonus compensation
annually.
In fiscal 2009, each
participants performance objectives were tied to the achievement of (i) target
levels of consolidated pre-tax profits (
Target Profits
) and (ii) individual
metrics. The Compensation Committee established a Target Profits goal that it
believed could be achieved only with significant operational success for the
Company. The individual metrics for the
participants are primarily related to individual development goals or
department specific goals, subject to discretionary adjustments that the
Compensation Committee deems appropriate. The Compensation Committee
established individual metrics for each participant that it believed could be
achieved only with significant effort by the participant. The Company does not pay any bonuses to
participants unless the participant achieves a threshold level of 81% of Target
Profits. In fiscal 2009, the Company did not achieve this threshold and
therefore none of its named executive officers earned any bonus compensation.
10
Table
of Contents
Equity
Incentive Plan Awards
In fiscal 2009, equity
plan-based awards were granted under either the Companys 1998 Stock Plan or
the Companys 2008 Stock Plan. In fiscal 2009, the Compensation Committee
granted equity awards in the form of Common Stock-settled SARs to executive
officers. The exercise price per share of the Common Stock underlying
each SAR is not less than the last reported sale price per share of the Common
Stock on the NASDAQ Global Select Market on the date of grant. Each SAR
granted under the Companys 1998 Stock Plan generally vests over four years in
equal installments of 25% of the total number of shares of Common Stock
underlying such SAR on each anniversary of the date of grant. Each SAR
granted under the Companys 2008 Stock Plan generally vests over two years in
equal installments of 50% of the total number of shares of Common Stock
underlying such SAR on each anniversary of the date of grant The Compensation Committee has the right to
accelerate the date of exercise of any installment of such SAR. In
addition, upon certain acquisitions, such SAR shall become fully vested.
SARs may be exercised from time to time, in whole or in part, up to the total
number of shares with respect to which the SAR is then exercisable. Each
SAR generally expires 10 years after the date of grant. SARs are subject
to early termination in certain circumstances.
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
The following table
summarizes the unexercised options and SARs for each Named Executive Officer
outstanding as of June 27, 2009. Other than as set forth below, no
Named Executive Officer had any unvested stock or other equity incentive plan
awards as of June 27, 2009.
Name
|
|
Number of Securities
Underlying
Unexercised Options /
SARs
(Exercisable)
(#)
|
|
Number of Securities
Underlying
Unexercised Options /
SARs
(Unexercisable)
(#)
|
|
Option / SAR
Exercise Price
($)
|
|
Option / SAR
Expiration Date
|
|
Dennis
S. Herman
|
|
15,000
|
|
|
|
4.67
|
|
04/29/2013
|
|
|
|
5,158
|
|
|
|
11.98
|
|
01/29/2014
|
|
|
|
9,842
|
|
|
|
11.98
|
|
01/29/2014
|
|
|
|
5,000
|
|
|
|
9.50
|
|
02/11/2015
|
|
|
|
22,500
|
|
7,500
|
|
15.33
|
|
01/30/2016
|
|
|
|
15,000
|
|
15,000
|
|
11.53
|
|
04/03/2017
|
|
|
|
15,000
|
|
45,000
|
|
4.29
|
|
01/25/2018
|
|
|
|
|
|
23,909
|
|
0.41
|
|
01/19/2019
|
|
Gerard
E. Puorro
|
|
9,150
|
|
|
|
11.96
|
|
01/26/2014
|
|
|
|
20,850
|
|
|
|
11.96
|
|
01/26/2014
|
|
|
|
858
|
|
|
|
11.98
|
|
01/29/2014
|
|
|
|
29,142
|
|
|
|
11.98
|
|
01/29/2014
|
|
|
|
8
|
|
|
|
10.35
|
|
08/23/2014
|
|
|
|
69,992
|
|
|
|
10.35
|
|
08/23/2014
|
|
|
|
5,000
|
|
|
|
9.50
|
|
02/11/2015
|
|
|
|
15,000
|
|
|
|
9.50
|
|
02/11/2015
|
|
|
|
60,000
|
|
20,000
|
|
15.33
|
|
01/30/2016
|
|
|
|
50,000
|
|
50,000
|
|
11.53
|
|
04/03/2017
|
|
|
|
30,000
|
|
90,000
|
|
4.29
|
|
01/25/2018
|
|
|
|
|
|
50,000
|
|
0.41
|
|
01/19/2019
|
|
Jay
D. Caplan
|
|
25,000
|
|
75,000
|
|
6.26
|
|
11/26/2017
|
|
|
|
|
|
30,000
|
|
0.41
|
|
01/19/2019
|
|
DIRECTOR
COMPENSATION
The Compensation Committee
regularly reviews the compensation for Directors who are not employees of the
Company (
Non-Employee Directors
). The following table summarizes
cash and non-cash compensation information with respect to the compensation of
Non-Employee Directors during the fiscal year ended June 27, 2009.
11
Table
of Contents
Name
|
|
Fees
Earned or
Paid in
Cash
($)
|
|
Stock
Awards
($)
|
|
Option /
SAR
Awards
($)
|
|
Non-
Equity
Incentive
Plan
Compensation
($)
|
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
|
|
All Other
Compensation
($) (1)
|
|
Total
($)
|
|
George
A. Abe (2)
|
|
27,500
|
|
|
|
|
|
|
|
|
|
|
|
27,500
|
|
Ben
Bailey III (3)
|
|
45,000
|
|
|
|
|
|
|
|
|
|
1,158
|
|
46,158
|
|
Nancy
E. Nager (4)
|
|
32,000
|
|
|
|
|
|
|
|
|
|
756
|
|
32,756
|
|
Kenneth
D. Roberts (5)
|
|
34,750
|
|
|
|
|
|
|
|
|
|
3,011
|
|
37,761
|
|
Douglas
W. Scott (6)
|
|
33,875
|
|
|
|
|
|
|
|
|
|
1,013
|
|
34,888
|
|
(1)
|
Reflects amounts paid
as premiums for long-term care insurance.
|
|
|
(2)
|
Mr. Abe had an
aggregate of 130,000 option / SAR awards outstanding as of June 27,
2009. The grant date fair value of such awards, computed in accordance with
FAS 123R, was $961,630.
|
|
|
(3)
|
Mr. Bailey had an
aggregate of 70,000 option / SAR awards outstanding as of June 27, 2009.
The grant date fair value of such awards, computed in accordance with FAS
123R, was $610,877.
|
|
|
(4)
|
Ms. Nager had an
aggregate of 85,000 option / SAR awards outstanding as of June 27, 2009.
The grant date fair value of such awards, computed in accordance with FAS
123R, was $710,247.
|
|
|
(5)
|
Mr. Roberts had an
aggregate of 205,000 option / SAR awards outstanding as of June 27,
2009. The grant date fair value of such awards, computed in accordance with FAS
123R, was $1,119,479.
|
|
|
(6)
|
Mr. Scott had an
aggregate of 130,000 option / SAR awards outstanding as of June 27,
2009. The grant date fair value of such awards, computed in accordance with
FAS 123R, was $961,507.
|
During the fiscal year
ended June 27, 2009, Non-Employee Directors received (i) an annual
retainer of $15,000; (ii) an additional annual retainer of $3,750 for the
Chair of the Board of Directors; (iii) an additional annual retainer of $3,750
for the Chair of the Audit Committee (unless such person is also Chair of the
Board of Directors); (iv) an additional annual retainer of $1,875 for the
Chair of the Compensation Committee; (v) a fee of $1,500 per meeting of
the Board of Directors that such Non-Employee Director attends in person; (vi) a
fee of $1,000 per meeting of the Board of Directors that such Non-Employee
Director attends by telephone; (vii) a fee of $1,000 per committee
meeting, that takes place on a day other than a day on which there is a
regularly scheduled meeting of the Board of Directors, and that such
Non-Employee Director attends in person; and (viii) a fee of $500 per
committee meeting, that takes place on a day other than a day on which there is
a regularly scheduled meeting of the Board of Directors, and that such Non-Employee
Director attends by telephone. In addition, commencing September 1,
2006 and ending with the final payment made December 30, 2008, Mr. Bailey
received a retainer of $3,000 per month relating to his liaising with
management on behalf of the Board of Directors relating to certain litigation
matters.
Directors who are
employees of the Company receive no additional compensation for their service
as a Director.
Item 12.
Security Ownership of
Certain Beneficial Owners and Management and Related Stockholder Matters.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following
table sets forth certain information with respect to the beneficial ownership
of Candelas common stock as of September 30, 2009, by:
·
|
each person known to
Candela to be the beneficial owner of more than 5% of its common stock;
|
|
|
·
|
each director, or
nominee for director, of Candela;
|
|
|
·
|
each named executive
officer of Candela; and
|
|
|
·
|
all directors, nominees
for director and executive officers of Candela as a group.
|
12
Table
of Contents
Except as otherwise
indicated in the footnotes to the table, to Candelas knowledge, the beneficial
owners listed in the table below have sole voting and sole investment power
(subject to community property laws where applicable) as to all shares
beneficially owned by them. The address
of each of Candelas directors and executive officers is c/o Candela Corporation,
530 Boston Post Road, Wayland, Massachusetts 01778.
|
|
Amount
and Nature of Beneficial Ownership
|
|
|
|
Name and Address of
Beneficial Owner
|
|
Common
Stock
|
|
Options(1)
|
|
Stock
Appreciation
Rights(1)
|
|
Total
|
|
Percent
of
Class(2)
|
|
Frank Russell Company(3)
909 A. Street
Tacoma, Washington 98402
|
|
1,664,716
|
|
0
|
|
0
|
|
1,664,716
|
|
7.3
|
%
|
JPMorgan
Chase & Co.(4)
270 Park Avenue
New York, New York 10017
|
|
1,149,239
|
|
0
|
|
0
|
|
1,149,239
|
|
5.0
|
%
|
Gerard
E. Puorro(5)
|
|
242,000
|
|
150,000
|
|
140,000
|
|
532,000
|
|
2.3
|
%
|
George
A. Abe
|
|
0
|
|
60,000
|
|
50,000
|
|
110,000
|
|
*
|
|
Ben
Bailey III(6)
|
|
1,000
|
|
0
|
|
50,000
|
|
51,000
|
|
*
|
|
Nancy
E. Nager
|
|
2,000
|
|
15,000
|
|
50,000
|
|
67,000
|
|
*
|
|
Kenneth
D. Roberts
|
|
77,400
|
|
105,000
|
|
50,000
|
|
232,400
|
|
1.0
|
%
|
Douglas
W. Scott(7)
|
|
7,500
|
|
60,000
|
|
50,000
|
|
117,500
|
|
*
|
|
Dennis
S. Herman
|
|
102,312
|
|
35,000
|
|
52,500
|
|
189,812
|
|
*
|
|
Jay
D. Caplan(8)
|
|
100,000
|
|
0
|
|
50,000
|
|
150,000
|
|
*
|
|
All
Directors, Nominees and Executive Officers as a Group (11 persons)(9)
|
|
714,212
|
|
530,000
|
|
615,000
|
|
1,859,212
|
|
7.7
|
%
|
*
|
Represents less than 1%
of Candelas outstanding common stock.
|
|
|
(1)
|
Pursuant to the
rules of the SEC, the number of shares of Candelas common stock deemed
beneficially owned includes, for each person or group referred to in the
table, shares issuable pursuant to options and shares underlying stock
appreciation rights held by the respective person or group that are currently
exercisable or will become exercisable within 60 days of September 30,
2009, the most recent practicable date for this proxy statement/prospectus.
|
|
|
(2)
|
Applicable percentage
of ownership is based upon 22,913,036 shares of Candelas common stock
outstanding as of September 30, 2009.
|
|
|
(3)
|
Information obtained
from the Schedule 13G filed by Frank Russell Company with the SEC on
February 17, 2009. Frank Russell Company is the beneficial owner of
1,664,716 shares of Candelas common stock, of which it has sole voting power
and shared dispositive power as to all of such shares, and shared voting
power and sole dispositive power as to none of such shares. Certain indirect
clients that are advised by Frank Russell Company have the right to receive
and the ultimate power to direct the receipt of dividends from, or the
proceeds of the sale of such securities.
|
|
|
(4)
|
Information obtained
from the Schedule 13G/A filed by JPMorgan Chase & Co. on behalf of
itself, J.P. Morgan Securities Inc., JPMorgan Chase Funding Inc. (f/k/a J.P.
Morgan Ventures Corporation) and The Bear Stearns Companies LLC with the SEC
on November 10, 2008. JPMorgan Chase & Co. is the beneficial owner
of 1,149,239 shares of Candelas common stock, of which it has sole voting
power and sole dispositive power as to all of such shares, and shared voting
power and shared dispositive power as to none of such shares.
|
|
|
(5)
|
The 242,000 shares of
Candela common stock beneficially owned by Mr. Puorro are owned jointly
with his spouse, with whom Mr. Puorro shares voting and investment power
over such shares.
|
|
|
(6)
|
Does not include
300,000 shares of Candela common stock owned by Massachusetts Capital Resource
Company, where Mr. Bailey serves as Vice President, as to which
Mr. Bailey disclaims beneficial ownership.
|
|
|
(7)
|
Includes 3,750 shares
owned by Mr. Scotts spouse, as to which Mr. Scott has shared
voting and shared dispositive power.
|
|
|
(8)
|
The 100,000 shares of
Candela common stock beneficially owned by Mr. Caplan are owned jointly
with his spouse, with whom Mr. Caplan shares voting and investment power
over such shares.
|
|
|
(9)
|
See Notes 5, 6, 7 and
8.
|
13
Table
of Contents
EQUITY COMPENSATION PLAN INFORMATION
The
following table sets forth a summary of the equity compensation plans offered
by Candela as of June 27, 2009:
|
|
As of June 27, 2009
|
|
Plan category
|
|
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
(a) (1) (2)
|
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
(b) (1)
|
|
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))
(c) (3)
|
|
Equity compensation plans approved by security
holders (4)
|
|
1,480,566
|
|
4.66
|
|
962,582
|
|
Equity Compensation plans not approved by security
holders
|
|
|
|
|
|
|
|
Total
|
|
1,480,566
|
|
4.66
|
|
962,582
|
|
(1)
|
Represents the
number of shares of Candela common stock that would have been issued if all
outstanding Candela options, warrants, and rights had been exercised on
June 27, 2009.
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As of June 27,
2009, there were 5,060,623 shares of Candela common stock underlying all
outstanding options, warrants, and rights. This consisted of (i) 983,487
shares of Candela common stock underlying outstanding options and
(ii) 4,077,136 shares of Candela common stock underlying outstanding
stock appreciation rights. If all such Candela options had been exercised on
June 27, 2009, then 983,487 shares of Candela common stock would have
been issued. If all such Candela stock appreciation rights had been exercised
on June 27, 2009, then an additional 497,079 shares of Candela common
stock would have been issued. In calculating the number of shares of Candela
common stock issuable upon the exercise of outstanding stock appreciation
rights, Candela used the fair market value of its common stock as reported on
the NASDAQ Global Select Market on June 26, 2009 ($0.87 per share), the
last trading date prior to Candelas fiscal year end.
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(2)
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Does not include
purchase rights accruing under Candelas 1990 Employee Stock Purchase Plan,
as amended, because the purchase price (and therefore the number of shares to
be purchased) will not be determined until the end of the purchase period.
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(3)
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Of the 962,582
shares of Candela common stock available for future issuance under Candelas
equity compensation plans, 602,710 shares remain available for issuance under
the terms of Candelas 1990 Employee Stock Purchase Plan, as amended.
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(4)
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The equity
compensation plans approved by security holders are the 1998 Stock Plan,
which expired pursuant to its terms on September 18, 2008, the 2008
Stock Plan, which was adopted by Candelas board of directors on
October 27, 2008 and approved by Candelas stockholders on
December 12, 2008 and the 1990 Employee Stock Purchase Plan, which was initially
adopted by Candelas board of directors on May 10, 1990 and approved by
Candelas stockholders on November 13, 1990.
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Item 13.
Certain Relationships
and Related Transactions and Director Independence.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
During fiscal 2009, the
Company did not engage in any transaction that would require disclosure under
Item 404(a) of Regulation S-K.
The Company maintains
policies and procedures for the review, approval, or ratification of
transactions in which (i) the Company was or is to be a participant and
the amount involved exceeds $120,000 and (ii) any related person (as such
term is defined in Item 404(a) of Regulation S-K) had or will have a
direct or indirect material interest (a
Related Person Transaction
).
As a general matter, the
Company prefers to avoid Related Person Transactions. Nevertheless, the
Company recognizes that there are situations where Related Person Transactions
may be in, or may not be inconsistent with, the best interests of the Company
and its stockholders, including but not limited to situations where the Company
may obtain products or services of a nature, quantity or quality, or on other
terms, that are not readily available from alternative sources or when the
Company provides products or services to related persons on an arms length
basis on terms comparable to those provided to unrelated third parties.
14
Table
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Related Person
Transactions that are identified as such prior to the consummation thereof or
amendment thereto shall be consummated or amended only if the following steps
are taken:
·
Prior to entering into the Related Person
Transaction (a) the related person, (b) the director, executive
officer, nominee or beneficial owner who is an immediate family member of the
related person, or (c) the business unit or function/department leader
responsible for the potential Related Person Transaction shall provide notice
to the Companys General Counsel of the facts and circumstances of the proposed
Related Person Transaction.
·
The proposed Related Person Transaction
shall be submitted to the Audit Committee for consideration at the next Audit
Committee meeting.
·
The Audit Committee shall consider all of
the relevant facts and circumstances available to the Audit Committee,
including (if applicable) but not limited to: (i) the benefits to
the Company; (ii) the impact on a directors independence in the event the
related person is a director, an immediately family member of a director or an
entity in which a director is a partner, shareholder or executive officer; (iii) the
availability of other sources for comparable products or services; (iv) the
terms of the transaction; and (v) the terms available to unrelated third
parties or to employees generally. No member of the Audit Committee
shall participate in any review, consideration or approval of any Related
Person Transaction with respect to which such member or any of his or her
immediate family members is the related person. The Audit Committee shall
approve only those Related Person Transactions that are in, or are not
inconsistent with, the best interests of the Company and its stockholders, as
the Audit Committee determines in good faith.
In the event the Companys
Chief Executive Officer, Chief Financial Officer or General Counsel becomes
aware of a Related Person Transaction that has not been previously approved or
previously ratified:
·
If the transaction is pending or ongoing,
it will be promptly submitted to the Audit Committee, and the Audit Committee
shall consider all of the relevant facts and circumstances available to the
Audit Committee, including (if applicable) but not limited to: (i) the
benefits to the Company; (ii) the impact on a directors independence in
the event the related person is a director, an immediately family member of a
director or an entity in which a director is a partner, shareholder or
executive officer; (iii) the availability of other sources for comparable
products or services; (iv) the terms of the transaction; and (v) the
terms available to unrelated third parties or to employees generally.
Based on the conclusions reached, the Audit Committee shall evaluate all
options, including but not limited to ratification, amendment or termination of
the Related Person Transaction.
·
If the transaction is completed, the
Audit Committee shall evaluate the transaction, taking into account the same
factors described above, to determine if rescission of the transaction is
appropriate.
DIRECTOR
INDEPENDENCE
The Board of Directors
has determined that a majority of members of the Board of Directors are
independent directors (as defined in NASDAQ Stock Market Rule 5605(a)(2))
and that Mr. Roberts, Mr. Abe, Mr. Bailey, Ms. Nager and Mr. Scott
are independent directors.
Item 14.
Principal Accountant
Fees and Services.
ACCOUNTING
FEES
The Audit Committee has
considered whether the Companys independent registered public accounting firms
provision of non-audit services to the Company and the fees charged for them,
as set forth below, are compatible with the independent registered public
accounting firms independence and believes such services are compatible with
the independent registered public accounting firms independence.
Audit Fees.
The aggregate fees billed by BDO Seidman, LLP
for professional services rendered for the audit of the Companys annual
financial statements for fiscal 2009, for the reviews of the financial
statements included in the Companys Forms 10-Q for fiscal 2009 and for the
independent audit of the Companys internal control over financial reporting
required under the Sarbanes-Oxley Act of 2002 for fiscal 2009 were $392,098.
The aggregate fees billed by BDO Seidman, LLP for professional services
rendered for the audit of the Companys annual financial statements for fiscal
2008, for the reviews of the financial statements included in the Companys
Forms 10-Q for fiscal 2008 and for the independent audit of the Companys
internal control over financial reporting required under the Sarbanes-Oxley Act
of 2002 for fiscal 2008 were $781,490.
Audit-Related Fees.
There were no fees billed by BDO Seidman, LLP
for assurance and related services that were reasonably related to the
performance of the audit of the Companys annual financial statements for
fiscal 2009 and 2008 or reviews of the financial statements included in the
Companys Forms 10-Q for fiscal 2009 and 2008.
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Table
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Tax Fees.
There were no fees billed by BDO Seidman, LLP
for professional services rendered for tax compliance, tax advice and tax
planning for fiscal 2009 and 2008.
All Other Fees.
There were no fees billed by BDO Seidman, LLP
for products and services provided other than those described above for fiscal
2009 and 2008.
AUDIT
COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES
The Companys Audit
Committee has adopted a Pre-Approval Policy for Audit and Non-Audit Services in
order to assure that such services do not impair the independent registered
public accounting firms independence. Pursuant to this policy, the Audit
Committee annually reviews and pre-approves the independent registered public
accounting firms year-end audit and quarterly reviews, as well as other known
or anticipated audit or non-audit services. During the course of the year, the
Audit Committee (or its delegatee) may pre-approve additional non-audit
services that have not been pre-approved at the annual review.
100% of the services
described under the caption Accounting Fees above were approved by the Audit
Committee pursuant to 17 CFR 210.2-02(c)(7)(i)(C).
Item 15.
Exhibits, Financial
Statement Schedules.
(a)
Documents Filed as Part of this Annual Report on Form 10-K/A
(1)
Consolidated Financial Statements
:
Previously Filed
(2)
Consolidated Financial Statement Schedules
:
Previously Filed
(3)
Exhibits
:
The following exhibits
are filed as part of this Annual Report on Form 10-K/A.:
Exhibit
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Footnote
|
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Description
|
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31.1*
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Rule 13a-14(a)/15d-14(a) Certification
of Chief Executive Officer
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31.2*
|
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|
|
Rule 13a-14(a)/15d-14(a) Certification
of Chief Financial Officer
|
|
|
|
|
|
32.1*
|
|
|
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Section 1350
Certification of Chief Executive Officer
|
|
|
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32.2*
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Section 1350
Certification of Chief Financial Officer
|
*
Filed herewith
16
Table of Contents
SIGNATURES
Pursuant to the
requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized, on October 26, 2009.
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CANDELA CORPORATION
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By:
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/s/ Gerard E. Puorro
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Name:
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Gerard E. Puorro
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Title:
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President, Chief
Executive Officer and Director
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17
Table of Contents
EXHIBIT
INDEX
Exhibit
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Footnote
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Description
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31.1
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Rule 13a-14(a)/15d-14(a) Certification
of Chief Executive Officer
|
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31.2
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Rule 13a-14(a)/15d-14(a) Certification
of Chief Financial Officer
|
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32.1
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Section 1350
Certification of Chief Executive Officer
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32.2
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Section 1350
Certification of Chief Financial Officer
|
18
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