UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): February 11, 2005
CANDELA CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
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(State or Other Jurisdiction of Incorporation)
000-14742 04-2477008
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(Commission File Number) (I.R.S. Employer
Identification Number)
530 BOSTON POST ROAD, WAYLAND, MASSACHUSETTS 01778
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(Address of Principal Executive Offices) (Zip Code)
(508) 358-7400
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
DIRECTOR COMPENSATION
On February 11, 2005, the Compensation Committee (the "Compensation Committee")
of the Board of Directors of the registrant approved compensation for members of
the Board of Directors who are not employees of the Company (each, a
"Non-Employee Director"). Directors who are employees of the Company receive no
additional compensation for their service as a Director.
Retroactive to January 1, 2005, Non-Employee Directors will receive the
following annual retainers and meeting fees:
(i) an annual retainer of $12,500;
(ii) an additional annual retainer of $5,000 for the Chair of the
Board of Directors;
(iii) an additional annual retainer of $5,000 for the Chair of the
Audit Committee (unless such person is also Chair of the Board
of Directors);
(iv) an additional annual retainer of $2,500 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.
Non-Employee Directors are also reimbursed for out-of-pocket expenses incurred
in connection with the performance of their duties as a Director.
In addition, on February 11, 2005, the Compensation Committee granted each
Non-Employee Director options to purchase 15,000 shares of the registrant's
common stock, $.01 par value per share (the "Common Stock"), at a per share
purchase price equal to the fair market value of the Common Stock on February
11, 2005. The options were immediately exercisable and will terminate on
February 11, 2015 unless terminated earlier in accordance with the terms of such
options. Until any subsequent amendment of policy, the Compensation Committee
intends to provide annual grants of 15,000 options to each Non-Employee Director
for each year of service on the Board of Directors.
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EXECUTIVE OFFICER COMPENSATION
On February 11, 2005, the Compensation Committee approved base salary increases
for certain executive officers. Gerard E. Puorro will receive an annual base
salary of $400,000, Dr. James C. Hsia will receive an annual base salary of
$220,919, and William H. McGrail will receive an annual base salary of $207,405,
in each case retroactive to the anniversary of their last performance review.
On February 11, 2005, the Compensation Committee approved the registrant's 2005
Executive Bonus Plan (the "Executive Bonus Plan").
The Compensation Committee approves executive officers for inclusion in the
Executive Bonus Plan. Only executive officers whose compensation is not tied to
specific sales targets are eligible for inclusion in the Plan.
Pursuant to the terms of the Executive Bonus Plan, each executive officer who
participates in the Executive Bonus Plan will receive a cash bonus if the
registrant achieves a certain percentage of the registrant's operating target
(the "Operating Target"). The following table sets forth percentages of the
Operating Target and the corresponding cash bonus (expressed as a percentage of
base salary).
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BONUS
(% OF BASE SALARY)
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% OF OPERATING TARGET EXECUTIVE OFFICERS (OTHER CHIEF EXECUTIVE OFFICER
THAN THE CHIEF EXECUTIVE
OFFICER)
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80% 0% 0%
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81% 1% 1.5%
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82% 2% 3%
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83% 3% 4.5%
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84% 4% 6%
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85% 5% 7.5%
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86% 6% 9%
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87% 7% 10.5%
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88% 8% 12%
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89% 9% 13.5%
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90% 10% 15%
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91% 11% 16.5%
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92% 12% 18%
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93% 13% 19.5%
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94% 14% 21%
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95% 15% 22.5%
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96% 16% 24%
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97% 17% 25.5%
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98% 18% 27%
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99% 19% 28.5%
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100% 30% 45%
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101% and up Add 1.5% for each % Add 2.25% for each % increase
increase in Operating in Operating Target
Target
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In addition, on February 11, 2005 the Compensation Committee granted each
Executive Officer listed in the following table an option to purchase the number
of shares of Common Stock set forth opposite such executive officer's name at
the per share purchase price equal to the fair market value of the Common Stock
on February 11, 2005. The options were immediately exercisable and will
terminate on February 11, 2015 unless terminated earlier in accordance with the
terms of such options.
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EXECUTIVE OFFICER NUMBER OF SHARES OF COMMON
STOCK UNDERLYING OPTION GRANT
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Gerard E. Puorro 20,000
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Dr. James C. Hsia 15,000
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F. Paul Broyer 10,000
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Paul B. Cardarelli 10,000
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Dennis S. Herman 10,000
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William H. McGrail 10,000
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Toshio Mori 10,000
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Robert J. Wilber 10,000
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Dr. Kathleen McMillan 5,000
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Robert E. Quinn 5,000
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ITEM 7.01. REGULATION FD DISCLOSURE.
On February 16, 2005, the registrant issued a press release announcing the
interim decision of the arbitrator in the registrant's dispute with The Regents
of the University of California. A copy of the press release is furnished as
Exhibit 99.1.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits. The following exhibits are furnished as part of this report:
Exhibit 99.1 Press release dated February 16, 2005.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
CANDELA CORPORATION
By: /s/ F. Paul Broyer
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F. Paul Broyer
Senior Vice President, Finance &
Administration, and Chief Financial Officer
(principal financial and accounting officer)
Date: February 17, 2005
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EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
99.1 Press release dated February 16, 2005