BONUS AGREEMENT
Dated: December ___, 1998
Star Medical Technologies, Inc. (the "Company"), Medical Technologies
Acquisition, Inc. ("Merger Sub"), Coherent, Inc. ("Coherent"), Palomar Medical
Technologies, Inc. ("Palomar"), Xx. Xxxxxx X. Xxxxx, Xx. Xxxxx X. Xxxxx and Xx.
Xxxxx X. Xxxxxxxxx are parties to that certain Agreement and Plan of
Reorganization (the "Agreement") dated as of December ___, 1998.
By executing this Bonus Agreement, Palomar hereby agrees to pay to the
individual employees of the Company listed on Schedule A hereto (and subject to
the withholding specified on such schedule), at the Closing (as defined in the
Agreement) an aggregate amount of $950,000, provided that Drs. Grove and Xxxxx
certify to Palomar as of the Closing that the Company has been able to produce
the cumulative number of units through the month ending prior to Closing set
forth opposite such month on the shipment forecast below (the "Requisite
Units"). If both (a) the certification provided for in the previous sentence has
not been provided, and (b) the Company has not produced and shipped (or is not
ready to ship, as the case may be) the Requisite Units, then Palomar shall pay
pro rata to the persons listed on Schedule A an amount equal to $950,000 times a
fraction, the numerator of which is equal to the cumulative number of units
shipped through the month ending prior to Closing plus the total number of units
in finished goods at the end of the month ending prior to Closing, and the
denominator of which is equal to the cumulative number of units in the shipment
forecast through the month ending prior to Closing. If the amount due hereunder
is less than $475,000, then no payments will be due hereunder, and in no case
shall the amount paid be in excess of $950,000.
Month Shipment Forecast (Units)
January 20
February 20
March 45
The parties hereto further agree and acknowledge that it is a condition
to the enforceability of that certain Power of Attorney and Proxy of even date
with the Agreement that the payments due under this Bonus Agreement are made at
the Closing as required herein.
[REST OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, Palomar, Company, Xx. Xxxxx and Xx. Xxxxx have duly
executed this Bonus Agreement, as of the date and year first above written.
"PALOMAR" "COMPANY"
PALOMAR MEDICAL TECHNOLOGIES, INC. STAR MEDICAL TECHNOLOGIES, INC.
By: By:
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Title: Title:
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Xxxxxx X. Xxxxx Xxxxx X. Xxxxx
