24351449
35000000
1141835641
93655000
1803000
6651000
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1701000
23000
22633000
-17550000
-886000
338742000
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8636000
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2949000
8118000
32950000
358112000
810000
26.83
1847242
23000
23253000
-33104000
-1628000
355082000
-3863000
39974000
7562000
8251000
79958000
81000
33374000
5561000
534610000
1065000
1000
451000
17882000
1851000
3105000
287135000
251000
12733000
20580000
6782000
387161000
74253000
3181000
108587000
3181000
42012000
24000
903000
9002000
33885000
24803000
38462000
14700000
2241000
-5460000
74173000
38713000
741000
17372000
2900000
17882000
45616000
0.001
5000000
24726000
53882000
74173000
8841000
44317000
79768000
35412000
534610000
8841000
105807000
3317000
6888000
105045000
11425000
1002000
38761000
22569000
69085000
39706000
73080000
404402000
810000
55781000
21356000
33104000
0
12500000
0
-42000
7296000
4005000
6694000
1
2432000
-5740000
22204000
21139000
497007000
74173000
59786000
14387000
5785000
5785000
124627
30.60
5567000
5567000
30.51
35.37
5785000
59786000
14387000
11216000
4163000
4902000
13106000
2470000
22572000
13327000
1324000
11000
35423000
35412000
9000
33923000
33914000
2000
1500000
1498000
70000
1000
38830000
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45000
1000
25916000
25872000
25000
12914000
12889000
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11877000
19718000
-42000
122000
1231000
1353000
2518000
15872000
18390000
14055000
15185000
29240000
232000
152000
384000
0.001
24327000
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0.001
0
8500000
24000
24327000
-33104000
-1628000
1641000
2880000
35185000
-5411000
387161000
-49000
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0.001
6629000
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10740000
90354000
204000
40485000
3707000
2923000
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417000
3373000
5108000
543000
19834000
1216000
19732000
3281000
338577000
277000
10444000
17962000
7101000
2960000
16300000
84158000
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84362000
2810000
100000
3301000
19573000
153625000
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3301000
42092000
25000
988000
13576000
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14915000
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2449000
16400000
2653000
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2875000
3800000
19834000
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56000
10156000
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5000000
2220000
28596000
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11440000
35707000
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11440000
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3258000
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13930000
2930000
817000
1966000
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1059000
6624000
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19448000
17278000
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47950000
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24.48
455494000
645412
13629000
810000
69982000
26.26
20358000
33104000
0
9209000
17100000
19700000
881201
26.19
893350
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0
-43000
10159000
3204000
0
7435000
1
2170000
-6199000
19662000
23554000
549490000
84158000
56859000
27299000
6196000
6196000
0
0
24052
52888
139833
41.39
238479
36.36
10875000
236134
0
10875000
29.40
29.40
52.78
0
36.29
10768000
0
6196000
56859000
27299000
66.00
0
0
608688
5588369
13783000
11055000
7233000
13061000
3077000
23821000
15224000
1181000
50000
46580000
46530000
47000
40542000
40495000
3000
6038000
6035000
154000
37782000
37628000
84000
16448000
16364000
70000
21334000
21264000
40495000
16364000
56859000
0
6035000
21264000
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0
4200000
7600000
4900000
200000
3300000
200000
600000
6095000
10257000
16395000
-43000
370000
977000
1347000
3406000
14964000
18370000
18579000
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27950000
146000
138000
284000
0.001
25316116
61500000
1628000
0.001
0
0
25000
25316000
-33104000
-1628000
1485000
3557000
42908000
-7293000
426014000
-130000
-7423000
69982000
2017-02-14
P20D
0
2018-02-01
8500000
6500000
16000000
P3Y
-1675000
1200000
734000
2617000
1073000
1300000
0.067
-18524000
-1187000
0.008
64000
7113000
-1.088
0.027
-13032000
-1398000
1306000
7114000
30420000
1.44
900000
8900000
17546000
1.41
28974000
-0.030
8600000
577000
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-1600000
1227000
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239000
127131000
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0.002
1073000
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0.001
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292369000
1495000
19000
3200000
-1476000
3331000
165238000
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143978000
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4864000
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13235000
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-217000
117000
1402000
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42106000
15778000
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0.0180
-0.006
15554000
22195000
0.44
0.00
371000
815000
1100000
21824000
22033000
8153000
854180
32400000
0.0141
10.50
88564000
1000000
P4Y7M6D
0.43
688000
76000
-0.003
2961000
55491000
0.016
963000
0.005
67000
236878000
8153000
4135000
0
292000
3880000
1007000
1934000
620000
15554000
742000
50513000
64651000
148803000
28402000
7114000
1073000
8153000
-46000
-2318000
31338000
-2266000
1000000
6133000
8457000
4265000
1000000
0.015
33456000
-533000
0.014
0.002
634000
7646000
-0.030
0.024
701000
-1234000
920000
7652000
30374000
0.71
1300000
10100000
19291000
0.70
14210000
-0.002
9200000
29000
1404000
20200000
-1800000
2367000
-1066000
357000
145928000
0.319
4265000
4265000
-885000
0.350
0.001
-1683000
339462000
1727000
19000
2100000
-1440000
3963000
193534000
3670000
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167213000
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63033000
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752000
20667000
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13136000
7927000
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27410000
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-119000
24215000
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61000
14145000
-1558000
7391000
37725000
0
10787000
13031000
0.0175
-0.014
22658000
0.43
0.00
372000
6.78
0
1700000
41.24
22286000
22343000
20163000
455999
44763000
0.0139
12.42
111506000
1400000
P4Y9M18D
0.41
P7Y3M29D
213000
0
2990000
41.24
63377000
6.78
18.94
10000000
845000
24.84
0.027
197000
30.18
276085000
-0.020
20163000
689958
1157284
41.24
6586000
22950000
0
86618
16685
P8Y10M24D
124627
35.37
30.51
344000
4076000
1167000
2059000
1000
1074000
40942000
70233000
202485000
25802000
7652000
4265000
20162000
-39000
-1558000
15807000
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Stock-Based Compensation</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure
follows the fair value recognition provisions of ASC
718, <i>Stock
Compensation Topic</i>. This guidance requires share-based payments
to employees, including grants of employee stock options and
restricted stock units (“RSUs”), to be recognized in
the statements of operations based on their fair values at the date
of grant. The fair value of performance-based stock units
(“PSUs”) is determined based on the fair market value
of Cynosure’s common stock on the vest dates. Cynosure
expenses the fair value of share-based payments over the service
period. ASC 718 requires companies to utilize an estimated
forfeiture rate when calculating the expense for the period.
Accordingly, Cynosure reviews its actual forfeiture rates and
periodically aligns its stock compensation expense with the
share-based payments that are vesting. Cynosure recorded
stock-based compensation expense of $10.1 million,
$7.6 million and $7.1 million for the years ended
December 31, 2016, 2015 and 2014, respectively. As of
December 31, 2016 and 2015, Cynosure had $31,000 and $29,000,
respectively, of stock-based compensation expense capitalized as a
part of inventory.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Total
stock-based compensation expense was recorded to cost of revenues
and operating expenses based upon the functional responsibilities
of the individual holding the respective share-based payments, as
follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="72%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Years Ended
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2014</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Cost of
revenues</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">463</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">344</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">292</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Sales and
marketing</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,774</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,059</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,934</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Research and
development</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,356</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,167</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,007</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">General and
administrative</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">5,517</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4,076</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,880</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total stock-based
compensation expense</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,110</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">7,646</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">7,113</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">As of
December 31, 2016, there was $16.3 million of
unrecognized compensation expense related to <font style="WHITE-SPACE: nowrap">non-vested</font> share awards that is expected
to be recognized on a straight-line basis over a weighted average
period of 1.6 years. Cash received from option exercises was
$25.2 million, $20.2 million and $8.2 million during
the years ended December 31, 2016, 2015 and 2014,
respectively.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure did
not grant any stock options during the year ended December 31,
2016. Cynosure granted 455,999 and 854,180 stock options during the
years ended December 31, 2015 and 2014, respectively. Cynosure
uses the Black-Scholes option pricing model to determine the
weighted average fair value of options. The weighted average fair
value of the options granted during the years ended
December 31, 2015 and 2014 was $12.42 and $10.50,
respectively, using the following assumptions:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="66%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="3" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Years Ended December 31,</b></font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2014</b></font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Risk-free interest
rate</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2"><font style="WHITE-SPACE: nowrap">1.39% - 1.75%</font></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2"><font style="WHITE-SPACE: nowrap">1.41% - 1.80%</font></font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Expected dividend
yield</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Expected term</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">4.8 years</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">4.6 years</font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Expected
volatility</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">41% - 43%</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">43% - 44%</font></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Option-pricing models require the input of various subjective
assumptions, including the option’s expected life and the
price volatility of the underlying stock. Cynosure’s
estimated expected stock price volatility is based on its own
historical volatility for the 2015 and 2014 periods.
Cynosure’s expected term of options granted during the years
ended December 31, 2015 and 2014 represents the weighted
average period of time that options granted are expected to be
outstanding giving consideration to vesting schedules and
Cynosure’s historical exercise patterns. The risk-free rate
for the expected term of the option is based on the U.S. Treasury
yield curve in effect at the time of grant. The dividend yield of
zero is based on the fact that Cynosure has never paid cash
dividends and has no present intention to pay cash
dividends.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure has
been increasingly using RSUs as an equity incentive award for
employees. Cynosure granted 173,113 and 86,618 RSUs to employees
during the years ended December 31, 2016 and 2015,
respectively, at the fair market value of its common stock on the
date of grant and which vest annually over a three-year period.
Fair market value was determined using the closing price of
Cynosure’s common stock on the date of grant. Cynosure is
recognizing related compensation expense, net of estimated
forfeitures, on a straight-line basis over the three-year
period.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure
granted 25,425 and 16,685 RSUs to <font style="WHITE-SPACE: nowrap">non-employee</font> directors during the years
ended December 31, 2016 and 2015, respectively, at a fair
market value of its common stock on the date of grant and which
vest quarterly over a <font style="WHITE-SPACE: nowrap">one-year</font> period. Fair market value was
determined using the closing price of Cynosure’s common stock
on the date of grant. Cynosure is recognizing related
compensation expense, net of estimated forfeitures, on a
straight-line basis over the <font style="WHITE-SPACE: nowrap">one-year</font> period.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure
implemented a PSU equity compensation program in 2016. Cynosure
granted PSUs in February 2016 to executive-level employees that
vest annually over a three-year period based on the achievement of
performance goals (determined by the compensation committee of the
board of directors in its sole discretion) and continued
performance of services. If Cynosure’s consolidated
cumulative revenue and/or EBITDA, as defined in each respective
award agreement, exceeds defined thresholds for the one, two and
three-year periods beginning on January 1, 2016 and ending
December 31, 2016, December 31, 2017 and
December 31, 2018, respectively, the PSUs vest on the date
which is the earlier of (i) the financial earnings release for
the year following the year in which the performance period ended
or (ii) a determination by the compensation committee of the
board of directors that the performance goal has been achieved.
Cynosure recognizes compensation expense for performance goals when
the probability of achieving such goals is considered probable and
is recognizing related compensation expense over the period from
the date of grant through the expected vest dates. Each recipient
of the PSUs is eligible to receive between zero and 200% of the
target number of shares of Cynosure’s common stock at the end
of the one, two and three-year periods, provided that the
performance goals have been achieved and the recipient has
continued performing services for Cynosure. For the year ended
December 31, 2016, 16,188 shares were awarded due to the
achievement of performance goals for the <font style="WHITE-SPACE: nowrap">one-year</font> period then ended. The actual
number of shares earned upon vesting will range from zero shares up
to a maximum of 52,888 shares if the 200% target is achieved
applicable to these PSUs for the <font style="WHITE-SPACE: nowrap">two-year</font> period ending
December 31, 2017, and the actual number of shares earned upon
vesting will range from zero shares up to a maximum of 24,052
shares for the three-year period ending December 31, 2018.
Fair value of the PSUs is determined based on the fair market value
of Cynosure’s common stock at each reporting period until
each performance goal is achieved. Cynosure reevaluates at each
reporting period whether the performance goals are probable of
achievement and, if at any point in time, Cynosure believes that
achieving a performance goal is not probable, it will stop
recognizing the related compensation expense and will adjust the
previously recognized compensation expense
prospectively.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure
granted 62,893 PSUs in December 2016 to one executive-level
employee that vest annually over a three-year period based on
achievement of performance goals, at the discretion of the
compensation committee of the board of directors, for the first
year, and then based on continued performance of services over the
remainder of the three-year period. If Cynosure’s adjusted
income from operations, as defined in the award agreement, exceeds
defined thresholds for the <font style="WHITE-SPACE: nowrap">one-year</font> period beginning on
January 1, 2017 and ending December 31, 2017, the PSUs
will vest upon the determination by the compensation committee of
the board of directors that the performance goal has been achieved.
This determination will be made promptly once Cynosure’s
consolidated statements of operations are finalized for the year
ending December 31, 2017. Cynosure recognizes compensation
expense for performance goals when the probability of achieving
such goals is considered probable and is recognizing related
compensation expense over the period from the date of grant through
the expected vest dates. Fair value of the PSUs is determined based
on the fair market value of Cynosure’s common stock at each
reporting period end until each performance goal is achieved.
Cynosure reevaluates at each reporting period whether the
performance goals are probable of achievement and, if at any point
in time, Cynosure believes that achieving a performance goal is not
probable, it will stop recognizing the related compensation expense
and will adjust the previously recognized compensation expense
prospectively.</font></p>
</div>
-2526000
CYNOSURE INC
3500000
9531000
13136000
3556000
100000
10-K
0000885306
1991-07-10
0.026
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 18px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>5. Goodwill and Other
Intangible Assets</b></font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Changes to
goodwill during the year ended December 31, 2016 were as
follows (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="88%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Balance—December 31, 2015</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">105,807</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Translation
adjustment</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(55</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Balance—December 31, 2016</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">105,752</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Other
intangible assets consist of the following at December 31,
2016 and December 31, 2015 (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="50%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Developed</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Technology</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>&
Patents</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Business</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Licenses</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Customer</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Relationships</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Trade</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Names</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Other</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Total</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2"><b>December 31,
2016</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">27,950</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">284</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">16,395</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">18,370</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,347</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">64,346</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Translation
adjustment</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(43</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(43</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Accumulated
amortization</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(18,579</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(146</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(6,095</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(3,406</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(370</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(28,596</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Balance, December 31,
2016</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">9,371</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">138</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">10,257</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">14,964</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">977</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">35,707</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2"><b>December 31,
2015</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">29,240</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">384</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">19,718</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">18,390</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,353</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">69,085</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Translation
adjustment</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(42</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(42</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Accumulated
amortization</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(14,055</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(232</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(7,799</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(2,518</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(122</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(24,726</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Balance, December 31,
2015</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">15,185</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">152</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">11,877</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">15,872</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,231</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">44,317</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Amortization
expense for the years ended December 31, 2016, 2015 and 2014
was $8.6 million, $9.2 million and $8.6 million,
respectively. Cynosure has approximately $56,000 of indefinite-life
intangible assets that are included in other intangible assets in
the table above. As of December 31, 2016, amortization expense
on existing intangible assets for the next five years and beyond is
as follows (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="89%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">2017</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">6,624</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">2018</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">5,108</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">2019</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,373</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">2020</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2,923</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">2021</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2,449</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">2022 and
thereafter</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">15,174</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">35,651</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
2016-12-31
45038000
-782000
-0.010
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Principles of Consolidation</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The
accompanying consolidated financial statements include the accounts
of Cynosure, Inc. and its wholly-owned subsidiaries: Cynosure
Securities Corporation, Palomar Medical Products, LLC, Palomar
Medical Technologies, LLC, Cynosure Mexico, Cynosure GmBH, S.A.R.L.
Cynosure France, Cynosure Maroc SARL, Cynosure UK LTD, Cynosure
Spain S.L., Cynosure B.V., Cynosure K.K, Suzhou Cynosure Medical
Devices Company Ltd., Cynosure Korea Limited, Cynosure Pty Ltd and
Cynosure Portugal. All intercompany balances and transactions have
been eliminated.</font></p>
</div>
0.021
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 18px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Advertising Costs</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Cynosure
expenses advertising costs as incurred. Advertising costs totaled
$3.5 million, $1.0 million and $1.2 million for the
years ended December 31, 2016, 2015 and 2014,
respectively.</font></p>
</div>
-87000
Yes
10110000
0.001
0.042
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">As of
December 31, 2016, Cynosure’s marketable securities
consist of the following (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="63%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Market</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Value</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Amortized</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Cost</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Unrealized</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Gains</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Unrealized</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Losses</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2"><b><i><font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">Available-for-Sale</font></font>
Securities:</i></b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2"><b>Short-term marketable
securities:</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">State and municipal
bonds</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">40,495</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">40,542</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(47</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Treasuries and government
agencies</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">6,035</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">6,038</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(3</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total short-term marketable
securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">46,530</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">46,580</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(50</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2"><b>Long-term marketable
securities:</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">State and municipal
bonds</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">16,364</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">16,448</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(84</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Treasuries and government
agencies</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">21,264</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">21,334</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(70</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total long-term marketable
securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">37,628</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">37,782</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(154</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font>
securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">84,158</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">84,362</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(204</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total marketable
securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">84,158</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">As of
December 31, 2015, Cynosure’s marketable securities
consist of the following (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="64%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Market</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Value</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Amortized</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Cost</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Unrealized</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Gains</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Unrealized</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Losses</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2"><b><i><font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">Available-for-Sale</font></font>
Securities:</i></b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2"><b>Short-term marketable
securities:</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">State and municipal
bonds</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">33,914</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">33,923</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(9</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Treasuries and government
agencies</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,498</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,500</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(2</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total short-term marketable
securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">35,412</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">35,423</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(11</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2"><b>Long-term marketable
securities:</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">State and municipal
bonds</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">25,872</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">25,916</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(45</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Treasuries and government
agencies</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">12,889</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">12,914</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(25</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total long-term marketable
securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">38,761</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">38,830</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(70</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font>
securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">74,173</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">74,253</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(81</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total marketable
securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">74,173</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
</table>
</div>
-558000
-1054000
2016
false
1854000
10112000
--12-31
Yes
42404000
0.61
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Concentration of Credit Risk</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Financial
instruments that subject Cynosure to credit risk consist primarily
of cash and cash equivalents, short and long-term marketable
securities and accounts receivable. Cynosure places cash and cash
equivalents and short and long-term marketable securities in
established financial institutions. Cynosure has no
significant <font style="WHITE-SPACE: nowrap">off-balance-sheet</font> risk or concentration of
credit risk, such as foreign exchange contracts, options contracts,
or other foreign hedging arrangements. Cynosure’s accounts
receivable balance, net of allowance for doubtful accounts, was
$42.1 million as of December 31, 2016, compared to
$42.0 million as of December 31, 2015. The allowance for
doubtful accounts as of December 31, 2016 and 2015 was
$3.3 million and $3.2 million, respectively. Cynosure
maintains an allowance for doubtful accounts based upon the aging
of its receivable balances, known collectability issues and
Cynosure’s historical experience with losses. Cynosure works
to mitigate bad debt exposure through its credit evaluation
policies, reasonably short payment terms and geographical
dispersion of sales. Losses from bad debt have historically been
within management’s estimates. Cynosure’s revenue
includes export sales to foreign companies located principally in
Europe, the Asia/Pacific region and the Middle East. Cynosure
obtains letters of credit for foreign sales that the Company
considers to be at risk.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">No customer
accounted for 10% or greater of revenue during 2016, 2015 or 2014.
No customer accounted for 10% or greater of accounts receivable as
of December 31, 2016 or 2015. Accounts receivable allowance
activity consisted of the following for the years ended
December 31:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2014</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Balance at beginning of
year</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,181</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,949</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,803</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Additions</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,606</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,599</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,373</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Deductions</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(1,486</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(2,367</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(1,227</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Balance at end of
year</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,301</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,181</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,949</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
1900000
12100000
20664000
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b>9.
Stock-Based Compensation</b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>2005
Stock Incentive Plan</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In August
2005, the Company’s board of directors adopted the 2005 Stock
Incentive Plan (the “2005 Plan”), which was approved by
Cynosure’s stockholders in December 2005. The 2005 Plan
provides for the grant of incentive stock options
(“ISOs”), as well as nonstatutory options, RSUs and
PSUs. The board of directors administers the 2005 Plan and has sole
discretion to grant options to purchase shares of Cynosure’s
common stock, RSUs and PSUs.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The board of
directors determines the term of each option, RSU and PSU, option
price, number of shares for which each option, RSU and PSU is
granted, whether restrictions would be imposed on the shares
subject to options and the rate at which each option is
exercisable. The exercise price for options granted is determined
by the board of directors, except that for ISOs, the exercise price
could not be less than the fair market value per share of the
underlying common stock on the date granted (110% of fair market
value for ISOs granted to holders of more than 10% of the voting
stock of Cynosure). The term of the options, RSUs and PSUs is set
forth in the applicable option agreement, except that in the case
of ISOs, the option term cannot exceed ten years. At
December 31, 2016 the number of shares of Class A common
stock reserved for issuance under the 2005 Plan is 5,588,369
shares. Options granted under the 2005 Plan vest either
(i) over a <font style="WHITE-SPACE: nowrap">36-month</font> period at the rate of 8.33%
each quarter until fully vested or (ii) over a vesting period
determined by the board of directors. RSUs granted to employees
under the 2005 Plan vest over a <font style="WHITE-SPACE: nowrap">36-month</font> period at the rate of 33% each
year until fully vested, and RSUs granted to <font style="WHITE-SPACE: nowrap">non-employee</font> directors under the 2005 Plan
vest over a <font style="WHITE-SPACE: nowrap">12-month</font> period at the rate of 25% each
quarter until fully vested. PSUs granted to employees under the
2005 Plan vest annually over a three-year period based on continued
performance of services and the achievement of performance goals.
As of December 31, 2016, there were 608,688 shares available
for future grant under the 2005 Plan.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><i>Stock
Options</i></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Stock option
activity under the 2005 Plan is as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="53%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Number of</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Options</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Exercise 
Price</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Range</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Weighted-<br />
Average</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Exercise</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Price</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Weighted-<br />
Average</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Remaining</b></font> <br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Contractual</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Life</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Aggregate</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Intrinsic</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Value</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>(in thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Vested</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,157,284</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2"><font style="WHITE-SPACE: nowrap">6.78 - 41.24</font></font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">24.84</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">22,950</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Unvested</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">689,958</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">18.94 - 41.24</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">30.18</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,000</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Outstanding,
December 31, 2015</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,847,242</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.78 - 41.24</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">26.83</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">7.33 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">32,950</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Exercised</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(924,614</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.78 - 41.24</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">27.24</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">18,428</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Forfeited</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(29,278</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">11.02 - 41.24</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">31.73</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">414</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Outstanding,
December 31, 2016</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">893,350</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.78 - 41.21</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">26.26</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.35 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">17,278</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Vested</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">645,412</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.78 - 41.21</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">24.48</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">5.81 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">13,629</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Unvested</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">247,938</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">18.94 - 41.00</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">30.88</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">7.75 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,649</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Vested or expected to
vest, December 31, 2016</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">881,201</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.78 - 41.21</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">26.19</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.33 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">17,100</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Exercisable,
December 31, 2016</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">645,412</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.78 - 41.21</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">24.48</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">5.81 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">13,629</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><i>Restricted
Stock Units</i></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">RSU activity
under the 2005 Plan is as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="49%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Number of</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>RSUs</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Grant Date 
Fair</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Value</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Range</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Weighted-<br />
Average</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Grant</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Date
Fair</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Value</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Weighted-<br />
Average</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Remaining</b></font> <br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Contractual</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Life</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Aggregate</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Intrinsic</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Value</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>(in thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Vested</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Unvested</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">124,627</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2"><font style="WHITE-SPACE: nowrap">30.51 - 35.37</font></font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">30.60</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">5,567</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Outstanding,
December 31, 2015</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">124,627</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">30.51 - 35.37</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">30.60</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8.90 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">5,567</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Granted</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">198,538</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">36.24 - 52.78</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">39.06</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">9,053</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Vested</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(64,806</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">29.40 - 47.03</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">34.12</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,481</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Forfeited</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(19,880</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">30.51 - 36.24</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">34.47</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">907</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Outstanding,
December 31, 2016</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">238,479</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2"><font style="WHITE-SPACE: nowrap">29.40 - 52.78</font></font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">36.36</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8.43 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,875</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Vested</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Unvested</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">238,479</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">29.40 - 52.78</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">36.36</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8.43 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,875</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Vested or expected to
vest, December 31, 2016</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">236,134</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">29.40 - 52.78</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">36.29</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8.43 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,768</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Exercisable,
December 31, 2016</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The following
table summarizes the RSU grant and unrecognized compensation
expense as of December 31, 2016. RSUs granted to
employees vest annually over a three-year period; Cynosure
recognizes the related compensation expense on a straight-line
basis over the three-year period. RSUs granted to <font style="WHITE-SPACE: nowrap">non-employee</font> directors vest quarterly over
a <font style="WHITE-SPACE: nowrap">one-year</font> period; Cynosure recognizes
the related compensation expense on a straight-line basis over
the <font style="WHITE-SPACE: nowrap">one-year</font> period.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="50%"></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Number of 
RSUs</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Granted</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Unrecognized</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Stock-based</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Compensation at</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>December 31,</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>(in
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Weighted</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Average  Period</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>for
Recognition</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>of Unrecognized</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Compensation</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">As of December 31,
2016</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">390,181</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8,669</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2.0 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><i>Performance- Based Stock Units</i></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><i>PSU
activity under the 2005 Plan is as follows:</i></font></p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="76%" align="center" border="0">
<tr>
<td width="64%"></td>
<td valign="bottom" width="11%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Number of<br />
PSUs(1)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Weighted Average<br />
Award-Issuance<br />
Fair Value</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Outstanding, December 31,
2015</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Granted</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">180,855</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">40.23</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Vested</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(16,188</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">36.24</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Forfeited</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(24,834</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">36.24</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Outstanding, December 31,
2016</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">139,833</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">41.39</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 6px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr style="break-inside: avoid">
<td valign="top" width="4%" align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">(1)</font></td>
<td valign="top" align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">Number of PSUs listed at
the maximum amounts. Pursuant to the terms of the Merger Agreement,
each then-outstanding Cynosure PSU award will vest and be cancelled
and converted into the right to receive the Offer Price in respect
of the maximum number of Shares underlying such PSU
award.</font></td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Net
Income per Share</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Basic net
income per share is determined by dividing net income by the
weighted average common shares outstanding during the period.
Diluted net income per share is determined by dividing net income
by the diluted weighted average shares outstanding during the
period. Diluted weighted average shares reflect the dilutive
effect, if any, of common stock options, RSUs and PSUs based on the
treasury stock method.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The
reconciliation of basic and diluted weighted average shares
outstanding for the years ended December 31, 2016, 2015 and
2014 is as follows (in thousands, except per share
data):</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="70%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Years Ended
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2014</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Net income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">14,201</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">15,807</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">31,338</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Basic weighted average
common shares outstanding</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">23,304</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">22,286</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">21,824</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Weighted average common
stock equivalents</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">402</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">372</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">371</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Diluted weighted average
common shares outstanding</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">23,706</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">22,658</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">22,195</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Basic net income per
share</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.61</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.71</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1.44</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Diluted net income per
share</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.60</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.70</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1.41</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">For the years
ended December 31, 2016, 2015 and 2014 approximately
0.1 million shares, 1.0 million shares and
1.3 million shares, respectively, of Cynosure’s
Class A common stock issuable pursuant to options and RSUs
were excluded from the calculation of diluted weighted average
common shares outstanding as their effect was
antidilutive.</font></p>
</div>
FY
0.60
12238000
0.017
Large Accelerated Filer
8600000
31000
No
1751000
25200000
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 18px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>3. Fair
Value</b></font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">U.S. GAAP
establishes a framework for measuring fair value under generally
accepted accounting principles and enhances disclosures about fair
value measurements. Fair value is defined as the exchange price
that would be received for an asset or paid to transfer a liability
(an exit price) in the principal or most advantageous market for
the asset or liability in an orderly transaction between market
participants on the measurement date. Valuation techniques used to
measure fair value must maximize the use of observable inputs and
minimize the use of unobservable inputs. The standard describes the
following fair value hierarchy based on three levels of inputs, of
which the first two are considered observable and the last
unobservable, that may be used to measure fair value:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 6px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr style="PAGE-BREAK-INSIDE: avoid">
<td width="5%"><font size="1"> </font></td>
<td valign="top" width="2%" align="left"><font style="FONT-FAMILY: Times New Roman" size="2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font style="FONT-FAMILY: Times New Roman" size="2">Level 1—Quoted prices in active markets for identical
assets or liabilities.</font></p>
</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 6px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr style="PAGE-BREAK-INSIDE: avoid">
<td width="5%"><font size="1"> </font></td>
<td valign="top" width="2%" align="left"><font style="FONT-FAMILY: Times New Roman" size="2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font style="FONT-FAMILY: Times New Roman" size="2">Level 2—Inputs other than Level 1 that are
observable, either directly or indirectly, such as quoted prices
for similar assets or liabilities; quoted prices in markets that
are not active; or other inputs that are observable or can be
corroborated by observable markets data for substantially the full
term of the assets or liabilities.</font></p>
</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 6px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr style="PAGE-BREAK-INSIDE: avoid">
<td width="5%"><font size="1"> </font></td>
<td valign="top" width="2%" align="left"><font style="FONT-FAMILY: Times New Roman" size="2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font style="FONT-FAMILY: Times New Roman" size="2">Level 3—Unobservable inputs that are supported by little
or no market activity and that are significant to the fair value of
the assets or liabilities.</font></p>
</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The following
table represents Cynosure’s fair value hierarchy for its
financial assets (cash equivalents and marketable securities)
measured at fair value as of December 31, 2016 (in
thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="64%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Level 1</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Level 2</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Level 3</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Total</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Money market
funds(1)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">6,196</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">6,196</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">State and municipal
bonds</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">56,859</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">56,859</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Treasuries and government
agencies</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">27,299</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">27,299</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">6,196</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">84,158</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">90,354</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The following
table represents Cynosure’s fair value hierarchy for its
financial assets (cash equivalents and marketable securities)
measured at fair value as of December 31, 2015 (in
thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="64%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Level 1</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Level 2</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Level 3</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Total</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Money market
funds(1)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">5,785</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">5,785</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">State and municipal
bonds</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">59,786</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">59,786</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Treasuries and government
agencies</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">14,387</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">14,387</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">5,785</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">74,173</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">79,958</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 2px; WIDTH: 10%; BORDER-BOTTOM: #000000 0.5pt solid; MARGIN-TOP: 0px; LINE-HEIGHT: 8px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top" width="4%" align="left"><font style="FONT-FAMILY: Times New Roman" size="2">(1)</font></td>
<td valign="top" align="left"><font style="FONT-FAMILY: Times New Roman" size="2">Included in cash and cash
equivalents at December 31, 2016 and 2015.</font></td>
</tr>
</table>
</div>
-800000
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Accounts
receivable allowance activity consisted of the following for the
years ended December 31:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2014</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Balance at beginning of
year</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,181</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,949</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,803</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Additions</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,606</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,599</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,373</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Deductions</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(1,486</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(2,367</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(1,227</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Balance at end of
year</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,301</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,181</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,949</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
Cynosure places cash and cash equivalents and short and long-term marketable securities in established financial institutions. Cynosure has no significant off-balance-sheet risk or concentration of credit risk, such as foreign exchange contracts, options contracts, or other foreign hedging arrangements.
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 18px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Cost of
Revenues</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Cynosure’s cost of revenues consist primarily of
material, labor and manufacturing overhead expenses and includes
the cost of components and subassemblies supplied by third-party
suppliers. Cost of revenues also includes royalties incurred on
certain products sold by Cynosure and its licensees, costs incurred
in connection with Cynosure’s efforts to litigate or settle
additional third-party license agreements, amortization expense
related to developed technology and patents intangible assets,
service and warranty expenses, as well as salaries and
personnel-related expenses, including stock-based compensation, for
Cynosure’s operations management team, purchasing and quality
control.</font></p>
</div>
1486000
-2394000
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 18px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Foreign
Currency Translation</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The financial
statements of Cynosure’s foreign subsidiaries are translated
from local currency into U.S. dollars using the current exchange
rate at the balance sheet date for assets and liabilities, and the
average exchange rate prevailing during the period for revenue and
expenses. The functional currency for Cynosure’s foreign
subsidiaries is considered to be the local currency for each entity
and, accordingly, translation adjustments for these subsidiaries
are included in accumulated other comprehensive loss within
stockholders’ equity. Certain intercompany and third-party
foreign currency-denominated transactions generated foreign
currency remeasurement losses of approximately $0.8 million,
$1.8 million and $1.6 million during 2016, 2015 and 2014,
respectively, which are included in other expense, net, in the
consolidated statements of operations.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b>12.
Commitments and Contingencies</b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Lease
Commitments</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure
leases the land portion of its U.S. operating facility and certain
U.S. and foreign facilities under <font style="WHITE-SPACE: nowrap">non-cancelable</font> operating lease agreements
expiring through May 2028. These leases are <font style="WHITE-SPACE: nowrap">non-cancellable</font> and typically contain renewal
options. Certain leases contain rent escalation clauses for which
Cynosure recognizes the expense on a straight-line basis. Rent
expense for the years ended December 31, 2016, 2015 and 2014
was approximately $2.3 million, $2.1 million and
$3.2 million, respectively. The 2014 period rent expense
includes rent expense on the former Palomar headquarters, which
Cynosure occupied through July 2014.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure
leases the buildings portion of its U.S. operating facility and
certain equipment and vehicles under capital lease agreements with
payments due through May 2028. Commitments under Cynosure’s
lease arrangements are as follows as of December 31, 2016 (in
thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="78%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Operating</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Leases</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Capital</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Leases</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">2017</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,220</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,960</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">2018</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,966</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,875</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">2019</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,661</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,810</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">2020</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">817</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,791</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">2021</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">562</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,923</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Thereafter</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,930</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">19,732</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total minimum lease
payments</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,156</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">34,091</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Less amount representing
interest</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(14,518</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Present value of
obligations under capital leases</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">19,573</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Current portion of
capital lease obligations</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">866</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Capital lease
obligations, net of current portion</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">18,707</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Purchase Commitments</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure has
entered into two distribution agreements with a contract
manufacturer that expire in October 2019 and November
2021. Each agreement automatically renews for
additional <font style="WHITE-SPACE: nowrap">one-year</font> terms unless either party
provides notice of termination at least six months prior to the
expiration of the initial term or any subsequent renewal
term. The distribution agreements have annual minimum purchase
obligations and may be terminated by the contract manufacturer if
Cynosure does not meet the annual minimum purchase obligations. The
future annual minimum purchase obligations can be reduced if
Cynosure exceeds the purchase limits in a given year as stated in
the distribution agreement.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Contingencies</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure
continually assesses litigation to determine if an unfavorable
outcome would lead to a probable loss or reasonably possible loss,
which could be estimated. In accordance with the Financial
Accounting Standards Board’s (FASB) guidance on accounting
for contingencies, Cynosure accrues for all direct costs associated
with the estimated resolution of contingencies at the earliest date
at which it is deemed probable that a liability has been incurred
and the amount of such liability can be reasonably
estimated. If the estimate of a probable loss is a range and
no amount within the range is more likely, Cynosure accrues the
minimum amount of the range. In cases where Cynosure believes that
a reasonably possible loss exists, Cynosure discloses the facts and
circumstances of the litigation, including an estimable range, if
possible.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">On
July 27, 2016, ARcare, Inc., individually and as putative
representative of a purported nationwide class, filed a complaint
against Cynosure in the U.S. District Court for the District of
Massachusetts. The plaintiff alleges that Cynosure violated the
federal Telephone Consumer Protection Act (TCPA) by sending fax
advertisements that did not comply with statutory and Federal
Communications Commission (FCC) requirements that senders provide
recipients with certain information about how to opt out from
receiving faxed advertisements in the future, and by sending
unsolicited fax advertisements. The complaint seeks damages,
declaratory and injunctive relief, and attorneys’ fees on
behalf of a purported class of all recipients of purported fax
advertisements that the plaintiff alleges did not receive an
adequate <font style="WHITE-SPACE: nowrap">opt-out</font> notice. The TCPA provides for
statutory damages of $500 per violation and gives courts the
discretion to increase that amount up to $1,500 for knowing and
willful violations. Based on preliminary estimates, Cynosure
believes the aggregate number of faxes sent in the four years prior
to the lawsuit to be approximately 835,000. On September 30,
2016, Cynosure answered the complaint and denied liability. On
September 7, 2016, the plaintiff sent a demand letter seeking
a class settlement for statutory damages under Massachusetts
General Laws, Chapter 93A § 9, and on October 7, 2016,
Cynosure responded denying any liability under Chapter 93A, but
offering the plaintiff statutory damages under Chapter 93A on an
individual basis. To date, the plaintiff has not moved to amend the
complaint to assert a claim under Chapter 93A. Cynosure and the
plaintiff have agreed to explore a possible class settlement of the
litigation in a mediation. On October 12, 2016, the court
allowed the parties’ request to stay the case until
January 11, 2017 while they pursued mediation. In January
2017, Cynosure and ARcare entered into an agreement to settle the
lawsuit. The settlement agreement was subject to court approval,
and, if approved, would have given Cynosure a full release from the
settlement class concerning the conduct alleged in the complaint,
in exchange for which Cynosure would have paid settlement
compensation between $6.5 million and $16.0 million
depending on the number of class members to file a valid claim. The
court overseeing the matter subsequently expressed concern about
aspects of the settlement agreement, and in February 2017, Cynosure
and ARcare agreed in principle to new terms to be incorporated into
a new settlement agreement that is subject to further negotiation,
and thereafter will be subject to court approval. As with the
initial settlement, if approved, Cynosure would pay a fixed
settlement compensation amount of $8.5 million and would receive a
full release from the settlement class concerning the conduct
alleged in the complaint.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The terms of
the original January 2017 settlement indicated that it was probable
that a liability would be incurred and that it could be reasonably
estimated. In connection with the original January 2017 settlement
agreement, Cynosure recorded a $7.2 million charge in the
fourth quarter of 2016 in connection with the settlement agreement,
including a $6.5 million estimated settlement plus expenses
associated with this matter. As a result of the new settlement
terms, Cynosure subsequently increased that charge by
$2.0 million, also effective in the fourth quarter of 2016, to
a total of $9.2 million. This $9.2 million represents
Cynosure’s best estimate of the total settlement expense to
be incurred in connection with the ARcare matter.</font></p>
</div>
2058000
<div>
<p style="margin-top:18px;margin-bottom:0px"><font style="font-family:Times New Roman" size="2"><b>11. 401(k)
Plan</b></font></p>
<p style="margin-top:6px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">Cynosure
sponsors the Cynosure 401(k) defined contribution plan.
Participation in the plan is available to all employees of Cynosure
who meet certain eligibility requirements. The 401(k) plan is
qualified under Section 401(k) of the Internal Revenue Code,
and is subject to contribution limitations as set annually by the
Internal Revenue Service. Employer matching contributions are at
Cynosure’s discretion. Cynosure’s contributions to this
plan totaled approximately $1.9 million, $1.3 million and
$0.9 million for the years ended December 31, 2016, 2015
and 2014, respectively.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The following
table represents Cynosure’s fair value hierarchy for its
financial assets (cash equivalents and marketable securities)
measured at fair value as of December 31, 2016 (in
thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="64%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Level 1</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Level 2</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Level 3</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Total</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Money market
funds(1)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">6,196</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">6,196</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">State and municipal
bonds</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">56,859</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">56,859</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Treasuries and government
agencies</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">27,299</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">27,299</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">6,196</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">84,158</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">90,354</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The following
table represents Cynosure’s fair value hierarchy for its
financial assets (cash equivalents and marketable securities)
measured at fair value as of December 31, 2015 (in
thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="64%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Level 1</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Level 2</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Level 3</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Total</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Money market
funds(1)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">5,785</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">5,785</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">State and municipal
bonds</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">59,786</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">59,786</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Treasuries and government
agencies</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">14,387</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">14,387</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">5,785</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">74,173</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">79,958</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 2px; WIDTH: 10%; BORDER-BOTTOM: #000000 0.5pt solid; MARGIN-TOP: 0px; LINE-HEIGHT: 8px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top" width="4%" align="left"><font style="FONT-FAMILY: Times New Roman" size="2">(1)</font></td>
<td valign="top" align="left"><font style="FONT-FAMILY: Times New Roman" size="2">Included in cash and cash
equivalents at December 31, 2016 and 2015.</font></td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 18px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Goodwill</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Goodwill
represents the excess of the purchase price over the fair value of
assets acquired and liabilities assumed in a business combination.
Cynosure does not amortize its goodwill, but instead tests for
impairment at least annually and more frequently whenever events or
changes in circumstances indicate that the fair value of the asset
may be less than its carrying value of the asset. Cynosure’s
annual test for impairment occurs on the first day of its fourth
quarter.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Cynosure has
adopted Accounting Standards Update (“ASU”)
<font style="WHITE-SPACE: nowrap">2011-08</font>
<i>Intangibles—Goodwill and Other,</i> an amendment to
ASC 350, which updates how an entity evaluates its goodwill
for impairment. The guidance provides entities an option to perform
a “qualitative” assessment to determine whether further
impairment testing is necessary. If further testing is required,
the test for impairment continues with the two step process. The
first step compares the carrying amount of the reporting unit to
its estimated fair value (Step 1). To the extent that the carrying
value of the reporting unit exceeds its estimated fair value, a
second step is performed, wherein the reporting unit’s
carrying value is compared to the implied fair value (Step 2). To
the extent that the carrying value exceeds the implied fair value,
impairment exists and must be recognized.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Cynosure has
one reporting unit for goodwill impairment testing and has
performed a qualitative assessment on that reporting unit. As a
result of this assessment, the Company determined that goodwill is
not impaired as of December 31, 2016 and 2015.</font></p>
</div>
178221000
0.431
0.002
P1Y7M6D
3556000
3556000
-1965000
0.350
0.003
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 18px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Fair
Value of Financial Instruments</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Cynosure’s financial instruments consist of cash, cash
equivalents, short and long-term marketable securities, accounts
receivable and capital leases. The rate implicit within
Cynosure’s capital lease obligations approximates market
interest rates. Cynosure’s estimate of fair value for
financial instruments, other than marketable securities, which are
carried at fair value, approximates their carrying value at
December 31, 2016 and 2015.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">ASC 820,
<i>Fair Value Measurement Topic</i>, applies to all financial
assets and financial liabilities that are being measured and
reported on a fair value basis, establishes a framework for
measuring fair value of assets and liabilities and expands
disclosures about fair value measurements.</font></p>
</div>
-1563000
433532000
1880000
18000
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">As of
December 31, 2016, Cynosure’s <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font> debt
securities mature as follows (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="46%"></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" colspan="2"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Maturities</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Total</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Less Than One Year</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>One to Five Years</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>More than five years</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">State and municipal
bonds</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">56,859</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">40,495</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">16,364</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Treasuries and government
agencies</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">27,299</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">6,035</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">21,264</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font> debt
securities</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">84,158</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">46,530</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">37,628</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
2300000
-834000
19430000
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 18px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Interest
Expense, net</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Interest
expense consists primarily of interest charges on the capital lease
of Cynosure’s U.S. operating facility, license transfer
agreement acquired from Ellman International, Inc.
(“Ellman”) and interest earned on Cynosure’s
short and long-term marketable securities consisting of state and
municipal bonds, and U.S. government agencies and treasuries.
Cynosure expects interest expense to remain consistent in 2017 as
compared to 2016.</font></p>
</div>
255311000
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 18px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>10. Income
Taxes</b></font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Income before
income tax provision (benefit) consists of the
following:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="70%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2014</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Domestic</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">22,388</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">20,667</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">15,424</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Foreign</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2,555</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2,531</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2,914</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">24,943</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">23,198</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">18,338</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The provision
(benefit) for income taxes consists of:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2014</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Current:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Federal</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">9,531</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">6,133</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">734</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">State</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,751</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,404</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">577</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Foreign</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,854</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">920</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,306</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total current</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">13,136</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">8,457</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2,617</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Deferred:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Federal</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(558</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">701</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(13,032</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">State</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(1,054</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(1,234</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(1,398</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Foreign</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(782</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(533</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(1,187</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total deferred</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(2,394</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(1,066</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(15,617</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">10,742</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">7,391</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(13,000</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">A
reconciliation of the federal statutory rate to Cynosure’s
effective tax rate is as follows for the years ended
December 31:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="77%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2014</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Income tax provision at
federal statutory rate:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">35.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">% </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">35.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">% </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">35.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">% </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">(Decrease) increase in tax
resulting from -</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">State taxes, net of federal
benefit</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2.1</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.2</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.8</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Nondeductible
expenses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2.6</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1.5</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">6.7</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">Tax-exempt</font> interest income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(0.2</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(0.2</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Effect of foreign
taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(0.9</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(1.4</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(0.6</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Stock-based
compensation</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.3</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.1</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.1</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Research and development
credit</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(4.2</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(2.4</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(2.7</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Change in uncertain tax
positions</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(0.3</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Change in valuation
allowance</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.1</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(3.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(108.8</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Change in control
payments</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1.6</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Unremitted
earnings</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(1.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1.4</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Domestic manufacturing
deduction</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(1.5</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(2.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">Non-deductible</font> officer
compensation</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">9.1</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2.7</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.5</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Other</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1.7</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(0.2</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(3.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Effective income tax
rate</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">43.1</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">% </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">31.9</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">% </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(70.9</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">)% </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In 2016,
Cynosure recorded an income tax provision of $10.7 million,
representing an effective tax rate of 43.1%. The effective tax
rate, in comparison to the U.S. statutory rate of 35%, is favorably
impacted by the jurisdictional mix of worldwide earnings, the
domestic manufacturing deduction and federal research credits. The
effective tax rate is unfavorably impacted by <font style="WHITE-SPACE: nowrap">non-deductible</font> expenses (primarily
related to disallowed officers’ compensation). The
year-over-year increase in the effective tax rate is primarily due
to the increase in <font style="WHITE-SPACE: nowrap">non-deductible</font> expenses and the impact
of a release of valuation allowance against certain foreign
deferred tax assets during 2015.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Significant
components of Cynosure’s deferred tax assets and liabilities
as of December 31, 2016 and 2015 are as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="77%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Deferred tax
assets:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Accrued expenses and
reserves</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">13,576</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">9,002</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Domestic net operating
loss & tax credit carry-forwards</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">8,858</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">12,500</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Foreign net operating loss
carry-forwards</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,216</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,851</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Stock-based
compensation</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,707</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">5,561</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Capital leases</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">7,435</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">6,694</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Other deferred tax
assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,281</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,105</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Gross deferred tax
assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">38,073</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">38,713</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Valuation
allowance</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(277</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(251</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total deferred tax assets
(after valuation allowance)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">37,796</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">38,462</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Long-term deferred tax
liabilities:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Intangible
assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(10,444</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(12,733</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Fixed assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(7,101</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(6,782</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Other deferred tax
liabilities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(417</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(1,065</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total long-term deferred
tax liabilities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(17,962</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(20,580</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Net deferred tax
assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">19,834</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">17,882</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Cynosure’s valuation allowance increased by $26,000
during the 2016 period, which is due to an increase in tax
attributes that the Company believes are not <font style="WHITE-SPACE: nowrap">more-likely-than-not</font> realizable. The
Company has considered several sources of taxable income in making
its valuation allowance assessment including taxable income in
carryback years, future reversals of existing taxable temporary
differences, tax planning strategies and forecasted future income.
As of December 31, 2016, a full valuation allowance is
maintained on the net deferred tax assets of its subsidiary in
Mexico.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">At
December 31, 2016, Cynosure has domestic federal net operating
loss carryforwards of approximately $7.6 million, federal tax
credit carryforwards of $4.9 million and state tax credit
carryforwards of $3.3 million that are available to reduce
future taxable income. Utilization of the federal net operating
losses and federal tax credits are subject to an annual limitation
due to the ownership change limitations set forth under Internal
Revenue Code Sections 381, 382 and 383. At December 31, 2016,
none of the federal net operating loss carryforwards, none of the
federal tax credit carryforwards and $0.2 million of the state
tax credit carryforwards relate to excess stock based compensation
tax benefits. The Company will record the $0.2 million of off
balance sheet state tax credits as a deferred tax asset with an
offset to retained earnings upon the adoption of ASU <font style="WHITE-SPACE: nowrap">2016-09.</font> The federal net operating
losses begin to expire in 2033. The federal and state tax credits
begin to expire in 2018.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">At
December 31, 2016, Cynosure has foreign net operating losses
of approximately $4.2 million in Germany, Mexico, Japan,
France, and Spain that are available to reduce future income.
Foreign net operating losses in Germany and France do not expire.
Mexican net operating losses will begin to expire in 2019, Japanese
net operating losses will begin to expire in 2021 and Spanish net
operating losses will begin to expire in 2029.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">As of
December 31, 2016, the Company has provided a deferred tax
liability of $0.1 million associated with U.S. income taxes
and foreign withholding taxes on approximately $0.6 million of
unremitted earnings which are not indefinitely invested. The
Company has not provided U.S. income taxes or foreign withholding
taxes on unremitted foreign earnings of approximately
$19.7 million as such amounts are considered to be
indefinitely reinvested in the business. The accumulated earnings
in the foreign subsidiaries are primarily utilized to fund working
capital requirements as Cynosure’s subsidiaries continue to
expand their operations. Due to the complexities of the U.S. tax
law, including the effect of the U.S. foreign tax credits, it is
not practicable to estimate the amount of income taxes payable on
the unremitted earnings that are considered indefinitely
reinvested.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">ASC 740
clarifies the accounting for uncertainty in income taxes recognized
in an enterprise’s financial statements by prescribing a
minimum recognition threshold and measurement of a tax position
taken or expected to be taken in a tax return.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The aggregate
changes in gross unrecognized tax benefits during the years ended
December 31, 2016, 2015 and 2014 were as follows (in
thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="77%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2014</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Balance at beginning of
year</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">810</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">810</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,701</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Decreases for acquired tax
positions within measurement window</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(815</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Decreases for tax positions
taken in prior periods</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(76</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Balance at end of
year</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">810</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">810</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">810</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">At
December 31, 2016, 2015, and 2014, Cynosure had gross
<font style="WHITE-SPACE: nowrap">tax-effected</font> unrecognized
tax benefits of $0.8 million of which the entire amount, if
recognized, would favorably impact the effective tax rate. Cynosure
classifies interest and penalties related to income taxes as a
component of its provision for income taxes, and the amount of
interest and penalties recorded as of December 31, 2016 and
2015 in the statements of operations and balance sheet was
immaterial. Cynosure does not expect any material changes in the
amounts of unrecognized tax benefits over the next 12
months.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Cynosure files
income tax returns in the U.S. federal jurisdiction, and in various
state and foreign jurisdictions. Cynosure is no longer subject to
U.S. federal tax examinations for years prior to 2013. With few
exceptions, Cynosure is no longer subject to U.S. state and local
income tax examinations by tax authorities for years before 2012.
Additionally, certain <font style="WHITE-SPACE: nowrap">non-U.S.</font> jurisdictions are no longer
subject for income tax examinations by tax authorities for years
before 2012.</font></p>
</div>
8576000
-1963000
227971000
14201000
64560000
1606000
24943000
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Inventory</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure
states all inventories at the lower of cost or market, determined
on a <font style="WHITE-SPACE: nowrap">first-in,</font> <font style="WHITE-SPACE: nowrap">first-out</font> method. Inventory includes
material, labor and overhead and consists of the
following:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="80%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Raw materials</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">19,448</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">22,569</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Work in
process</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,258</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,317</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Finished goods</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">53,266</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">53,882</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">75,972</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">79,768</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Included in
finished goods are lasers used for demonstration purposes.
Cynosure’s policy is to include demonstration lasers as
inventory for a period of up to one year. As finished goods
inventory, demonstration systems remain sellable while in
inventory, are kept in proper working order and may be sold or
transferred to other warehouse locations. Similar to any other
finished goods in inventory, Cynosure accounts for such
demonstration inventory in accordance with the policy for excess
and obsolescence review of its entire inventory. The majority of
Cynosure’s demonstration system sales occur during the first
year. Sales beyond the first year are infrequent. If not sold after
a period of one year, demonstration systems are transferred to
fixed assets and continuously used by representatives to foster
sales. Cynosure places a three-year useful life on each
demonstration system classified as a fixed asset, which reflects
the reduction in value and benefits realized from its use over
time.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure’s excess and obsolescence reserve policy is to
establish inventory reserves when conditions exist that suggest
that inventory may be in excess of anticipated demand or is
obsolete based upon assumptions about future demand for products
and market conditions. Cynosure regularly evaluates the ability to
realize the value of inventory based on a combination of factors
including the following: historical usage rates, forecasted sales
or usage, product end of life dates, estimated current and future
market values and new product introductions.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure
purchases raw material components as well as certain finished goods
from sole source suppliers. A delay in the production capabilities
of these vendors could cause a delay in Cynosure’s
manufacturing, and a possible loss of revenues, which would
adversely affect operating results.</font></p>
</div>
-26177000
-81000
-1882000
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Property and
equipment consists of the following at December 31:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="68%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Estimated</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Useful</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Life</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>(Years)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2016</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Cost</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2015</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Cost</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Equipment</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">3-5</font></font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">13,783</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">11,216</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Furniture and
fixtures</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">3-5</font></font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,077</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2,470</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Computer equipment and
software</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">7,233</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">4,902</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Leased equipment</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">3-4</font></font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,181</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,324</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Leased buildings</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">15</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">15,224</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">13,327</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Leasehold
improvements</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">5</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">13,061</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">13,106</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Demonstration
equipment</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">23,821</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">22,572</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Construction <font style="WHITE-SPACE: nowrap">in-progress</font></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">11,055</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">4,163</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">88,435</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">73,080</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Less: Accumulated
depreciation and amortization</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(40,485</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(33,374</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">47,950</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">39,706</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 18px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Intangible Assets</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Cynosure
capitalizes and includes in intangible assets the costs of
developed technology and patents, customer relationships, trade
names and business licenses acquired in a business combination or
asset acquisition. Intangible assets are recorded at fair value and
stated net of accumulated amortization and impairments. Cynosure
amortizes its intangible assets that have finite lives using either
the straight-line or accelerated method, based on the useful life
of the asset over which it is expected to be consumed utilizing
expected undiscounted future cash flows. Amortization is recorded
over the estimated useful lives ranging from five to 23 years.
Cynosure evaluates the realizability of its definite lived
intangible assets whenever events or changes in circumstances or
business conditions indicate that the carrying value of these
assets may not be recoverable based on expectations of future
undiscounted cash flows for each asset group. If the carrying value
of an asset or asset group exceeds its undiscounted cash flows,
Cynosure estimates the fair value of the assets, generally
utilizing a discounted cash flow analysis based on the present
value of estimated future cash flows to be generated by the assets
using a risk-adjusted discount rate. To estimate the fair value of
the assets, Cynosure uses market participant assumptions pursuant
to ASC 820, <i>Fair Value Measurements</i>. If the estimate of an
intangible asset’s remaining useful life is changed, Cynosure
will amortize the remaining carrying value of the intangible asset
prospectively over the revised useful life.</font></p>
</div>
944000
22388000
2555000
-8943000
-4304000
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Reclassification</i></b></font></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><font style="FONT-FAMILY: "Times New Roman"" size="2">Certain amounts in prior
years’ investing activities within the consolidated
statements of cash flows have been reclassified to conform to the
current year’s presentation.</font></font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Recent
Accounting Pronouncements</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In May 2014,
the FASB issued guidance codified in ASC 606, <i>Revenue </i><i>Recognition—Revenue</i><i> from
Contracts with Customers</i>, which amends the guidance in ASC 605,
Revenue Recognition. This new revenue standard creates a single
source of revenue guidance for all companies in all industries and
is more principles-based than the current revenue guidance. The new
guidance must be adopted using either a full retrospective approach
for all periods presented in the period of adoption or a modified
retrospective approach. ASC 606 will be effective for public
entities for interim and annual reporting periods beginning after
December 15, 2017. Cynosure has prepared an initial assessment
of the potential effects of ASC 606. Based on the initial
assessment, Cynosure anticipates that the new standard will not
impact the recognition of product sales given their point of sale
nature. Cynosure is still in the process of evaluating its
arrangements with distributors as well as those related to service
contracts and extended warranties under ASC 606 and anticipates the
impact will not be significant, however, final conclusions will not
be determined until Cynosure completes their analysis. Cynosure
expects to adopt ASC 606 using the modified retrospective method.
Should the adoption of ASC 606 under the modified retrospective
method result in the deferral of revenue previously recognized, or
the recognition of revenue previously deferred under ASC 605 beyond
January 1, 2018, Cynosure would record a
cumulative <font style="WHITE-SPACE: nowrap">catch-up</font> adjustment
at January 1, 2018.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In August
2014, the FASB issued ASU <font style="WHITE-SPACE: nowrap">2014-15,</font> <i>Presentation of Financial
Statements—Going Concern</i>, which requires management of
public and private companies to evaluate whether there is
substantial doubt about the entity’s ability to continue as a
going concern within one year after the date that the financial
statements are issued. Management’s evaluation should be
based on relevant conditions and events that are known and
reasonably knowable at the date that the financial statements are
issued. If conditions or events raise substantial doubt about an
entity’s ability to continue as a going concern, and
substantial doubt is not alleviated after consideration of
management’s plans, an entity should include a statement in
the footnotes indicating that there is substantial doubt about the
entity’s ability to continue as a going concern within one
year after the date that the financial statements are
issued. The new standard is effective for annual periods
ending after December 15, 2016, and for annual periods and
interim periods thereafter. Cynosure has adopted ASU <font style="WHITE-SPACE: nowrap">2014-15</font> and has assessed its ability
to continue as a going concern. As of December 31, 2016,
Cynosure has concluded that substantial doubt about its ability to
continue as a going concern does not exist.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In July 2015,
the FASB issued ASU <font style="WHITE-SPACE: nowrap">2015-11,</font> <i>Simplifying the Measurement
of Inventory</i>. ASU <font style="WHITE-SPACE: nowrap">2015-11</font> simplifies the subsequent
measurement of inventory by replacing the lower of cost or market
test with a lower of cost and net realizable value test. The
guidance applies only to inventories for which cost is determined
by methods other than <font style="WHITE-SPACE: nowrap">last-in</font> <font style="WHITE-SPACE: nowrap">first-out</font> and the retail inventory
method. The guidance will be effective for public business entities
for fiscal years beginning after December 15, 2016. Cynosure
is currently evaluating the impact of the provisions of
ASU <font style="WHITE-SPACE: nowrap">2015-11.</font></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In February
2016, the FASB issued ASU <font style="WHITE-SPACE: nowrap">2016-02,</font><i> Leases</i><i> (Topic
842)</i>, which supersedes the existing guidance for lease
accounting, <i>Leases (Topic 840)</i>.
ASU <font style="WHITE-SPACE: nowrap">2016-02</font> requires lessees to recognize
leases on their balance sheets, and leaves lessor accounting
largely unchanged. The amendments in this ASU are effective for
fiscal years beginning after December 15, 2018 and interim
periods within those fiscal years. Early application is permitted
for all entities. ASU <font style="WHITE-SPACE: nowrap">2016-02</font> requires a modified
retrospective approach for all leases existing at, or entered into
after, the date of initial application, with an option to elect to
use certain transition relief. Cynosure is currently evaluating the
impact of this new standard on its consolidated financial
statements.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In March
2016, the FASB issued ASU <font style="WHITE-SPACE: nowrap">2016-09,</font> <i>Compensation—Stock
Compensation (Topic 718): Improvement to Employee Share-Based
Payment Accounting</i>. The new standard contains several
amendments that will simplify the accounting for employee
share-based payment transactions, including the accounting for
income taxes, forfeitures, statutory tax withholding requirements,
classification of awards as either equity or liabilities, and
classification on the statement of cash flows. The changes in the
new standard eliminate the accounting for excess tax benefits to be
recognized in additional <font style="WHITE-SPACE: nowrap">paid-in</font> capital and tax deficiencies
recognized either in the income tax provision or in
addition <font style="WHITE-SPACE: nowrap">paid-in</font> capital. The new standard is
effective for public business entities for fiscal years beginning
after December 15, 2016 with early adoption permitted.
ASU <font style="WHITE-SPACE: nowrap">2016-09</font> requires a modified
retrospective approach , with a cumulative-effect adjustment to
opening retained earnings for any outstanding liability awards that
qualify for the classification. Cynosure is currently evaluating
the impact of this new standard on its consolidated financial
statements.</font></p>
</div>
18603000
-55000
3843000
27340000
-938000
26268000
-81000
-465000
78000
-9641000
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 18px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>4. Short and Long-Term
Marketable Securities</b></font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Cynosure’s <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font> securities
at December 31, 2016 consisted of approximately
$84.2 million in investments in debt securities consisting of
state and municipal bonds, treasuries and government agencies. All
investments in <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font> securities
are recorded at fair market value, with any unrealized gains and
losses reported as a separate component of accumulated other
comprehensive loss.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">As of
December 31, 2016, Cynosure’s marketable securities
consist of the following (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="63%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Market</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Value</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Amortized</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Cost</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Unrealized</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Gains</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Unrealized</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Losses</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2"><b><i><font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">Available-for-Sale</font></font>
Securities:</i></b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2"><b>Short-term marketable
securities:</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">State and municipal
bonds</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">40,495</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">40,542</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(47</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Treasuries and government
agencies</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">6,035</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">6,038</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(3</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total short-term marketable
securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">46,530</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">46,580</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(50</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2"><b>Long-term marketable
securities:</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">State and municipal
bonds</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">16,364</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">16,448</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(84</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Treasuries and government
agencies</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">21,264</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">21,334</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(70</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total long-term marketable
securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">37,628</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">37,782</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(154</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font>
securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">84,158</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">84,362</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(204</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total marketable
securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">84,158</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">As of
December 31, 2015, Cynosure’s marketable securities
consist of the following (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="64%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Market</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Value</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Amortized</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Cost</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Unrealized</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Gains</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Unrealized</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Losses</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2"><b><i><font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">Available-for-Sale</font></font>
Securities:</i></b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2"><b>Short-term marketable
securities:</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">State and municipal
bonds</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">33,914</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">33,923</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(9</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Treasuries and government
agencies</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,498</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,500</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(2</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total short-term marketable
securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">35,412</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">35,423</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(11</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2"><b>Long-term marketable
securities:</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">State and municipal
bonds</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">25,872</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">25,916</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(45</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Treasuries and government
agencies</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">12,889</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">12,914</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(25</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total long-term marketable
securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">38,761</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">38,830</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(70</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font>
securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">74,173</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">74,253</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(81</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total marketable
securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">74,173</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">As of
December 31, 2016, Cynosure’s <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font> debt
securities mature as follows (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="46%"></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" colspan="2"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Maturities</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Total</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Less Than One Year</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>One to Five Years</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>More than five years</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">State and municipal
bonds</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">56,859</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">40,495</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">16,364</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Treasuries and government
agencies</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">27,299</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">6,035</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">21,264</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font> debt
securities</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">84,158</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">46,530</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">37,628</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
-1882000
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The results of
operations for any quarter are not necessarily indicative of the
results of operations for any future period.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="57%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="14" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Quarter
Ended</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>March 31,</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>June 30,</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Sept. 30,</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Dec. 31,</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="14" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>(In thousands, except
per share data)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Revenues</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">94,664</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">110,343</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">106,386</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">122,139</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Gross profit</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">55,420</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">65,057</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">62,810</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">72,024</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Income from
operations</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">4,451</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">10,500</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">8,162</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">4,227</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Net income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2,847</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">6,340</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">4,163</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">851</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Basic net income per
share</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.13</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.27</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.18</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.04</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Diluted net income per
share</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.12</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.27</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.17</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.04</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="56%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="14" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Quarter
Ended</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>March 31,</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>June 30,</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Sept. 30,</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Dec. 31,</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="14" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>(In thousands, except
per share data)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Revenues</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">74,912</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">83,694</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">78,414</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">102,442</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Gross profit</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">42,773</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">47,356</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">44,405</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">59,000</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Income from
operations</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2,053</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">7,641</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">4,835</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">11,792</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Net income
(loss)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(8</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">5,358</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,229</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">7,228</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Basic net income (loss) per
share</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(0.00</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.24</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.14</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.32</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Diluted net income (loss)
per share</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(0.00</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.24</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.14</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.31</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The aggregate
changes in gross unrecognized tax benefits during the years ended
December 31, 2016, 2015 and 2014 were as follows (in
thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="77%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2014</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Balance at beginning of
year</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">810</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">810</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,701</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Decreases for acquired tax
positions within measurement window</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(815</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Decreases for tax positions
taken in prior periods</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(76</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Balance at end of
year</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">810</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">810</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">810</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
26000000
10742000
<div>
<p style="margin-top:12px;margin-bottom:0px"><font style="font-family:Times New Roman" size="2"><b>1. Nature of the
Business</b></font></p>
<p style="margin-top:6px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">Cynosure, Inc.
(“Cynosure” or “the Company”) develops,
manufactures and markets aesthetic treatment systems that enable
plastic surgeons, dermatologists and other medical practitioners to
perform <font style="white-space:nowrap">non-invasive</font> and
minimally invasive procedures to remove hair, treat vascular and
benign pigmented lesions, remove multi-colored tattoos, revitalize
the skin, reduce fat through laser lipolysis, reduce cellulite,
clear nails infected by toe fungus, ablate sweat glands and improve
women’s health. Cynosure also markets radiofrequency
(“RF”) energy sourced medical devices for precision
surgical applications such as facial plastic and general surgery,
gynecology, ear, nose, and throat procedures, ophthalmology, oral
and maxillofacial surgery, podiatry and proctology. Cynosure sells
its products through a direct sales force in the United States,
Canada, France, Morocco, Germany, Spain, the United Kingdom,
Australia, China, Japan and Korea and through international
distributors in over 120 other countries. Cynosure is a Delaware
corporation, incorporated on July 10, 1991, located in
Westford, Massachusetts.</font></p>
<p style="margin-top:12px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">As further
described under Note 14, Subsequent Events, below, on
February 14, 2017, the Company entered into an Agreement and
Plan of Merger (the “Merger Agreement”) with Hologic,
Inc. (“Hologic”) and Minuteman Merger Sub, Inc., a
wholly-owned subsidiary of Hologic (the “Purchaser”).
Pursuant to the terms of Merger Agreement, the Purchaser commenced
an all cash tender offer on February 22, 2017 (the
“Offer”) for any (subject to the minimum condition) and
all of Cynosure’s outstanding shares of Class A common
stock, par value $0.001 per share (the “Shares”), at a
purchase price of $66.00 per Share (the “Offer Price”),
net to the seller in cash, without interest, subject to any
required withholding of taxes. The Offer will remain open for a
minimum of 20 business days from the date of commencement.
Following the completion of the Offer, subject to the absence of
injunctions or other legal restraints preventing the consummation
of the Merger, the Purchaser will merge with and into Cynosure,
with Cynosure surviving as a wholly-owned subsidiary of Hologic
(the “Merger”), pursuant to the procedure provided for
under Section 251(h) of the Delaware General Corporation Law,
without any additional stockholder approvals. The Merger will be
effected as soon as practicable following the time of purchase by
the Purchaser of Shares validly tendered and not withdrawn in the
Offer. Unless extended by Hologic in accordance with the Merger
Agreement, the offering period for the Offer will expire at the end
of the day, 12:00 Midnight, Eastern time, on Tuesday,
March 21, 2017. The Company expects the Merger to close in
late March or April of 2017. The Merger Agreement contains
customary termination rights for both Cynosure and Hologic,
including, among others, for failure to consummate the Offer on or
before August 14, 2017.</font></p>
</div>
45034000
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 18px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Other
Noncurrent Liabilities</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Other
noncurrent liabilities consist of the following at
December 31:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="84%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Noncurrent deferred
rent</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">543</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">451</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Noncurrent tenant
improvement allowances</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2,170</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2,432</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">License transfer
agreement</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,204</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">4,005</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">5,917</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">6,888</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
0
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 18px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Income
Taxes</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Cynosure
provides for income taxes in accordance with ASC 740, <i>Accounting
for Income Taxes</i> (“ASC 740”). ASC 740 recognizes
tax assets and liabilities for the cumulative effect of all
temporary differences between the financial statement carrying
amounts and the tax basis of assets and liabilities, and are
measured using the enacted tax rates that will be in effect when
these differences are expected to reverse. Valuation allowances are
provided if, based on the weight of available evidence, it is more
likely than not that some portion or all of the deferred tax assets
will not be realized. Cynosure considers several sources of taxable
income in making its valuation allowance assessments including
taxable income in carryback years, future reversals of existing
taxable temporary differences, tax planning strategies and
forecasted future income.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Cynosure
evaluates at the end of each reporting period whether some or all
of the undistributed earnings of its foreign subsidiaries are
permanently reinvested. Cynosure recognizes deferred income tax
liabilities to the extent that management asserts that
undistributed earnings of its foreign subsidiaries are not
permanently reinvested or will not be permanently reinvested in the
future. Cynosure’s position is based upon several factors
including the Company’s evaluation of its subsidiaries’
financial requirements, the short term and long term operational
and fiscal objectives of the Company, and the tax consequences
associated with the repatriation of earnings.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Cynosure
accounts for uncertain tax positions following the provisions of
ASC 740. ASC 740 clarifies the accounting for income taxes, by
prescribing a minimum recognition threshold a tax position is
required to meet before being recognized in the financial
statements. ASC 740 also provides guidance on <font style="WHITE-SPACE: nowrap">de-recognition,</font> measurement,
classification, interest and penalties, accounting in interim
periods, disclosure and transition.</font></p>
</div>
13465000
16004000
0
<div>
<p style="margin-top:18px;margin-bottom:0px"><font style="font-family:Times New Roman" size="2"><b>8. Stockholders’
Equity</b></font></p>
<p style="margin-top:6px;margin-bottom:0px; margin-left:2%">
<font style="font-family:Times New Roman" size="2"><b><i>Common
Stock Authorized</i></b></font></p>
<p style="margin-top:6px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">Cynosure has a
single-class common stock capital structure consisting of $0.001
par value Class A common stock. Cynosure has authorized
61,500,000 shares of $0.001 par value Class A common
stock.</font></p>
<p style="margin-top:12px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">As of
December 31, 2016, there were 25,316,116 shares of
Class A common stock issued.</font></p>
<p style="margin-top:12px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">The rights,
preferences and privileges of Class A common stock are as
follows:</font></p>
<p style="margin-top:18px;margin-bottom:0px; margin-left:2%">
<font style="font-family:Times New Roman" size="2"><b><i>Voting
Rights</i></b></font></p>
<p style="margin-top:6px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">The holders of
Class A common stock will be entitled to one vote per share
with respect to each matter presented to Cynosure stockholders on
which the holders of common stock are entitled to vote.</font></p>
<p style="margin-top:18px;margin-bottom:0px; margin-left:2%">
<font style="font-family:Times New Roman" size="2"><b><i>Conversion</i></b></font></p>
<p style="margin-top:6px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">Cynosure’s
Class A common stock is not convertible into any other shares
of Cynosure’s capital stock.</font></p>
<p style="margin-top:18px;margin-bottom:0px; margin-left:2%">
<font style="font-family:Times New Roman" size="2"><b><i>Dividends</i></b></font></p>
<p style="margin-top:6px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">Subject to
preferences that may apply to any shares of preferred stock
outstanding at the time, the holders of Class A common stock
shall be entitled to share equally, on a per share basis, in any
dividends that Cynosure’s board of directors may determine to
issue from time to time.</font></p>
<p style="font-size:1px;margin-top:18px;margin-bottom:0px">
 </p>
<p style="margin-top:0px;margin-bottom:0px; margin-left:2%">
<font style="font-family:Times New Roman" size="2"><b><i>Liquidation Rights</i></b></font></p>
<p style="margin-top:6px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">In the event of
Cynosure’s liquidation or dissolution, the holders of
Class A common stock shall be entitled to share equally, on a
per share basis, in all assets remaining after the payment of all
debts and other liabilities and subject to the prior rights of any
outstanding preferred stock.</font></p>
<p style="margin-top:18px;margin-bottom:0px; margin-left:2%">
<font style="font-family:Times New Roman" size="2"><b><i>Preferred
Stock</i></b></font></p>
<p style="margin-top:6px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">Cynosure has
authorized 5,000,000 shares of $0.001 par value preferred stock.
The Company’s board of directors has full authority to issue
this stock and to fix the voting powers, preference rights,
qualifications, limitations, or restrictions thereof, including
dividend rights, conversion rights, redemption privileges and
liquidation preferences and the number of shares constituting any
series or designation of such series.</font></p>
<p style="margin-top:18px;margin-bottom:0px; margin-left:2%">
<font style="font-family:Times New Roman" size="2"><b><i>Treasury
Stock</i></b></font></p>
<p style="margin-top:6px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">In February
2016, Cynosure announced that its board of directors has authorized
the repurchase of up to $35 million of its Class A common
stock, from time to time, on the open market or in privately
negotiated transactions under a new stock repurchase program. This
program will terminate on February 1, 2018. During the year
ended December 31, 2016, Cynosure did not repurchase any
shares of its common stock under this program.</font></p>
</div>
924614
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 18px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Management Estimates</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The preparation
of financial statements in conformity with accounting principles
generally accepted in the United States (“U.S. GAAP”)
requires management to make estimates and assumptions that affect
the reported amounts of assets, liabilities, revenues and expenses,
and the related disclosures at the date of the financial statements
and during the reporting period. Components particularly subject to
estimation include the allowance for doubtful accounts, inventory
reserves, reserve for sales returns, intangible assets, impairment
analysis of goodwill and intangibles, deferred tax assets,
liabilities and valuation allowances, fair value of stock options
and investments and accrued warranties. On an ongoing basis,
management evaluates its estimates. Actual results could differ
from these estimates.</font></p>
</div>
-0.009
23706000
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 18px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Property
and Equipment</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Property and
equipment are recorded at cost less accumulated depreciation.
Depreciation is computed using the straight-line method over the
estimated useful lives of the assets. Assets under capital leases
and leasehold improvements are amortized using the straight-line
method over the shorter of the estimated useful life of the asset
or the respective lease term. Included in property and equipment
are certain lasers that are used for demonstration purposes.
Maintenance and repairs are charged to expense as incurred.
Cynosure continually evaluates whether events or circumstances have
occurred that indicate that the estimated remaining useful life of
its long-lived assets may warrant revision or that the carrying
value of these assets may be impaired. Cynosure evaluates the
realizability of its long-lived assets based on profitability and
cash flow expectations for the related asset. Any write-downs are
treated as permanent reductions in the carrying amount of the
assets. Based on this evaluation, Cynosure believes that, as of
each of the balance sheet dates presented, none of Cynosure’s
long-lived assets were impaired.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 18px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Product
Warranty Costs</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Cynosure
typically provides a <font style="WHITE-SPACE: nowrap">one-year</font> system and labor warranty on
<font style="WHITE-SPACE: nowrap">end-user</font> sales of lasers.
Distributor sales of lasers generally include a <font style="WHITE-SPACE: nowrap">one-year</font> warranty on systems only.
These <font style="WHITE-SPACE: nowrap">one-year</font> warranty
obligations are limited to the repair or replacement of parts and
materials which prove to be defective, and do not contain any
service performance obligations. Estimated future costs for initial
product warranties are provided for at the time of revenue
recognition and recorded as cost of revenues within
Cynosure’s consolidated statement of operations. The
following table sets forth activity in the accrued warranty
account, which is a component of accrued expenses in the
consolidated balance sheets:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="68%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Years Ended
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2014</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Balance at beginning of
year</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">8,841</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">8,118</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">6,651</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Warranty provision related
to new sales</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">18,603</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">13,754</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">15,104</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Costs incurred</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(16,004</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(13,031</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(13,637</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Balance at end of
year</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">11,440</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">8,841</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">8,118</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Changes to
accumulated other comprehensive loss during the year ended
December 31, 2016 were as follows (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="59%"></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Unrealized</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Loss on</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Marketable</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Securities, net</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>of
taxes</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Translation</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Adjustment</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Accumulated</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Other</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Comprehensive</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Loss</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Balance—December 31, 2015</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(49</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(5,411</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(5,460</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Current period
other comprehensive loss</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(81</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(1,882</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(1,963</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Balance—December 31, 2016</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(130</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(7,293</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(7,423</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 18px"><font style="FONT-FAMILY: Times New Roman" size="2"><b>14. Subsequent
Events</b></font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">On
February 14, 2017, Cynosure and Hologic entered into the
Merger Agreement. Pursuant to the terms of Merger Agreement, the
Purchaser commenced the Offer on February 22, 2017 for any
(subject to the minimum condition) and all of the Shares at the
Offer Price, net to the seller in cash, without interest, subject
to any required withholding of taxes. The Offer will remain open
for a minimum of 20 business days from the date of
commencement.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The obligation
of the Purchaser to purchase Shares tendered in the Offer is
subject to customary closing conditions, including (i) Shares
having been validly tendered and not withdrawn that represent at
least a majority of the total number of Shares then outstanding,
(ii) the expiration or termination of applicable waiting
periods under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, (iii) approval from the German Federal
Cartel Office under the German Act Against Restraints of
Competition having been obtained, (iv) the absence of
injunctions or other legal restraints preventing the consummation
of the Offer or the Merger, as defined below, (v) the accuracy
of representations and warranties made by Cynosure in the Merger
Agreement, (vi) compliance by Cynosure with its covenants in
the Merger Agreement, and (vii) other conditions set forth in
Annex I to the Merger Agreement. The consummation of the Offer is
not subject to any financing conditions.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Following the
completion of the Offer, subject to the absence of injunctions or
other legal restraints preventing the consummation of the Merger,
the Purchaser will merge with and into Cynosure, with Cynosure
surviving as a wholly-owned subsidiary of Hologic, pursuant to the
procedure provided for under Section 251(h) of the Delaware
General Corporation Law, without any additional stockholder
approvals. The Merger will be effected as soon as practicable
following the time of purchase by the Purchaser of Shares validly
tendered and not withdrawn in the Offer.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">At the
effective time of the Merger (the “<u>Effective
Time</u>”), each issued and outstanding Share (other than
Shares owned by (i) Cynosure, Hologic, the Purchaser, or any
other subsidiary of Hologic, which Shares will be cancelled and
will cease to exist, (ii) any subsidiary of Cynosure, which
Shares will be converted into such number of shares of common stock
of the surviving corporation so as to maintain relative ownership
percentages or (iii) stockholders who validly exercise
appraisal rights under Delaware law with respect to such Shares)
will be converted into the right to receive an amount in cash equal
to the Offer Price, without interest, subject to any required
withholding taxes.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Pursuant to the
terms of the Merger Agreement, as of immediately prior to the
Effective Time, (i) each then-outstanding Cynosure stock
option will vest in full and be cancelled and converted into a
right to receive the Offer Price (less the applicable exercise
price) in respect of each Share underlying such stock option,
(ii) each then outstanding Cynosure restricted stock unit
award will vest and be cancelled and converted into the right to
receive the Offer Price in respect of each Share underlying such
restricted stock unit award, and (iii) each then-outstanding
Cynosure PSU award will vest and be cancelled and converted into
the right to receive the Offer Price in respect of the maximum
number of Shares underlying such PSU award.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In the Merger
Agreement, Cynosure has agreed, among other things, (i) to use
commercially reasonable efforts to conduct its business in the
ordinary course during the period between the execution of the
Merger Agreement and the consummation of the Merger;
(ii) subject to certain customary exceptions set forth in the
Merger Agreement to permit Cynosure’s board of directors to
comply with its fiduciary duties, to recommend that
Cynosure’s stockholders accept the Offer and tender their
shares pursuant to the Offer; and (iii) not to solicit
alternative acquisition proposals and to certain restrictions on
its ability to respond to any such proposals. The Merger Agreement
also contains customary representations, warranties and covenants
of Cynosure, Hologic and the Purchaser.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Cynosure
expects the Merger to close in late March or April of 2017. The
Merger Agreement contains customary termination rights for both
Cynosure and Hologic, including, among others, for failure to
consummate the Offer on or before August 14, 2017.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The weighted
average fair value of the options granted during the years ended
December 31, 2015 and 2014 was $12.42 and $10.50,
respectively, using the following assumptions:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="66%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="3" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Years Ended December 31,</b></font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2014</b></font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Risk-free interest
rate</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">1.39% - 1.75%</font></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: Times New Roman" size="2"><font style="WHITE-SPACE: nowrap">1.41% - 1.80%</font></font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Expected dividend
yield</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Expected term</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="2">4.8 years</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: Times New Roman" size="2">4.6 years</font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Expected
volatility</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: Times New Roman" size="2">41% - 43%</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: Times New Roman" size="2">43% - 44%</font></td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The following
table sets forth activity in the accrued warranty account, which is
a component of accrued expenses in the consolidated balance
sheets:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="68%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Years Ended
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2014</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Balance at beginning of
year</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">8,841</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">8,118</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">6,651</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Warranty provision related
to new sales</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">18,603</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">13,754</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">15,104</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Costs incurred</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(16,004</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(13,031</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(13,637</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Balance at end of
year</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">11,440</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">8,841</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">8,118</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The
reconciliation of basic and diluted weighted average shares
outstanding for the years ended December 31, 2016, 2015 and
2014 is as follows (in thousands, except per share
data):</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="70%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Years Ended
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2014</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Net income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">14,201</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">15,807</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">31,338</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Basic weighted average
common shares outstanding</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">23,304</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">22,286</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">21,824</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Weighted average common
stock equivalents</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">402</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">372</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">371</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Diluted weighted average
common shares outstanding</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">23,706</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">22,658</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">22,195</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Basic net income per
share</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.61</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.71</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1.44</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Diluted net income per
share</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.60</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.70</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1.41</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Total
stock-based compensation expense was recorded to cost of revenues
and operating expenses based upon the functional responsibilities
of the individual holding the respective share-based payments, as
follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="72%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Years Ended
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2014</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Cost of revenues</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">463</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">344</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">292</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Sales and
marketing</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2,774</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2,059</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,934</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Research and
development</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,356</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,167</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,007</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">General and
administrative</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">5,517</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">4,076</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,880</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total stock-based
compensation expense</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">10,110</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">7,646</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">7,113</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Cynosure states
all inventories at the lower of cost or market, determined on a
<font style="WHITE-SPACE: nowrap">first-in,</font> <font style="WHITE-SPACE: nowrap">first-out</font> method. Inventory includes
material, labor and overhead and consists of the
following:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="80%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Raw materials</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">19,448</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">22,569</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Work in process</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,258</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,317</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Finished goods</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">53,266</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">53,882</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">75,972</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">79,768</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
402000
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Changes to
goodwill during the year ended December 31, 2016 were as
follows (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="88%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Balance—December 31, 2015</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">105,807</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Translation
adjustment</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(55</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Balance—December 31, 2016</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">105,752</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
31.73
6.78
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The provision
(benefit) for income taxes consists of:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2014</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Current:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Federal</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">9,531</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6,133</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">734</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">State</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,751</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,404</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">577</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Foreign</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,854</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">920</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,306</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total current</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">13,136</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8,457</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,617</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Deferred:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Federal</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(558</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">701</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(13,032</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">State</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(1,054</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(1,234</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(1,398</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Foreign</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(782</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(533</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(1,187</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total deferred</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(2,394</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(1,066</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(15,617</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,742</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">7,391</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(13,000</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
</div>
0
2000000
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Significant
components of Cynosure’s deferred tax assets and liabilities
as of December 31, 2016 and 2015 are as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="77%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Deferred tax
assets:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Accrued expenses and
reserves</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">13,576</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">9,002</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Domestic net operating
loss & tax credit carry-forwards</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">8,858</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">12,500</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Foreign net operating loss
carry-forwards</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,216</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,851</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Stock-based
compensation</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,707</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">5,561</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Capital leases</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">7,435</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">6,694</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Other deferred tax
assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,281</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,105</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Gross deferred tax
assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">38,073</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">38,713</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Valuation
allowance</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(277</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(251</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total deferred tax assets
(after valuation allowance)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">37,796</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">38,462</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Long-term deferred tax
liabilities:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Intangible
assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(10,444</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(12,733</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Fixed assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(7,101</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(6,782</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Other deferred tax
liabilities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(417</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(1,065</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total long-term deferred
tax liabilities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(17,962</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(20,580</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Net deferred tax
assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">19,834</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">17,882</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Income before
income tax provision (benefit) consists of the
following:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="70%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2014</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Domestic</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">22,388</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">20,667</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">15,424</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Foreign</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,555</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,531</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,914</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">24,943</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">23,198</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">18,338</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
41.21
27.24
23304000
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Commitments
under Cynosure’s lease arrangements are as follows as of
December 31, 2016 (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="78%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Operating</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Leases</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Capital</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Leases</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">2017</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,220</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,960</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">2018</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,966</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,875</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">2019</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,661</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,810</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">2020</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">817</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,791</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">2021</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">562</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,923</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Thereafter</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,930</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">19,732</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total minimum lease
payments</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,156</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">34,091</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Less amount representing
interest</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(14,518</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Present value of
obligations under capital leases</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">19,573</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Current portion of
capital lease obligations</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">866</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Capital lease
obligations, net of current portion</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">18,707</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b>2. Summary
of Significant Accounting Policies</b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Significant
accounting policies followed in the preparation of these
consolidated financial statements are as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Management Estimates</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The
preparation of financial statements in conformity with accounting
principles generally accepted in the United States (“U.S.
GAAP”) requires management to make estimates and assumptions
that affect the reported amounts of assets, liabilities, revenues
and expenses, and the related disclosures at the date of the
financial statements and during the reporting period. Components
particularly subject to estimation include the allowance for
doubtful accounts, inventory reserves, reserve for sales returns,
intangible assets, impairment analysis of goodwill and intangibles,
deferred tax assets, liabilities and valuation allowances, fair
value of stock options and investments and accrued warranties. On
an ongoing basis, management evaluates its estimates. Actual
results could differ from these estimates.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Principles of Consolidation</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The
accompanying consolidated financial statements include the accounts
of Cynosure, Inc. and its wholly-owned subsidiaries: Cynosure
Securities Corporation, Palomar Medical Products, LLC, Palomar
Medical Technologies, LLC, Cynosure Mexico, Cynosure GmBH, S.A.R.L.
Cynosure France, Cynosure Maroc SARL, Cynosure UK LTD, Cynosure
Spain S.L., Cynosure B.V., Cynosure K.K, Suzhou Cynosure Medical
Devices Company Ltd., Cynosure Korea Limited, Cynosure Pty Ltd and
Cynosure Portugal. All intercompany balances and transactions have
been eliminated.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Reclassification</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Certain
amounts in prior years’ investing activities within the
consolidated statements of cash flows have been reclassified to
conform to the current year’s presentation.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Cash,
Cash Equivalents, Short and Long-Term Marketable
Securities</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure
considers all short-term, highly liquid investments with original
maturities at the time of purchase of 90 days or less to be cash
equivalents. Cynosure accounts for short and long-term marketable
securities as <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font> in accordance with Accounting
Standards Codification (“ASC”) 320, <i>Investments—Debt and
Equity Securities Topic</i>. Under ASC 320, securities purchased to
be held for indefinite periods of time and not intended at the time
of purchase to be held until maturity are classified as <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font> securities. ASC 320 requires
Cynosure to recognize all marketable securities on the consolidated
balance sheets at fair value. Cynosure’s marketable
securities are stated at fair value based on quoted market
prices. Adjustments to the fair value of marketable securities
that are classified as <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font> are recorded as increases or
decreases, net of income taxes, within accumulated other
comprehensive loss in shareholders’ equity. The
amortized cost of marketable debt securities is adjusted for
amortization of premiums and discounts to maturity computed under
the effective interest method. The cost of securities sold is
determined by the specific identification method. Cynosure
continually evaluates whether any marketable securities have been
impaired and, if so, whether such impairment is temporary or other
than temporary.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Fair
Value of Financial Instruments</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure’s financial instruments consist of cash, cash
equivalents, short and long-term marketable securities, accounts
receivable and capital leases. The rate implicit within
Cynosure’s capital lease obligations approximates market
interest rates. Cynosure’s estimate of fair value for
financial instruments, other than marketable securities, which are
carried at fair value, approximates their carrying value at
December 31, 2016 and 2015.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">ASC
820, <i>Fair Value
Measurement Topic</i>, applies to all financial assets and
financial liabilities that are being measured and reported on a
fair value basis, establishes a framework for measuring fair value
of assets and liabilities and expands disclosures about fair value
measurements.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Concentration of Credit Risk</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Financial
instruments that subject Cynosure to credit risk consist primarily
of cash and cash equivalents, short and long-term marketable
securities and accounts receivable. Cynosure places cash and cash
equivalents and short and long-term marketable securities in
established financial institutions. Cynosure has no
significant <font style="WHITE-SPACE: nowrap">off-balance-sheet</font> risk or concentration of
credit risk, such as foreign exchange contracts, options contracts,
or other foreign hedging arrangements. Cynosure’s accounts
receivable balance, net of allowance for doubtful accounts, was
$42.1 million as of December 31, 2016, compared to
$42.0 million as of December 31, 2015. The allowance for
doubtful accounts as of December 31, 2016 and 2015 was
$3.3 million and $3.2 million, respectively. Cynosure
maintains an allowance for doubtful accounts based upon the aging
of its receivable balances, known collectability issues and
Cynosure’s historical experience with losses. Cynosure works
to mitigate bad debt exposure through its credit evaluation
policies, reasonably short payment terms and geographical
dispersion of sales. Losses from bad debt have historically been
within management’s estimates. Cynosure’s revenue
includes export sales to foreign companies located principally in
Europe, the Asia/Pacific region and the Middle East. Cynosure
obtains letters of credit for foreign sales that the Company
considers to be at risk.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">No customer
accounted for 10% or greater of revenue during 2016, 2015 or 2014.
No customer accounted for 10% or greater of accounts receivable as
of December 31, 2016 or 2015. Accounts receivable allowance
activity consisted of the following for the years ended
December 31:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="69%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2014</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Balance at beginning of
year</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,181</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,949</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,803</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Additions</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,606</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,599</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,373</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Deductions</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(1,486</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(2,367</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(1,227</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Balance at end of
year</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,301</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,181</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,949</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Inventory</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure
states all inventories at the lower of cost or market, determined
on a <font style="WHITE-SPACE: nowrap">first-in,</font> <font style="WHITE-SPACE: nowrap">first-out</font> method. Inventory includes
material, labor and overhead and consists of the
following:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="80%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Raw materials</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">19,448</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">22,569</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Work in
process</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,258</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,317</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Finished goods</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">53,266</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">53,882</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">75,972</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">79,768</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Included in
finished goods are lasers used for demonstration purposes.
Cynosure’s policy is to include demonstration lasers as
inventory for a period of up to one year. As finished goods
inventory, demonstration systems remain sellable while in
inventory, are kept in proper working order and may be sold or
transferred to other warehouse locations. Similar to any other
finished goods in inventory, Cynosure accounts for such
demonstration inventory in accordance with the policy for excess
and obsolescence review of its entire inventory. The majority of
Cynosure’s demonstration system sales occur during the first
year. Sales beyond the first year are infrequent. If not sold after
a period of one year, demonstration systems are transferred to
fixed assets and continuously used by representatives to foster
sales. Cynosure places a three-year useful life on each
demonstration system classified as a fixed asset, which reflects
the reduction in value and benefits realized from its use over
time.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure’s excess and obsolescence reserve policy is to
establish inventory reserves when conditions exist that suggest
that inventory may be in excess of anticipated demand or is
obsolete based upon assumptions about future demand for products
and market conditions. Cynosure regularly evaluates the ability to
realize the value of inventory based on a combination of factors
including the following: historical usage rates, forecasted sales
or usage, product end of life dates, estimated current and future
market values and new product introductions.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure
purchases raw material components as well as certain finished goods
from sole source suppliers. A delay in the production capabilities
of these vendors could cause a delay in Cynosure’s
manufacturing, and a possible loss of revenues, which would
adversely affect operating results.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Property and Equipment</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Property and
equipment are recorded at cost less accumulated depreciation.
Depreciation is computed using the straight-line method over the
estimated useful lives of the assets. Assets under capital leases
and leasehold improvements are amortized using the straight-line
method over the shorter of the estimated useful life of the asset
or the respective lease term. Included in property and equipment
are certain lasers that are used for demonstration purposes.
Maintenance and repairs are charged to expense as incurred.
Cynosure continually evaluates whether events or circumstances have
occurred that indicate that the estimated remaining useful life of
its long-lived assets may warrant revision or that the carrying
value of these assets may be impaired. Cynosure evaluates the
realizability of its long-lived assets based on profitability and
cash flow expectations for the related asset. Any write-downs are
treated as permanent reductions in the carrying amount of the
assets. Based on this evaluation, Cynosure believes that, as of
each of the balance sheet dates presented, none of Cynosure’s
long-lived assets were impaired.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Intangible Assets</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure
capitalizes and includes in intangible assets the costs of
developed technology and patents, customer relationships, trade
names and business licenses acquired in a business combination or
asset acquisition. Intangible assets are recorded at fair value and
stated net of accumulated amortization and impairments. Cynosure
amortizes its intangible assets that have finite lives using either
the straight-line or accelerated method, based on the useful life
of the asset over which it is expected to be consumed utilizing
expected undiscounted future cash flows. Amortization is recorded
over the estimated useful lives ranging from five to 23 years.
Cynosure evaluates the realizability of its definite lived
intangible assets whenever events or changes in circumstances or
business conditions indicate that the carrying value of these
assets may not be recoverable based on expectations of future
undiscounted cash flows for each asset group. If the carrying value
of an asset or asset group exceeds its undiscounted cash flows,
Cynosure estimates the fair value of the assets, generally
utilizing a discounted cash flow analysis based on the present
value of estimated future cash flows to be generated by the assets
using a risk-adjusted discount rate. To estimate the fair value of
the assets, Cynosure uses market participant assumptions pursuant
to ASC 820, <i>Fair
Value Measurements</i>. If the estimate of an intangible
asset’s remaining useful life is changed, Cynosure will
amortize the remaining carrying value of the intangible asset
prospectively over the revised useful life.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Goodwill</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Goodwill
represents the excess of the purchase price over the fair value of
assets acquired and liabilities assumed in a business combination.
Cynosure does not amortize its goodwill, but instead tests for
impairment at least annually and more frequently whenever events or
changes in circumstances indicate that the fair value of the asset
may be less than its carrying value of the asset. Cynosure’s
annual test for impairment occurs on the first day of its fourth
quarter.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure has
adopted Accounting Standards Update (“ASU”) <font style="WHITE-SPACE: nowrap">2011-08</font> <i>Intangibles—Goodwill
and Other,</i> an
amendment to ASC 350, which updates how an entity evaluates
its goodwill for impairment. The guidance provides entities an
option to perform a “qualitative” assessment to
determine whether further impairment testing is necessary. If
further testing is required, the test for impairment continues with
the two step process. The first step compares the carrying amount
of the reporting unit to its estimated fair value (Step 1). To the
extent that the carrying value of the reporting unit exceeds its
estimated fair value, a second step is performed, wherein the
reporting unit’s carrying value is compared to the implied
fair value (Step 2). To the extent that the carrying value exceeds
the implied fair value, impairment exists and must be
recognized.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure has
one reporting unit for goodwill impairment testing and has
performed a qualitative assessment on that reporting unit. As a
result of this assessment, the Company determined that goodwill is
not impaired as of December 31, 2016 and 2015.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Revenue
Recognition and Deferred Revenue</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure
generate revenues primarily from sales of its <font style="WHITE-SPACE: nowrap">non-invasive</font> and minimally invasive laser
and light-based aesthetic treatment systems, as well as RF energy
based surgical and aesthetic systems, which Cynosure refers to
collectively as its product sales. Cynosure also generates revenues
from sales of parts and accessories, from services, including
product warranty revenues, and from royalty payments received from
its licensees. Cynosure’s business model generally does not
involve separate contracts entered into at or near the same time;
nor does its business model involve incremental future discounts
offered to the same customer. Cynosure does not offer a right of
cancellation, termination, refund or return.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure
recognizes revenue from sales of its products, parts and
accessories in accordance with the ASC<i> Revenue Recognition
Topic </i><font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">605-10-S99.</font></font> Cynosure recognizes revenue
from sales of its products, parts and accessories when title and
risk of ownership has been transferred, which is upon shipment,
provided there are no uncertainties regarding customer acceptance,
and the following factors are present:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 6px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr style="break-inside: avoid">
<td width="5%"><font size="1"> </font></td>
<td valign="top" width="2%" align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">persuasive evidence of an arrangement;</font></p>
</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 6px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr style="break-inside: avoid">
<td width="5%"><font size="1"> </font></td>
<td valign="top" width="2%" align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">the fee is fixed or determinable; and</font></p>
</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 6px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr style="break-inside: avoid">
<td width="5%"><font size="1"> </font></td>
<td valign="top" width="2%" align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">collectability of the related receivable is reasonably
assured.</font></p>
</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Revenues from
the sale of services and extended warranty contracts are deferred
and recognized on a straight-line basis over the contract period as
services are provided.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure
recognizes royalty revenues when it can reliably estimate such
amounts and collectability is reasonably assured. As such, Cynosure
recognizes royalty revenues in the quarter reported to it by its
licensees, or one quarter following the quarter in which sales by
its licensees occurred. Royalty revenues also include amounts
due from settlements with licensees for back-owed royalties from
prior periods. These settlement amounts are considered revenue,
when collectability is reasonably assured, because they constitute
Cynosure’s ongoing major or central operations.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Multiple-element arrangements are evaluated in accordance with
ASC <font style="WHITE-SPACE: nowrap">605-25,</font> <i>Multiple-Element
Arrangements</i>. Cynosure determined that its multiple-element
arrangements are generally comprised of the following elements that
are recognized as separate units of accounting: products,
accessories, extended warranties and installation and training
services. Installation and training services are not essential to
the functionality of the aesthetic treatment system. Cynosure
allocates revenue among the elements based upon their vendor
specific objective evidence of fair value (“VSOE”). If
VSOE does not exist, Cynosure may use third-party evidence of fair
value (“TPE”), to determine the relative selling price
of each element. If neither VSOE nor TPE exists, Cynosure may use
management’s best estimate of selling price
(“BESP”) of each element to determine the relative
selling price. Presently there are no elements for which Cynosure
is utilizing TPE or BESP.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">VSOE is based
on the relative sales price based on separate stand-alone sales of
Cynosure’s elements. Revenues associated with products and
accessories are recognized when shipped. Accessories are
predominantly shipped with the aesthetic treatment system when sold
with the product. Revenues associated with extended warranties are
deferred and recognized ratably over the extended warranty period,
which is generally one year. The relative sales prices of extended
warranties are based on the actual pricing of service contracts
purchased on a standalone basis at a later time, normally at the
end of the standard warranty period. Due to the type of revenue
arrangements and structure of its contracts, Cynosure refers to
guidance on separately priced extended warranties within
ASC <font style="WHITE-SPACE: nowrap">605-20,</font> <i>Services</i>. Under
ASC <font style="WHITE-SPACE: nowrap">605-20,</font> Cynosure defers the selling
price of the separately priced extended warranty at the inception
of the arrangement, and allocates the remainder of the arrangement
consideration among the remaining elements on their VSOE of fair
value in accordance with ASC <font style="WHITE-SPACE: nowrap">605-25.</font></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In accordance
with the provisions of ASC <font style="WHITE-SPACE: nowrap">605-45,</font> <i>Revenue Recognitions
Topic—Principal Agent Considerations</i>, Cynosure records
shipping and handling costs billed to its customers as a component
of revenue, and the underlying expense as a component of cost of
revenue. Shipping and handling costs included as a component of
revenue totaled approximately $1.9 million, $1.4 million
and $1.0 million for the years ended December 31, 2016,
2015 and 2014, respectively. Shipping and handling costs included
as a component of cost of revenue totaled $2.0 million,
$1.7 million and $1.1 million for the years ended
December 31, 2016, 2015 and 2014, respectively.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure
collects sales tax from its customers on product sales for which
the customer is not tax exempt and remits such taxes to the
appropriate governmental authorities. Cynosure presents its sales
taxes on a net basis; therefore, these taxes are excluded from
revenues.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Cost of
Revenues</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure’s cost of revenues consist primarily of
material, labor and manufacturing overhead expenses and includes
the cost of components and subassemblies supplied by third-party
suppliers. Cost of revenues also includes royalties incurred on
certain products sold by Cynosure and its licensees, costs incurred
in connection with Cynosure’s efforts to litigate or settle
additional third-party license agreements, amortization expense
related to developed technology and patents intangible assets,
service and warranty expenses, as well as salaries and
personnel-related expenses, including stock-based compensation, for
Cynosure’s operations management team, purchasing and quality
control.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Product
Warranty Costs</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure
typically provides a <font style="WHITE-SPACE: nowrap">one-year</font> system and labor warranty
on <font style="WHITE-SPACE: nowrap">end-user</font> sales of lasers. Distributor
sales of lasers generally include a <font style="WHITE-SPACE: nowrap">one-year</font> warranty on systems only.
These <font style="WHITE-SPACE: nowrap">one-year</font> warranty obligations are
limited to the repair or replacement of parts and materials which
prove to be defective, and do not contain any service performance
obligations. Estimated future costs for initial product warranties
are provided for at the time of revenue recognition and recorded as
cost of revenues within Cynosure’s consolidated statement of
operations. The following table sets forth activity in the accrued
warranty account, which is a component of accrued expenses in the
consolidated balance sheets:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="68%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Years Ended
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2014</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Balance at beginning of
year</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8,841</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8,118</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6,651</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Warranty provision
related to new sales</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">18,603</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">13,754</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">15,104</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Costs incurred</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(16,004</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(13,031</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(13,637</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Balance at end of
year</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">11,440</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8,841</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8,118</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Research and Development</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Research and
development costs consist of salaries and other personnel-related
expenses, including stock-based compensation, for employees
primarily engaged in research, development and engineering
activities and materials used and other overhead expenses incurred
in connection with the design and development of Cynosure’s
products and from time to time expenses associated with
collaborative research agreements that the Company may enter into.
These costs are expensed as incurred.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Advertising Costs</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure
expenses advertising costs as incurred. Advertising costs totaled
$3.5 million, $1.0 million and $1.2 million for the
years ended December 31, 2016, 2015 and 2014,
respectively.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Foreign
Currency Translation</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The financial
statements of Cynosure’s foreign subsidiaries are translated
from local currency into U.S. dollars using the current exchange
rate at the balance sheet date for assets and liabilities, and the
average exchange rate prevailing during the period for revenue and
expenses. The functional currency for Cynosure’s foreign
subsidiaries is considered to be the local currency for each entity
and, accordingly, translation adjustments for these subsidiaries
are included in accumulated other comprehensive loss within
stockholders’ equity. Certain intercompany and third-party
foreign currency-denominated transactions generated foreign
currency remeasurement losses of approximately $0.8 million,
$1.8 million and $1.6 million during 2016, 2015 and 2014,
respectively, which are included in other expense, net, in the
consolidated statements of operations.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Accumulated Other Comprehensive Loss</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Changes to
accumulated other comprehensive loss during the year ended
December 31, 2016 were as follows (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="59%"></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Unrealized</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Loss on</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Marketable</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Securities, net</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>of
taxes</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Translation</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Adjustment</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Accumulated</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Other</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Comprehensive</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Loss</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Balance—December 31, 2015</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(49</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(5,411</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(5,460</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Current period
other comprehensive loss</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(81</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(1,882</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(1,963</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Balance—December 31, 2016</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(130</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(7,293</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(7,423</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Stock-Based Compensation</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure
follows the fair value recognition provisions of ASC
718, <i>Stock
Compensation Topic</i>. This guidance requires share-based payments
to employees, including grants of employee stock options and
restricted stock units (“RSUs”), to be recognized in
the statements of operations based on their fair values at the date
of grant. The fair value of performance-based stock units
(“PSUs”) is determined based on the fair market value
of Cynosure’s common stock on the vest dates. Cynosure
expenses the fair value of share-based payments over the service
period. ASC 718 requires companies to utilize an estimated
forfeiture rate when calculating the expense for the period.
Accordingly, Cynosure reviews its actual forfeiture rates and
periodically aligns its stock compensation expense with the
share-based payments that are vesting. Cynosure recorded
stock-based compensation expense of $10.1 million,
$7.6 million and $7.1 million for the years ended
December 31, 2016, 2015 and 2014, respectively. As of
December 31, 2016 and 2015, Cynosure had $31,000 and $29,000,
respectively, of stock-based compensation expense capitalized as a
part of inventory.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Total
stock-based compensation expense was recorded to cost of revenues
and operating expenses based upon the functional responsibilities
of the individual holding the respective share-based payments, as
follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="72%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Years Ended
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2014</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Cost of
revenues</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">463</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">344</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">292</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Sales and
marketing</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,774</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,059</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,934</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Research and
development</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,356</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,167</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,007</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">General and
administrative</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">5,517</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4,076</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,880</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Total stock-based
compensation expense</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,110</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">7,646</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">7,113</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">As of
December 31, 2016, there was $16.3 million of
unrecognized compensation expense related to <font style="WHITE-SPACE: nowrap">non-vested</font> share awards that is expected
to be recognized on a straight-line basis over a weighted average
period of 1.6 years. Cash received from option exercises was
$25.2 million, $20.2 million and $8.2 million during
the years ended December 31, 2016, 2015 and 2014,
respectively.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure did
not grant any stock options during the year ended December 31,
2016. Cynosure granted 455,999 and 854,180 stock options during the
years ended December 31, 2015 and 2014, respectively. Cynosure
uses the Black-Scholes option pricing model to determine the
weighted average fair value of options. The weighted average fair
value of the options granted during the years ended
December 31, 2015 and 2014 was $12.42 and $10.50,
respectively, using the following assumptions:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="66%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="3" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Years Ended December 31,</b></font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2014</b></font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Risk-free interest
rate</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2"><font style="WHITE-SPACE: nowrap">1.39% - 1.75%</font></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2"><font style="WHITE-SPACE: nowrap">1.41% - 1.80%</font></font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Expected dividend
yield</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Expected term</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">4.8 years</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">4.6 years</font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Expected
volatility</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">41% - 43%</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="2">43% - 44%</font></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Option-pricing models require the input of various subjective
assumptions, including the option’s expected life and the
price volatility of the underlying stock. Cynosure’s
estimated expected stock price volatility is based on its own
historical volatility for the 2015 and 2014 periods.
Cynosure’s expected term of options granted during the years
ended December 31, 2015 and 2014 represents the weighted
average period of time that options granted are expected to be
outstanding giving consideration to vesting schedules and
Cynosure’s historical exercise patterns. The risk-free rate
for the expected term of the option is based on the U.S. Treasury
yield curve in effect at the time of grant. The dividend yield of
zero is based on the fact that Cynosure has never paid cash
dividends and has no present intention to pay cash
dividends.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure has
been increasingly using RSUs as an equity incentive award for
employees. Cynosure granted 173,113 and 86,618 RSUs to employees
during the years ended December 31, 2016 and 2015,
respectively, at the fair market value of its common stock on the
date of grant and which vest annually over a three-year period.
Fair market value was determined using the closing price of
Cynosure’s common stock on the date of grant. Cynosure is
recognizing related compensation expense, net of estimated
forfeitures, on a straight-line basis over the three-year
period.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure
granted 25,425 and 16,685 RSUs to <font style="WHITE-SPACE: nowrap">non-employee</font> directors during the years
ended December 31, 2016 and 2015, respectively, at a fair
market value of its common stock on the date of grant and which
vest quarterly over a <font style="WHITE-SPACE: nowrap">one-year</font> period. Fair market value was
determined using the closing price of Cynosure’s common stock
on the date of grant. Cynosure is recognizing related
compensation expense, net of estimated forfeitures, on a
straight-line basis over the <font style="WHITE-SPACE: nowrap">one-year</font> period.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure
implemented a PSU equity compensation program in 2016. Cynosure
granted PSUs in February 2016 to executive-level employees that
vest annually over a three-year period based on the achievement of
performance goals (determined by the compensation committee of the
board of directors in its sole discretion) and continued
performance of services. If Cynosure’s consolidated
cumulative revenue and/or EBITDA, as defined in each respective
award agreement, exceeds defined thresholds for the one, two and
three-year periods beginning on January 1, 2016 and ending
December 31, 2016, December 31, 2017 and
December 31, 2018, respectively, the PSUs vest on the date
which is the earlier of (i) the financial earnings release for
the year following the year in which the performance period ended
or (ii) a determination by the compensation committee of the
board of directors that the performance goal has been achieved.
Cynosure recognizes compensation expense for performance goals when
the probability of achieving such goals is considered probable and
is recognizing related compensation expense over the period from
the date of grant through the expected vest dates. Each recipient
of the PSUs is eligible to receive between zero and 200% of the
target number of shares of Cynosure’s common stock at the end
of the one, two and three-year periods, provided that the
performance goals have been achieved and the recipient has
continued performing services for Cynosure. For the year ended
December 31, 2016, 16,188 shares were awarded due to the
achievement of performance goals for the <font style="WHITE-SPACE: nowrap">one-year</font> period then ended. The actual
number of shares earned upon vesting will range from zero shares up
to a maximum of 52,888 shares if the 200% target is achieved
applicable to these PSUs for the <font style="WHITE-SPACE: nowrap">two-year</font> period ending
December 31, 2017, and the actual number of shares earned upon
vesting will range from zero shares up to a maximum of 24,052
shares for the three-year period ending December 31, 2018.
Fair value of the PSUs is determined based on the fair market value
of Cynosure’s common stock at each reporting period until
each performance goal is achieved. Cynosure reevaluates at each
reporting period whether the performance goals are probable of
achievement and, if at any point in time, Cynosure believes that
achieving a performance goal is not probable, it will stop
recognizing the related compensation expense and will adjust the
previously recognized compensation expense
prospectively.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure
granted 62,893 PSUs in December 2016 to one executive-level
employee that vest annually over a three-year period based on
achievement of performance goals, at the discretion of the
compensation committee of the board of directors, for the first
year, and then based on continued performance of services over the
remainder of the three-year period. If Cynosure’s adjusted
income from operations, as defined in the award agreement, exceeds
defined thresholds for the <font style="WHITE-SPACE: nowrap">one-year</font> period beginning on
January 1, 2017 and ending December 31, 2017, the PSUs
will vest upon the determination by the compensation committee of
the board of directors that the performance goal has been achieved.
This determination will be made promptly once Cynosure’s
consolidated statements of operations are finalized for the year
ending December 31, 2017. Cynosure recognizes compensation
expense for performance goals when the probability of achieving
such goals is considered probable and is recognizing related
compensation expense over the period from the date of grant through
the expected vest dates. Fair value of the PSUs is determined based
on the fair market value of Cynosure’s common stock at each
reporting period end until each performance goal is achieved.
Cynosure reevaluates at each reporting period whether the
performance goals are probable of achievement and, if at any point
in time, Cynosure believes that achieving a performance goal is not
probable, it will stop recognizing the related compensation expense
and will adjust the previously recognized compensation expense
prospectively.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Interest Expense, net</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Interest
expense consists primarily of interest charges on the capital lease
of Cynosure’s U.S. operating facility, license transfer
agreement acquired from Ellman International, Inc.
(“Ellman”) and interest earned on Cynosure’s
short and long-term marketable securities consisting of state and
municipal bonds, and U.S. government agencies and treasuries.
Cynosure expects interest expense to remain consistent in 2017 as
compared to 2016.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Income
Taxes</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure
provides for income taxes in accordance with ASC 740, <i>Accounting for Income
Taxes </i>(“ASC 740”).
ASC 740 recognizes tax assets and liabilities for the cumulative
effect of all temporary differences between the financial statement
carrying amounts and the tax basis of assets and liabilities, and
are measured using the enacted tax rates that will be in effect
when these differences are expected to reverse. Valuation
allowances are provided if, based on the weight of available
evidence, it is more likely than not that some portion or all of
the deferred tax assets will not be realized. Cynosure considers
several sources of taxable income in making its valuation allowance
assessments including taxable income in carryback years, future
reversals of existing taxable temporary differences, tax planning
strategies and forecasted future income.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure
evaluates at the end of each reporting period whether some or all
of the undistributed earnings of its foreign subsidiaries are
permanently reinvested. Cynosure recognizes deferred income tax
liabilities to the extent that management asserts that
undistributed earnings of its foreign subsidiaries are not
permanently reinvested or will not be permanently reinvested in the
future. Cynosure’s position is based upon several factors
including the Company’s evaluation of its subsidiaries’
financial requirements, the short term and long term operational
and fiscal objectives of the Company, and the tax consequences
associated with the repatriation of earnings.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Cynosure
accounts for uncertain tax positions following the provisions of
ASC 740. ASC 740 clarifies the accounting for income taxes, by
prescribing a minimum recognition threshold a tax position is
required to meet before being recognized in the financial
statements. ASC 740 also provides guidance on <font style="WHITE-SPACE: nowrap">de-recognition,</font> measurement, classification,
interest and penalties, accounting in interim periods, disclosure
and transition.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Net
Income per Share</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Basic net
income per share is determined by dividing net income by the
weighted average common shares outstanding during the period.
Diluted net income per share is determined by dividing net income
by the diluted weighted average shares outstanding during the
period. Diluted weighted average shares reflect the dilutive
effect, if any, of common stock options, RSUs and PSUs based on the
treasury stock method.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The
reconciliation of basic and diluted weighted average shares
outstanding for the years ended December 31, 2016, 2015 and
2014 is as follows (in thousands, except per share
data):</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="70%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Years Ended
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2014</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Net income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">14,201</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">15,807</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">31,338</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Basic weighted average
common shares outstanding</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">23,304</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">22,286</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">21,824</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Weighted average common
stock equivalents</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">402</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">372</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">371</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Diluted weighted average
common shares outstanding</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">23,706</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">22,658</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">22,195</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Basic net income per
share</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.61</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.71</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1.44</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Diluted net income per
share</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.60</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.70</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1.41</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">For the years
ended December 31, 2016, 2015 and 2014 approximately
0.1 million shares, 1.0 million shares and
1.3 million shares, respectively, of Cynosure’s
Class A common stock issuable pursuant to options and RSUs
were excluded from the calculation of diluted weighted average
common shares outstanding as their effect was
antidilutive.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Recent
Accounting Pronouncements</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In May 2014,
the FASB issued guidance codified in ASC 606, <i>Revenue </i><i>Recognition—Revenue</i><i> from
Contracts with Customers</i>, which amends the guidance in ASC 605,
Revenue Recognition. This new revenue standard creates a single
source of revenue guidance for all companies in all industries and
is more principles-based than the current revenue guidance. The new
guidance must be adopted using either a full retrospective approach
for all periods presented in the period of adoption or a modified
retrospective approach. ASC 606 will be effective for public
entities for interim and annual reporting periods beginning after
December 15, 2017. Cynosure has prepared an initial assessment
of the potential effects of ASC 606. Based on the initial
assessment, Cynosure anticipates that the new standard will not
impact the recognition of product sales given their point of sale
nature. Cynosure is still in the process of evaluating its
arrangements with distributors as well as those related to service
contracts and extended warranties under ASC 606 and anticipates the
impact will not be significant, however, final conclusions will not
be determined until Cynosure completes their analysis. Cynosure
expects to adopt ASC 606 using the modified retrospective method.
Should the adoption of ASC 606 under the modified retrospective
method result in the deferral of revenue previously recognized, or
the recognition of revenue previously deferred under ASC 605 beyond
January 1, 2018, Cynosure would record a
cumulative <font style="WHITE-SPACE: nowrap">catch-up</font> adjustment
at January 1, 2018.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In August
2014, the FASB issued ASU <font style="WHITE-SPACE: nowrap">2014-15,</font> <i>Presentation of Financial
Statements—Going Concern</i>, which requires management of
public and private companies to evaluate whether there is
substantial doubt about the entity’s ability to continue as a
going concern within one year after the date that the financial
statements are issued. Management’s evaluation should be
based on relevant conditions and events that are known and
reasonably knowable at the date that the financial statements are
issued. If conditions or events raise substantial doubt about an
entity’s ability to continue as a going concern, and
substantial doubt is not alleviated after consideration of
management’s plans, an entity should include a statement in
the footnotes indicating that there is substantial doubt about the
entity’s ability to continue as a going concern within one
year after the date that the financial statements are
issued. The new standard is effective for annual periods
ending after December 15, 2016, and for annual periods and
interim periods thereafter. Cynosure has adopted ASU <font style="WHITE-SPACE: nowrap">2014-15</font> and has assessed its ability
to continue as a going concern. As of December 31, 2016,
Cynosure has concluded that substantial doubt about its ability to
continue as a going concern does not exist.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In July 2015,
the FASB issued ASU <font style="WHITE-SPACE: nowrap">2015-11,</font> <i>Simplifying the Measurement
of Inventory</i>. ASU <font style="WHITE-SPACE: nowrap">2015-11</font> simplifies the subsequent
measurement of inventory by replacing the lower of cost or market
test with a lower of cost and net realizable value test. The
guidance applies only to inventories for which cost is determined
by methods other than <font style="WHITE-SPACE: nowrap">last-in</font> <font style="WHITE-SPACE: nowrap">first-out</font> and the retail inventory
method. The guidance will be effective for public business entities
for fiscal years beginning after December 15, 2016. Cynosure
is currently evaluating the impact of the provisions of
ASU <font style="WHITE-SPACE: nowrap">2015-11.</font></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In February
2016, the FASB issued ASU <font style="WHITE-SPACE: nowrap">2016-02,</font><i> Leases</i><i> (Topic
842)</i>, which supersedes the existing guidance for lease
accounting, <i>Leases (Topic 840)</i>.
ASU <font style="WHITE-SPACE: nowrap">2016-02</font> requires lessees to recognize
leases on their balance sheets, and leaves lessor accounting
largely unchanged. The amendments in this ASU are effective for
fiscal years beginning after December 15, 2018 and interim
periods within those fiscal years. Early application is permitted
for all entities. ASU <font style="WHITE-SPACE: nowrap">2016-02</font> requires a modified
retrospective approach for all leases existing at, or entered into
after, the date of initial application, with an option to elect to
use certain transition relief. Cynosure is currently evaluating the
impact of this new standard on its consolidated financial
statements.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">In March
2016, the FASB issued ASU <font style="WHITE-SPACE: nowrap">2016-09,</font> <i>Compensation—Stock
Compensation (Topic 718): Improvement to Employee Share-Based
Payment Accounting</i>. The new standard contains several
amendments that will simplify the accounting for employee
share-based payment transactions, including the accounting for
income taxes, forfeitures, statutory tax withholding requirements,
classification of awards as either equity or liabilities, and
classification on the statement of cash flows. The changes in the
new standard eliminate the accounting for excess tax benefits to be
recognized in additional <font style="WHITE-SPACE: nowrap">paid-in</font> capital and tax deficiencies
recognized either in the income tax provision or in
addition <font style="WHITE-SPACE: nowrap">paid-in</font> capital. The new standard is
effective for public business entities for fiscal years beginning
after December 15, 2016 with early adoption permitted.
ASU <font style="WHITE-SPACE: nowrap">2016-09</font> requires a modified
retrospective approach , with a cumulative-effect adjustment to
opening retained earnings for any outstanding liability awards that
qualify for the classification. Cynosure is currently evaluating
the impact of this new standard on its consolidated financial
statements.</font></p>
</div>
CYNO
28973000
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 18px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Research
and Development</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Research and
development costs consist of salaries and other personnel-related
expenses, including stock-based compensation, for employees
primarily engaged in research, development and engineering
activities and materials used and other overhead expenses incurred
in connection with the design and development of Cynosure’s
products and from time to time expenses associated with
collaborative research agreements that the Company may enter into.
These costs are expensed as incurred.</font></p>
</div>
25186000
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b>13.
Summary Selected Quarterly Financial Data
(Unaudited)</b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">The following
table sets forth certain unaudited consolidated quarterly
statements of operations data for the eight quarters ended
December 31, 2016. This information is unaudited, but in the
opinion of management, it has been prepared on the same basis as
the audited consolidated financial statements and all necessary
adjustments, consisting only of normal recurring adjustments, have
been included in the amounts stated below to state fairly the
unaudited consolidated quarterly results of operations. The results
of operations for any quarter are not necessarily indicative of the
results of operations for any future period.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="57%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="14" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Quarter
Ended</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>March 31,</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>June 30,</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Sept. 30,</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Dec. 31,</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="14" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>(In thousands, except
per share data)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Revenues</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">94,664</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">110,343</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">106,386</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">122,139</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Gross profit</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">55,420</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">65,057</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">62,810</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">72,024</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Income from
operations</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4,451</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,500</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8,162</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4,227</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Net income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,847</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6,340</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4,163</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">851</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Basic net income per
share</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.13</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.27</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.18</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.04</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Diluted net income per
share</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.12</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.27</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.17</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.04</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="56%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="14" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Quarter
Ended</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>March 31,</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>June 30,</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Sept. 30,</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Dec. 31,</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="14" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>(In thousands, except
per share data)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Revenues</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">74,912</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">83,694</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">78,414</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">102,442</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Gross profit</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">42,773</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">47,356</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">44,405</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">59,000</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Income from
operations</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,053</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">7,641</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4,835</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">11,792</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Net income
(loss)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(8</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">5,358</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,229</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">7,228</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Basic net income (loss)
per share</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.00</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.24</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.14</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.32</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Diluted net income (loss)
per share</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.00</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.24</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.14</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.31</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Accrued
expenses consist of the following at December 31:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="80%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015<sup style="VERTICAL-ALIGN: baseline; POSITION: relative; BOTTOM: 0.8ex">(1)</sup></b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Accrued payroll and
payroll taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,159</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">7,296</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Accrued employee
benefits</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,653</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,241</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Accrued warranty
costs</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">11,440</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8,841</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Accrued
commissions</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,740</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8,251</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Accrued income,
value-added and sales taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6,629</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">7,562</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">ARcare settlement
agreement charge</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">9,209</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Accrued other</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">13,930</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">11,425</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">64,760</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">45,616</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 6px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr style="break-inside: avoid">
<td valign="top" width="4%" align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">(1)</font></td>
<td valign="top" align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">Certain amounts in the
2015 column have been reclassified to conform to 2016
presentation.</font></td>
</tr>
</table>
</div>
<div>
<p style="margin-top:18px;margin-bottom:0px"><font style="font-family:Times New Roman" size="2"><b>6. Segment and Geographic
Information</b></font></p>
<p style="margin-top:6px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">In accordance
with ASC 280, <i>Segment Reporting Topic,</i> operating segments
are identified as components of an enterprise about which separate
discrete financial information is available for evaluation by the
chief operating decision maker, or decision-making group, in making
decisions how to allocate resources and assess performance.
Cynosure’s chief decision-maker, as defined under ASC 280, is
a combination of the Chief Executive Officer and the Chief
Financial Officer. Cynosure views its operations and manages its
business as one segment, aesthetic treatment products and
services.</font></p>
<p style="margin-top:12px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">The following
table represents total revenue by geographic
destination:</font></p>
<p style="font-size:12px;margin-top:0px;margin-bottom:0px">
 </p>
<table cellspacing="0" cellpadding="0" width="92%" border="0" style="BORDER-COLLAPSE:COLLAPSE" align="center">
<tr>
<td width="67%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="10" align="center" style="border-bottom:1px solid #000000"><font style="font-family:Times New Roman" size="1"><b>Year Ended
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000"><font style="font-family:Times New Roman" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000"><font style="font-family:Times New Roman" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000"><font style="font-family:Times New Roman" size="1"><b>2014</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="10" align="center"><font style="font-family:Times New Roman" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF" style="page-break-inside:avoid">
<td valign="top">
<p style="margin-left:1.00em; text-indent:-1.00em"><font style="font-family:Times New Roman" size="2">United States</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">283,137</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">202,485</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">148,803</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="top">
<p style="margin-left:1.00em; text-indent:-1.00em"><font style="font-family:Times New Roman" size="2">Europe</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">41,900</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">40,942</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">50,513</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
</tr>
<tr bgcolor="#CCEEFF" style="page-break-inside:avoid">
<td valign="top">
<p style="margin-left:1.00em; text-indent:-1.00em"><font style="font-family:Times New Roman" size="2">Asia/Pacific</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">80,789</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">70,233</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">64,651</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="top">
<p style="margin-left:1.00em; text-indent:-1.00em"><font style="font-family:Times New Roman" size="2">Other</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">27,706</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">25,802</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">28,402</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
</tr>
<tr style="font-size:1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF" style="page-break-inside:avoid">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">433,532</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">339,462</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">292,369</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
</tr>
<tr style="font-size:1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="margin-top:12px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">Total assets by
geographic area are as follows:</font></p>
<p style="font-size:12px;margin-top:0px;margin-bottom:0px">
 </p>
<table cellspacing="0" cellpadding="0" width="92%" border="0" style="BORDER-COLLAPSE:COLLAPSE" align="center">
<tr>
<td width="77%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="6" align="center" style="border-bottom:1px solid #000000"><font style="font-family:Times New Roman" size="1"><b>December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000"><font style="font-family:Times New Roman" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000"><font style="font-family:Times New Roman" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="6" align="center"><font style="font-family:Times New Roman" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF" style="page-break-inside:avoid">
<td valign="top">
<p style="margin-left:1.00em; text-indent:-1.00em"><font style="font-family:Times New Roman" size="2">United States</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">549,490</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">497,007</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="top">
<p style="margin-left:1.00em; text-indent:-1.00em"><font style="font-family:Times New Roman" size="2">Europe</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">19,662</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">22,204</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
</tr>
<tr bgcolor="#CCEEFF" style="page-break-inside:avoid">
<td valign="top">
<p style="margin-left:1.00em; text-indent:-1.00em"><font style="font-family:Times New Roman" size="2">Asia/Pacific</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">23,554</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">21,139</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="top">
<p style="margin-left:1.00em; text-indent:-1.00em"><font style="font-family:Times New Roman" size="2">Eliminations</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">(6,199</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">(5,740</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2">) </font></td>
</tr>
<tr style="font-size:1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF" style="page-break-inside:avoid">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">586,507</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">534,610</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
</tr>
<tr style="font-size:1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="font-size:1px;margin-top:12px;margin-bottom:0px">
 </p>
<p style="margin-top:0px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">Long-lived
assets (property and equipment only) by geographic area are as
follows:</font></p>
<p style="font-size:12px;margin-top:0px;margin-bottom:0px">
 </p>
<table cellspacing="0" cellpadding="0" width="92%" border="0" style="BORDER-COLLAPSE:COLLAPSE" align="center">
<tr>
<td width="80%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="6" align="center" style="border-bottom:1px solid #000000"><font style="font-family:Times New Roman" size="1"><b>December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000"><font style="font-family:Times New Roman" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000"><font style="font-family:Times New Roman" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="6" align="center"><font style="font-family:Times New Roman" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF" style="page-break-inside:avoid">
<td valign="top">
<p style="margin-left:1.00em; text-indent:-1.00em"><font style="font-family:Times New Roman" size="2">United States</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">42,908</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">35,185</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="top">
<p style="margin-left:1.00em; text-indent:-1.00em"><font style="font-family:Times New Roman" size="2">Europe</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">1,485</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">1,641</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
</tr>
<tr bgcolor="#CCEEFF" style="page-break-inside:avoid">
<td valign="top">
<p style="margin-left:1.00em; text-indent:-1.00em"><font style="font-family:Times New Roman" size="2">Asia/Pacific</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">3,557</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">2,880</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
</tr>
<tr style="font-size:1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td> </td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">47,950</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">39,706</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
</tr>
<tr style="font-size:1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="margin-top:12px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">No individual
country within Europe or Asia/Pacific represented greater than 10%
of total revenue, assets or long-lived assets for any period
presented.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">A
reconciliation of the federal statutory rate to Cynosure’s
effective tax rate is as follows for the years ended
December 31:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="77%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2014</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Income tax provision at
federal statutory rate:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">35.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">% </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">35.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">% </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">35.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">% </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">(Decrease) increase in
tax resulting from -</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">State taxes, net of
federal benefit</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2.1</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.2</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.8</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Nondeductible
expenses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2.6</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1.5</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.7</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2"><font style="WHITE-SPACE: nowrap">Tax-exempt</font> interest income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.2</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.2</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Effect of foreign
taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.9</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(1.4</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.6</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Stock-based
compensation</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.3</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.1</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.1</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Research and development
credit</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(4.2</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(2.4</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(2.7</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Change in uncertain tax
positions</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.3</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Change in valuation
allowance</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.1</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(3.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(108.8</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Change in control
payments</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1.6</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Unremitted
earnings</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(1.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1.4</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Domestic manufacturing
deduction</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(1.5</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(2.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2"><font style="WHITE-SPACE: nowrap">Non-deductible</font> officer
compensation</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">9.1</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2.7</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">0.5</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Other</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1.7</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(0.2</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(3.0</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Effective income tax
rate</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">43.1</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">% </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">31.9</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">% </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(70.9</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">)% </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><i>Stock
Options</i></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Stock option
activity under the 2005 Plan is as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="53%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Number of</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Options</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Exercise 
Price</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Range</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Weighted-<br />
Average</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Exercise</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Price</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Weighted-<br />
Average</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Remaining</b></font> <br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Contractual</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Life</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Aggregate</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Intrinsic</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Value</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>(in thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Vested</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,157,284</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2"><font style="WHITE-SPACE: nowrap">6.78 - 41.24</font></font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">24.84</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">22,950</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Unvested</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">689,958</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">18.94 - 41.24</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">30.18</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,000</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Outstanding,
December 31, 2015</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,847,242</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.78 - 41.24</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">26.83</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">7.33 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">32,950</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Exercised</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(924,614</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.78 - 41.24</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">27.24</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">18,428</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Forfeited</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(29,278</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">11.02 - 41.24</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">31.73</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">414</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Outstanding,
December 31, 2016</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">893,350</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.78 - 41.21</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">26.26</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.35 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">17,278</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Vested</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">645,412</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.78 - 41.21</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">24.48</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">5.81 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">13,629</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Unvested</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">247,938</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">18.94 - 41.00</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">30.88</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">7.75 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,649</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Vested or expected to
vest, December 31, 2016</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">881,201</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.78 - 41.21</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">26.19</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.33 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">17,100</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Exercisable,
December 31, 2016</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">645,412</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6.78 - 41.21</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">24.48</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">5.81 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">13,629</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
</table>
</div>
18428000
0
51926000
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 18px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Revenue
Recognition and Deferred Revenue</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Cynosure
generate revenues primarily from sales of its <font style="WHITE-SPACE: nowrap">non-invasive</font> and minimally invasive
laser and light-based aesthetic treatment systems, as well as RF
energy based surgical and aesthetic systems, which Cynosure refers
to collectively as its product sales. Cynosure also generates
revenues from sales of parts and accessories, from services,
including product warranty revenues, and from royalty payments
received from its licensees. Cynosure’s business model
generally does not involve separate contracts entered into at or
near the same time; nor does its business model involve incremental
future discounts offered to the same customer. Cynosure does not
offer a right of cancellation, termination, refund or
return.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Cynosure
recognizes revenue from sales of its products, parts and
accessories in accordance with the ASC <i>Revenue Recognition
Topic</i> <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">605-10-S99.</font></font> Cynosure recognizes
revenue from sales of its products, parts and accessories when
title and risk of ownership has been transferred, which is upon
shipment, provided there are no uncertainties regarding customer
acceptance, and the following factors are present:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 6px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr style="PAGE-BREAK-INSIDE: avoid">
<td width="5%"><font size="1"> </font></td>
<td valign="top" width="2%" align="left"><font style="FONT-FAMILY: Times New Roman" size="2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font style="FONT-FAMILY: Times New Roman" size="2">persuasive evidence of an arrangement;</font></p>
</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 6px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr style="PAGE-BREAK-INSIDE: avoid">
<td width="5%"><font size="1"> </font></td>
<td valign="top" width="2%" align="left"><font style="FONT-FAMILY: Times New Roman" size="2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font style="FONT-FAMILY: Times New Roman" size="2">the fee is fixed or determinable; and</font></p>
</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 6px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr style="PAGE-BREAK-INSIDE: avoid">
<td width="5%"><font size="1"> </font></td>
<td valign="top" width="2%" align="left"><font style="FONT-FAMILY: Times New Roman" size="2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font style="FONT-FAMILY: Times New Roman" size="2">collectability of the related receivable is reasonably
assured.</font></p>
</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Revenues from
the sale of services and extended warranty contracts are deferred
and recognized on a straight-line basis over the contract period as
services are provided.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Cynosure
recognizes royalty revenues when it can reliably estimate such
amounts and collectability is reasonably assured. As such, Cynosure
recognizes royalty revenues in the quarter reported to it by its
licensees, or one quarter following the quarter in which sales by
its licensees occurred. Royalty revenues also include amounts
due from settlements with licensees for back-owed royalties from
prior periods. These settlement amounts are considered revenue,
when collectability is reasonably assured, because they constitute
Cynosure’s ongoing major or central operations.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Multiple-element arrangements are evaluated in accordance with
ASC <font style="WHITE-SPACE: nowrap">605-25,</font>
<i>Multiple-Element Arrangements</i>. Cynosure determined that its
multiple-element arrangements are generally comprised of the
following elements that are recognized as separate units of
accounting: products, accessories, extended warranties and
installation and training services. Installation and training
services are not essential to the functionality of the aesthetic
treatment system. Cynosure allocates revenue among the elements
based upon their vendor specific objective evidence of fair value
(“VSOE”). If VSOE does not exist, Cynosure may use
third-party evidence of fair value (“TPE”), to
determine the relative selling price of each element. If neither
VSOE nor TPE exists, Cynosure may use management’s best
estimate of selling price (“BESP”) of each element to
determine the relative selling price. Presently there are no
elements for which Cynosure is utilizing TPE or BESP.</font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">VSOE is based
on the relative sales price based on separate stand-alone sales of
Cynosure’s elements. Revenues associated with products and
accessories are recognized when shipped. Accessories are
predominantly shipped with the aesthetic treatment system when sold
with the product. Revenues associated with extended warranties are
deferred and recognized ratably over the extended warranty period,
which is generally one year. The relative sales prices of extended
warranties are based on the actual pricing of service contracts
purchased on a standalone basis at a later time, normally at the
end of the standard warranty period. Due to the type of revenue
arrangements and structure of its contracts, Cynosure refers to
guidance on separately priced extended warranties within ASC
<font style="WHITE-SPACE: nowrap">605-20,</font> <i>Services</i>.
Under ASC <font style="WHITE-SPACE: nowrap">605-20,</font> Cynosure
defers the selling price of the separately priced extended warranty
at the inception of the arrangement, and allocates the remainder of
the arrangement consideration among the remaining elements on their
VSOE of fair value in accordance with ASC <font style="WHITE-SPACE: nowrap">605-25.</font></font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">In accordance
with the provisions of ASC <font style="WHITE-SPACE: nowrap">605-45,</font> <i>Revenue Recognitions
Topic—Principal Agent Considerations</i>, Cynosure records
shipping and handling costs billed to its customers as a component
of revenue, and the underlying expense as a component of cost of
revenue. Shipping and handling costs included as a component of
revenue totaled approximately $1.9 million, $1.4 million
and $1.0 million for the years ended December 31, 2016,
2015 and 2014, respectively. Shipping and handling costs included
as a component of cost of revenue totaled $2.0 million,
$1.7 million and $1.1 million for the years ended
December 31, 2016, 2015 and 2014, respectively.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Cynosure
collects sales tax from its customers on product sales for which
the customer is not tax exempt and remits such taxes to the
appropriate governmental authorities. Cynosure presents its sales
taxes on a net basis; therefore, these taxes are excluded from
revenues.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">As of
December 31, 2016, amortization expense on existing intangible
assets for the next five years and beyond is as follows (in
thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="89%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">2017</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">6,624</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">2018</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">5,108</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">2019</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">3,373</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">2020</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2,923</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">2021</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2,449</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">2022 and
thereafter</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">15,174</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">35,651</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><i>Restricted
Stock Units</i></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">RSU activity
under the 2005 Plan is as follows:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="49%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Number of</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>RSUs</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Grant Date 
Fair</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Value</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Range</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Weighted-<br />
Average</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Grant</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Date
Fair</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Value</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Weighted-<br />
Average</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Remaining</b></font> <br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Contractual</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Life</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Aggregate</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Intrinsic</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Value</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>(in thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Vested</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Unvested</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">124,627</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2"><font style="WHITE-SPACE: nowrap">30.51 - 35.37</font></font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">30.60</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">5,567</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Outstanding,
December 31, 2015</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">124,627</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">30.51 - 35.37</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">30.60</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8.90 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">5,567</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Granted</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">198,538</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">36.24 - 52.78</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">39.06</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">9,053</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Vested</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(64,806</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">29.40 - 47.03</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">34.12</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,481</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Forfeited</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(19,880</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">30.51 - 36.24</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">34.47</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">907</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Outstanding,
December 31, 2016</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">238,479</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2"><font style="WHITE-SPACE: nowrap">29.40 - 52.78</font></font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">36.36</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8.43 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,875</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Vested</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Unvested</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">238,479</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">29.40 - 52.78</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">36.36</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8.43 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,875</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Vested or expected to
vest, December 31, 2016</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">236,134</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">29.40 - 52.78</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">36.29</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8.43 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,768</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Exercisable,
December 31, 2016</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
</table>
</div>
153853000
29278
1900000
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"><font style="FONT-FAMILY: "Times New Roman"" size="2"><i>PSU activity under the
2005 Plan is as follows:</i></font></font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"></p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="76%" align="center" border="0">
<tr>
<td width="64%"></td>
<td valign="bottom" width="11%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Number of<br />
PSUs(1)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Weighted Average<br />
Award-Issuance<br />
Fair Value</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Outstanding, December 31,
2015</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Granted</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">180,855</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">40.23</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Vested</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(16,188</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">36.24</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Forfeited</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(24,834</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">36.24</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Outstanding, December 31,
2016</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">139,833</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">41.39</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 6px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2"> </font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"></p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr style="break-inside: avoid">
<td valign="top" width="4%" align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">(1)</font></td>
<td valign="top" align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">Number of PSUs listed at
the maximum amounts. Pursuant to the terms of the Merger Agreement,
each then-outstanding Cynosure PSU award will vest and be cancelled
and converted into the right to receive the Offer Price in respect
of the maximum number of Shares underlying such PSU
award.</font></td>
</tr>
</table>
</div>
<div>
<p style="margin-top:12px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">The following
table represents total revenue by geographic
destination:</font></p>
<p style="font-size:12px;margin-top:0px;margin-bottom:0px">
 </p>
<table cellspacing="0" cellpadding="0" width="92%" border="0" style="BORDER-COLLAPSE:COLLAPSE" align="center">
<tr>
<td width="67%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="10" align="center" style="border-bottom:1px solid #000000"><font style="font-family:Times New Roman" size="1"><b>Year Ended
December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000"><font style="font-family:Times New Roman" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000"><font style="font-family:Times New Roman" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000"><font style="font-family:Times New Roman" size="1"><b>2014</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="10" align="center"><font style="font-family:Times New Roman" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF" style="page-break-inside:avoid">
<td valign="top">
<p style="margin-left:1.00em; text-indent:-1.00em"><font style="font-family:Times New Roman" size="2">United States</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">283,137</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">202,485</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">148,803</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="top">
<p style="margin-left:1.00em; text-indent:-1.00em"><font style="font-family:Times New Roman" size="2">Europe</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">41,900</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">40,942</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">50,513</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
</tr>
<tr bgcolor="#CCEEFF" style="page-break-inside:avoid">
<td valign="top">
<p style="margin-left:1.00em; text-indent:-1.00em"><font style="font-family:Times New Roman" size="2">Asia/Pacific</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">80,789</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">70,233</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">64,651</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="top">
<p style="margin-left:1.00em; text-indent:-1.00em"><font style="font-family:Times New Roman" size="2">Other</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">27,706</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">25,802</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">28,402</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
</tr>
<tr style="font-size:1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF" style="page-break-inside:avoid">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">433,532</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">339,462</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">292,369</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
</tr>
<tr style="font-size:1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
P5Y9M22D
P6Y4M6D
2474000
P6Y3M29D
1
<div>
<p style="margin-top:0px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">Long-lived
assets (property and equipment only) by geographic area are as
follows:</font></p>
<p style="font-size:12px;margin-top:0px;margin-bottom:0px">
 </p>
<table cellspacing="0" cellpadding="0" width="92%" border="0" style="BORDER-COLLAPSE:COLLAPSE" align="center">
<tr>
<td width="80%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="6" align="center" style="border-bottom:1px solid #000000"><font style="font-family:Times New Roman" size="1"><b>December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000"><font style="font-family:Times New Roman" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000"><font style="font-family:Times New Roman" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="6" align="center"><font style="font-family:Times New Roman" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF" style="page-break-inside:avoid">
<td valign="top">
<p style="margin-left:1.00em; text-indent:-1.00em"><font style="font-family:Times New Roman" size="2">United States</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">42,908</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">35,185</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="top">
<p style="margin-left:1.00em; text-indent:-1.00em"><font style="font-family:Times New Roman" size="2">Europe</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">1,485</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">1,641</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
</tr>
<tr bgcolor="#CCEEFF" style="page-break-inside:avoid">
<td valign="top">
<p style="margin-left:1.00em; text-indent:-1.00em"><font style="font-family:Times New Roman" size="2">Asia/Pacific</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">3,557</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">2,880</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
</tr>
<tr style="font-size:1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td> </td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">47,950</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">39,706</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
</tr>
<tr style="font-size:1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
0
2741000
41.00
120
11.02
41.21
P1Y
P2Y
75564000
41.21
6.78
2028-05
41.24
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 18px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Accumulated Other Comprehensive Loss</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Changes to
accumulated other comprehensive loss during the year ended
December 31, 2016 were as follows (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="59%"></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Unrealized</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Loss on</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Marketable</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Securities, net</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>of
taxes</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Translation</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Adjustment</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Accumulated</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Other</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Comprehensive</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Loss</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Balance—December 31, 2015</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(49</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(5,411</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(5,460</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Current period
other comprehensive loss</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(81</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(1,882</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(1,963</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Balance—December 31, 2016</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(130</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(7,293</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(7,423</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
P5Y9M22D
18.94
390181
<div>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b>7. Balance
Sheet Accounts</b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Property and Equipment</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Property and
equipment consists of the following at December 31:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="68%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Estimated</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Useful</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Life</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>(Years)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Cost</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font><br />
<font style="FONT-FAMILY: "Times New Roman"" size="1"><b>Cost</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="10" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Equipment</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2"><font style="WHITE-SPACE: nowrap">3-5</font></font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">13,783</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">11,216</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Furniture and
fixtures</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2"><font style="WHITE-SPACE: nowrap">3-5</font></font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,077</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,470</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Computer equipment and
software</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">7,233</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4,902</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Leased
equipment</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2"><font style="WHITE-SPACE: nowrap">3-4</font></font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,181</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">1,324</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Leased
buildings</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">15</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">15,224</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">13,327</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Leasehold
improvements</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">5</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">13,061</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">13,106</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Demonstration
equipment</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">23,821</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">22,572</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Construction <font style="WHITE-SPACE: nowrap">in-progress</font></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">11,055</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4,163</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">88,435</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">73,080</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Less: Accumulated
depreciation and amortization</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(40,485</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">(33,374</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">47,950</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">39,706</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 12px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Depreciation
expense relating to property and equipment was $12.1 million,
$10.1 million and $8.9 million for the years ended
December 31, 2016, 2015 and 2014, respectively. As of
December 31, 2016 and 2015, the cost of assets recorded under
capitalized leases was approximately $16.4 million and
$14.7 million, respectively, and the related accumulated
amortization was approximately $3.8 million and
$2.9 million, respectively. Amortization expense of assets
recorded under capitalized leases is included as a component of
depreciation expense.</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Accrued
Expenses</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Accrued
expenses consist of the following at December 31:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="80%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015<sup style="VERTICAL-ALIGN: baseline; POSITION: relative; BOTTOM: 0.8ex">(1)</sup></b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Accrued payroll and
payroll taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,159</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">7,296</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Accrued employee
benefits</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,653</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,241</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Accrued warranty
costs</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">11,440</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8,841</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Accrued
commissions</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">10,740</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">8,251</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Accrued income,
value-added and sales taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6,629</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">7,562</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">ARcare settlement
agreement charge</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">9,209</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Accrued other</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">13,930</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">11,425</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">64,760</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">45,616</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 6px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr style="break-inside: avoid">
<td valign="top" width="4%" align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">(1)</font></td>
<td valign="top" align="left"><font style="FONT-FAMILY: "Times New Roman"" size="2">Certain amounts in the
2015 column have been reclassified to conform to 2016
presentation.</font></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; MARGIN-LEFT: 37px; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 18px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2"><b><i>Other
Noncurrent Liabilities</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: medium; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 4%; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
<font style="FONT-FAMILY: "Times New Roman"" size="2">Other
noncurrent liabilities consist of the following at
December 31:</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; FONT-FAMILY: "Times New Roman"; WHITE-SPACE: normal; WORD-SPACING: 0px; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; COLOR: rgb(0,0,0); FONT-STYLE: normal; ORPHANS: 2; WIDOWS: 2; MARGIN-TOP: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; font-variant-ligatures: normal; font-variant-caps: normal; -webkit-text-stroke-width: 0px">
 </p>
<table style="FONT-FAMILY: "Times New Roman"; WORD-SPACING: 0px; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; ORPHANS: 2; WIDOWS: 2; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="84%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: rgb(0,0,0) 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: "Times New Roman"" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Noncurrent deferred
rent</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">543</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">451</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">Noncurrent tenant
improvement allowances</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,170</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">2,432</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="break-inside: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: "Times New Roman"" size="2">License transfer
agreement</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">3,204</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">4,005</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="break-inside: avoid">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">5,917</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: "Times New Roman"" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: "Times New Roman"" size="2">6,888</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: "Times New Roman"" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: rgb(0,0,0) 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
P90D
3649000
6.78
0.00
1097000
24.48
0.091
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Other
intangible assets consist of the following at December 31,
2016 and December 31, 2015 (in thousands):</font></p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 12px; MARGIN-TOP: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="50%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Developed</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Technology</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>&
Patents</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Business</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Licenses</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Customer</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Relationships</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Trade</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Names</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Other</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Total</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2"><b>December 31,
2016</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">27,950</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">284</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">16,395</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">18,370</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,347</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">64,346</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Translation
adjustment</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(43</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(43</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Accumulated
amortization</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(18,579</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(146</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(6,095</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(3,406</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(370</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(28,596</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Balance, December 31,
2016</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">9,371</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">138</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">10,257</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">14,964</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">977</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">35,707</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2"><b>December 31,
2015</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">29,240</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">384</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">19,718</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">18,390</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,353</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">69,085</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Translation
adjustment</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(42</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(42</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Accumulated
amortization</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(14,055</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(232</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(7,799</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(2,518</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(122</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">(24,726</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">Balance, December 31,
2015</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">15,185</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">152</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">11,877</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">15,872</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">1,231</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">44,317</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
187000
P7Y9M
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; MARGIN-TOP: 18px">
<font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Cash,
Cash Equivalents, Short and Long-Term Marketable
Securities</i></b></font></p>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 6px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">Cynosure
considers all short-term, highly liquid investments with original
maturities at the time of purchase of 90 days or less to be cash
equivalents. Cynosure accounts for short and long-term marketable
securities as <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font> in
accordance with Accounting Standards Codification
(“ASC”) 320, <i>Investments—Debt and Equity
Securities Topic</i>. Under ASC 320, securities purchased to be
held for indefinite periods of time and not intended at the time of
purchase to be held until maturity are classified as <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font> securities.
ASC 320 requires Cynosure to recognize all marketable securities on
the consolidated balance sheets at fair value. Cynosure’s
marketable securities are stated at fair value based on quoted
market prices. Adjustments to the fair value of marketable
securities that are classified as <font style="WHITE-SPACE: nowrap"><font style="WHITE-SPACE: nowrap">available-for-sale</font></font> are recorded
as increases or decreases, net of income taxes, within accumulated
other comprehensive loss in shareholders’ equity. The
amortized cost of marketable debt securities is adjusted for
amortization of premiums and discounts to maturity computed under
the effective interest method. The cost of securities sold is
determined by the specific identification method. Cynosure
continually evaluates whether any marketable securities have been
impaired and, if so, whether such impairment is temporary or other
than temporary.</font></p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 12px; TEXT-INDENT: 4%">
<font style="FONT-FAMILY: Times New Roman" size="2">The following
table summarizes the RSU grant and unrecognized compensation
expense as of December 31, 2016.</font> </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="50%"></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Number of 
RSUs</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Granted</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Unrecognized</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Stock-based</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Compensation at</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>December 31,</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>2016</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>(in
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Weighted</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Average  Period</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>for
Recognition</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>of Unrecognized</b></font><br />
<font style="FONT-FAMILY: Times New Roman" size="1"><b>Compensation</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="PAGE-BREAK-INSIDE: avoid" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font style="FONT-FAMILY: Times New Roman" size="2">As of December 31,
2016</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">390,181</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">8,669</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">2.0 years</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
0.10
P3Y
30.88
357968000
-0.015
25186000
0
P1Y
247938
6.78
645412
<div>
<p style="margin-top:12px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">Total assets by
geographic area are as follows:</font></p>
<p style="font-size:12px;margin-top:0px;margin-bottom:0px">
 </p>
<table cellspacing="0" cellpadding="0" width="92%" border="0" style="BORDER-COLLAPSE:COLLAPSE" align="center">
<tr>
<td width="77%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="6" align="center" style="border-bottom:1px solid #000000"><font style="font-family:Times New Roman" size="1"><b>December 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000"><font style="font-family:Times New Roman" size="1"><b>2016</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000"><font style="font-family:Times New Roman" size="1"><b>2015</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="6" align="center"><font style="font-family:Times New Roman" size="1"><b>(In
thousands)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF" style="page-break-inside:avoid">
<td valign="top">
<p style="margin-left:1.00em; text-indent:-1.00em"><font style="font-family:Times New Roman" size="2">United States</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">549,490</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">497,007</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="top">
<p style="margin-left:1.00em; text-indent:-1.00em"><font style="font-family:Times New Roman" size="2">Europe</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">19,662</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">22,204</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
</tr>
<tr bgcolor="#CCEEFF" style="page-break-inside:avoid">
<td valign="top">
<p style="margin-left:1.00em; text-indent:-1.00em"><font style="font-family:Times New Roman" size="2">Asia/Pacific</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">23,554</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">21,139</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
</tr>
<tr style="page-break-inside:avoid">
<td valign="top">
<p style="margin-left:1.00em; text-indent:-1.00em"><font style="font-family:Times New Roman" size="2">Eliminations</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">(6,199</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2">) </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">(5,740</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2">) </font></td>
</tr>
<tr style="font-size:1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:1px solid #000000"> </p>
</td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF" style="page-break-inside:avoid">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">586,507</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="font-family:Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="font-family:Times New Roman" size="2">534,610</font></td>
<td nowrap="nowrap" valign="bottom"><font style="font-family:Times New Roman" size="2"> </font></td>
</tr>
<tr style="font-size:1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td valign="bottom">
<p style="border-top:3px double #000000"> </p>
</td>
<td> </td>
</tr>
</table>
</div>
414000
41.21
6493000
41.24
13629000
2
8669000
6.78
0
835000
P20D
16188
36.24
40.23
16188
24834
36.24
180855
0.00
2.00
P3Y
P3Y
62893
P3Y
P3Y
173113
P1Y
P1Y
25425
34.47
39.06
2481000
64806
19880
34.12
198538
P8Y5M5D
P8Y5M5D
30.51
9053000
238479
907000
0
52.78
52.78
36.24
P8Y5M5D
29.40
29.40
36.24
52.78
47.03
2017-02-14
P5Y
500
P3Y
P3Y
P3Y
P23Y
P1Y
1500
P5Y
P5Y
P4Y
1.10
0.10
P36M
P10Y
0.33
P36M
P12M
463000
5517000
1356000
2774000
P3Y
P5Y
P3Y
P15Y
2029
2021
2019
2018
2033
2018
2021-11
P1Y
2019-10
P1Y
1000
989000
41900000
80789000
283137000
27706000
-1882000
10112000
3556000
25185000
-81000
-1963000
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14201000
0.00
0.00
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42773000
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2053000
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0.24
83694000
47356000
5358000
7641000
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0.12
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55420000
2847000
4451000
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0.27
0.27
110343000
65057000
6340000
10500000
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0.14
0.14
78414000
44405000
3229000
4835000
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106386000
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