On December 10, 2008, the Board of Directors of Thermage, Inc. (the "Company") approved certain modifications to the Company's non-employee director compensation policy.

First, effective immediately, the Board of Directors approved an amendment to the Company's 2006 Equity Incentive Plan to increase the automatic, nondiscretionary grant of non-statutory options to the Company's non-employee directors in the following manner:

• Upon initial election as a director, each non-employee director will be granted an option to purchase fifty thousand (50,000) shares of common stock, which option shall vest ratably as to 1/36th of shares subject to the option each month, subject to the director's continued service on each relevant vesting date; and

• Immediately following the date of each regular annual meeting of stockholders of the Company, each non-employee director who has been a director for at least six months will be granted an option to purchase twenty-five thousand (25,000) shares of common stock, which option shall vest ratably as to 1/12th of the shares subject to the option each month, subject to the director's continued service on each relevant vesting date.

Second, effective January 1, 2009, the Board of Directors of the Company approved an increase to $25,000 of the annual retainer for each non-employee director for general service as a director as well as increases to the annual retainers for the chairs of the Company's Compensation Committee and Nominating and Governance Committee to $10,000 and $4,000, respectively, for service in these roles.

(d) Pursuant to the Agreement and Plan of Merger and Reorganization, dated July 7, 2008, by and among the Company, Relay Acquisition Company, LLC, and Reliant Technologies, Inc., and with respect to Articles VIII and X only, Steven Mendelow as Securityholder Representative and U.S. Bank National Association as Escrow Agent, the Company agreed to take all actions necessary such that, effective as of the closing of the merger of Reliant with and into Relay Acquisition Company, LLC (the "Closing"), three individuals designated by Reliant's Board of Directors would become members of the Company's Board of Directors. In light of this obligation, on December 10, 2008, the Company's Board of Directors appointed Eric B. Stang, Leonard DeBenedictis and Steven Mendelow to the Board of Directors of the Company, effective as of the Closing. Mr. Stang will serve as a Class III director, whose initial term will expire at the Company's 2009 annual meeting of stockholders. Messrs. DeBenedictis and Mendelow will serve as Class II directors, whose initial terms will expire at the Company's 2011 annual meeting of stockholders.

(e) On December 10, 2008, the Compensation Committee of the Company's Board of Directors approved the Company's 2009 corporate bonus plan. The purpose of the bonus plan is to reward employees for successful achievement of certain corporate performance goals based on revenue, operating income and product pipeline during fiscal year 2009.

Except for certain of the Company's employees in manufacturing who are under a monthly bonus plan and the Company's sales representatives who are under a sales compensation plan, all full-time regular employees, including the executive officers listed in the table below, are eligible to participate in the 2009 corporate bonus plan. Eligible employees must remain employed by the Company at the time awards are paid out on a semi-annual basis under the program in order to receive their awards, if any. The Compensation Committee may modify, amend, revoke or suspend the 2009 corporate bonus plan at any time in its sole discretion.

The Compensation Committee set target bonuses under the 2009 corporate bonus plan applicable to the Company's executive officers. The target bonus for Stephen J. Fanning, the Company's president and chief executive officer, is 80% of his base salary; the target bonus for John F. Glenn, the Company's chief financial officer, and Clint Carnell, the Company's chief operating officer, is 50% of their respective base salary; and for each other executive officer, the target bonus is 40% of his or her respective base salary.

                                                                            Potential          Potential
                                            Current         Target         Bonus at 75%      Bonus at 193%
                                          Base Salary     Percentage        of Target          of Target
Stephen J. Fanning                       $     450,000            80 %    $      270,000    $       694,800
President and Chief Executive Officer
John F. Glenn                            $     265,000            50 %    $       99,375    $       255,725
Chief Financial Officer
Clint Carnell                            $     300,000            50 %    $      112,500    $       289,500
Chief Operating Officer

The Compensation Committee retains the discretion to increase, reduce or eliminate the bonus that otherwise might be payable under the 2009 corporate bonus plan based on actual performance as compared to the Company's goals.