HEALTHTRONICS SURGICAL SERVICES, INC. NONQUALIFIED DEFERRED COMPENSATION PLAN

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HEALTHTRONICS SURGICAL SERVICES, INC.

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Title: HEALTHTRONICS SURGICAL SERVICES, INC. NONQUALIFIED DEFERRED COMPENSATION PLAN
Governing Law: Georgia Date: 3/15/2004
Industry: Medical Equipment and Supplies Sector: Healthcare

HEALTHTRONICS SURGICAL SERVICES, INC.
NONQUALIFIED DEFERRED COMPENSATION PLAN

(Amended and Restated as of January 1, 2004)

HealthTronics Surgical Services, Inc.
Nonqualified Deferred Compensation Plan
(Amended and Restated as of January 1, 2004)

Table of Contents

ARTICLE I. PURPOSE AND EFFECTIVE DATE

1.1	Purpose
1.2	Effective Date

ARTICLE II. DEFINITIONS

2.1	Account
2.2	Annual Bonus
2.3	Beneficiary
2.4	Change-in-Control
2.5	Code
2.6	Committee
2.7	Company
2.8	Company Matching Account
2.9	Compensation
2.10	Deferral Account
2.11	Deferral Election
2.12	Designated Bonus
2.13	Employee
2.14	Eligible Employee
2.15	Employer
2.16	Enrollment Period
2.17	401(k) Plan
2.18	Participant
2.19	Plan
2.20	Plan Year
2.21	Salary
2.22	Year of Service

ARTICLE III. ELIGIBILITY

3.1	Conditions on Eligibility
3.2	Deferral Election
3.3	Time of Election
3.4	Change of Election
3.5	Election Made by Company

ARTICLE IV. ACCRUAL OF BENEFITS

4.1	Contributions to Participants’ Accounts
4.2	Timing of Contributions
4.3	Taxation of Contributions
4.4	Vesting of Accounts
4.5	Company Matching Account Forfeitures
4.6	Death, Disability, or Retirement
4.7	Change-in-Control

ARTICLE V. DISTRIBUTIONS

5.1	Commencement of Distribution
5.2	Manner of Distribution
5.3	Form of Payment of Account
5.4	Distributions on Account of Death
5.5	Distributions on Account of Financial Hardship

ARTICLE VI. ADMINISTRATION

6.1	Plan Administration
6.2	Committee Action
6.3	Rights and Duties
6.4	Compensation, Indemnity, and Liability
6.5	Taxes

ARTICLE VII. CLAIMS PROCEDURE

7.1	Claims for Benefits
7.2	Appeals

ARTICLE VIII. AMENDMENT AND TERMINATION

8.1	Amendment
8.2	Termination of the Plan


ARTICLE IV. MISCELLANEOUS

9.1	Limitation on Participant’s Rights
9.2	Benefits Unfunded
9.3	Other Plans
9.4	Governing Law
9.5	Gender, Number, and Headings
9.6	Successors and Assigns; Nonalienation of Benefits

HEALTHTRONICS SURGICAL SERVICES, INC.
NONQUALIFIED DEFERRED COMPENSATION PLAN

(Amended and Restated as of January 1, 2004)

A RTICLE I
PURPOSE AND EFFECTIVE DATE

1 .1 Purpose . The purpose of the HealthTronics Surgical Services, Inc. Nonqualified Deferred Compensation Plan is to provide a select group of management employees with the opportunity to enhance their retirement by deferring amounts of their Compensation.

1 .2 Effective Date . The general effective date of this amendment and restatement shall be January 1, 2004. The original effective date of the Plan was July 1, 2000, and certain provisions below may be shown as having different effective dates for historical purposes.

A RTICLE II
DEFINITIONS

2 .1 “Account” means the records maintained by the Nonqualified Deferred Compensation Plan Committee that represent each Participant’s total interest under the Plan. Such interest may be reflected as a book reserve entry in the Company’s accounting records, or as a separate account under a trust, or as a combination of both. Each Participant’s Account shall consist of at least three subaccounts, a Deferral Account, a Company Matching Account, and a Company Stock Account, which subaccounts may be further divided as provided elsewhere in this Plan or by the Committee.

2. 2 “Annual Bonus” means any bonus paid on an annual basis to the Participant by the Company.

2 .3 “Beneficiary” means the person or persons last designated by the Participant, in writing, as entitled to receive such Participant’s interest under the Plan in the event of his death. If the Participant fails to designate a Beneficiary, the Participant’s spouse shall be the designated Beneficiary. If all designated Beneficiaries predecease the Participant or the Participant fails to designate a Beneficiary and is not married, the Beneficiary shall be the estate of the Participant.

2 .4 “Change-in-Control” of the Company means a change in control of a nature that would be required to be reported in response to Item 5(f) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934 (“Act”) or any successor thereto, provided that without limiting the foregoing, a Change-in-Control of the Company also shall be deemed to have occurred if:

(i)

any “person” (as defined under Section 3(a)(9) of the Act) or “group” of persons (as provided under Rule 13d-3 of the Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 or otherwise under the Act), directly or indirectly (including

		as provided in Rule 13d-3(d)(1) of the Act), of capital stock of the Company the holders of which are entitled to vote for the election of directors (“voting stock”) representing that percentage of the Company’s then outstanding voting stock (giving effect to the deemed ownership of securities by such person or group, as provided in Rule 13d-3(d)(1) of the Act, but not giving effect to any such deemed ownership of securities by another person or group) equal to or greater than thirty-five percent (35%) of all such voting stock;

	(ii)	individuals who constitute the Board on the date hereof (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof. Any person becoming a director subsequent to such date whose election, or nomination for election, is, at any time, approved by a vote of at least a majority of the directors comprising the Incumbent Board shall be considered as though he were a member of the Incumbent Board;

	(iii)	the Company combines with another person or entity, whether through a merger, asset sale, reorganization or otherwise, and (a) any person or group of persons holds at any time after such combination, voting stock equal to or greater than thirty-five percent (35%) determined by reference to the voting securities of the surviving entity, or (b) the Company’s directors, as of the date immediately before such combination, constitute less than a majority of the Board of Directors of the combined entity.

2 .5 “Code” means the Internal Revenue Code of 1986, as amended.

2 .6 “Committee” means the committee appointed to administer the Plan pursuant to Section 6.1.

2. 7 “Company” means HealthTronics Surgical Services, Inc. a corporation with its principal place of business in Georgia, or its successor or successors.

2 .8 “Company Matching Account” means that portion of each Participant’s Account that represents his interest in the Plan that is credited pursuant to Section 4.1(b).

2 .9 “Compensation” means a Participant’s Salary and a Participant’s Annual Bonus and any Designated Bonus awarded to the Participant, regardless of whether such amounts are deferred under this Plan or any other plan of the Company. Compensation may exclude a Designated Bonus, if so provided in writing at the time such a bonus is granted. For purposes of this Plan, Compensation shall be determined without regard to the limits of Section 401(a)(17) of the Code. Compensation shall not include fringe benefit compensation, income received upon the exercise of stock options granted by the Company, or any compensation made in the form of Company stock.

2 .10 “Deferral Account” means that portion of each Participant’s Account that represents his interest in the Plan that is credited pursuant to Section 4.1(a).

2 .11 “Deferral Election” means a Participant’s election to defer a portion of his Salary, Annual Bonus, and/or Designated Bonus, which election must be made in a manner authorized by the Committee and within an applicable Enrollment Period. The Committee shall require separate Deferral Elections for a Participant’s Annual Bonus and any Designated Bonuses. Any bonuses paid that are not Designated Bonuses shall be subject to a Participant’s Salary Deferral Election.

2 .12 “Designated Bonus” means any bonus, other than an Annual Bonus, designated in writing by the Committee or the Company as a Designated Bonus for purposes of this Plan prior to the payment of such bonus by the Company.

2 .13 “Employee” means any common-law employee of the Employer.

2 .14 “Eligible Employee” means any Employee who satisfies the criteria for participation in the Plan, as established from time to time by the Committee. An Employee’s status as an Eligible Employee will be reviewed by the Committee prior to each Enrollment Period, and an Employee who no longer satisfies the criteria for participation shall not be permitted to make a Deferral Election under this Plan during the next Plan Year.

2 .15 “Employer” means the Company.

2 .16 “Enrollment Period” means the following:

	(a)	For the 2000 Plan Year only and with respect to payroll periods after July 1, 2000, the thirty (30) day period ending on July 1, 2000;

	(b)	For Plan Years beginning after December 31, 2000 and with respect to payroll periods beginning on or after January 1, the preceding month of December;

	(c)	For Plan Years beginning before January 1, 2003, the thirty (30) day period following the date a newly Eligible Employee becomes an Eligible Employee, with respect to the payroll periods after the date on the Employee makes a Deferral Election; and

	(d)	For Plan Years beginning after December 31, 2003, the thirty (30) day period following an Eligible Employee’s date of hire, with respect to payroll periods beginning after the expiration of such thirty (30) day period.

2 .17 “401(k) Plan” means the HealthTronics Surgical Services, Inc. 401(k) Plan, as it may be amended from time to time.

2 .18 “Participant” means any Eligible Employee who makes a Deferral Election pursuant to Section 3.2. Any Employee who has an interest under the Plan shall also be considered a Participant, even though such Employee is, for any particular Plan Year, ineligible to make a Deferral Election.

2 .19 “Plan” means the HealthTronics Surgical Services, Inc. Nonqualified Deferred Compensation Plan, as it may be amended from time to time.

2 .20 “Plan Year” means the twelve (12) month period beginning January 1st and ending on December 31st.

2 .21 “Salary” means the amount of remuneration that the Company has agreed to pay to the Participant on a regular and recurring basis for services rendered. Salary shall also include any bonuses that are neither an Annual Bonus nor a Designated Bonus, unless paid in the form of Company stock.

2 .22 “Year of Service” means a Plan Year in which an Employee has at least 1,000 hours of service and was employed on the last day of the Plan Year, including periods prior to the effective date of the Plan. Hours of service shall be credited in the same manner as under the 401(k) Plan.

A RTICLE III
ELIGIBILITY

3 .1 Conditions on Eligibility . An Eligible Employee shall become a Participant in the Plan as of the date he makes an effective Deferral Election or, if earlier, as of the date he is credited with an interest under the Plan.

3 .2 Deferral Election . Each Participant may elect to defer any whole percentage of his Salary, Annual Bonus, and any Designated Bonus. The Committee may provide for separate elections with respect to identifiable portions of a Participant’s Salary, Annual Bonus or Designated Bonus, for example, amounts of Compensation above and below the limits provided by Section 401(a)(17) of the Code. A Participant’s Deferral Election under this Plan shall be effective with respect to his Salary, Annual Bonus, and any Designated Bonus without regard to whether such amounts are subject to a deferral election under the 401(k) Plan.

3 .3 Time of Election . A Participant’s Deferral Election with respect to his Salary shall be effective only if made during the applicable Enrollment Period. Further, a Participant’s Deferral Election with respect to his Annual Bonus and any Designated Bonus shall be effective only if made prior to each Plan Year for which the Annual Bonus or Designated Bonus is payable.

3 .4 Change of Election .

	(a)	A Participant’s most recent Deferral Election with respect to his Salary shall remain in effect for all Plan Years subsequent to the Plan Year for which such Deferral Election was made until the Participant makes a new Deferral Election. A Participant’s Deferral Election with respect to his Annual Bonus and any Designated Bonuses shall, however, only be effective for the one Plan Year for which such Deferral Elections were made.

	(b)	A Participant may increase or decrease the percentage of his Salary, Annual Bonus and/or Designated Bonus subject to his Deferral Election for a Plan Year during the

		Enrollment Period for a subsequent Plan Year, provided, however, such increase or decrease is made with respect to Compensation not yet due and payable to the Participant.

	(c)	A Participant may, during a Plan Year, discontinue his Deferral Election with

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