SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED OCTOBER 31, 20062009

COMMISSION FILE NO. 1-8597

THE COOPER COMPANIES, INC.

(Exact name of registrant as specified in its charter)

925-460-3600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x    No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a non-accelerated filer.smaller reporting company. See definitiondefinitions of “large accelerated filer,” “accelerated filerfiler” and large accelerated filer”“smaller reporting company” in Rule 12b-2 of the Exchange Act (check one).

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

On November 30, 2006,2009, there were 44,296,62844,839,464 shares of the registrant’s common stock held by non-affiliates with aggregate market value of $2.4$1.3 billion on April 30, 2006,2009, the last day of the registrant’s most recently completed fiscal second fiscal quarter.

Number of shares outstanding of the registrant’s common stock, as of November 30, 2006: 44,982,8332009: 45,247,674

Documents Incorporated by Reference:

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Annual Report on Form 10-K

for the Fiscal Year Ended October 31, 20062009

Table of Contents

PART I

Forward-Looking Statements

This Annual Report on Form 10-K contains “forward-looking statements” as defined bywithin the Privatemeaning of Section 27A of the Securities Litigation Reform Act of 1995.1934 and Section 21E of the Securities Exchange Act of 1934. These include certain statements about the integration of the Ocular Sciences, Inc. (Ocular) business, our capital resources,relating to plans, prospects, goals, strategies, future actions, events or performance and resultsother statements which are other than statements of operations.historical fact. In addition, all statements regarding anticipated growth in our revenue, CooperVision’s manufacturing restructuring plan, anticipated market conditions, planned product launches and expected results of operations and integration of any acquisition are forward-looking. To identify these statements look for words like “believes,” “expects,” “may,” “will,” “should,” “could,” “seeks,” “intends,” “plans,” “estimates” or “anticipates” and similar words or phrases. Discussions of strategy, plans or intentions often contain forward-looking statements. Forward-looking statements necessarily depend on assumptions, data or methods that may be incorrect or imprecise and are subject to risks and uncertainties. These includeAmong the risk that acquired businesses will not be integrated successfully into CooperVision (CVI) and CooperSurgical (CSI), including the risk that The Cooper Companies, Inc. (“Cooper,” “the Company,” “we” or similar pronouns) may not continue to realize anticipated benefits from its cost-cutting measures and inherent in accounting assumptions made in the acquisitions; the risks that CVI’s new products will be delayed or not occur at all, or that sales will be limited following introduction due to manufacturing constraints or poor market acceptance; risks related to implementation of information technology systems covering the Company’s businesses and any delays in such implementation or other events which could result in management having to report a material weakness in the effectiveness of the Company’s internal control over financial reporting in its 2006 annual report on Form 10-K; risks with respect to the ultimate validity and enforceability of the Company’s patent applications and patents and the possible infringement of the intellectual property of others; and the impact of the NeoSurg Technologies, Inc., Inlet Medical, Inc. and Lone Star Medical Products, Inc. acquisitions on CSI’s and the Company’s revenue, earnings and margins.

Events, among others,factors that could cause our actual results and future actions of the Company to differ materially from those described in forward-looking statements include majorare:

We caution investors that forward-looking statements reflect our analysis only on their stated date. We disclaim any intent to update them except as required by law.

Item 1. Business.

The Cooper Companies, Inc. (Cooper or the Company), a Delaware corporation organized in 1980, develops, manufactures and markets healthcare products, primarily medical devices through its two business units, CooperVision, Inc. (CVI) and CooperSurgical, Inc. (CSI).

CVI develops, manufactures and markets a broad range of contact lenses for the worldwide vision correction market. Its leading products are disposable spherical and specialty contact lenses.

CVI is a leading manufacturer of toric lenses, which correct astigmatism, multifocal lenses for presbyopia (blurring near vision due to advancing age), cosmetic lenses that change or enhance the appearance of the color of the eye and spherical lenses that correct the most common visual defects. CVI’s products are primarily manufactured at its facilities located in the United Kingdom, Puerto Rico, Norfolk, Virginia, and Norfolk, Virginia.Scottsville, New York. CVI distributes products out of Rochester, New York, and the United Kingdom, Liege, Belgium, and various smaller international distribution facilities.

CSI develops, manufactures and markets medical devices, diagnostic products and surgical instruments and accessories used primarily by gynecologists and obstetricians. CSI’s products are primarily manufactured and distributed at its facilityfacilities in Trumbull, Connecticut.Connecticut, Stafford, Texas, and Pasadena, California.

CVI and CSI each operate in highly competitive environments. Competition in the medical device industry involves the search for technological and therapeutic innovations in the prevention, diagnosis and treatment of disease. Both of Cooper’s businesses compete primarily on the basis of product quality and differentiation, technological benefit, service and reliability.

COOPERVISION

We estimate thatcompete in the worldwide soft contact lens market will grow about 5 percent during calendar 2006 to about $4.8 billion annually. Inand service the three primary regions of the Americas, which we estimate is about 41 percent of the worldwide market, we estimate that revenue will grow about 7 percent to $2.0 billion,EMEA (Europe, Middle East and in Europe, which we estimate is about 28 percent of the market, we estimate that revenue will grow about 3 percent to $1.3 billion. We estimate that JapanAfrica) and Asia Pacific countries, about $1.5 billion or 31 percent of the world market, will grow about 3 percent.

including Japan. The contact lens market has two major segments. The spherical lens segment, which we estimate is about $3.6 billion in calendar 2006, includesproduct segments:

In order to achieve comfortable and healthy contact lens wear, products are sold with recommended replacement schedules, otherwise defined as modalities, with the primary modalities being single-use, two-week and monthly.

CVI offers spherical, aspherical, toric, multifocal and toric multifocal lens products in all primary modalities. We estimate that products recommendedthe worldwide market for one day of wear (single-use lenses) account for about 40contact lenses by modality is 34 percent of spherical lens revenue. The specialty lens segment, which we estimate at $1.2 billion in calendar 2006, includes lenses that meet special needs of contact lens patients: toric, cosmeticsingle-use, 39 percent two-week and multifocal lenses. CVI offers both specialty lenses and spherical lenses.

27 percent monthly. To compete successfully in the numerous niches of the contact lens market, companies must offer differentiated products that are priced competitively and manufactured efficiently. CVI believes that it is the only contact lens manufacturer to use three different manufacturing processes to produce its lenses: lathing, cast molding and FIPS,FIPS™, a cost-effective combination of lathing and molding. This manufacturing flexibility provides CVI with competitive advantage by:

disposable sphere and toric lenses and custom toric lenses for patients with a high degree of astigmatism.

In addition, CVI believes that its lenses provide superior comfort through itsthe use of the lens edge technology provided under the patents covered by its Edge Patent License described under “Patents, Trademarks and Licensing Agreements.”

technology. Cooper’s Proclear^® line of spherical, multifocaltoric and toricmultifocal lenses are manufactured with omafilcon A, a material that incorporates a proprietary phosphorylcholine technologyPhosphorylcholine (PC) Technology™ that helps enhance tissue-device compatibility. Proclear^® lenses are the only lenses with FDA clearance for the claim “… may provide improved comfort for contact lens wearers who experience mild discomfort or symptoms relating to dryness during lens wear.” Mild discomfort relating to dryness during lens wear is a condition that often causes patients to discontinue contact lens wear.

The contact lens market has in recent years experienced a shift toward contact lenses made from silicone hydrogel materials. Silicone hydrogel materials supply a higher level of oxygen to the cornea, as measured by the transmissibility of oxygen through a given thickness of material, or “dk/t,” than traditional hydrogel lenses. The use of these materials in contact lenses has grown significantly, and this material is a major product material in the industry. CVI has launched Biofinity^® and Avaira^®, silicone hydrogel spherical contact lens products, in the United States, Europe and Asia Pacific, excluding Japan. We also launched a monthly silicone hydrogel toric lens, under the Biofinity label, in the first calendar quarter of 2009.

In addition to its silicone hydrogel and PC Technology™ product offerings, CVI competes in the contact lens market with its single-use products and with traditional hydrogel products utilizing advanced design technologies.

Contact Lens Product Sales

Spheres:CVI’s spherical lens net sales grew 3 percent in fiscal 2009 with disposable sphere growth of 4 percent and single-use spheres, representing 21 percent of CVI’s soft lens net sales, up 15 percent. CVI’s silicone hydrogel spherical lens net sales for fiscal 2009 were $99.7 million or 11 percent of CVI’s soft lens net sales.

Toric and Multifocal:CVI’s toric lens net sales, representing 31 percent of CVI’s soft lens net sales in fiscal 2009, declined 7 percent, due primarily to a trend in the market toward silicone hydrogel toric lenses. CVI’s newly introduced silicone hydrogel toric lens had sales of $12.4 million. Single-use toric lenses grew 71 percent. Multifocal lens sales grew 7 percent.

Proclear:CVI’s PC Technology products – which consist of spherical, toric and multifocal products, including Biomedics^® XC and Proclear 1 Day – continued market share gains as sales increased 7 percent in fiscal 2009. Proclear toric sales grew 5 percent, Proclear spheres grew 5 percent and Proclear multifocal lenses grew 14 percent.

CVI Fiscal 2009 Net Sales Growth by Geographic Region

We have experienced sales growth in many geographic markets, it is our beliefregions that favorable demographic trends in younger cohorts; an increase in the reported incidence of myopia due in part to the recently described “computer vision syndrome”;we believe will continue and that there will be lower contact lens wearer drop out rates as technology improves andimproves. In addition, we believe that there is a continuing shift in practitioner preferences from low-featured “commodity” lenses to higher-value specialty and single-use lenses supportthat supports a favorable world market outlook, includingoutlook. This includes a trend primarily in the United States, to fitting silicone hydrogel lenses, which, as measured by their “dk/t” score, supply a higher level of oxygen to the cornea than traditional hydrogel lenses.

CVI has yet to develop sufficient manufacturing capabilities to compete in the market for silicone hydrogel lenses, which we estimate accounts for 22 percent or $1 billion of the

CVI’s worldwide contact lens market.

Historically, CVI has shown strength in the specialty lens segments which include toric lenses, cosmetic lenses and multifocal lenses. CVI estimates that specialty lenses currently account for about 25 percent or $1.2 billion of the worldwide contact lens market.

To participate in these market trends, CVI continues to leverage the January 6, 2005, acquisition of Ocular Sciences, Inc. (Ocular) giving it access to new technologies, particularly patented silicone hydrogel and single-use lens technologies, new geographic markets, particularly Japan and Germany, and higher volume manufacturing processes, particularly the Gen II manufacturing platform (Gen II).

With the Ocular acquisition, CVI gained a significant presence in the largest segment of the contact lens market: spherical lenses that correct the most common types of visual defects; near- and farsightedness uncomplicated by more complex visual defects. We estimate that spherical lenses account for about 75 percent of the world market for contact lenses.

Contact Lens Products

CVI’s core product lines include specialty lenses – which are toric, cosmetic and multifocal lenses – plus phosphorylcholine (PC) Technology^™ brand spherical lenses, silicone hydrogel spherical lenses and single-use lenses. Worldwide, CVI’s specialty lens revenuenet sales grew 93 percent in fiscal 20062009 over fiscal 2005. Sales of CVI’s toric lenses, grew 11 percent in fiscal 2006 and now account for about 35 percent

of its soft lens revenue and disposable toric lenses grew 16 percent in fiscal 2006. We estimate that the worldwide toric market will grow about 11 percent in calendar 2006. CVI’s PC Technology™ products – its line of spherical, toric and multifocal products, including Biomedics XC™, that incorporate PC Technology™ – grew 29 percent in fiscal 2006.

We estimate that the market for spherical contact lenses will grow 4 percent worldwide during calendar 2006 driven in part by the acceptance of newer silicone hydrogel lenses. We estimate that worldwide silicone hydrogel revenue will increase about 53 percent to $1.1 billion during calendar 2006, approximately two-thirds of which will be generated in the United States. CVI began a limited launch of its Biofinity™ brand of silicone hydrogel spherical contact lenses in Europe, the United States and selected markets in Asia-Pacific, in fiscal 2006 and continues to develop its manufacturing capabilities to participate in this market. CVI’s reported spherical revenue grew 2 percent in fiscal 2006 to $422.2 million. Single-use sphere revenue grew 21 percent in fiscal 2006 and now represents 12 percent of CVI’s soft lens revenue.

In addition to growing Biofinity™ manufacturing capacity, capabilities and sales, CVI continues to compete against silicone hydrogel products with its PC Technology™ and single-use products, and with traditional hydrogel products utilizing advanced design technologies.

CVI Fiscal 2006 Revenue Growth by Geographic Segment

CVI’s worldwide revenue grew 5 percent in fiscal 2006 over fiscal 20052008 with the Americas region up 3 percent and now representing 4843 percent of itsCVI’s fiscal 2009 worldwide revenue; Europenet sales, up 9 percent and1 percent; EMEA representing 3738 percent of its worldwide revenuenet sales, up 2 percent; and the Asia-PacificAsia Pacific region up 4 percent and representing 1519 percent of its worldwide revenue.net sales, up 12 percent.

Americas

We estimate the Americas revenue growth slowed due to a 1region by modality is 12 percent decline in spherical revenue in fiscal 2006 over fiscal 2005 caused primarily by a market shift to silicone hydrogel spherical lenses. Overall revenuesingle-use, 63 percent two-week and 25 percent monthly. CVI Americas net sales growth was driven by sales of our silicone hydrogel spherical and toric lenses, which grew 6Biofinity and Avaira, totaling $65.9 million, a 7 percent increase in sales of PC Technology lenses and multifocal lenses, which grew 34all single-use spherical and toric lens sales increasing 41 percent.

EuropeEMEA

European revenueWe estimate the EMEA region by modality is 38 percent single-use, 12 percent two-week and 50 percent monthly. EMEA net sales growth was driven by sales of silicone hydrogel spherical and toric lenses which grew 20totaling $41.5 million, a 4 percent increase in fiscal 2006 over fiscal 2005,PC Technology lens sales, and all single-use lenses, which grew 29 percentspherical and multifocal lenses, which grew 38toric lens sales increasing 5 percent. CVI estimates that it is the second largest contact lens supplier in Europe, with direct business units in France, Germany, Holland, Hungary, Italy, the Netherlands, Norway, Portugal, Spain, Sweden Switzerland and the United Kingdom.

Asia Pacific

Japan isWe estimate the second largest contact lens market in the world after the United States, and soft lens popularity continues to grow. CVI estimates that the total market for soft contact lenses in Japan and the Pacific Rim today is about $1.5 billion, compared to an estimated $2.0 billion in the Americas. The Japanese market is largely made up of single-use lenses, which we estimate represents about 57 percent of the market.

We believe that the incidence of nearsightedness in Japan is one of the highest in the world and based on our experience about half of those with astigmatism are potential candidates for toric lenses. We

expect that the Japanese toric segment, currently a smaller percentage of the total market than it is in the United States, will grow rapidly as newer generations of toric lenses are introduced.

Asia Pacific revenueregion by modality is 54 percent single-use, 31 percent two-week and 15 percent monthly. Asia Pacific net sales growth was driven by sales of single-use product, which grew 18spherical and toric lenses up 20 percent and a 96 percent increase in fiscal 2006 over fiscal 2005 and represented 54 percent of CVI’s sales in Japan.Biofinity spherical lenses.

CVI Competition

A number of manufacturers competeThe contact lens market is highly competitive. CVI’s three largest competitors in the worldwide market for contact lenses. CVI’s three largestand its primary competitors in the spherical, toric and multifocal lens segments of that market are Johnson & Johnson’s Vistakon division (Vistakon)Johnson Vision Care, Inc., CIBA Vision (owned by Novartis AG) and Bausch & Lomb Incorporated.

The contact lens market is highly competitive. CVI’s primary competitors in the spherical lens market are Bausch & Lomb, CIBA Vision and Vistakon. Recent trends in themarketing spherical lens marketlenses include a shift towardstoward silicone hydrogel lenses, primarily in the United States, Europe and Japan, and toward single-use lenses. CVI’s primary competitors currently control almost allthe majority of the silicone hydrogel segment of the market. CVI is taking market asshare with its monthly and two-week spherical lens offerings, but its share is still lagging due to the late entry of these products into the market. In Japan, CVI continuesdoes not have regulatory approval to develop itssell a silicone hydrogel manufacturing capabilities. Siliconeproduct and only has the rights to market or sell its current two-week silicone hydrogel products, while essential to CVI’s long-term success, are not expected to begin to contribute revenue growth until the second half of 2007.products.

In the specialtytoric lens market, CVI’s primary toric competitors are Bausch & Lomb and Vistakon. Toric lens manufacturers compete to provide the highest possible level of visual acuity and patient satisfaction by offering a wide range of lens parameters, superior wearing comfort and a high level of customer service, both for patients and contact lens practitioners. CVI believes that its three manufacturing processes yield a wider range of toric lens parameters than its competitors, providing greater choices for patient and practitioner and better visual acuity, and that it offers superior customer services, including high standards of on-time product delivery. However, there is a developing trend in the U.S.United States toric lens market toward silicone hydrogel products. CVI has not

launched a monthly silicone hydroge1 producthydrogel toric lens, under the Biofinity label, in the first calendar quarter of 2009 and does not expectplans to do so until late calendar 2007launch a two-week silicone hydrogel toric, under the Avaira label, in fiscal year 2010 that will allow us to early calendar 2008.compete in this market shift to silicone hydrogel torics.

CVI’s major competitors have greater financial resources and larger research and development budgets and sales forces. Nevertheless, CVI offers a high level of customer service through its direct sales organizations around the world and through telephone sales and technical service representatives who consult with eye care professionals about the use of the Company’s lens products. CVI believes that its sales force is particularly well equipped, through extensive training, to meet the needs of contact lens practitioners and their customers.

CVI also competes with manufacturers of eyeglasses and with refractive surgical procedures that correct visual defects. CVI believes that it will continue to compete favorably against eyeglasses, particularly in markets where the penetration of contact lenses in the vision correction market is low, offering lens manufacturers an opportunity to gain market share. CVI also believes that laser vision correction is not a material threat to its sales of contact lenses because each modality serves a different age group. CVI believes that almost all new contact lens wearers are in their teens or twenties, while refractive surgery patients are typically in their late thirties or early forties when their vision has stabilized.

COOPERSURGICAL

Since its beginning in 1990, CSI has successfully established a leading position among companies providing medical device products to the obstetrics and gynecology medical specialty. Historically, many small medical device companies have supplied the women’s healthcare market with a wide range of products through a fragmented distribution system. CSI’s strategy ishas been and continues to be to identify and acquire selected smaller companies and product lines that will improve its existing market position or serve new clinical areas.

In November 2006, CSI acquired Lone Star Medical Products, Inc. (Lone Star) advancing its expansion into the hospital segment of women’s healthcare. This acquisition complements the 2005 acquisitions of Inlet Medical, Inc. (Inlet) and NeoSurg Technologies, Inc. (NeoSurg) which also address the surgical market. See “Profiles of Recent Acquisitions” below.

Since its beginning in 1990, CSI has successfully established a leading position among companies providing medical device products to the obstetrics and gynecology medical specialty. Since then, CSI has grown to over $120$170.9 million in revenuenet sales both organically and through a series of more than 2025 acquisitions. During the past five years, CSI’s revenuenet sales grew at a compounded rate of 1611 percent with double-digit operating margins excluding restructuring costs and minimal capital expenditure requirements. Cooper’s strong cash flow allows CSI to readily compete for available opportunities in both the office and hospital markets.

Market for Women’s Healthcare

Based on U.S.United States Census estimates, CVICSI expects patient visits to United States obstetricians and gynecologists (Ob/Gyns) to increase over the next decade. Driving this growth is a large group of women of childbearing age and a rapidly growing middle-aged population with emerging gynecologic concerns. Consistent with an aging population, menopausal problems – abnormal bleeding, incontinence and osteoporosis – are expected to increase, while pregnancy, contraceptive management and general

examinations are expected to remain relatively stable. The trend toward delaying the age of childbearing to the mid-thirties and beyond will likely drive increasing treatment for infertility.

While general medical practitioners play an important role in women’s primary care, the Ob/Gyn specialist is the primary market for associated medical devices.

Some significant features of this market are:

CSI’s 2006 Revenue2009 Net Sales Growth

During 2006, CSI revenue2009, CSI’s net sales grew 152 percent to $124.8$170.9 million from $168.3 million in 2008, representing 1516 percent of Cooper’s revenue. Its operating margin was 12 percent for the fiscal year, including a $7.5 million or 6% charge for acquired in-process researchnet sales in both periods. Fiscal 2009 sales of products marketed directly to hospitals grew 14% and development, compared to last year’s 16 percent.represent 33% of CSI’s total net sales.

CSI Competition

CSI focuses on selected segments of the women’s healthcare market, supplying high quality diagnostic products and surgical instruments and accessories. In some instances, CSI offers all of the items

needed for a complete procedure. The market segments in which CSI competes remains fragmented, typified by smaller technology-driven firms that generally offer only one or two product lines. Most are privately owned or divisions of public companies including some owned by companies with greater financial resources than Cooper.

Competitive factors in these segments include technological and scientific advances, product quality, price, customer service and effective communication of product information to physicians and hospitals. CSI believes that it competes successfully against these companies with its superior sales and marketing and the technological advantages of its products, andas well as by developing and acquiring new products, including those used in new medical procedures. As CSI expands its product line, it also offers to traintraining for medical professionals in theirthe appropriate use.use of its products.

CSI is expanding its presence in the significantly larger hospital and outpatient surgical procedure market. Thissegment of the market that is dominated by larger competitors such as Johnson & Johnson’s Ethicon Endo-Surgery and Ethicon Women’s Health and Urology companies, Boston Scientific and Gyrus and ACMI. These competitors have well established positions within the operating room environment. CSI believes its relationship with gynecologic surgeons and focus on devices specific to gynecologygynecologic surgery will facilitate in its successful expansion within the surgical market.

PROFILES OF RECENT ACQUISITIONS

Ocular Sciences, Inc.

On January 6, 2005, Cooper acquired allsegment of the outstanding common stock of Ocular, a global manufacturer and marketer of soft contact lenses, primarily spherical and daily disposable contact lenses that are brand and product differentiated by distribution channel. The aggregate consideration paid for the stock of Ocular was about $1.2 billion plus transaction costs. Cooper paid $605 million in cash and issued approximately 10.7 million shares of its common stock to Ocular stockholders and option holders. Under the terms of the acquisition, each share of Ocular common stock was converted into the right to receive 0.3879 of a share of Cooper common stock and $22.00 in cash without interest, plus cash for fractional shares. Outstanding Ocular stock options were redeemed in exchange for a combination of cash and Cooper stock for the spread between their exercise prices and the value of the merger consideration immediately prior to closing.

Inlet Medical, Inc.

On November 1, 2005, Cooper purchased Inlet, a manufacturer of trocar closure systems and pelvic floor reconstruction procedure kits. Inlet offers a cost-effective trocar wound closure system and supplies procedure kits for the treatment of pelvic support problems. We paid $25.8 million in cash for Inlet and anticipate paying an additional amount of approximately $12.3 million related to an earn-out provision in the agreement based on revenue and operating profit achievements through October 31, 2006.

NeoSurg Technologies, Inc.

On November 21, 2005, Cooper acquired NeoSurg for $21.6 million in cash. NeoSurg has developed a patented combination reusable and disposable trocar access system to compete in the market for trocars, which we estimate is $285 million within the estimated $2.9 billion market for laparoscopic surgical devices.

CSI introduced the redesigned NeoSurg product line of reusable and disposable trocar access systems used in laparoscopic surgery to gynecologists in November 2006. CSI believes that NeoSurg’s technology will offer surgeons a superior product to existing disposable trocars while giving hospital

and surgery centers the opportunity to realize significant cost reduction. The small disposable tips used in the NeoSurg system can significantly reduce hospital costs compared to existing systems offered by competitors.

Lone Star Medical Products, Inc.

On November 2, 2006, CSI acquired all of the outstanding shares of Lone Star for $27.2 million in cash. Lone Star is a manufacturer of medical devices that improve the management of the surgical site, most notably theLone Star Retractor System, which places a retraction ring around the surgical incision providing greater exposure of the surgical field. While this system is used in a wide variety of surgical procedures, gynecological surgery represents 40% of its use and urology 30%.market.

RESEARCH AND DEVELOPMENT

Cooper employs 107149 people in its research and development and manufacturing engineering departments, primarily in CVI. External specialists in lens design, formulation science, polymer chemistry, microbiology and biochemistry support product development and clinical research for CVI products. CVI’s research and development activities include programs to develop silicone hydrogel products, product lines utilizing PC Technology™Technology and expansion of single-use product lines. CSI conducts research and development in-house and also employs external surgical specialists, including members of its surgical advisory board. CSI’s fiscal 2009 research and development activities were for newly acquired laparoscopic surgical devices and for upgradingthe upgrade and redesign of many CSI osteoporoses, in-vitro fertilization,existing incontinence, and assisted reproductive technology products and other obstetrical and gynecological product development activities.uterine manipulation products.

Cooper-sponsored research and development expenditures during the fiscal years ended October 31, 2006, 20052009, 2008 and 20042007 were $27$30.3 million, – excluding a write-off$35.5 million and $32.7 million, net of $7.5 million of purchasedacquired in-process research and development related to NeoSurg, $22.9of $3.0 million – excluding a write-off of $20in 2009 and $7.2 million of purchased in-processin 2007. Net research and development related to Ocular – and $6.5 million, respectively, representingexpenditures represented 3%, 3% and 1% of net sales in each fiscal year. During fiscal 2006,2009, CVI represented 87% and CSI represented 13% of the total expenditures, net of acquired in-process research and development.expenditures. We did not participate in any customer-sponsored research and development programs.

GOVERNMENT REGULATION

Medical Device Regulation

Our products are medical devices subject to extensive regulation by the United States Food and Drug Administration (FDA) in the United States and other regulatory bodies abroad. FDA regulations govern, among other things, medical device design and development, testing, manufacturing, labeling, storage, recordkeeping, premarket clearance or approval, advertising and promotion, and sales and distribution. Unless an exemption applies, each medical device we wish to commercially distribute in the United States will require either prior 510(k) clearance or prior premarket approval (PMA) from the FDA. A majority of the medical devices we currently market have received FDA clearance through the 510(k) process or approval through the PMA process. Because we cannot be assured that any new products we develop, or any product enhancements, will be subject to the shorter 510(k) clearance process, significant delays in the introduction of any new products or product enhancements may occur. For example, to qualify our new silicone hydrogel contact lens products for extended wear use, we believe that more extensive premarket testing and approval would be required.

Device Classification

The FDA classifies medical devices into one of three classes – Class I, II or III – depending on the degree of risk associated with each medical device and the extent of control needed to ensure its safety

and effectiveness. Both CVI and CSI develop and market medical devices under different levels of FDA regulation depending on the classification of the device. Class III devices, such as flexible and extended wear contact lenses, require extensive premarket testing and approval, while Class I and II devices require substantially lower levels of regulation. The majority of CSI’s products are Class II devices.

Class I devices are those for which safety and effectiveness can be assured by adherence to the FDA’s general regulatory controls for medical devices, which include compliance with the applicable portions of the FDA’s Quality System Regulation, facility registration and product listing, reporting of adverse medical events, and appropriate, truthful and non-misleading labeling, advertising, and promotional materials (General Controls). Some Class I devices also require premarket clearance by the FDA through the 510(k) premarket notification process described below.

Class II devices are subject to the FDA’s General Controls, and any other special controls as deemed necessary by the FDA to ensure the safety and effectiveness of the device. Premarket review and clearance by the FDA for Class II devices is accomplished through the 510(k) premarket notification procedure. Pursuant to the Medical Device User Fee and Modernization Act of 2002 (MDUFMA), as of October 2002 unless a specific exemption applies, 510(k) premarket notification submissions are subject to user fees. Certain Class II devices are exempt from this premarket review process.

Class III devices are those devices which have a new intended use, or use advanced technology that is not substantially equivalent to that of a legally marketed device. The safety and effectiveness of Class

III devices cannot be assured solely by the General Controls and the other requirements described above. These devices almost always require formal clinical studies to demonstrate safety and effectiveness and must be approved through the premarket approval process described below. Premarket approval applications (and supplemental premarket approval applications) are subject to significantly higher user fees under MDUFMA than are 510(k) premarket notifications.

510(k) Clearance Pathway

When we are required to obtain a 510(k) clearance for a device that we wish to market, we must submit a premarket notification to the FDA demonstrating that the device is substantially equivalent to a previously cleared 510(k) device or a device that was in commercial distribution before May 28, 1976, for which the FDA has not yet called for the submission of premarket approval applications. By regulation, the FDA is required to respond to a 510(k) premarket notification within 90 days of submission of the notification. As a practical matter, clearance can take significantly longer. If the FDA determines that the device, or its intended use, is not substantially equivalent to a previously-cleared device or use, the FDA will place the device, or the particular use of the device, into Class III.

After a device receives 510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that changes its intended use, will require a new 510(k) clearance or could require premarket approval. The FDA requires each manufacturer to make this determination initially, but the FDA can review any such decision and can disagree with a manufacturer’s determination. If the FDA disagrees with a manufacturer’s determination that a new clearance or approval is not required for a particular modification, the FDA can require the manufacturer to cease marketing and/or recall the modified device until 510(k) clearance or premarket approval is obtained. Also, in these circumstances, wea manufacturer may be subject to significant regulatory fines or penalties. We have made and plan to continue to make additional product enhancements and modifications to our devices that we believe do not require new 510(k) clearances.

Premarket Approval Pathway

A PMA application must be submitted if the device cannot be cleared through the 510(k) premarket notification procedures. The PMA process is much more demanding than the 510(k) premarket notification process. A PMA application must be supported by extensive data including, but not limited to, technical, preclinical, clinical trials, manufacturing and labeling to demonstrate to the FDA’s satisfaction the safety and effectiveness of the device.

After a PMA application is complete, the FDA begins an in-depth review of the submitted information. The FDA, by statute and regulation, has 180 days to review an accepted PMA application, although the review generally occurs over a significantly longer period of time, and can take up to several years. During this review period, the FDA may request additional information or clarification of information already provided. Also during the review period, an advisory panel of experts from outside the FDA may be convened to review and evaluate the application and provide recommendations to the FDA as to the approvability of the device. In addition, the FDA will conduct a preapproval inspection of the manufacturing facility to ensure compliance with the Quality System Regulation (QSR). New PMA applications or PMA application supplements are required for significant modifications to the manufacturing process, labeling and design of a device that is approved through the premarket approval process. Premarket approval supplements often require submission of the same type of information as a premarket approval application, except that the supplement is limited to information needed to support any changes from the device covered by the original premarket approval application, and may not require as extensive clinical data or the convening of an advisory panel.

Clinical Trials

A clinical trial is almost always required to support a PMA application and is sometimes required for a 510(k) premarket notification. These trials generally require submission of an application for an investigational device exemption (IDE) to the FDA. The IDE application must be supported by appropriate data, such as animal and laboratory testing results, showing that it is safe to test the device in humans and that the testing protocol is scientifically sound. The IDE application must be approved in advance by the FDA for a specified number of patients, unless the product is deemed a non-significant risk device and eligible for more abbreviated investigational device exemption requirements. Clinical trials for a significant risk device may begin once the IDE application is approved by both the FDA and the appropriate institutional review boards at the clinical trial sites. All of Cooper’s currently marketed products have been cleared by all appropriate regulatory agencies, and Cooper has no product currently being marketed under an IDE.

Continuing FDA Regulation

After a device is placed on the market, numerous regulatory requirements apply. These include: the QSR, which requires manufacturers to follow design, testing, control, documentation and other quality assurance procedures during the manufacturing process; labeling regulations, which prohibit the promotion of products for unapproved or “off-label” uses and impose other restrictions on labeling; and medical device reporting regulations, which require that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur. The FDA has broad post-market and regulatory enforcement powers. We are subject to unannounced inspections by the FDA to determine our compliance with the QSR and other regulations.

Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include any of the following sanctions: fines, injunctions and civil penalties; recall,

seizure or seizureimport holds of our products; operating restrictions, suspension of production; refusing our request for 510(k) clearance or premarket approval of new products; withdrawing 510(k) clearance or premarket approvals that are already granted;granted and criminal prosecution.

Even if regulatory approval or clearance of a medical device is granted, the FDA may impose limitations or restrictions on the uses and indications for which the device may be labeled and promoted. Medical devices may be marketed only for the uses and indications for which they are cleared or approved. FDA regulations prohibit a manufacturer from promoting a device for an unapproved or “off-label” use. Failure to comply with this prohibition on “off-label” promotion could result in enforcement action by the FDA, including, among other things, warning letters, fines, injunctions, consent decrees and civil or criminal penalties.

Foreign Regulation

Health authorities in foreign countries regulate Cooper’s clinical trials and medical device sales. The regulations vary widely from country to country. Even if the FDA has approved a product, the regulatory agencies in each country must approve new products before they may be marketed there.

These regulatory procedures require a considerable investment in time and resources and usually result in a substantial delay between new product development and marketing. If the Company does not maintain compliance with regulatory standards or if problems occur after marketing, product approval may be withdrawn.

In addition to FDA regulatory requirements, the Company also maintains ISO 9000 certification and CE mark approvals for its products. A CE mark is an international symbol of adherence to certain standards and compliance with applicable European medical device requirements. These quality programs and approvals are required by the European Medical Device Directive and must be maintained for all products intended to be sold in the European market. In order to maintain these quality benchmarks, the Company is subjected to rigorous biannual reassessment audits of its quality systems and procedures.

Other Health Care Regulation

We may be subject to various federal, state and foreign laws pertaining to healthcare fraud and abuse, including anti-kickback laws and physician self-referral laws. Violations of these laws are punishable by criminal and civil sanctions, including, in some instances, exclusion from participation in federal and state healthcare programs, including Medicare, Medicaid, Veterans Administration health programs and TRICARE. Similarly if the physicians or other providers or entities with whom we do business are found to be noncompliant with applicable laws, they may be subject to sanctions, which could indirectly have a negative impact on our business, financial conditions and results of operations. While we believe that our operations are in material compliance with such laws, because of the complex and far-reaching nature of these laws, there can be no assurance that we would not be required to alter one or more of our practices to be in compliance with these laws. In addition, health care reform proposals have been formulated by the legislative and administrative branches of the federal and state governments. Additionally, there may also be changes that could affect coverage and reimbursement for our products from governmental and other third-party payors. These changes could affect our business, revenues, profitability and results of operations. If there is a change in law, regulation or administrative or judicial interpretation, we may have to change our business practices or our existing business practices could be challenged as unlawful.

Anti-Kickback and Fraud LawsLaw

Our operations may be subject to federal and state anti-kickback laws. Certain provisions of the Social Security Act,The federal anti-kickback statutes, which are commonly known collectively as the Medicare Fraud and Abuse Statute,

prohibit persons from knowingly and willfully soliciting, receiving, offering or providing remuneration directly or indirectly to induce either the referral of an individual, or the furnishing, recommending or arranging for a good or service for which payment may be made under a federal healthcare program such as Medicare and Medicaid. The definition of “remuneration” under this statute has been broadly interpreted to include anything of value, including such items as gifts, discounts, waiver of payments and providing anything at less than its fair market value. ManyWhile we believe most sales of our products are not subject to the federal anti-kickback statutes, many states have adopted prohibitions similar to the Medicare Fraud and Abuse Statute,federal anti-kickback statutes, some of which apply to the referral of patients for healthcare services reimbursed by any source, not only by the Medicare and Medicaid programs.

TheIn addition to establishing federal privacy, security and transaction standards, the Federal Health Insurance Portability and Accountability Act of 1996, (HIPAA)or HIPAA, created two new prohibitions on: healthcare fraud and false statements relating to healthcare matters.abuse laws. The healthcare fraud statute prohibits knowingly and willfully executing or attempting to execute a scheme or artifice to defraud any healthcare benefit program, including private payers.payors. The false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement or representation in connection with the delivery of or payment for healthcare benefits, items or services. This statute applies to any health benefit plan, not just Medicare and Medicaid. Additionally, HIPAA granted expanded enforcement authority to the U.S. Department of Health and Human Services (HHS) and the U.S. Department of Justice (DOJ) and provided enhanced resources to support the activities and responsibilities of the Office of Inspector General (OIG) and DOJ by authorizing large increases in funding for investigating fraud and abuse violations relating to healthcare delivery and payment. In addition, HIPAA mandates the adoption of standards for the electronic exchange of health information.

Physician Self-Referral Laws

We may also be subject to federal and state physician self-referral laws. Federal physician self-referral legislationThe federal Ethics in Patient Referral Act of 1989 (commonly known as the Stark Law) prohibits, subject to certain exceptions, physician referrals of Medicare and Medicaid patients to an entity providing certain “designated health services” if the physician or an immediate family member has any financial relationship with the entity. The Stark Law also prohibits the entity receiving the referral from billing any good or service furnished pursuant to an unlawful referral, and any person collecting any amounts in connection with an unlawful referral is obligated to refund such amounts. Various states have corollary laws to the Stark Law, including laws that require physicians to disclose any financial interest they may have with a healthcare provider to their patients when referring patients to that provider. Both the scope and exceptions for such laws vary from state to state.

False Claims Laws

Under separate statutes, submission of claims for payment or causing such claims to be submitted that are “not provided as claimed” may lead to civil money penalties, criminal fines and imprisonment, and/or exclusion from participation in Medicare, Medicaid and other federally fundedand/or federally-funded state health programs. These false claims statutes include the federal False Claims Act, which prohibits the knowing filing of a false claim or the knowing use of false statements to obtain payment from the federal government. When an entity is determined to have violated the False Claims Act, it must pay three times the actual damages sustained by the government, plus mandatory civil penalties of between $5,500 and $11,000 for each separate false claim. Suits filed under the False Claims Act, known as “qui tam” actions, can be brought by any individual on behalf of the government and such individuals (known as “relators” or, more commonly, as “whistleblowers”) may share in any amounts paid by the entity to the government in fines or settlement. In addition, certain states have enacted laws modeled

after the federal False Claims Act. Qui tam actions have increased significantly in recent years causing greater numbers of healthcare companies to have to defend a false claim action, pay fines or be excluded from the Medicare, Medicaid or other federal or state healthcare programs as a result of an investigation arising out of such action.

RAW MATERIALS

CVI’s raw materials primarily consist of various chemicals and packaging materials. Therematerials and are alternative supply sources for all of our raw materials othergenerally available from more than our silicone hydrogel material.one source. Asahikasei Aime Co. Ltd. (Asahi) is our sole supplier of the primary material used to make our silicone hydrogel contact lens products, comfilcon A. If Asahi fails to supply sufficient material on a timely basis or at all for any reason, we may suffer a disruption in the supply of our silicone hydrogel contact lens products and may need to switch to an alternative supplier in accordance with our agreement with Asahi.

Raw materials used by CSI are generally available from more than one source. However, because some products require specialized manufacturing procedures, we could experience inventory shortages if we were required to use an alternative supplier on short notice.

MARKETING AND DISTRIBUTION

In the United States, CVI markets its products through its field sales representatives, who call on optometrists, ophthalmologists, opticians, optical chains and distributors. CVI augments its U.S.United States sales and marketing efforts with e-commerce, telemarketing and advertising in professional journals. In

Australia, Brazil, Canada, China, France, Germany, Holland, Hungary, Italy, Japan, Korea, Malaysia, Norway, Portugal, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan and the United Kingdom, CVI primarily markets its products through its field sales representatives. In other countries, CVI uses distributors and has given some of them the exclusive right to market its products.

CSI’s products are marketed by a network of field sales representatives and distributors. In the United States, CSI augments its sales and marketing activities withby participating in national and regional industry tradeshows and using e-commerce, telemarketing, direct mail and advertising in professional journals.

PATENTS, TRADEMARKS AND LICENSING AGREEMENTS

Cooper owns or licenses a variety of domestic and foreign patents, which, in total, are material to its overall business. The names of certain of Cooper’s products are protected by trademark registrations in the United States Patent and Trademark Office and, in some cases, also in foreign trademark offices. Applications are pending for additional trademark and patent registrations. Cooper aggressively protects its intellectual property rights.

No individual patent or license is material to the Company or either of its principal business units other than:

products (both spherical and toric lenses) that are manufactured using a cast molding technology in the CVI’s Hamble, England, Norfolk, Virginia and Juana Diaz, Puerto Rico, facilities.

In addition to trademarks and patent licenses, the Company owns certain trade secrets, copyrights, know-how and other intellectual property.

DEPENDENCE ON CUSTOMERS

Neither of our business units depends to any material extent on any one customer or any one affiliated group of customers.

GOVERNMENT CONTRACTS

Neither of our business units is materially subject to profit renegotiation or termination of contracts or subcontracts at the election of the United States government.

BACKLOG

Backlog is not a material factor in either of Cooper’s business units.

SEASONALITY

CVI’s contact lens sales in its fiscal first fiscal quarter, which runs from November 1 through January 31, are typically lower than subsequent quarters, as patient traffic to practitioners’ offices is relatively light during the holiday season.

COMPLIANCE WITH ENVIRONMENTAL LAWS

Federal, state and local provisions that regulate the discharge of materials into the environment, or relate to the protection of the environment, do not currently materially affect Cooper’s capital expenditures, earnings or competitive position.

WORKING CAPITAL

Cooper has not required any material working capital arrangements in the past five years.

FINANCIAL INFORMATION ABOUT BUSINESS SEGMENTS, GEOGRAPHIC AREAS, FOREIGN OPERATIONS AND EXPORT SALES

The information required by this item is included in Note 13.14. Business Segment Information of our Financial Statements and Supplementary Data and Item 1A. Risk Factors – Risks Relating to Our Business, included in this report.

EMPLOYEES

On October 31, 2006,2009, the Company had about 7,5006,600 employees. The Company believes that its relations with its employees are good.

NEW YORK STOCK EXCHANGE CERTIFICATION

We submitted our 20062009 annual Section 12(a) CEO certification with the New York Stock Exchange. The certification was not qualified in any respect. Additionally, we filed with the Securities and Exchange Commission as exhibits to ourthis Annual Report on Form 10-K for the year ended October 31, 2006,2009, the CEO and CFO certifications required under Section 302 of the Sarbanes-Oxley Act of 2002.

AVAILABLE INFORMATION

The Cooper Companies, Inc. Internet address is http://www.coopercos.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, along with all other reports and amendments filed with or furnished to the Securities and Exchange Commission (SEC), are publicly available free of charge on our Web site as soon as reasonably practicable. The public may read and copy these materials at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains a Web site that contains such reports, proxy and information statements and other information whose Internet address is http://www.sec.gov. The Company’s Corporate Governance Principles, Ethics and Business Conduct Policy and charters of each standing committee of the Board of Directors are also posted on the Company’s Web site. The information on the Company’s Web site is not part of this or any other report we file with, or furnish to, the SEC.

Item 1A.Risk Factors.

Our business faces significant risks. These risks include those described below and may include additional risks and uncertainties not presently known to us or that we currently deem immaterial. Our business, financial condition and results of operations could be materially adversely affected by any of these risks, and the trading prices of our common stock or convertible debentures could decline. These risks should be read in conjunction with the other information in this report.

Risks Relating to Our Business

We operate in the highly competitive healthcare industry and there can be no assurance that we will be able to compete successfully.

Each of our businesses operates within a highly competitive environment. In our soft contact lens segment, CVI faces intense competition from competitors’ products, in particular silicone hydrogel contact lenses, and may face increasing competition as other new products enter the market. Our major competitors in the contact lens business, Johnson & Johnson Vision Care, Inc., CIBA Vision (owned by Novartis AG) and Bausch & Lomb, have substantially greater financial resources, larger research and development budgets, larger sales forces, greater market penetration and larger manufacturing volumes than CVI.

Our major competitors in the specialty contact lens business offer competitive products and newer materials, plus a variety of other eye care products including lens care products and ophthalmic pharmaceuticals, which may give them a competitive advantage in marketing their lenses. Moreover, silicone hydrogel lenses are gaining market acceptance in the specialty lens business, particularly in the U.S., and while we are not yet able to manufacture and markethave recently introduced our own competitive silicone hydrogel specialty product, our late introduction of this product versus competitive products which could erodemay not be sufficient to prevent erosion of our specialty lens market share and margins.

The market for our non-specialty, commodity contact lenses is also intensely competitive and is characterized by declining sales volumes for older product lines and growing demand for silicone hydrogel based products. Our ability to respond to these competitive pressures will depend on our ability to decrease our costs and maintain gross margins and operating results and to successfully introduce new products, including our own silicone hydrogel products, on a timely basis in markets such as the United States, Europe and Japan, and to achieve manufacturing efficiencies and sufficient manufacturing capacity and capabilities for such products. Any significant decrease in our costs per lens will depend, in part, on our ability to increase sales volume and production capabilities and/or convert certain high volume production onto our Gen II manufacturing platform (Gen II).capabilities. Our failure to respond to competitive pressures in a timely manner could have a material adverse effect on our business, financial condition and results of operations.

To a lesser extent, CVI also competes with manufacturers of eyeglasses and providers of other forms of vision correction including ophthalmic surgery.

There can be no assurance that we will not encounter increased competition in the future, or that a successful entry intoour competitors’ newer specialty lens products will not successfully erode CVI’s higher-margin specialty lens segments by a larger competitor would notbusiness, which could have a material adverse effect on our business, financial condition orand results of operations.

In the women’s healthcare segment, competitive factors include technological and scientific advances, product quality, price and effective communication of product information to physicians and hospitals. CSI competes with a number of manufacturers in each of its niche markets,areas, some of which have

substantially greater financial and personnel resources and sell a much broader range of products, which may give them an advantage in marketing competitive products.

Current market conditions and recessionary pressures in one or more of our markets could impact our ability to grow our business.

In the United States and globally, current market and economic conditions have been unprecedented and challenging with tighter credit conditions and slower economic growth. The U.S. economy has been in a recession for the past two years and faces continued concerns about the systemic impacts of adverse economic conditions such as inflation, energy costs, geopolitical issues, the availability and cost of credit, and an unstable real estate market. Countries globally are affected by similar systemic impacts. We continue to experience slower than historical growth in contact lens sales, particularly in the U.S. and continue to have lower than historical expectations for market growth in 2010.

As a result of these market conditions, the cost and availability of credit has been and may continue to be adversely affected by illiquid credit markets and wider credit spreads. Continued turbulence in the United States and international market and economic conditions may adversely affect our liquidity and financial condition, and the liquidity and financial condition of our customers. If these market conditions continue, they may limit our ability, and the ability of our customers, to timely replace maturing liabilities and to access the capital markets to meet liquidity needs, which could have a material adverse effect on our financial condition and results of operations.

If current market conditions do not improve, the demand for contact lenses may materially decrease, which could have a material adverse effect on our business.

Product innovations are important in the industry in which we operate, and we face the risk of product obsolescence.

Product innovations are important in the contact lens business in which CVI competes and in the niche areas of the healthcare industry in which CSI competes. Historically, we did not allocate substantial resources to new product development, but rather purchased, leveraged or licensed the technology developments of others. With the acquisition of Ocular,However, since 2005, we arehave been investing more in new product development, including the development of silicone hydrogel-based contact lenses. Although our focus is on products that will be marketable immediately or in the short to medium term rather than on funding longer-term, higher risk research and development projects, time commitments, the cost of obtaining necessary regulatory approval and other costs related to product innovations can be substantial. There can be no assurance that we will successfully obtain necessary regulatory approvals or clearances for our new products or that our new products will successfully compete in the marketplace and, as a result, justify the expense involved in their development and regulatory approval. In addition, our competitors may have developed or may in the future develop new products or technologies that could lead to the obsolescence of one or more of our products. Competitors may also introduce new uses for contact lenses, such as for drug delivery or the control of myopia. Failure to stay current with our competitors with regard todevelop new product offerings and technological changes and to offer products that provide performance that is at least comparable to competing products could have a material adverse effect on our business, financial condition, or results of operations.

If our products are not accepted by the market, we will not be able to sustain or expand our business.

Certain of our proposed products have not yet been clinically tested or commercially introduced, and we cannot assure you that any of them, assuming they receive necessary regulatory approvals, will achieve market acceptance or generate operating profits. WeIn addition, we have not commercially marketed many of our planned new products, such as certain of our plannedbeen slower to introduce silicone hydrogel specialty contact lens products and new contact lens products containingthan our patented PC Technology™ and have limited manufacturing capabilities for our silicone hydrogel product recently launched on a limited basis for sale in Europe, the United States and select Asia-Pacific markets.competitors. Market acceptance and customer demand for these products are uncertain. The development of a market for our products may be influenced by many factors, some of which are out of our control, including:

New medical and technological developments may reduce the need for our products.

Technological developments in the eye care and women’s healthcare industries, such as new surgical procedures or medical devices, may limit demand for our products. Corneal refractive surgical procedures such as Lasik surgery and the development of new pharmaceutical products may decrease

the demand for our optical products. If these new advances were to provide a practical alternative to traditional vision correction, the demand for contact lenses and eyeglasses may materially decrease. We cannot assure that medical advances and technological developments will not have a material adverse effect on our businesses.

Our substantial and expanding international operations are subject to uncertainties which could affect our operating results.

A significant portion of our current operations isfor CVI are conducted and located outside the United States, and our growth strategy involves expanding our existing foreign operations and entering into new foreign jurisdictions. We have significant manufacturing and distribution sites in North America and Europe. Approximately 50%63% and 49%62% of our net sales for CVI for the years ended October 31, 20062009 and 2005,2008, respectively, were derived from the sale of products outside the United States. Further, we believe that sales outside the United States will continue to account for a material portion of our total net sales for the foreseeable future. International operations and business expansion plans are subject to numerous additional risks, including:

As we continue to expand our business globally, our success will depend, in large part, on our ability to anticipate and effectively manage these and other risks associated with our international operations. However, any of these factors could adversely affect our international operations and, consequently, our operating results.

Acquisitions that we may make may involve numerous risks.

We have a history of acquiring businesses and products that have significantly contributed to our growth in recent years, including our acquisition of Ocular.years. As part of our growth strategy, particularly at CSI, we intend to continue to consider acquiring complementary technologies, products and businesses. Future acquisitions could result in potentially dilutive issuances of equity securities, the incurrence of debt and contingent liabilities and an increase in amortization and/or write-offs of goodwill and other intangible assets, which could have a material adverse effect upon our business, financial condition and results of operations. Risks we could face with respect to acquisitions include:

We face risks associated with disruption of manufacturing and distribution operations and failure to develop new manufacturing processes that could adversely affect our profitability or competitive position.

We manufacture a significant portion of the medical device products we sell. Any prolonged disruption in the operations of our existing manufacturing facilities, whether due to technical or labor difficulties, destruction of or damage to any facility (as a result of natural disaster, use and storage of hazardous materials or other events), enforcement action by the FDA or other regulatory body if we are found to be in non-compliance with current Good Manufacturing Practices (cGMPSs) or other reasons, could have a material adverse effect on our business, financial condition and results of operations. In addition, materials, such as silicone hydrogel require improvements to our manufacturing processes to make them cost effective. OurWhile we have improved our manufacturing capabilities for our silicone hydrogel products, our failure to continue to develop such newimprovements to our manufacturing processes and reduce our cost of goods could significantly impact our ability to compete.

CVI manufactures molded contact lenses, which represent a significant portion of our contact lens revenues, primarily at our facilities in the United Kingdom and Puerto Rico and Norfolk, Virginia.Rico. CSI manufactures the majority of its products in Trumbull, Connecticut.Connecticut, Stafford, Texas, and Pasadena, California. We manufacture certain products at only one manufacturing site for certain markets, and certain of our products are approved for manufacturing only at one site. Before we can use a second manufacturing site, we must obtain the approval of regulatory authorities, and because this process is expensive, we have generally not sought approvals needed to manufacture at an additional site. If there were any prolonged disruption in the operations of the approved facility, it could take a significant amount of time to validate a second site and replace lost product, which could result in lost customers and thereby reduce sales, profitability and market share.

CVI distributes products out of Rochester, New York, and the United Kingdom and various smaller international distribution facilities. CSI’s products are primarily distributed out of its facility in Trumbull, Connecticut. Any prolonged disruption in the operations of our existing distribution facilities, whether due to technical or labor difficulties, destruction of or damage to any facility (as a result of natural disaster, use and storage of hazardous materials or other events) or other reasons, could have a material adverse effect on our business, financial condition and results of operations.

If our manufacturing operations fail to comply with applicable regulations, our manufacturing could be delayed or disrupted, and our product sales and profitability could suffer.

Our manufacturing operations and processes are required to comply with numerous federal, state and foreign regulatory requirements, including the FDA’s cGMP and QSR regulations, which govern the procedures related to the design, testing, production processes, controls, quality assurance, labeling, packaging, storage, importing, exporting and shipping of our products. We also are subject to state requirements and licenses applicable to manufacturers of medical devices. In addition, we must engage in extensive recordkeeping and reporting and must make available our manufacturing facilities and records for periodic unscheduled inspections by governmental agencies, including the FDA, state

authorities and comparable agencies in other countries. Failure to pass a cGMP, QSR or similar foreign inspection or to comply with these and other applicable regulatory requirements could result in disruption of our operations and manufacturing delays in addition to, among other things, significant fines, suspension of approvals, seizures, recalls or recallsimport holds of products, operating restrictions and criminal prosecutions. As a result, any failure to comply with applicable requirements could adversely affect our product sales and profitability.

We are in the process of shutting down manufacturing facilities and have excess manufacturing capacity which may reduce our reported earnings.

We are in the process of shutting down manufacturing facilities completely in Norfolk, Virginia and partially in Adelaide, Australia, and transferring production to our facilities in Puerto Rico and the United Kingdom. Changing production facilities on product lines creates operational risk and products having regulatory approvals tied to the closed facilities will require regulatory approval from the new facility. Any failure to successfully transfer our production could adversely affect our product sales and profitability. In addition, depending on our market growth, we may have more production capacity than necessary to meet future demand. If we are unable to put purchased capacity into production, we may have to write-off new or existing lines which would adversely impact our reported earnings.

We rely on independent suppliers for raw materials and we could experience inventory shortages if we were required to use an alternative supplier on short notice.

We rely on independent suppliers for key raw materials, consisting primarily of various chemicals and packaging materials. Raw materials used by us are generally available from more than one source. However, because some products require specialized manufacturing procedures, we could experience inventory shortages if we were required to use an alternative manufacturer on short notice. Asahikasei Aime Co. Ltd. (Asahi) is our sole supplier of the primary material used to make our silicone hydrogel contact lens products, comfilcon A.Biofinity and Avaira. If Asahi fails to supply sufficient material on a timely basis or at all for any reason, we may suffer a disruption in the supply of our silicone hydrogel contact lens products and may need to switch to an alternative supplier in accordance with our agreement with Asahi. A disruption in the supply of comfilcon A could disrupt production of our silicone hydrogel contact lens products thereby adversely impacting our ability to market and sell such products and our ability to compete in all segmentsthis important segment of the contact lens market.

If we fail to adequately protect our intellectual property, our business could suffer.

We consider our intellectual property rights, including patents, trademarks and licensing agreements, to be an integral component of our business. We attempt to protect our intellectual property rights through a combination of patent, trademark, copyright and trade secret laws, as well as licensing agreements and third-party nondisclosure and assignment agreements. Our failure to obtain or maintain adequate protection of our intellectual property rights for any reason could have a material adverse effect on our business, financial condition and results of operations and financial condition.operations.

We may also seek to enforce our intellectual property rights on others through litigation. See Item 3. Legal Proceedings (CIBA Vision). Our claims, even if meritorious, may be found invalid or inapplicable to a party we believe infringes or has misappropriated our intellectual property rights. In addition, litigation can:

We have applied for patent protection in the United States and other foreign jurisdictions relating to certain existing and proposed processes and products. We cannot assure you that any of our patent applications will be approved. Patent applications in the United States and other foreign jurisdictions are maintained in secrecy for a period of time, which may last until patents are issued, and since publication of discoveries in the scientific or patent literature tends to lag behind actual discoveries by several months, we cannot be certain that we will be the first creator of inventions covered by any patent application we make or the first to file patent applications on such inventions. The patents we own could be challenged, invalidated or circumvented by others and may not be of sufficient scope or strength to provide us with any meaningful protection or commercial advantage. Further, we cannot assure you that we will have adequate resources to enforce our patents.

We also rely on unpatented proprietary technology. It is possible that others will independently develop the same or similar technology or otherwise obtain access to our unpatented technology. To protect our trade secrets and other proprietary information, we require employees, consultants, advisors and collaborators to enter into confidentiality agreements. Weagreements and assignment agreements, which generally provide that inventions conceived by the party in the course of rendering services to us will be our exclusive property. However, we cannot assure you that these confidentiality agreements will provide meaningful protection for our trade secrets, know-how or other proprietary information in the event of any unauthorized use, misappropriation or disclosure of such trade secrets, know-how or other proprietary information. Furthermore, enforcing a claim that a party illegally obtained and is using our trade secrets is difficult, expensive and time consuming and the outcome is unpredictable. Certain patents protecting our Proclear line of products are due to expire in fiscal year 2011, which could allow competitors to market and sell products with similar attributes. If we are unable to maintain the proprietary nature of our technologies, we could lose competitive advantage and be materially adversely affected.

We rely on trademarks to establish a market identity for our products. To maintain the value of our trademarks, we might have to file lawsuits against third parties to prevent them from using trademarks confusingly similar to or dilutive of our registered or unregistered trademarks. Also, we might not obtain registrations for our pending or future trademark applications, and might have to defend our registered trademark and pending applications from challenge by third parties. Enforcing or defending our registered and unregistered trademarks might result in significant litigation costs and damages, including the inability to continue using certain trademarks.

The laws of certainother foreign countries in which we do business or contemplate doing business in the future do not recognize intellectual property rights or protect them to the same extent as do the laws of the United States. Adverse determinations in a judicial or administrative proceeding could prevent us from manufacturing and selling our products or prevent us from stopping others from manufacturing and selling competing products, and thereby have a material adverse affect on our business, financial condition and results of operations.

Our intellectual property could be subject to claims of infringement.

Our competitors in both the U.S.United States and foreign countries, many of which have substantially greater resources and have made substantial investments in competing technologies, may have applied

for or obtained, or may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with our ability to make and sell our existing and planned products. Claims that our products infringe the proprietary rights of others often are not asserted until after commencement of commercial sales incorporating our technology.

Significant litigation regarding intellectual property rights exists in our industry. Third parties have made, and it is possible that they will make in the future, claims of infringement against us or our contract manufacturers in connection with their use of our technology. See Item 3. Legal Proceedings (Bausch & Lomb, CIBA Vision). Any claims, even those without merit, could:

We cannot be certain of the outcome of any litigation. Any royalty or licensing agreement, if required, may not be available to us on acceptable terms or at all. Our failure to obtain the necessary licenses or other rights could prevent the sale, manufacture, or distribution of some of our products and, therefore, could have a material adverse effect on our business.

A successful claim of infringement against us or our contract manufacturers in connection with the use of our technology, in particular if we are unable to manufacture or sell any of our planned products in any major market, could adversely affect our business.

We could experience losses from product liability claims, including such claims and other losses resulting from sales of counterfeit and other infringing products.

We face an inherent risk of exposure to product liability claims in the event that the use of our products results in personal injury. We also face the risk that defects in the design or manufacture of our products or sales of counterfeit or other infringing productproducts might necessitate a product recall and other actions by manufacturers, distributors or retailers in order to safeguard the health of consumers and protect the integrity of the subject brand. In addition, consumers may halt or delay purchases of a product that is the subject of a claim or recall, or has been counterfeited. We handle some risk with third-party carrier policies that are subject to deductibles and limitations. There can be no assurance that we will not experience material losses due to product liability claims or recalls, or a decline in sales resulting from sales of counterfeit or other infringing product,products, in the future.

We face risks in connection with securities litigation.

The Company and several of its directors and officers have been named in a consolidated putative securities class action lawsuit and its directors and certain of its officers have been named in two consolidated derivative lawsuits, the nature and status of which are described in Item 3. Legal Proceedings. The consolidated putative securities class action seeks unspecified damages from the Company, and we are unable to estimate the range of potential losses that would be incurred if the plaintiffs in this action were to prevail, or to determine the total effect that it may have on our results of

operations, financial position and cash flows. However, anylegal expenses beyond those presently contemplated to be incurred through trial (currently scheduled for March 2010) or a settlement or adverse judgment on the merits of this actionthe Action could have a material adverse effect on the Company’s liquidity, results of operations and financial condition. In addition, securities litigation, irrespective of its merits, is costly to defend and diverts management’s attention and resources, which could adversely affect our business.

The purported derivative lawsuits, which are at a very preliminary stage, do not seek damages from the Company. However, derivative litigation is costly, and these lawsuits may divert management’s attention and resources, which could adversely affect our business.

We face risks related to environmental matters.

Our facilities are subject to a broad range of federal, state, local and foreign environmental laws and requirements, including those governing discharges to the air and water, the handling or disposal of solid and hazardous substances and wastes, and remediation of contamination associated with the release of hazardous substances at our facilities and offsite disposal locations.locations and occupational safety and health. We have made, and will continue to make, expenditures to comply with such laws and requirements. Future events, such as changes in existing laws and regulations, or the enforcement thereof, or the discovery of contamination at our facilities, may give rise to additional compliance or remediation costs that could have a material adverse effect on our business, financial condition and results of operations or financial condition.operations. Such laws and requirements are constantly changing, are different in every jurisdiction and can impose substantial fines and sanctions for violations. As a manufacturer of various products, we are exposed to some risk of claims with respect to environmental matters, and there can be no assurance that material costs or liabilities will not be incurred in connection with any such claims.

We are involved inconducting a voluntary clean-up at one of our sites in the state of New York, and althoughYork. Although the workplan that we submitted to the state was acceptedhas been approved and we believe that the clean-up is proceeding in accordance with the workplan and our expectations, there can be no assurance that the clean-up will be completed within the timeframe and cost projected, that the expected results will be achieved, or that we will not identify alternate sources or higher levels of contamination in connection with their remediation.contamination. As such, there can be no assurance that material costs or liabilities will not be incurred in connection with any such remediation.therewith.

Our substantial indebtedness could adversely affect our financial health and prevent us from fulfilling our debt obligations.

We have now and expect to continue to have a significant amount of indebtedness.

Our substantial indebtedness could:

In addition, ourOur credit facility containsand senior notes contain financial and other restrictive covenants that will limit our ability to engage in activities that may be in our long-term best interests. In addition, current conditions in the global debt markets would make it difficult and costly to refinance our credit facility and senior notes. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all of our debt.debt, which could adversely affect our business, earnings and financial condition.

We are vulnerable to interest rate risk with respect to our debt.

We are subject to interest rate risk in connection with the issuance of variable and fixed-rate debt. In order to maintain our desired mix of fixed-rate and variable-rate debt, we currently use, and may continue to use, interest rate swap agreements and exchange fixed and variable-rate interest payment obligations over the life of the arrangements, without exchange of the underlying principal amounts. We may not be successful in structuring such swap agreements to effectively manage our risks, which could adversely affect our business, earnings and financial condition.

Exchange rate fluctuations and our foreign currency hedges could adversely affect our financial results.

As a result of our international operations, currency exchange rate fluctuations tend to affect our results of operations and financial position. Our most significant currency exposures are the British pound Canadian dollar,sterling, euro, Japanese yen, Swedish krona and Euro.Canadian dollar. We expect to generate an increasing portion of our revenue and incur a significant portion of our expenses in currencies other than U.S. dollars. Although we enter into foreign exchange agreements with financial institutions to reduce our exposure to fluctuations in

foreign currency values relative to our debt or receivables obligations, these hedging transactions do not eliminate that risk entirely. These hedges also serve to reduce any gain that we may have made based on favorable foreign currency fluctuations. In addition, to the extent we are unable to match revenue received in foreign currencies with costs paid in the same currency, exchange rate fluctuations could have a negative impact on our financial condition and results of operations. Finally, because our consolidated financial results are reported in dollars, if we generate sales or earnings in other currencies the translation of those results into dollars can result in a significant increase or decrease in the amount of those sales or earnings.earnings and can make it more difficult for our shareholders to understand the relative strengths or weaknesses of the underlying business on a period-over-period comparative basis.

We may be required to recognize impairment charges on goodwill, which would reduce our net income, consolidated net worth and stockholders’ equity.

Pursuant to generally accepted accounting principles in the United States, we are required to perform impairment tests on our goodwill balance annually or at any time when events occur, which could impact the value of our business segments. Our determination of whether an impairment has occurred is based on a comparison of each of our reporting units’ fair market value with its carrying value. Significant and unanticipated changes could require a provisioncharge for impairment in a future period that could substantially affect our reported earnings in a period of such change. In addition, such charges would reduce our consolidated net worth andincome. If such charges were included in our shareholders’ equity, increasing our debt to total capitalization ratio, which maycovenant calculations, it could result in a defaultnoncompliance with certain financial covenants under our credit facilities.facilities in the period of such charge.

We performed our annual impairment test in our fiscal third quarter 2009, and our analysis indicated that we had no impairment of goodwill. The fair value of our reporting units was determined using a combination of the income approach, specifically the discounted cash flow method, and the market valuation approach. Under the income approach, the fair value of the reporting unit is based on the present value of estimated future cash flows that the reporting unit is expected to generate over its remaining life. Under the market approach, the value of the reporting unit is based on an analysis that compares the value of the reporting unit to values of publicly traded companies in similar lines of business.

Actual future results related to assumed variables could differ from our estimates. Goodwill impairment analysis and measurement is a process that requires significant judgment. If our common stock price trades below book value per share, there are changes in market conditions or a future downturn in our business, or the annual goodwill impairment test indicates an impairment of our goodwill, the Company may have to recognize a non-cash impairment of its goodwill that could be material, and could adversely affect our results of operations in the period recognized and also adversely affect our total assets, stockholders’ equity and financial condition.

Increases in our effective tax rates or adverse outcomes resulting from examination of income tax returns for Ocular for periods prior to our acquisition could adversely affect our results.

Our future effective tax rates could be adversely affected by earnings being higher than anticipated in countries where the Company has higher statutory rates or lower than anticipated in countries where it has lower statutory rates, by changes in valuation of our deferred tax assets and liabilities, or by changes in tax laws or interpretations of those laws. In addition, the Internal Revenue Service (IRS) has been auditing Ocular’sthe Company’s income tax returns for the years 20022005 – 2005,2007, and we are also subject to the examination of itsour income tax returns by other tax authorities. The outcome of these examinations could have a material adverse effect on our operating results and financial condition.

At October 31, 2006 we hadWe operate globally and changes in tax laws could adversely affect our results.

We operate globally and changes in tax laws could adversely affect our results. We have overseas manufacturing, administrative and sales offices and generate substantial revenues and profits in foreign jurisdictions. Recently a number of countries, including the United States, have proposed changes to their tax laws, some of which affect taxation of earnings recognized in foreign jurisdictions. Such changes in tax laws or their interpretation, if adopted, could adversely affect our effective tax rates and our results. In addition, the U.S. net operating loss (NOL) carryforwardsCongress is currently considering a number of approximately $143.4 million. Approximately $56.3 millionlegislative proposals to reform the U.S. health care system. Certain of these proposals contemplate that a portion of the NOL expires in fiscal 2007 and 2008. Although we presently anticipate utilizing the entire NOL in our tax filings, significant and unanticipated changes in our projected U.S. taxable income may result in our not fully utilizing the NOL. Should this occur, the tax effectcost of the unutilized NOLsuch proposals would be reflected a as a non-cash-related tax provisionpaid by imposing new fees or taxes on medical device companies. We cannot at this time anticipate which, if any, of these proposals will become law, the magnitude of taxes that would be imposed on the Company under any enacted law, or whether any such taxes will materially affect our statement of income.profitability.

We are in the process of upgrading certain of our management information systems, and we cannot assure you that there will not be associated excessive costs or disruption of our business.

We have implemented a management information system at our major locations and are in the process of implementing the systemrelated systems for substantially all of our businesses worldwide. Many other companies have had severe problems with computer system implementations of this nature and scope.

We are using a controlled project plan, and we believe we have assigned adequate staffing and other resources to the projects to ensure its successful implementation. However, we cannot assure you that the design will meet our current and future business needs or that it will operate as designed. We are heavily

dependent on such computer systems, and any failure or delay in the system implementation would cause a substantial interruption to our business, additional expense and loss of sales, customers and profits.

If we do not retain our key personnel and attract and retain other highly skilled employees, our business could suffer.

If we fail to recruit and retain the necessary personnel, our business and our ability to obtain new customers, develop new products and provide acceptable levels of customer service could suffer. The success of our business is heavily dependent on the leadership of our key management personnel. Our success also depends on our ability to recruit, retain and motivate highly skilled sales, marketing, engineering and engineeringscientific personnel. Competition for these persons in our industry is intense, and we may not be able to successfully recruit, train or retain qualified personnel.

Provisions of our governing documents and Delaware law, and our rights plan, may have anti-takeover effects.

Certain provisions of our Second Restated Certificate of Incorporation and Amended and Restated By-laws may inhibit changes in control of the Company not approved by our board of directors. These provisions include: (i) advance notice requirements for stockholder proposals and nominations and (ii) the authority of our board to issue without stockholder approval preferred stock with such terms as our board may determine. We will also be afforded the protections of Section 203 of the Delaware General Corporation Law, which could have similar effects. Our board of directors adopted aextended our preferred stock purchase rights plan, commonly known as a “poison pill,” pursuant to aan amended rights agreement dated as of October 29, 1997.2007. The rights agreement is intended to prevent abusive hostile takeover attempts by requiring a potential acquiror to negotiate the terms of an acquisition with our board of directors. However, it could have the effect of deterring or preventing an acquisition of our Company, even if a majority of the our stockholders would be in favor of such acquisition, and could also have the effect of making it more difficult for a person or group to gain control of the Company or to change existing management.

Risks Relating to Government Regulation of Manufacture and Sale of Our Products

Our failure to comply with regulatory requirements or to receive regulatory clearance or approval for our products or operations could adversely affect our business.

Our products and operations are subject to rigorous regulation by the FDA, and numerous other federal, state and foreign governmental authorities. In the United States, the FDA regulates virtually all aspects of a medical device’s design, development, testing, manufacture, safety, labeling, storage, recordkeeping, reporting, marketing, promotion and distribution, as well as the export of medical devices manufactured in the United States to foreign markets. Our failure to comply with FDA regulations could lead to the imposition of administrative or judicial sanctions, including injunctions, suspensions or the loss of regulatory approvals, product recalls, termination of distribution or product seizures. In the most egregious cases, criminal sanctions or closure of our manufacturing facilities are possible.

Our medical devices require clearance or approval by the FDA before they can be commercially distributed in the United States and may require similar approvals by foreign regulatory agencies before distribution in foreign jurisdictions. Medical devices may only be marketed for the indications

for which they are approved or cleared. The process of obtaining regulatory approvals to market a medical device, particularly from the FDA, can be costly and time consuming. There can be no assurance that such approvals will be granted on a timely basis, if at all, or that significant delays in the introduction of any new products or product enhancements will not occur, which could adversely affect our competitive position and results of operations. In addition, the FDA may change its policies, adopt additional regulations or revise existing regulations, each of which could prevent or delay premarket approval or clearance of our products or could impact our ability to market our currently approved or cleared products.

Modifications and enhancements to a medical device also require a new FDA clearance or approval if they could significantly affect its safety or effectiveness or would constitute a major change in its intended use, design or manufacture. The FDA requires every manufacturer to make this determination in the first instance, but the FDA may review any manufacturer’s decision. We have made modifications and enhancements to our medical devices that we do not believe require a new clearance or application, but we cannot confirm that the FDA will agree with our decisions. If the FDA requires us to seek clearance or approval for modification of a previously cleared product for which we have concluded that new clearances or approvals are unnecessary, we may be required to cease marketing or to recall the modified product until we obtain clearance or approval, and we may be subject to significant regulatory fines or penalties, which could have a material adverse effect on our financial results and competitive position. We also cannot assure you that we will be successful in obtaining clearances or approvals for our modifications, if required.

Even if regulatory approval or clearance of a medical device is granted, the FDA may impose limitations or restrictions on the uses and indications for which the device may be labeled and promoted, and failure to comply with FDA regulations prohibiting a manufacturer from promoting a device for an unapproved, or “off-label” use could result in enforcement action by the FDA, including, among other things, warning letters, fines, injunctions, consent decrees, and civil or criminal penalties.

Development and marketing of our products isare subject to strict governmental regulation by foreign regulatory agencies, and failure to receive, or delay in receiving, foreign qualifications could have a material adverse affecteffect on our business.

In many of the foreign countries in which we market our products, we are subject to regulations affecting, among other things, product standards, packaging requirements, labeling requirements, import restrictions, tariff regulations, duties and tax requirements. Many of the regulations applicable to our devices and products in such countries are similar to those of the FDA.

In the European Economic Area, a medical device can only be placed on the market if it is in conformity with the essential requirements set out in the European Directives and implementing regulations that govern medical devices. These Directives prescribe quality programs and standards which must be maintained in order to achieve required ISO certification and to approve the use of CE marking. In order to maintain ISO certification and CE marking quality benchmarks, firms’ quality systems and procedures are subjected to rigorous periodic inspections and reassessment audits.

In many countries, the national health or social security organizations require our products to be qualified before they can be marketed with the benefit of reimbursement eligibility. To date, we have

not experienced difficulty in complying with these regulations. Due to the movement towards harmonization of standards in the European Union, we expect a changing regulatory environment in Europe characterized by a shift from a country by-country regulatory system to a European Union-wide single regulatory system. We cannot currently predict the timing of this harmonization. OurHowever, our failure to receive, or delays in the receipt of, relevant foreign qualifications could have a material adverse effect on our business, financial condition and results of operations.

Our products are subject to reporting requirements and recalls, even after receiving regulatory clearance or approval, which could harm our reputation, business and financial results.

After a device is placed on the market, numerous regulatory requirements apply, including the FDA’s cGMP and QSR regulations, which requires manufacturers to follow design, testing, control, documentation and other quality

assurance procedures during the manufacturing process; labeling regulations, which prohibit the promotion of products for unapproved or “off-label” uses and impose other restrictions on labeling; and medical device reporting regulations that require us to report to FDA or similar governmental bodies in other countries if our products cause or contribute to a death or serious injury or malfunction in a way that would be reasonably likely to contribute to death or serious injury if the malfunction were to recur. The FDA and similar governmental bodies in other countries have the authority to require the recall of our products in the event of material deficiencies or defects in design or manufacture. A government mandated or voluntary recall by us could occur as a result of manufacturing or labeling errors or design defects. Any voluntary or government mandated recall may divert management attention and financial resources and harm our reputation with customers. Any recall involving one of our products could also harm the reputation of the product and the Company and would be particularly harmful to our business and financial results.

Changes in legislation and government regulation of the retail opticalhealthcare industry or inas well as third-party payors’ efforts to control the selling and prescribing practices for contact lensescosts of healthcare could have a material adverse impact onmaterially adversely affect our business and financial results.business.

Our success depends toIn recent years, an increasing number of healthcare reform proposals have been formulated by the legislative and executive branches of the federal and state governments. The current administration has made health care reform a priority, and there have been a significant extent uponnumber of federal legislative initiatives and reform measures this past year. Pending and future legislative proposals could effect major changes in the successhealthcare system, either nationally or at the state level. Among the proposals under consideration are annual, non-deductible fees on manufacturers or importers of certain prescription drugs, biologics or medical devices offered for sale in the United States, price controls on hospitals, insurance market reforms to expand the availability of health insurance, requirements that companies that sell products to hospitals and other healthcare providers must publicly disclose their prices, and the creation of a government health insurance plan or plan designed to ensure coverage for all citizens. Federal legislation also has been introduced to avoid a 21.2 percent reduction in 2010 payments to physicians for services provided to Medicare patients by revising the applicable statutory formula used to develop the Medicare payment rates. In past years, annual federal legislation avoided reductions stemming from the formula, and current pending legislation would revise the formula to prevent the need for annual legislative adjustments in this area.

This year, new health care reform measures that were passed include appropriation of federal funds to conduct, support or synthesize research that compares and evaluates the risk and benefits, clinical outcomes, effectiveness and appropriateness of products, among other things. The comparative effectiveness research is intended to improve the quality of health care, but how the research will impact coverage, reimbursement or other policies developed by health insurance companies remains unclear. There also continues to be efforts at the federal level to introduce expanded fraud and abuse and anti-referral legislation and to further reduce certain Medicare and Medicaid expenditures by

revising coverage and reimbursement policies. A broad range of both similar and more comprehensive healthcare reform initiatives is likely to be considered at the state level. Although it is uncertain which, if any, of these or other proposals will be adopted, the potential for adoption of these proposals affects or may affect our ability to market our products.

Any adoption of healthcare reform proposals on a state-by-state basis could require us to develop state-specific marketing and sales approaches. In addition, we may experience pricing pressures in connection with the sale of our customers who prescribeproducts due to additional legislative proposals or healthcare reform initiatives, including those initiatives affecting coverage and fit contact lenses, including optometrists, ophthalmologists,reimbursement for our products. Future legislation and optical retail outlets, which are subject to a varietyregulations may adversely affect the growth of federal, state and local laws, regulations and ordinances. These regulations relate to who is permitted to prescribe and fit contact lenses, the prescriber’s obligation to provide prescriptions to its patients,market for our products or demand for our products. We cannot predict the lengtheffect such reforms or the prospect of time a prescription is valid, the ability or obligation of prescribers to prescribe lenses by brand rather than by generic equivalent or specification, and other matters. The state and local legal requirements vary widely among jurisdictions and are subject to frequent change.their enactment may have on our business.

In addition, numerous healthcare-related legislative proposals have been made in recent years inthird-party payors, whether governmental or commercial, whether inside the CongressUnited States or abroad, increasingly attempt to contain or reduce the costs of healthcare. These cost-control methods include prospective payment systems, capitated rates, group purchasing, redesign of benefits, requiring pre-authorizations or second opinions prior to certain medical procedures, encouragement of healthier lifestyles and in various state legislatures. For instance, the Fairness to Contact Lens Consumers Act, which was enacted on December 6, 2003, requires that contact lens prescribers provide patients with a copyexploration of their contact lens prescriptions after a contact lens fitting and verify those prescriptions to any third party designated by a patient, such as an online seller. In addition, legislation has been introduced in Congress and in several states to require manufacturersmore cost-effective methods of contact lenses to distribute through Internet suppliers and other companies, even if the manufacturers would not choose to distribute through these outlets in the absence of such a requirement.delivering healthcare. Although such legislation has been enacted only in the State of Utah, there are likely to be continued efforts to enact it in Congress and in other states. Further legislative or policy initiatives directed at prescribers and the retail optical industry could be introduced on either the federal or state level. The impact of the Utah law on our business in that state is uncertain since the law has recently gone into effect, and there have been no interpretations of its provisions by the Utah courts or the Utah Attorney General. The potential impact of other legislative proposals with respect to the business of our customers is also uncertain, and we cannot assure you that the proposals, if adopted, would not have a material adverse impact on our revenues, business, financial condition and results of operations.

Adverse regulatory or other decisions affecting eye care practitioners, or material changes in the selling and prescribing practices for contact lenses, could also have a material adverse affect on our business, operating results and financial condition. Finally, although cost controls or other requirements imposed by third party healthcarethird-party payors such as insurers and health maintenance organizations, have not historically had a significant effect on contact lens prices or distribution practices, this could change in the future and could adversely affect our business, financial condition and results of operations.

Changes in government regulation of the healthcare industry could materially adversely affect our business.

In recent years, an increasing number of legislative initiatives have been introduced or proposed in Congress and in state legislatures that could effect major changes in the healthcare system, either nationally or at the state level. Among the proposals under consideration are price controls on hospitals, insurance market reforms to increase the availability of group health insurance to small businesses, requirements that all businesses offer health insurance coverage to their employees and the creation of a government health insurance plan or plans that would cover all citizens. There continue to be efforts at the federal level to introduce various insurance market reforms, expanded fraud and abuse and anti referral legislation and further reductions in Medicare and Medicaid coverage and reimbursement. A broad range of both similar and more comprehensive healthcare reform initiatives is likely to be considered at the state level. It is uncertain which, if any, of these or other proposals will be adopted. We cannot predict the effect such reforms or the prospect of their enactment may have on our business.

The costs of complying with the requirements of federal laws pertaining to the privacy and security of health information and the potential liability associated with failure to do so could materially adversely affect our business and results of operations.

Other federal legislation affects the manner in which we use and disclose health information. The Health Insurance Portability and Accountability Act of 1996, or HIPAA, mandates, among other things, the adoption of standards for the electronic exchange of health information that may require significant and costly changes to current practices. HHSThe Department of Health and Human Services (HHS) has released threeseveral rules to date mandating the use of newspecified standards with respect to certain healthcare transactions and health information. The firstelectronic transactions rule requires the use of uniform standards for common healthcare transactions, including healthcare claims information, plan eligibility, referral certification and authorization, claims status, plan enrollment and disenrollment, payment and remittance advice, plan premium payments and coordination of benefits. The secondprivacy rule released by HHS imposes new standards relating to the privacy of individually identifiable health information. These standards not only require compliance with rules governing the use and disclosure of protectedindividually identifiable health information, but they also require an entity subject to HIPAA to obtain satisfactory assurances that any of its business associates to whom such information is disclosed will safeguard the information. The thirdsecurity rule released by HHS establishes minimum standards for the security of electronic health information. information, and requires the adoption of administrative, physical and technical safeguards.

Additionally, the Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009 was signed into law as part of the stimulus package in February 2009. Previously, HIPAA directly regulated only certain covered entities, such as health care providers and health plans. Under HITECH, certain of HIPAA’s privacy and security standards are now also directly applicable to covered entities’ business associates. As a result, business associates are now subject to civil and criminal penalties for failure to comply with applicable privacy and security rule requirements. Moreover, HITECH creates a new requirement to report any breach of unsecured, individually identifiable health information and imposes penalties on entities that fail to do so.

While we do not believe that we are directly regulated as a covered entity under HIPAA, many of our customers are covered entities subject to HIPAA. Such customers may require us to enter into business associate

agreements, which obligate us to safeguard certain health information we obtain in the course of servicing thetheir customers, restrict the manner in which we use and disclose such information and impose liability on us for failure to meet our contractual obligations. Pursuant to the HITECH Act, as business associates, we are now additionally subject to direct governmental enforcement for failure to comply with certain privacy and security requirements. The costs of complying with these contractual obligations, new legal and regulatory requirements, and the potential liability associated with failure to do so could have a material adverse effect on our business, and financial condition and results of operations.

Federal and state laws pertaining to healthcare fraud and abuse could materially adversely affect our business, financial condition and results of operations.

We may be subject to various federal and state laws pertaining to healthcare fraud and abuse, including anti-kickback laws, and physician self-referral laws and false claims laws. Violations of these laws are punishable by criminal and civil sanctions, including, in some instances, exclusion from participation in federal and state healthcare programs, including Medicare, Medicaid, Veterans Administration health programs and TRICARE. Similarly, if the physicians or other providers or entities with whom we do business are found to be non-compliant with applicable laws, they may be subject to sanctions, which could indirectly have a negative impact on our business, financial condition and results of operations. While we believe that our operations are in material compliance with such laws, because of

the complex and far-reaching nature of these laws, there can be no assurance that we would not be required to alter one or more of itsour practices to be in compliance with these laws. Indeed, recent changes in state laws and model codes of ethics have already required us to alter certain of our compliance efforts. For example, in April of 2009, Massachusetts issued regulations governing the conduct of pharmaceutical and medical device manufacturers with respect to healthcare practitioners. This regulation became effective on July 1, 2009 and sets forth what medical device manufacturers may and may not permissibly do with respect to providing meals, sponsoring continuing medical education and otherwise providing payments or items of economic benefit to healthcare practitioners located within the state. Additionally, the regulation requires medical device manufacturers to have in place robust fraud and abuse compliance programs. Other states (e.g., California and Nevada) have adopted similar laws. The Advanced Medical Technology Association (AdvaMed), a trade association representing the interests of medical device manufacturers, has also recently released a revised code of ethics outlining permissible interactions with health care professionals. This code became effective July 1, 2009. These laws, regulations and guidance documents act to limit our marketing practices, require the dedication of resources to ensure compliance, and expose us to additional liabilities.

Any violations of these laws or regulations could result in a material adverse effect on our business, financial condition and results of operations. In addition, if there is a changechanges in law, regulation,these laws, regulations, or administrative or judicial interpretation, weinterpretations, may haverequire us to further change our business practices or subject our existing business practices could be challenged as unlawful,to legal challenges, which could have a material adverse effect on our business, financial condition and results of operations.

Item 1B.Unresolved Staff Comments.

None.

Item 2.Properties.

The following is a summary of Cooper’s principal facilities as of October 31, 2006.2009. Cooper generally leases its office and operations facilities but owns several manufacturing and research and development facilities.facilities, including 205,850 square feet in Hamble, United Kingdom, 49,500 square feet in Scottsville, New York, 39,000 square feet in Norfolk, Virginia, and 33,630 square feet in Stafford, Texas. Our lease agreements expire at various dates through the year 2023. The Company believes its properties are suitable and adequate for its businesses.

Item 3.Legal Proceedings.

Levine v. TheIn re Cooper Cos.,Companies, Inc., et.al. Securities Litigation

On February 15, 2006, Alvin L. Levine filed a putative securities class action lawsuit in the United States District Court for the Central District of California, Case No. SACV-06-169 CJC, against the Company, A. Thomas Bender, its Chairman of the Board President and Chief Executive Officer and a director, Robert S. Weiss, its Executive Vice President, Chief OperatingExecutive Officer and a director, and John D. Fruth, a former director. Two similar putative class action lawsuits were also filed in the United States District Court for the Central District of California, Case Nos. SACV-06-306 CJC and SACV-06-331 CJC. On May 19, 2006, the Court consolidated all threethis action and two related actions under the headingIn re Cooper Companies, Inc. Securities Litigation and selected a lead plaintiff and lead counsel pursuant to the provisions of the Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-4.

The lead plaintiff filed a consolidated complaint on July 31, 2006. The consolidated complaint was filed on behalf of all purchasers of the Company’s securities between July 28, 2004, and December 12, 2005, including persons who received Company securities in exchange for their shares of Ocular Sciences, Inc. (Ocular) in the January 2005 merger pursuant to which the Company acquired Ocular. In addition to the Company, Messrs. Bender, Weiss, and Fruth, the consolidated complaint namesnamed as defendants several of the Company’s other current officers and directors and one former officer.officers. On July 13, 2007, the Court granted Cooper’s motion to dismiss the consolidated complaint and granted the lead plaintiff leave to amend to attempt to state a valid claim.

On August 9, 2007, the lead plaintiff filed an amended consolidated complaint. In addition to the Company, the amended consolidated complaint names as defendants Messrs. Bender, Weiss, Fruth, Steven M. Neil, the Company’s former Executive Vice President and Chief Financial Officer, and Gregory A. Fryling, CooperVision’s former President and Chief Operating Officer.

The amended consolidated complaint purports to allege violations of Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934 by, among other things, contending that: (a)that the defendants made misstatements concerning the Biomedics product line, sales force integration following the merger with Ocular, the impact of silicone hydrogel lenses and financial projections. The amended consolidated complaint also alleges that the Company improperly accounted for assets acquired in the Ocular merger by improperly allocating $100 million of acquired customer relationships and manufacturing technology to goodwill (which is not amortized against earnings) instead of to intangible assets other than goodwill (which are amortized against earnings); (b), that the Company lacked appropriate internal controls and issued false and misleading Sarbanes-Oxley Act certifications.

On October 23, 2007, the Court granted in-part and denied in-part Cooper and the individual defendants’ motion to dismiss. The Court dismissed the claims relating to the Sarbanes-Oxley Act certifications and the Company’s earnings guidance reflectedaccounting of assets acquired in the improper accounting for intangible assets and was inflated by (among other things)Ocular merger. The Court denied the amount ofmotion as to the understated amortization expense; (c) contraryclaims related to certain alleged false statements Ocular had “floodedconcerning the trade channel” with its older products as its Premier lenses were not being well received by customers; (d) the Company’s aggressive revenue and growth targets for 2005 and beyond lacked any reasonable basis when made and did not reflect realistically achievable results primarily because of the absence of a two-week silicone hydrogel product; (e) the Company’s internal controls were inadequate making it possible to misstate earnings by improperly accounting for the merger with Ocular and (f)Biomedics product line, sales force integration, was not materializingthe impact of silicone hydrogel lenses and was fraught with dissensionthe Company’s financial projections. On November 28, 2007, the Court dismissed all claims against Mr. Fruth. On December 3, 2007, the Company and acrimony.Messrs. Bender, Weiss, Neil and Fryling answered the amended consolidated complaint. On April 8, 2008, the Court granted a motion by Mr. Neil for judgment on the pleadings as to him. On October 20, 2009, the Court confirmed that Plaintiffs’ financial projection claims had been dismissed in its earlier rulings.

On September 29, 2006,January 6, 2009, the CompanyCourt granted plaintiffs’ motion for class certification. The certified class consists of those persons who purchased or otherwise acquired Cooper common stock between July 28, 2004, and November 21, 2005. Discovery in this matter has closed. On October 7, 2009, the individual defendants movedCourt continued the trial date to dismiss the consolidated complaint. A hearing on the motion is currently scheduled for January 22, 2007.March 2, 2010. The Company intends to vigorously defend this matter.matter vigorously.

In re Cooper Companies, Inc. Derivative Litigation

On March 17, 2006, Eben Brice filed a purported shareholder derivative complaint in the United States District Court for the Central District of California, Case No. 8:06-CV-00300-CJC-RNB, against several current and former officers and directors of the Company. The Company is named as a “nominal defendant.” Since the filing of the first purported shareholder derivative lawsuit, three similar purported shareholder derivative suits were filed in the United States District Court for the Central District of California. All four actions have been consolidated under the heading In re Cooper Companies, Inc. Derivative Litigation and the Court selected a lead plaintiff and lead counsel.

On September 11, 2006, plaintiffs filed a consolidated amended complaint. The consolidated amended complaint names as defendants Messrs. Bender, Weiss, Fruth and Fryling. It also names as defendants current directors Michael Kalkstein, Moses Marx, Steven Rosenberg, Stanley Zinberg, Allan Rubenstein, and one former director. The Company is a nominal defendant. The complaint purports to allege causes of action for breach of fiduciary duty, insider trading, breach of contract, and unjust

enrichment, and largely repeats the allegations in the class action securities case, described above. The Company andtime for the individual defendants have yetCompany to respond to the consolidated amended complaint.complaint has not yet passed.

In addition to the derivative action pending in federal court, three similar purported shareholder actions were filed in the Superior Court for the State of California for the County of Alameda. These actions have been consolidated under the heading In re Cooper Companies, Inc. Shareholder Derivative Litigation, Case No.Nos. RG06260748. A consolidated amended complaint was filed on September 18, 2006.

The consolidated amended complaint names as defendants the same individuals that are the defendants in the federal derivative action. In addition, the complaint names Mr. Fryling, current officers Carol R. Kaufman, Paul L. Remmell, Jeffrey Allan McLean, and Nicholas J. Pichotta and former officers. The Company is a nominal defendant. On November 29, 2006, the Superior Court for the County of Alameda entered an order staying the consolidated action pending the resolution of the federal derivative action.

Both the state and federal derivative actionactions are derivative in nature and do not seek damages from the Company.

Bausch & Lomb Incorporated Litigation

On October 5, 2004, Bausch & Lomb Incorporated (Bausch & Lomb) filed a lawsuit against Ocular in the U.S. District Court for the Western District of New York alleging that its Biomedics^® toric soft contact lens and its private label equivalents infringe Bausch & Lomb’s U.S. Patent No. 6,113,236 relating to toric contact lenses having optimized thickness profiles. The complaint seeks an award of damages, including multiple damages, attorneys’ fees and costs and an injunction preventing the alleged infringement. The parties have filed claim construction briefs for the court to consider for its Markman order, and fact discovery substantially concluded during the first quarter of fiscal 2006. Based on our review of the complaint and the patent, as well as other relevant information obtained in discovery, we believe this lawsuit is without merit and plan to continue to pursue a vigorous defense.

United States Tax Court Litigation

United States Tax Court Litigation: On September 29, 2004, the IRS issued Notices of Deficiency to Ocular in connection with its audit of Ocular’s income tax returns for the years 1999, 2000 and 2001. The Notice primarily pertains to transfer pricing issues and an alternative adjustment under the anti-deferral provisions of Subpart F of the Internal Revenue Code and asserts that $44.8 million of additional taxes is owed for these years, plus unspecified interest and approximately $12.7 million in related penalties.

On December 29, 2004, Ocular filed a Petition for the United States Tax Court to redetermine the deficiencies asserted by the IRS. On February 11, 2005, the IRS filed its Answer to the Petition generally denying the various arguments made by Ocular against the assertions of the IRS. The Company believes that the IRS may not have fully reviewed the facts before making its assessment of additional taxes, and that its position misapplies the law and is incorrect. Discovery began on March 7, 2005, and the Company intends to fully access the work product of the IRS to more fully ascertain an understanding of its position.

The amount of taxes paid for these years was supported by pricing studies performed by an international firm of tax advisors. The resulting intercompany transactions and tax payments reflected pricing terms that were and are consistent with industry practice for arm’s length transactions with

unrelated third parties. The Company intends to vigorously contest the IRS’s claims, and believes that the ultimate outcome of this matter will not have a material adverse effect on financial condition, liquidity or cash flow of the Company.

The Company continues to be subject to the examination of Ocular’s income tax returns by the IRS and other fiscal authorities, and we cannot assure that the outcomes from these examinations will not have a material adverse effect on the Company’s operating results and financial condition. Moreover, the Company’s future effective tax rates could be adversely affected by earnings being higher than anticipated in countries where it has higher statutory rates or lower than expected in countries where it has lower statutory rates, by changes in the valuation of deferred tax assets or liabilities, or by changes in tax laws or interpretations thereof.

CIBA Vision Litigation

On April 10, 2006, CVI filed a lawsuit against CIBA Vision (CIBA) in the United States District Court for the Eastern District of Texas alleging that CIBA is infringing United States Patent Nos. 6,431,706, 6,923,538, 6,467,903, 6,857,740 and 6,971,746 by, among other things, making, using, selling and offering to sell its O2Optix line of contact lenses. On June 5, 2006, CIBA filed an answer denying infringement and asserting certain affirmative defenses. The Court has set a trial date of January 8, 2008.

On April 11, 2006, CVI filed a lawsuit against CIBA in the United States District Court for the District of Delaware seeking a judicial declaration that CVI’s Biofinity™ line of silicone hydrogel contact lenses does not infringe any valid and enforceable claims of United States Patent Nos. 5,760,100, 5,776,999, 5,789,461, 5,849,811, 5,965,631 and 6,951,894. On July 5, 2006, CIBA answered the complaint by denying the allegation that CVI’s Biofinity™ line of silicone hydrogel contact lenses does not infringe any valid and enforceable claims of the foregoing patents. The answer also asks the Court for permission to interpose a counterclaim for infringement in the future if, after examination of the lenses, CIBA believes they infringe the foregoing patents, which counterclaim would seek both damages and injunctive relief. The Court has set a trial date of October 6, 2008.

On November 21, 2006, CVI filed a lawsuit against CIBA in the United States District Court for the Eastern District of Texas alleging that CIBA is infringing United States Patent Nos. 7,134,753 and 7,133,174 by, among other things, making, using, selling and offering to sell its O2Optix toric line of contact lenses. The Court has not yet set a schedule in the case.

Item 4.Submission of Matters to a Vote of Security Holders.

During the fourth quarter of fiscal 2006,2009, the Company did not submit any matters to a vote of the Company’s security holders.

PART II

Item 5.Market for Registrant’s Common Equity and Related Stockholder Matters.

Our common stock, par value $0.10 per share, is traded on the New York Stock Exchange under the symbol “COO.” In the table that follows, we indicate the high and low selling prices of our common stock for each three-month period of 20062009 and 2005:2008:

At November 30, 2006,2009, there were 748812 common stockholders of record.

Dividend Policy

Our current policy is to pay annual cash dividends on our common stock of $0.06 per share, in two semiannual payments of $0.03 per share each. In dollar terms, we paid cash for dividends of about $2.7 million in 2006both 2009 and $2.3 million2008. Dividends are paid when, as and if declared at the discretion of our board of directors from funds legally available for that purpose. Our board of directors periodically reviews our dividend policy and considers the Company’s earnings, financial condition, liquidity needs, business plans and opportunities and other factors in 2005.making and setting dividend policy.

Performance Graph

The following graph compares the cumulative total return on the Company’s common stock with the cumulative total return of the Standard & Poor’s Smallcap 600 Stock Index (which includes the Company) and the Standard & Poor’s Health Care Equipment Index for the five-year period ended October 31, 2009. The graph assumes that the value of the investment in the Company and in each index was $100 on October 31, 2004, and assumes that all dividends were reinvested.

Net sales growth includes increases in disposable toric sales up 16%, single-use spheres up 21%15%, at $190.2 million, all disposable multifocalsspheres up 31%4% and total spheres up 3%. Silicone hydrogel spheres had sales of $99.7 million primarily in the United States and Europe. Our newly introduced silicone hydrogel toric lenses had sales of $12.4 million and single-use torics grew 71%, but total torics declined 7% primarily due to a continuing trend in the market toward silicone hydrogel toric lenses. Disposable multifocal lens sales grew 9% to $59.8 million. Older conventional lens products declined 20%, and cosmetic lenses declined 10%. Proclear products continued global market share gains as Proclear toric sales up 11%. CVI’s core product lines grew 11%increased 5%, Proclear 1 Day spheres increased 59% and Proclear^® products, including Biomedics XC™, grew 29% multifocal lenses increased 14%. Proclear^® toric sales grew 42%, Proclear^®

Management’s Discussion and Analysis of Financial Condition and

Results of Operations – (Continued)

spheres up 15% and Proclear^® multifocal lenses up 101%. Total sphereCVI’s sales excluding single-use lenses declined 3% with total sphere sales up 2%. Single-use sales growth remained below expectations due largely to slower than anticipated acceptance of new products and delays in our transition to the new strip-blister packaging configuration. A majority of our lines have now been converted, and we expect all lines to be converted by February 2007.

Sales growth is driven primarily through increases in the volume of lenses sold as the market continues to move to more frequent replacement. While unit growth and product mix have influenced CVI’s sales growth, average realized prices by product didhave not materially influenceinfluenced sales growth.

CVI results include Ocular beginning on January 6, 2005, when Cooper acquired Ocular. To present CVI’s organic growth, this paragraph discusses reported sales adjusted by adding Ocular’s net sales of $51.6 million for November 1, 2004 through January 5, 2005, when Cooper did not own Ocular, to CVI’s reported net sales of $697.9 million for Cooper’s fiscal 2005. As so adjusted, organic net sales declined 2%, 1% in constant currency. Americas sales declined 2%, 3% in constant currency, European sales grew 2%, 5% in constant currency, and Asia-Pacific sales declined 9%, 4% in constant currency. CVI’s core product lines grew 5% with single-use lens growth of 3%. Disposable lens sales were flat with disposable toric sales up 11%, disposable multifocal lens sales up 25% and disposable spheres declining 6%.

CVI New Products and MarketsCSI Net Sales

During calendar 2006 CVI introduced these new products:CSI’s net sales increased 2% to $170.9 million. Sales of products marketed directly to hospitals grew 14% and now represent 33% of CSI’s sales. Women’s healthcare products used primarily by obstetricians and gynecologists generate 96% of CSI’s sales. The balance are sales of medical devices outside of women’s healthcare which CSI does not actively market. While unit growth and product mix have influenced organic sales growth, average realized prices by product have not materially influenced organic sales growth.

Products scheduled for introduction in calendar 2007 include: Proclear^® single-use in the United States and Europe and Proclear^® multifocal toric (a multifocal toric for monthly replacement), Proclear^® toric XR (extended parameter range) and an improved two-week silicone hydrogel sphere in the United States.THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Biofinity™ toric, a silicone hydrogel product, is currently expected to be introduced in the United States and Europe in late calendar 2007 or early 2008 depending on manufacturing capacity available for toric lenses after satisfying demand for Biofinity™ sphere.

Management’s Discussion and Analysis of Financial Condition and

Results of Operations – (Continued)

20052008 Compared with 20042007

Highlights: Fiscal Year 20052008 vs. Fiscal Year 20042007

Selected Statistical Information – Percentage of Net Sales and Growth

Net Sales Growth

Our consolidated net sales grew by 65%11% in 20052008 and 19%10% in 2004.2007. CVI has consistently achieved double-digit11% net sales growth overprimarily on growth of disposable lenses, including single-use lenses, and the three-year period driven by organic growth as well as acquisitions.sale of our silicone hydrogel lenses, Biofinity and Avaira. CSI achieved 7%9% net sales growth in 2005,2008 primarily driven bydue to 6% organic growth and double-digit growth in the prior two periods driven by acquisition and organic growth.including products marketed directly to hospitals.

CVI Net Sales by MarketGrowth

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

CVI’s worldwide net sales grew 80%, 77% in constant currency. Americas sales grew 58%, 56% in constant currency. European sales grew 67%, 63% in constant currency. Sales to the Asia-Pacific region grew 386%, 379% in constant currency. The inclusion of Ocular net sales, since the acquisition date of January 6, 2005, is the primary reason for CVI’s growth in fiscal 2005.

Management’s Discussion and Analysis of Financial Condition and

Results of Operations – (Continued)

CSI Net SalesIn 2008, CVI launched Biofinity and Avaira, its silicone hydrogel spherical lens products in the United States, Europe and Asia Pacific, excluding Japan. CVI’s toric products are facing increased pressure due to the launch of silicone hydrogel toric products by its major competitors. CVI began production of Biofinity toric, a silicone hydrogel toric lens, and launched this product in fiscal 2009.

Women’s healthcareCVI introduced the following products used primarily in obstetricians’ and gynecologists’ practices generate about 90% of CSI’s revenue. The balance are sales of medical devices outside of women’s healthcareduring 2008:

where CSI does not actively market. In 2005, CSI’s sales increased 7% to $108.7 million, $7.2 million above 2004. CSI’s core revenue grew 10%. While unit growth and product mix influenced organic revenue growth, average realized prices by product did not materially influence such growth. Results of operations of acquired companies are included in our consolidated results beginning on the acquisition date.

CVI Net Sales by Region

CVI’s worldwide net sales grew 11%, 8% in constant currency. Americas sales grew 8%, 7% in constant currency, primarily due to market gains of CVI’s silicone hydrogel lenses, Biofinity and Avaira, PC Technology lenses and single-use lenses. EMEA sales grew 13%, 6% in constant currency, driven by increases in sales of Biofinity, disposable toric and disposable sphere products, including Proclear 1 Day lenses. Sales to the Asia Pacific region grew 18%, 14% in constant currency, primarily due to significant sales growth of single-use and other disposable sphere products, disposable toric products and Biofinity lenses.

SalesNet sales growth included continued global market gains during the year, includingincludes increases in single-use spheres up 45%, at $165.3 million, all disposable sphericalspheres up 18% and total spheres up 16%. Biofinity had sales up 121%, disposableof $50.7 million primarily in Europe and the United States, and Avaira had sales of $7.6 million in the United States. Disposable toric sales grew 11% with total toric sales up 62%,8% and disposable multifocal sales up 142%26%. CVI’s line of specialty lenses grew 10%. Older conventional lens products declined 14%, and totalcosmetic lenses declined 2%. Proclear products continued global market share gains as Proclear toric sales up 51%. CVI’s core product lines grew 76% with specialty lens growth of 46% during the year. Sales increases also resulted from the global rollout ofincreased 39% to $72.2 million, Proclear spheres, including Biomedics^® toric thatXC and Proclear 1 Day, increased 62%22% to $25.4$124.6 million and the launch of Proclear^® multifocal lenses, with 2005including Biomedics XC, increased 40% to $44.4 million.

CVI’s sales of $10.6 million. Single-use lens revenue was $72.4 million during the year. Sales growth was driven primarily through increases in the volume of lenses sold as the market continues to move to more frequent replacement, including within rapidly growing specialty lenses and daily disposable spheres.replacement. While unit growth and product mix have influenced CVI’s sales growth, average realized prices by product didhave not materially influenceinfluenced sales growth.

CSI Net Sales

CVI results include Ocular beginning on January 6, 2005, when Cooper acquired Ocular. To present CVI’s organic growth, we have adjusted reported sales in this discussion for Ocular’s unauditedCSI’s net sales when Cooper did not own Ocular of $269.3increased 9% to $168.3 million for January 6, 2004 through October 31, 2004 with CVI’s reported netorganic sales of $388.7 million for Cooper’s fiscal 2004. Organic net sales grew 6%, 4% in constant currency. Americas sales grew 1%, European sales grew 8%, 5% in constant currency, and Asia-Pacific sales grew 22%, 20% in constant currency. CVI’s core product lines grew 20% with specialty lens growth of 17%about 6%. Sales of products marketed directly to hospitals grew 19% and single-use lens growthnow represent 30% of 38%. Disposable lens sales growth included spherical lens sales up 5%, disposable toric sales up 26%CSI’s sales. Women’s healthcare products used primarily by obstetricians and disposable multifocal lens sales up 59%. During 2005, CVI lost, on an organic basis, market share in the two-week spherical lens market in the United States.gynecologists generate 95% of CSI’s sales.

2006 Compared to 2005 and 2005 Compared to 2004THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Cost of Sales/Gross Profit

Included in the 2006 margin for CVI was $6.7 million for production start up costs primarily related to our silicone hydrogel products, $8.3 million of restructuring and integration expenses, $1.1 million of phase out costs for our corneal health products and $0.5 million for share-based compensation expense. In addition, we have lower gross margin on single-use lenses that now account for about 12% of CVI’s

Management’s Discussion and Analysis of Financial Condition and

Results of Operations – (Continued)

net sales. The decrease in 2005 was primarily due to the recognition in cost ofbalance are sales of a $16.8 million step upmedical devices outside of Ocularwomen’s healthcare which CSI does not actively market. While unit growth and product mix have influenced organic sales growth, average realized prices by product have not materially influenced organic sales growth.

2009 Compared to 2008 and 2008 Compared to 2007

Cost of Sales/Gross Profit

CVI’s margin was 54% in fiscal 2009 compared with 58% in fiscal 2008. The decline is largely attributed to costs associated with inventory and equipment write-offs and idle equipment. Also, in our fiscal third quarter of 2009, we initiated the 2009 CooperVision Manufacturing restructuring plan to reflect purchasedmove contact lens manufacturing profit sold post acquisitionprimarily from Norfolk, Virginia, to existing manufacturing operations in Juana Diaz, Puerto Rico, and $5.4Hamble, UK. In fiscal 2009, $5.0 million of costs associated with this manufacturing restructuring expenses. About 44%plan, primarily severance charges and accelerated depreciation, were recorded as costs of lens units are manufactured insales. As discussed below, we expect to incur similar costs related to this manufacturing restructuring plan through the United Kingdom. The favorable impactfiscal first quarter of currency on revenue is offset by the unfavorable impact on manufacturing costs.2011.

CSI’s gross margin improved to 58%was 60% in 2006 from 57%fiscal 2009 and 59% in 2005 and from 55% in 2004 reflecting high marginsfiscal 2008. Gross margin reflects CSI’s emphasis on product lines acquired during the year, continuing efficiencies from CSI’s restructuring activities completed in the fourth quarter of fiscal 2005organic growth, and the successful integrationincrease is a result of acquisitions.manufacturing efficiencies along with a changing product mix including higher margin products marketed directly to hospitals that represent 33% of net sales in fiscal 2009 compared to 30% in fiscal 2008.

Selling, General and Administrative Expense (SGA)