SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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1225 Old Highway 8 NW

St. Paul, Minnesota 55112

Telephone: 877-CSI-0360

You are cordially invited to attend the Annual Meeting of Stockholders (the “Annual Meeting”) of Cardiovascular Systems, Inc. (the “Company” or “CSI”) on Wednesday, November ~~14, 2018,~~13, 2019, at 10:00 a.m. (Central Time). A notice of the Annual Meeting and a Proxy Statement covering the formal business of the ~~meeting~~Annual Meeting appear on the following pages.

This year’s ~~meeting~~Annual Meeting will be a virtual meeting that will be conducted live via webcast. You will be able to attend the ~~annual meeting of stockholders~~Annual Meeting online and submit your questions during the ~~meeting~~Annual Meeting by visiting www.virtualshareholdermeeting.com/~~CSII2018~~CSII2019. You will also be able to vote your shares electronically at the ~~annual meeting.~~Annual Meeting.

We are excited to continue to utilize the latest technology to provide ready access, real-time communication and cost savings for our stockholders and the Company. ~~Hosting~~We believe that hosting a virtual ~~meeting~~Annual Meeting will facilitate stockholder attendance and participation from any location in the world.

Thank you for your continued support of and interest in Cardiovascular Systems, Inc.

To Be Held on November ~~14, 2018~~13, 2019 at 10:00 a.m. (Central Time)

These items of business are more fully described in the proxy statement accompanying this Notice.

October ~~2, 2018~~1, 2019

You are cordially invited to attend the ~~meeting.~~Annual Meeting. Whether or not you expect to attend the ~~meeting,~~Annual Meeting, please vote your ~~shares.~~shares by proxy. You may vote by proxy over the telephone or the Internet as instructed in ~~this~~the accompanying proxy statement. If you received a proxy card or voting instruction card by mail, you may submit your proxy card or voting instruction card by completing, signing, dating and mailing your proxy card or voting instruction card in the envelope provided. Any stockholder attending the ~~meeting~~Annual Meeting online may vote at the ~~meeting,~~Annual Meeting, even if you already returned a proxy card or voting instruction card or voted by proxy over the telephone or the Internet. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the ~~meeting,~~Annual Meeting, you must obtain a proxy issued in your name from that record holder.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE

ANNUAL MEETING TO BE HELD ON NOVEMBER ~~14, 2018:~~13, 2019:

CARDIOVASCULAR SYSTEMS, INC.

1225 Old Highway 8 NW

St. Paul, Minnesota 55112

Telephone: 877-CSI-0360

FOR THE ANNUAL MEETING OF STOCKHOLDERS

INFORMATION CONCERNING SOLICITATION AND VOTING

QUESTIONS AND ANSWERS ABOUT THIS PROXY MATERIAL, VOTING AND ~~VOTING~~PARTICIPATION IN THE ANNUAL MEETING

Why did I receive in the mail a Notice of Internet Availability of Proxy Materials instead of a full set of proxy materials?

We are pleased to take advantage of the SEC rule that allows companies to furnish their proxy materials over the Internet. Accordingly, we have sent to our beneficial owners and stockholders of record a Notice of Internet Availability of Proxy Materials. Instructions on how to access the proxy materials over the Internet or to request a paper copy may be found in the Notice. Our stockholders may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis. A stockholder’s election to receive proxy materials by mail or electronically by email will remain in effect until the stockholder terminates its election.

Why did I receive a full set of proxy materials in the mail instead of a Notice of Internet Availability of Proxy Materials?

We are providing paper copies of the proxy materials instead of a Notice to beneficial owners or stockholders of record who have previously requested to receive paper copies of our proxy materials. If you are a beneficial owner or stockholder of record who received a paper copy of the proxy materials, and you would like to reduce the environmental impact and the costs incurred by us in mailing proxy materials, you may elect to receive all future proxy materials electronically via ~~email or the Internet.~~email.

You can choose to receive our future proxy materials electronically via email by visiting http://www.proxyvote.com. Your choice to receive proxy materials electronically via email will remain in effect until you instruct us otherwise by following the instructions contained in your Notice and visiting http://www.proxyvote.com, sending an email to sendmaterial@proxyvote.com, or calling 1-800-579-1639.

The SEC has enacted rules that permit us to make available to stockholders electronic versions of the proxy materials even if the stockholder has not previously elected to receive the materials in this manner. We have chosen this option in connection with the Annual Meeting with respect to both our beneficial owners and stockholders of record.

Who can vote at the Annual Meeting?

Only stockholders of record at the close of business on September ~~17, 2018~~16, 2019 will be entitled to vote at the virtual Annual Meeting through www.virtualshareholdermeeting.com/~~CSII2018~~CSII2019. On the record date, there were ~~34,705,999~~35,213,805 shares of common stock of the Company outstanding and entitled to vote.

Stockholder of Record: Shares Registered in Your Name

If, on September ~~17, 2018,~~16, 2019, your shares were registered directly in your name with the Company’s transfer agent, ~~American Stock Transfer & Trust Company,~~Broadridge Corporate Issuer Solutions, Inc., then you are a stockholder of record. As a stockholder of record, you may vote at the virtual Annual Meeting through www.virtualshareholdermeeting.com/~~CSII2018~~CSII2019 or vote by proxy. Whether or not you plan to attend the virtual Annual Meeting, we urge you to vote your shares by proxy by completing, signing, dating and mailing your proxy card in the envelope provided, if you received paper copies of the proxy materials, or vote your shares by proxy over the telephone or the Internet as instructed below to ensure your vote is counted.

Beneficial Owner: Shares Registered in the Name of a Broker or Bank

If, on September ~~17, 2018,~~16, 2019, your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer, or other similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct your broker, bank or other ~~agent~~nominee regarding how to vote the shares in your account. You are also invited to attend the virtual Annual Meeting; however, since you are not the stockholder of record, you may not vote your shares at the Annual Meeting unless you request and obtain a valid proxy from your broker, bank or other ~~agent.~~nominee.

What am I voting on?

There are three matters scheduled for a vote:

The procedures for voting are as follows:

Stockholder of Record: Shares Registered in Your Name

If you are a stockholder of record, you may vote at the virtual Annual Meeting, vote by proxy using the enclosed proxy card (if you received paper copies of the proxy materials), vote by proxy over the telephone, or vote by proxy over the Internet. Whether or not you plan to attend the Annual Meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the Annual Meeting and vote at that time even if you have already voted by proxy.

We are providing Internet proxy voting to allow you to vote your shares via proxy online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your Internet access, such as usage charges from Internet access providers and telephone companies. These costs will also apply to virtual attendance at the Annual Meeting.

Beneficial Owner: Shares Registered in the Name of Broker or Bank

If you are a beneficial owner of shares registered in the name of your broker, bank, or other ~~agent,~~nominee, you may have received a Notice of Internet Availability or a proxy card and voting instructions with these proxy materials from that organization rather than from us. Simply complete and mail the proxy card to ensure that your vote is submitted to your broker, bank or ~~bank.~~other nominee. Internet and telephone voting also may be available to you; please see the materials you received from your broker, bank or other ~~agent~~nominee for further information. To vote online at the virtual Annual Meeting, you will need the 16-digit control number included with your voting instruction card or voting instructions you received from your broker, bank, or other agent.

How many votes do I have?

On each matter to be voted upon, you have one vote for each share of common stock you own as of September ~~17, 2018.~~16, 2019. There is no cumulative voting for election of directors.

What if I return a proxy card but do not make specific choices?

If you return a signed and dated proxy card without marking any voting selections, your shares will be voted as follows:

If any other matter is properly presented at the meeting, your proxyholder (one of the individuals named on your proxy card) will vote your shares using his or her best judgment.

Who is paying for this proxy solicitation?

We will pay for the entire cost of soliciting proxies. Our directors and employees may solicit proxies in person, by telephone, or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.

What does it mean if I receive more than one proxy card?

If you receive more than one proxy card, your shares are registered in more than one name or are registered in different accounts. Please complete, sign and return each proxy card to ensure that all of your shares are voted.

Are proxy materials available on the Internet?

This proxy statement and our fiscal ~~2018~~2019 Annual Report to Stockholders are available at http://www.proxyvote.com or http://www.csi360proxy.com.

Can I change my vote after submitting my proxy?

Yes. You can revoke your proxy at any time before the final vote at the virtual Annual Meeting. If you are the record holder of your shares, you may revoke your proxy in any one of four ways:

If your shares are held by your broker, bank or ~~bank as a~~other nominee, ~~or agent,~~ you should follow the instructions provided by your broker, bank or ~~bank.~~other nominee.

How are votes counted?

Votes will be counted by the inspector of election appointed for the Annual Meeting, who will separately count “For” and “Against” votes and abstentions and broker non-votes for director elections; “For” and “Against” votes and abstentions for auditor selection ratification; and “For” and “Against” votes and abstentions and broker non-votes for the advisory vote on Named Executive Officer compensation.

Abstentions will not be counted toward the vote total for the election of directors, but abstentions will be counted towards the vote total for each other proposal, and will have the same effect as “Against” votes for those proposals. Broker non-votes have no effect and will not be counted towards the vote total for any proposal.

What are “broker non-votes”?

Broker non-votes occur when a beneficial owner of shares held in “street name” does not give instructions to the broker, bank or other nominee holding the shares as to how to vote on matters deemed “non-routine.” Generally, if shares are held in street name, the beneficial owner of the shares is entitled to give voting instructions to the broker, bank, or other nominee holding the shares. If the beneficial owner does not provide voting instructions, the broker, bank, or other nominee can still vote the shares with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. Under the rules and interpretations of the New York Stock Exchange, the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm is currently considered a routine ~~matter. The~~matter and the election of directors and advisory vote on Named Executive Officer compensation are currently considered non-routine ~~matters under the rules of the New York Stock Exchange.~~matters.

How many votes are needed to approve each proposal?

What is the quorum requirement?

A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if stockholders holding at least a majority of the outstanding shares are present at the virtual Annual Meeting or represented by proxy. On the record date, there were ~~34,705,999~~35,213,805 shares outstanding and entitled to vote. Thus, the holders of ~~17,353,000~~17,606,903 shares must be present in person or represented by proxy at the Annual Meeting to have a quorum.

Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank, or other nominee) or if you vote at the Annual Meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, the holders of a majority of shares present at the Annual Meeting in person or represented by proxy, or the chairman of the Annual Meeting, may adjourn the Annual Meeting to another date.

How can I find out the results of the voting at the Annual Meeting?

Preliminary voting results will be announced at the Annual Meeting. Final voting results will be published in a Current Report on Form 8-K, which we will file within three business days of the Annual Meeting.

When are stockholder proposals due for the ~~Fiscal 2019~~fiscal 2020 Annual Meeting?

Any appropriate proposal submitted by a stockholder and intended to be presented at the fiscal ~~2019~~2020 Annual Meeting must be submitted in writing to our Secretary at 1225 Old Highway 8 NW, St. Paul, Minnesota 55112, and received no later than June ~~7, 2019,~~5, 2020, to be includable in the Company’s proxy statement and related proxy for the fiscal ~~2019~~2020 Annual Meeting. A stockholder proposal will need to comply with the SEC regulations under Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), regarding the inclusion of stockholder proposals in company-sponsored proxy materials. Although our Board of Directors will consider stockholder proposals, we reserve the right to omit from our proxy statement a stockholder proposal that we are not required to include under the Exchange Act, including under Rule 14a-8. Additionally, pursuant to the advance notice provisions of the Company’s Bylaws, as authorized by applicable state law, in order for stockholders to present director nominations or other business at the fiscal ~~2019~~2020 Annual Meeting, a stockholder’s notice of such nomination or other business must be received by our Secretary at the same address no earlier than the close of business on July ~~17, 2019,~~15, 2020, and no later than the close of business on August ~~16, 2019,~~14, 2020, and must be in a form that complies with the requirements set forth in the Company’s Bylaws. You are advised to review the Company’s Bylaws for these requirements.

What are “householding” rules and how do they affect me?

Why are you holding a virtual Annual Meeting?

How can I participate and ask questions at the virtual Annual Meeting?

What do I do if I have technical problems during the virtual Annual Meeting?

If I can’t participate in the live Meeting webcast, can I listen to it later?

ELECTION OF DIRECTORS

~~The~~Our Board of Directors (the “Board”) is divided into three classes, with each class serving staggered three-year terms. Vacancies on the Board may be filled only by persons elected by a majority of the remaining directors. A director elected by the Board to fill a vacancy in a class, including vacancies created by an increase in the number of directors, will serve for the remainder of the full term of that class and until such director’s successor is elected and qualified.

The term of office of the Class III directors expires at the Annual Meeting. The Board has nominated Scott ~~Bartos, Edward Brown, and Augustine Lawlor~~R. Ward for election at the Annual Meeting. ~~Messrs. Bartos, Brown, and Lawlor have~~Mr. Ward has served on the Board since ~~2012, 2009,~~2013, and ~~2009, respectively.~~was appointed Chairman in November, 2014. He served as our Interim President and Chief Executive Officer beginning November 30, 2015, and on August 15, 2016, Mr. Ward was appointed as our President and Chief Executive Officer. If elected at the Annual Meeting, ~~Messrs. Bartos, Brown, and Lawlor~~Mr. Ward would serve until the fiscal ~~2021 annual meeting~~2022 Annual Meeting and until ~~their successors are~~his successor is elected and ~~have~~has qualified, or, if sooner, until ~~the director’s~~his death, resignation or removal. The term of the other Class II director, Brent Blackey, expires at the Annual Meeting, and Mr. Blackey will no longer be a director following the Annual Meeting. We are currently conducting a search for a new director who would be qualified to serve on the Audit Committee and be the Audit Committee financial expert, with the goal of appointing such new director as of the time Mr. Blackey’s term ends.

Unless a contrary choice is specified, shares represented by executed proxies will be voted “For” the election of the nominees named in this proxy statement, or, if a nominee becomes unavailable for election as a result of an unexpected occurrence, “For” the election of a substitute nominee designated by our Board. The ~~nominees have~~nominee has agreed to serve as a director if elected, and we have no reason to believe that ~~the nominees~~he will be unable to serve.

The following is a brief biography for ~~each of~~ the Class III director ~~nominees,~~nominee, and each person whose term of office as a Class III or Class III director will continue after the Annual Meeting.



Name	Age⁽¹⁾	Position
Class I Directors:
~~Scott Bartos~~Erik Paulsen⁽²⁾⁽⁴⁾	5554	Director
Edward Brown⁽²⁾⁽³⁾	5556	Director
Augustine Lawlor^(2)(3)(4)	6263	Director
Class II ~~Directors:~~Director Nominee:
~~Brent G. Blackey~~⁽⁴⁾	59	~~Director~~
Scott R. Ward	5859	Chairman, President and Chief Executive Officer
Class III ~~Director Nominees:~~Directors:
Martha Goldberg Aronson⁽³⁾⁽⁴⁾	5152	Director
William E. Cohn, M.D.⁽²⁾	5859	Director

~~NOMINEES~~NOMINEE FOR ELECTION FOR A THREE-YEAR TERM EXPIRING AT THE FISCAL ~~2021~~2022 ANNUAL MEETING

Scott ~~Bartos~~R. Ward. Mr. ~~Bartos~~Ward has been a member of our Board since ~~October 2012.~~November 2013 and has served as its Chairman since November 2014. Mr. ~~Bartos~~Ward served as our Interim President and Chief Executive Officer beginning November 30, 2015, and on August 15, 2016, Mr. Ward was appointed as our President and Chief Executive Officer. Since 2013, Mr. Ward has ~~more than 25 years~~been one of ~~experience~~the Managing Directors at SightLine Partners. Following his appointment as our President and Chief Executive Officer, Mr. Ward continues to be a ~~healthcare executive~~Managing Director of SightLine Opportunity Management Fund II, LLC and ~~director,~~may provide limited advisory and ~~is currently~~consulting services to SightLine Partners in this capacity. From 1981 to 2010, Mr. Ward was employed by Medtronic, Inc. and held a ~~director~~number of ~~Outset Medical (f/k/a Home Dialysis Plus).~~senior leadership positions. Mr. Ward was Senior Vice President and President of Medtronic’s CardioVascular business from May 2007 to November 2010. Prior to that he was Senior Vice President and President of Medtronic’s Vascular business from May 2004 to May 2007, Senior Vice President and President of Medtronic’s Neurological and Diabetes Business, from February 2002 to May 2004, and was President of Medtronic’s Neurological business from January 2000 to January 2002. He ~~previously~~was Vice President and General Manager of Medtronic’s Drug Delivery Business from 1995 to 2000. Prior to that, Mr. Ward led Medtronic’s Neurological Ventures in the successful development of new therapies. Mr. Ward serves on the boards of several private companies. Until April 2016, Mr. Ward was the Chairman of the Board of Creganna Medical. Mr. Ward served as a ~~director of Alliance HealthCare Services, Inc. until its sale in August 2017. He also previously served as President & CEO and chairman~~member of the ~~board~~Board of directors of Rural/Metro Corporation. Rural/Metro Corporation filed for bankruptcy in August 2013, and Mr. Bartos was hired to lead the turnaround effort in connection with this bankruptcy. Rural/Metro was acquired in October 2015. Mr. Bartos previously served as President, Chief Executive Officer, and a director of LaVie Care Centers, a national long-term care company with revenues exceeding $1.0 billion annually, from July 2009 through the sale of the company in December 2011. From December 2008 to July 2009, he was an Executive in Residence at Warburg Pincus LLC. Mr. Bartos was Division President for Gambro Healthcare,Surmodics, Inc. from ~~2000~~September 2010 to ~~2004 and COO-East from 2004 to 2005. Mr. Bartos previously was the founder, President, CEO and a Director of Endoscopy Specialists Inc.~~March 2015. We believe that Mr. ~~Bartos’~~Ward’s experience ~~in business design, strategic planning, new product~~running businesses within a large medical device company and ~~service innovation, sales and marketing, and mergers and acquisitions with large, medium and small businesses in both public and private company settings~~his knowledge of the medical device industry allow him to make a valuable ~~contributions~~contribution to our Board. In addition, as our President and Chief Executive Officer, Mr. Ward is the person most familiar with our business and industry and most capable of effectively identifying strategic priorities and leading the execution of strategy.

DIRECTORS CONTINUING IN OFFICE UNTIL THE FISCAL 2021 ANNUAL MEETING

Erik Paulsen. Mr. Paulsen has been a member of our Board since July 2019. From 2009 to 2019, Mr. Paulsen represented Minnesota’s Third Congressional District in the United States House of Representatives. During his tenure, Mr. Paulsen was a leading member on the House Ways and Means Committee, the House’s tax-writing body with broad jurisdiction over healthcare, economic and trade policy. He also served as Chairman of Congress’ Joint Economic Committee, a unique House-Senate panel tasked with working alongside the President’s Council of Economic Advisors and the Federal Reserve Board to identify and address macroeconomic trends. Mr. Paulsen was co-chair of the bipartisan House Medical Technology Caucus, as well. Prior to his service in Congress, Mr. Paulsen was a member of the Minnesota State Legislature, where he served as House Majority Leader. Mr. Paulsen has over 16 years of business experience, including working as a business analyst at Target Corporation. We believe Mr. Paulsen’s leadership abilities, experience in government affairs, achievements in domestic policy relating to the healthcare industry, and strong advocacy for the medical technology industry will strengthen the Board’s understanding of critical issues facing its business and be invaluable to the Company as it seeks to expand the number of patients it serves.

Edward Brown. Mr. Brown has been a member of our Board since February 2009. Mr. Brown was a member of the board of directors of Replidyne, Inc. from May 2007 to February 2009. Mr. Brown was appointed as our Lead Independent Director in August 2016. Mr. Brown currently serves as Managing Director at Five Arrows Capital Partners, an affiliate of the Rothschild Group. Mr. Brown was previously a Partner at Health Evolution Partners from 2010 to 2016, Managing Director at TPG Biotech from 2007 to 2009 and a Managing Director and co-founder of Healthcare Investment Partners, a private equity fund focused on healthcare investments, from 2004 to 2007. Before Healthcare Investment Partners, Mr. Brown was a Managing Director in the healthcare group of Credit Suisse Group where he led the firm’s West Coast healthcare effort and was one of the senior partners responsible for the firm’s global life sciences practice. Mr. Brown has previously served on the boards of various public and private companies. We believe that Mr. Brown’s leadership experience in life sciences and strategic transactions and his service as a board member of public and private healthcare companies enable him to bring valuable insight and knowledge to our Board.

Augustine Lawlor. Mr. Lawlor has been a member of our Board since February 2009. He was a member of the board of directors of Replidyne, Inc. from March 2002 to February 2009. Mr. Lawlor is the Managing Partner of HealthCare Ventures LLC, where he was a Managing Director from 2000 to 2007. Mr. Lawlor is also the Chief Operating Officer of Leap Therapeutics. Mr. Lawlor was previously Chief Operating Officer of LeukoSite, Inc. and has also served as a management consultant with KPMG Peat Marwick. Mr. Lawlor serves on the board of directors of Catalyst Biosciences, Inc., as well as several private companies. He also served on the board of directors of Human Genome Sciences, Inc. from March 2004 to August 2012. We believe that Mr. Lawlor’s leadership experience in operating companies and with investment firms and his service as a board member of public companies enable him to bring valuable insight and knowledge to our Board.

DIRECTORS CONTINUING IN OFFICE UNTIL THE FISCAL 2020 ANNUAL MEETING

Martha Goldberg Aronson. Ms. Goldberg Aronson has been a member of our Board since February 2017. Ms. Goldberg Aronson served as Executive Vice President of Strategic Planning at Ecolab, Inc., a specialty chemical company, from November 2015 to April 2016, and previously served as Ecolab’s Executive Vice President and President-Global Healthcare, from September 2012 to November 2015. Prior to Ecolab, Ms. Goldberg Aronson served as Senior Vice President and President, North America, of Hill-Rom Holdings, Inc., a leading worldwide manufacturer and provider of medical technologies and related services for the health-care industry, since August 2010. Before joining Hill-Rom, she served as Senior Vice President at Medtronic, Inc., from March 2008 to November 2009, and in various other domestic and international management positions with Medtronic, since 1991. She is also a director of Methode Electronics, Inc., CONMED Corporation and Clinical Innovations, LLC, and previously served as a director of Hutchinson Technology from 2010 to 2016, when it was acquired. We believe that Ms. Goldberg Aronson’s leadership experience at companies within the healthcare industry and knowledge of the medical device industry make her a valuable contributor to our Board.

William E. Cohn, M.D. Dr. Cohn has been a member of our Board since February 2015. Dr. Cohn is a Vice President of Medical Devices and Director of the Center for Device Innovation at Johnson & Johnson. He is also a Cardiothoracic Surgeon and a professor of Surgery at Baylor College of Medicine. Dr. Cohn is the chief medical officer of BiVACOR USA, a privately-held medical device company. In addition to being the only physician on our Board, we believe Dr. Cohn’s active involvement in the development, implementation, and regulatory clearance for several medical devices in cardiovascular medicine make him a valuable contributor to our Board and mission.

~~Brent G. Blackey.~~ Mr. Blackey has been a member of our Board since October 2007. Mr. Blackey served as the President and Chief Operating Officer for Holiday Companies from December 2004 until December 2017, when it was sold to Alimentation Couche-Tard. Between 2002 and 2004, Mr. Blackey was a Senior Partner at the accounting firm of Ernst & Young LLP. Prior to 2002, Mr. Blackey served as a Senior Partner at the accounting firm of Arthur Andersen LLP. Mr. Blackey has served on the board of directors of Coborn’s Inc. since January 2018 and the advisory boards of Northern Tool and Equipment Company, Inc. and Oppidan, Inc. since December 2017. Mr. Blackey served on the board of directors of Datalink Corporation, a publicly-held company, from April 2006 until it was sold in January 2017. Mr. Blackey also serves on the Board of Overseers for the University of Minnesota’s Carlson School of Management. We believe that Mr. Blackey’s accounting background, experience as an executive officer and his service as a board member of a public company are strong endorsements for membership on our Board and invaluable to his role as our audit committee financial expert and Chairman of the Audit, Risk Management and Finance Committee.

~~Scott R. Ward~~. Mr. Ward has been a member of our Board since November 2013 and has served as its Chairman since November 2014. Mr. Ward served as our Interim President and Chief Executive Officer beginning November 30, 2015, and on August 15, 2016, Mr. Ward was appointed as our President and Chief Executive Officer. Since 2013, Mr. Ward has been one of the Managing Directors at SightLine Partners. Following his appointment as our President and Chief Executive Officer, Mr. Ward continues to be a Managing Director of SightLine Opportunity Management Fund II, LLC and may provide limited advisory and consulting services to SightLine Partners in this capacity. From 1981 to 2010, Mr. Ward was employed by Medtronic, Inc. and held a number of senior leadership positions. Mr. Ward was Senior Vice President and President of Medtronic’s CardioVascular business from May 2007 to November 2010. Prior to that he was Senior Vice President and President of Medtronic’s Vascular business from May 2004 to May 2007, Senior Vice President and President of Medtronic’s Neurological and Diabetes Business, from February 2002 to May 2004, and was President of Medtronic’s Neurological business from January 2000 to January 2002. He was Vice President and General Manager of Medtronic’s Drug Delivery Business from 1995 to 2000. Prior to that, Mr. Ward led Medtronic’s Neurological Ventures in the successful development of new therapies. Mr. Ward serves on the boards of several private companies. Until April 2016, Mr. Ward was the Chairman of the Board of Creganna Medical. Mr. Ward served as a member of the Board of Surmodics, Inc. from September 2010 to March 2015. We believe that Mr. Ward’s experience running businesses within a large medical device company and his knowledge of the medical device industry allow him to make a valuable contribution to our Board. In addition, as our President and Chief Executive Officer, Mr. Ward is the person most familiar with our business and industry and most capable of effectively identifying strategic priorities and leading the execution of strategy.

INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

INDEPENDENCE OF THE BOARD OF DIRECTORS

Under the Nasdaq Stock Market (“Nasdaq”) listing standards, a majority of the members of a listed company’s board of directors must qualify as “independent,” as affirmatively determined by the board of directors. Our Board consults with the Company’s legal counsel to ensure that the Board’s determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in ~~pertinent~~the applicable Nasdaq listing standards ~~of Nasdaq,~~ as in effect from time to time.

BOARD LEADERSHIP STRUCTURE

~~We have historically~~Prior to August 2016, we had separate individuals serving as Chairman of the Board and as President and Chief Executive Officer. However, in connection with the appointment of Mr. Ward to serve as our President and Chief Executive Officer in August 2016, the Board gave thoughtful and rigorous consideration to its governance structure and determined at that time that having the same individual serve as the President and Chief Executive Officer and as the Chairman of the Board best serves the interests of the Company and our stockholders. The Board believes that Mr. Ward’s extensive knowledge of, and experience in, the medical device industry will allow him to provide focused, long-term leadership and direction for the Board and executive management. As the President and Chief Executive Officer, Mr. Ward is additionally responsible for setting the strategic direction of the Company and managing the day-to-day leadership and performance of the Company. The combined roles provide clear accountability on both short- and long-term goals and a single focus for the Company’s long-term growth.

Additionally, because we believe independent directors and management have different perspectives and roles in strategy development, the Board appointed Mr. Brown as Lead Independent Director, with the following responsibilities:

chair all executive sessions of independent directors and any Board meetings where the Chairman/CEO is not present;

provide feedback from executive sessions of the independent directors to the Chairman/CEO;

call meetings of the independent directors when necessary;

act as liaison between the independent directors and the Chairman/CEO;

work with the Chairman to develop agendas for the Board and committee meetings;

respond directly to stockholder and other stakeholder questions and comments that are directed to the Lead Independent Director or to the independent directors as a group, when appropriate;

be available for consultation and direct communication with major stockholders, if they request;

retain consultants and advisors that report directly to the Board; and

perform such other duties as the Board may from time to time delegate.

The Lead Independent Director promotes active participation of the independent directors and strengthens the role of the Board in fulfilling its oversight responsibility and fiduciary duties to our stockholders.

OVERSIGHT OF RISK MANAGEMENT

The Board has an active role, as a whole and also at the committee level, in overseeing management of the Company’s risks. The Board regularly reviews information regarding the Company’s credit, liquidity and operations, as well as the risks associated with each, and the Board receives regular reports from members of senior management on areas of material risk to the Company, including operational, financial, legal, regulatory, strategic and reputational risks. The Human Resources and Compensation Committee is responsible for overseeing the management of risks relating to the Company’s executive compensation plans and arrangements, and, in fiscal ~~2018,~~2019, performed a risk assessment of the Company’s compensation programs and confirmed that the Company does not appear to have compensation programs that would encourage excessive risk-taking. The Audit, Risk Management and Finance Committee oversees our disclosure and internal controls and regularly assesses financial and accounting processes, and reviews and assesses the Company’s major enterprise, financial condition and operational risks. As a part of this responsibility, the Audit, Risk Management and Finance Committee oversees our compliance program. The Governance/Nominating Committee manages risks associated with the independence of the Board and potential conflicts of interest. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board is regularly informed through committee reports about such risks and has overall risk management oversight responsibility.

CODE OF ETHICS AND BUSINESS CONDUCT

The Company has adopted the Cardiovascular Systems, Inc. Code of Ethics and Business Conduct, which applies to all officers, directors and employees and was last amended on July ~~26, 2016.~~1, 2019. We intend to maintain the highest standards of ethical business practices and compliance with all laws and regulations applicable to our business. The Code of Ethics and Business Conduct, as amended, is available on our website at http://www.csi360.com in the “Corporate Governance” section. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of our Code of Ethics and Business Conduct by either posting such information on our website at the web address and location specified above or filing a Form 8-K.

STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS

Stockholders may communicate directly with the Board. All communications should be directed to the Company’s Secretary at the address below and should prominently indicate on the outside of the envelope that it is intended for the Board or for non-management directors, and the Company’s Secretary will forward the communications to all specified directors. If no director is specified, the communication will be forwarded to the entire Board. Stockholder communications to the Board should be sent to:

Cardiovascular Systems, Inc. Board of Directors

Attention: Secretary

1225 Old Highway 8 NW

St. Paul, MN 55112

DIRECTOR ATTENDANCE AT ANNUAL MEETINGS OF STOCKHOLDERS

Directors’ attendance at annual meetings of our stockholders can provide stockholders with an opportunity to communicate with directors about issues affecting the Company. We encourage, but do not require, our directors and nominees for director to attend annual meetings of stockholders. All of our then-current directors attended our last annual meeting of stockholders, held on November ~~15, 2017.~~14, 2018.

MEETINGS OF THE BOARD OF DIRECTORS

The Board met ~~eight~~six times during the fiscal year ended June 30, ~~2018.~~2019. All directors attended at least 75% of the aggregate number of meetings of the Board and of the committees on which they served and that were held during the period for which they were directors or committee members. In addition, the directors often communicate informally to discuss the affairs of the Company and, when appropriate, take formal action by written consent, in accordance with the Company’s charter and bylaws and Delaware law.

INFORMATION REGARDING COMMITTEES OF THE BOARD OF DIRECTORS

During the fiscal year ended June 30, ~~2018,~~2019, the Board maintained three standing committees: the Audit, Risk Management and Finance Committee; the Human Resources and Compensation Committee; and the Governance/Nominating Committee. The following table provides ~~current~~ committee membership and meeting information for fiscal ~~2018~~2019 for each of the committees of the Board in existence through June 30, ~~2018:~~2019:

Name

Audit, Risk

Management

and Finance

Committee

Human Resources and

Compensation Committee

Governance/

Nominating Committee

Audit, Risk

Management

and Finance

Committee

Human Resources and

Compensation Committee

Governance/

Nominating Committee

Martha Goldberg Aronson

Scott Bartos

Brent G. Blackey⁽¹⁾

Edward Brown⁽²⁾

William E. Cohn, M.D.

Augustine Lawlor⁽³⁾

Total meetings in fiscal 2018

Total meetings in fiscal 2019


(1)	Chair of Audit, Risk Management and Finance Committee


(2)	Chair of Human Resources and Compensation Committee


(3)	Chair of ~~Governance /~~ Governance/Nominating Committee

Following Mr. Bartos’ resignation from the Board of Directors effective July 24, 2019, Mr. Paulsen was appointed to the Board of Directors and serves on the Governance/Nominating Committee. In addition, Mr. Lawlor was appointed to serve on the Audit, Risk Management and Finance Committee and Mr. Brown was appointed to serve on the Governance/Nominating Committee.

Below is a description of each committee of the Board as such committees are presently constituted. The Board has determined that each current member of each committee meets the applicable SEC and Nasdaq rules and regulations regarding “independence” and that each member is free of any relationship that would impair his individual exercise of independent judgment with regard to the Company.

Audit, Risk Management and Finance Committee

The Audit, Risk Management and Finance Committee of the Board (the “Audit Committee”) was established by the Board in accordance with Section 3(a)(58)(A) of the Exchange Act to oversee the Company’s corporate accounting and financial reporting processes and audits of its financial statements. The Audit Committee is composed of Brent G. Blackey, Chair, Martha Goldberg Aronson and ~~Scott Bartos.~~Augustine Lawlor. The Board has adopted an Audit, Risk Management and Finance Committee Charter, which was last amended on July 26, 2017 and is available on our website at http://www.csi360.com in the “Corporate Governance” section. The functions of the Audit Committee include, among other things:

serving as an independent and objective party to monitor the Company’s financial reporting process and internal control system;

appointing, compensating and overseeing the Company’s independent auditors;

coordinating, reviewing and appraising the audit efforts of the Company’s independent auditors and management and the internal auditing or similar department or persons performing the functions of such department (to the extent the Company has such a department);

communicating directly with the independent auditors, the financial and senior management, the internal auditing department, and the Board regarding the matters related to the Audit Committee’s responsibilities and duties;

monitoring, overseeing and reviewing the Company’s risk management and ethical and legal compliance programs and exercising principal oversight responsibility with respect to certain of the Company’s material financial matters;

reviewing and overseeing the performance of our Compliance Officer and Compliance Committee and management’s implementation of our compliance program, monitoring our compliance with the Corporate Integrity Agreement we entered into with the Office of the Inspector General of the U.S. Department of Health and Human Services, and fulfilling any obligations imposed on the Audit Committee under the Corporate Integrity Agreement; and

reviewing and making recommendations to the Board regarding the financial policies of the Company, the Company’s capital structure and the Company’s current and anticipated financial requirements, and overseeing management of the financial affairs of the Company.

Our independent registered public accounting firm, legal counsel and management periodically meet privately with our Audit Committee.

Each Audit Committee member is a non-employee director of our Board. The Board reviews the Nasdaq listing standards definition of independence for Audit Committee members on an annual basis and has determined that all current members of the Company’s Audit Committee are independent (as independence is currently defined in Rule 5605(a)(2) of the Nasdaq listing standards and Rule 10A-3(b)(1) under the Exchange Act).

Audit Committee Financial Expert

The Board has determined that Mr. Blackey is the “audit committee financial expert,” as defined in Item 407(d)(5)(ii) of Regulation S-K, as amended. As noted above, Mr. Blackey is independent within the meaning of Nasdaq’s listing standards. ~~A description of Mr. Blackey’s experience is set forth above under “Directors Continuing In Office Until The Fiscal 2019 Annual Meeting.”~~ The designation of Mr. Blackey as the audit committee financial expert does not impose on Mr. Blackey any duties, obligations or liability that are greater than the duties, obligations and liability imposed on Mr. Blackey as a member of the Audit Committee and the Board in the absence of such designation or identification.

Report of the Audit Committee of the Board of Directors

In accordance with its written charter, the Audit Committee assists the Board with fulfilling its oversight responsibility regarding the quality and integrity of the accounting, auditing and financial reporting practices of the Company. In discharging its oversight responsibilities regarding the audit process, the Audit Committee:

(1) reviewed and discussed the audited financial statements with ~~management and the independent auditors;~~management;

(2) discussed with the independent auditors the material required to be discussed by ~~Auditing Standard No. 1301 (Communications with Audit Committees), with~~the applicable requirements of the Public Company Accounting Oversight Board and ~~without management present;~~the Securities and Exchange Commission

(3) received the written disclosures and the letter from the independent auditors required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence, and discussed with the independent accountant the independent accountant’s independence.

Based upon the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, ~~2018,~~2019, as filed with the Securities and Exchange Commission.

Brent G. Blackey, Chair

Martha Goldberg Aronson

~~Scott Bartos~~Augustine Lawlor

Human Resources and Compensation Committee

Our Human Resources and Compensation Committee (the “Compensation Committee”) consists of three directors: Edward Brown, Chair, Augustine Lawlor and Martha Goldberg Aronson. All members of the Company’s Compensation Committee were appointed by the Board, and consist entirely of directors who are “outside directors” for purposes of the prior version of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), “non-employee directors” for purposes of Rule 16b-3 under the Exchange Act, and “independent,” as independence is currently defined in Rule 5605(a)(2) of the Nasdaq listing standards.

The Board has adopted a Human Resources and Compensation Committee Charter, which is reviewed annually and was last amended on November 16, 2016 and is available on our website at http://www.csi360.com in the “Corporate Governance” section. The functions of the Compensation Committee include, among other things:

setting annual base compensation and approving incentive compensation for all of our executive officers, other than the Chief Executive Officer;

reviewing corporate goals and objectives relevant to Chief Executive Officer compensation, the Chief Executive Officer’s performance in light of those goals and objectives, and recommending to the independent directors of the Board the Chief Executive Officer’s compensation;

oversight responsibility for the Company’s equity incentive plans and the incentive compensation plans for our executive officers, including the delegation of routine or ministerial activities to management;

reviewing and approving employment agreements and severance agreements for our executive officers, except for the Chief Executive Officer, which are subject to input from the Board when appropriate, including change in control provisions, plans or agreements;

reviewing director compensation and recommending appropriate adjustments for submission for approval to the Board;

reviewing the Company’s processes to recruit, retain and develop management resources, including its executive personnel appraisal, development and selection processes, with a focus on the Company’s commitment to diversity;

reviewing and discussing with management the Compensation Discussion and Analysis and other executive compensation-related disclosures required by the SEC to be included in the Company’s annual Form 10-K and annual proxy statement and recommending to the Board whether the Compensation Discussion and Analysis should be included in the Company’s annual Form 10-K and annual proxy statement;

reviewing and discussing the Company’s incentive compensation and other compensation arrangements to determine whether they encourage excessive risk-taking and the relationship between risk management policies and practices and compensation, and evaluating any changes to or additional compensation policies and practices that could mitigate any such risk; and

overseeing the preparation and authorizing the filing of the Human Resources and Compensation Committee Report required to be included in the annual proxy statement.

During fiscal ~~2018,~~2019, the Compensation Committee retained Willis Towers Watson to provide independent executive compensation consulting services. Willis Towers Watson ~~helped~~advised the Compensation Committee ~~determine~~regarding competitive compensation levels for our executive officers, including base salary, annual incentive compensation, ~~stock options~~ and ~~restricted stock awards.~~equity compensation. Specifically, Willis Towers Watson provided competitive compensation data from comparable publicly-held healthcare equipment, research and development focused, or direct sales force companies, as well as incentive design observations. Willis Towers Watson also assisted the Compensation Committee in setting compensation for our directors to recommend to the Board for approval. In fiscal ~~2018,~~2019, Willis Towers Watson also provided consulting services to the Company’s human resources department in connection with its talent management strategy and development ~~process and a privacy compliance review.~~process. The Compensation Committee approved these consulting services, after considering the potential effect on Willis Towers Watson’s independence.

The Compensation Committee thoroughly reviewed Willis Towers Watson ~~meets~~relative to the six independence ~~standards specified~~factors highlighted by the ~~SEC.~~

SEC and has concluded that Willis Towers Watson is independent.

Our Chief Executive Officer may not be present during any Compensation Committee or Board voting or deliberations with respect to his compensation. Our Chief Executive Officer may, however, be present during any other voting or deliberations regarding compensation of our other executive officers, but may not vote on such items of business. In fiscal ~~2018,~~2019, the Compensation Committee met without the Chief Executive Officer present to review and recommend to the Board the compensation of the Chief Executive Officer, with input from the Compensation Committee’s third-party compensation consultant on his annual salary, equity award compensation and cash incentive compensation for the year, and the Board met without the Chief Executive Officer present to approve his compensation. For all other executive officers in fiscal ~~2018,~~2019, the Compensation Committee met with the Chief Executive Officer to consider and determine executive compensation, based on recommendations by the Chief Executive Officer and the Compensation Committee’s third-party compensation consultant.

Compensation Committee Interlocks and Insider Participation

As indicated above, the Compensation Committee consists of Messrs. Brown and Lawlor and Ms. Aronson. No member of the Compensation Committee has ever been an executive officer or employee of ours. None of our officers currently serves, or has served during the last completed year, on the compensation committee or the board of directors of any other entity that has one or more officers serving as a member of the Board or the Compensation Committee.

Governance/Nominating Committee

Our Governance/Nominating Committee consists of ~~three~~four directors: Augustine Lawlor, Chair, Edward Brown, William E. Cohn and ~~Scott Bartos.~~Erik Paulsen. All members of the Company’s Governance/Nominating Committee are “non-employee directors” for purposes of Rule 16b-3 under the Exchange Act, and “independent,” as independence is currently defined in Rule 5605(a)(2) of the Nasdaq listing standards.

The Board has adopted a Governance/Nominating Committee Charter, which was last amended on November 12, 2014, and is available on our website at http://www.csi360.com in the “Corporate Governance” section. The functions of the Governance/Nominating Committee include, among other things:

developing, reviewing and revising as appropriate, for adoption by the Board, the Principles of Corporate Governance by which the Company and the Board will be governed;

developing and recommending to the Board policies and processes designed to provide for effective and efficient governance, including, but not limited to: policies for evaluation of the Board and the chairperson; the director nomination process, including Board membership criteria, minimum qualifications for directors, and stockholder nomination of directors; stockholder-director communications; stockholder communication regarding stockholder proposals; director attendance at annual meetings; and succession planning for the Board chairperson and other Board leaders;

annually reviewing the composition of the Board against a matrix of skills and characteristics focused on the governance and business needs and requirements of the Company, and reporting to the Board regarding suggested changes in Board composition that will guide the committee in the selection, recruitment and recommendation of directors;

meeting as necessary to consider the nomination and screening of Board member candidates and evaluating the performance of the Board and its members; and

overseeing organization, membership and evaluation of Board committees and committee members, and making appropriate recommendations to the Board with respect to such matters.

The Governance/Nominating Committee believes that candidates for director should have certain minimum qualifications, including the ability to read and understand basic financial statements, being over 21 years of age and having the highest personal integrity and ethics. The Governance/Nominating Committee also intends to consider such factors as possessing relevant expertise upon which to be able to offer advice and guidance to management, having sufficient time to devote to the affairs of the Company, demonstrated excellence in his or her field, having the ability to exercise sound business judgment and having the commitment to rigorously represent the long-term interests of the Company’s stockholders. Candidates for director nominees are reviewed in the context of the current composition of the Board, the operating requirements of the Company and the long-term interests of stockholders. In conducting this assessment, the Governance/Nominating Committee considers diversity, age, skills, and such other factors as it deems appropriate given the current needs of the Board and the Company, to maintain a balance of knowledge, experience and capability. The Governance/Nominating Committee does not have a formal diversity policy and does not follow any ratio or formula with respect to diversity in order to determine the appropriate composition of the Board. In the case of incumbent directors whose terms of office are set to expire, the Governance/Nominating Committee reviews these directors’ overall service to the Company during their terms, including the number of meetings attended, level of participation, quality of performance, and any other relationships and transactions that might impair

the directors’ independence. In the case of new director candidates, the Governance/Nominating Committee also determines whether the nominee is independent for Nasdaq purposes, which determination is based upon applicable Nasdaq listing standards, applicable SEC rules and regulations and the advice of counsel, if necessary. The Governance/Nominating Committee conducts any appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates after considering the function and needs of the Board. The Governance/Nominating Committee meets to discuss and consider the candidates’ qualifications and then selects a nominee by majority vote.

The Governance/Nominating Committee will consider director candidates recommended by business and professional sources, including executive search firms, and director candidates recommended by stockholders. The Governance/Nominating Committee intends to evaluate all director candidates in the same manner, including the minimum criteria set forth above, whether or not the candidate was recommended by a stockholder. To nominate a director for the fiscal ~~2019~~2020 Annual Meeting, stockholders must submit such nomination in writing to our Secretary at 1225 Old Highway 8 NW, St. Paul, Minnesota 55112 not later than the close of business on August ~~16, 2019,~~14, 2020, nor earlier than the close of business on July ~~17, 2019;~~15, 2020; provided, however, that in the event that the date of the fiscal ~~2019~~2020 annual meeting changes more than 30 days from November ~~14, 2019,~~13, 2020, the written proposal must be delivered not earlier than the close of business on the 120th day prior to the date of the fiscal ~~2019~~2020 Annual Meeting and not later than the close of business on the later of the 90th day prior to the date of the fiscal ~~2019~~2020 Annual

Meeting or the 10th day following the day on which public announcement of the date of the fiscal ~~2019~~2020 Annual Meeting is first made by the Company. You are advised to review the Company’s Bylaws for requirements relating to director nominees.

Corporate Responsibility

As described in our Code of Ethics and Business Conduct, our company is mission-driven, patient-centric and customer focused. Our mission is Saving Limbs. Saving Lives. Every Day. Patients are at the center of everything we do, as we lead the

way in the effort to successfully treat arterial calcium, a common complication for millions of patients suffering from peripheral

and coronary artery diseases, by developing innovative medical devices to help us fulfill our mission. Our core values of Accountability, Community, Courage, Excellence, Integrity and Velocity guide the work we do every day and are used in our decision-making. We recognize the growing interest of our investors, employees and business partners in environmental, social and governance issues. Accordingly, we are committed to operating our business in a responsible manner, which includes improving our corporate sustainability by making business decisions that consider ethics, social and environmental factors, recognizing the benefits that diversity and inclusion provide and commit to equal opportunity and fair treatment in all aspects of our business, and respecting the human rights and dignity of people throughout our operations, our global supply chain and the world.

VOTE REQUIRED

The Board recommends that you vote “FOR” the election of ~~each of~~ the ~~nominees~~nominee to the Board set forth in this Proposal 1. The election of ~~each of~~ the ~~nominees~~nominee requires a majority of the votes cast by the shares present in person or represented by proxy and entitled to vote on the election of directors at the Annual Meeting at which a quorum is present.

PROPOSAL 2

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

The Audit Committee has appointed PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, ~~2019,~~2020, and the Board has directed that the appointment of the independent registered public accounting firm be submitted for ratification by the stockholders at the Annual Meeting. PricewaterhouseCoopers LLP also served as the Company’s independent registered public accounting firm for the fiscal year ended June 30, ~~2018~~2019 and has been the Company’s independent registered public accounting firm since February 25, 2009. Representatives of PricewaterhouseCoopers LLP are expected to be present at the Annual Meeting. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.

The Audit Committee is directly responsible for the appointment, compensation (including the negotiations therefor), retention and oversight of PricewaterhouseCoopers LLP. The Audit Committee and its Chair are directly involved in the selection of the lead engagement partner of PricewaterhouseCoopers LLP when there is a required rotation. While the Audit Committee periodically considers whether there should be a regular rotation of the Company’s independent auditors, members of the Audit Committee and the Board believe that the continued retention of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm is in the best interests of the Company and its stockholders.

Neither the Company’s Bylaws nor other governing documents or law require stockholder ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm. However, the appointment of PricewaterhouseCoopers LLP is being submitted to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the appointment, the Audit Committee will reconsider whether or not to retain that firm. Even if the appointment is ratified, the Audit Committee in its discretion may direct the appointment of different independent auditors at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders.

The affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote at the Annual Meeting will be required to ratify the appointment of PricewaterhouseCoopers LLP. Abstentions will have the same effect as Against votes.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

In connection with the audit of the fiscal ~~2018~~2019 financial statements, the Company entered into an engagement agreement with PricewaterhouseCoopers LLP that sets forth the terms by which PricewaterhouseCoopers LLP performed audit services for the Company.

The following table presents the aggregate fees for the fiscal years ended June 30, ~~2018~~2019 and June 30, ~~2017~~2018 billed by PricewaterhouseCoopers LLP. All fees described below were approved by the Audit Committee.


	2018		2017		2019		2018
Audit Fees⁽¹⁾	$	563,637	$	457,852	$	561,302	$	563,637
Audit-Related Fees⁽²⁾	25,600		—		10,000		25,600
Tax Fees⁽³⁾	15,000		—		—		15,000
All Other Fees⁽⁴⁾	2,713		1,800		2,766		2,713
	$	606,950	$	459,652	$	574,068	$	606,950


⁽¹⁾	Audit Fees were principally for services rendered for the audit and/or review of our consolidated financial statements. Audit fees also include fees for services rendered in connection with the filing of registration statements and other documents with the SEC, and the issuance of accountant consents and comfort letters.


⁽²⁾	Audit-Related Fees consist of professional services rendered in connection with our adoption of new accounting standards in future periods.


⁽³⁾	Tax Fees consist of assistance related to technical analysis of a tax matter.


⁽⁴⁾	All Other Fees consist of fees billed in the indicated year for other permissible work performed by PricewaterhouseCoopers LLP that is not included within the above category descriptions.

PRE-APPROVAL POLICIES AND PROCEDURES

Pursuant to its written charter, the Audit Committee is required to pre-approve the audit and non-audit services performed by our independent auditors. The Audit Committee may not approve non-audit services prohibited by applicable regulations of the SEC if such services are to be provided contemporaneously while serving as independent auditors. The Audit Committee has delegated authority to the Chairman of the Audit Committee to approve the commencement of permissible non-audit related services to be performed by the independent auditors and the fees payable for such services, provided that the full Audit Committee subsequently ratifies and approves all such services. For fiscal ~~2018,~~2019, all audit and non-audit services performed by our independent auditors were pre-approved in accordance with such pre-approval policies. The Audit Committee has determined that the rendering of the services other than audit services by PricewaterhouseCoopers LLP is compatible with maintaining the principal accountant’s independence.

VOTE REQUIRED

The Board recommends that you vote “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, ~~2019.~~2020. Ratification of the appointment of PricewaterhouseCoopers LLP requires the affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote at the Annual Meeting.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This Compensation Discussion and Analysis describes the material elements of compensation awarded to each of the following executive officers (the “Named Executive Officers”) for fiscal ~~2018:~~2019:



• Scott R. Ward		Chairman, President and Chief Executive Officer
• ~~Laurence L. Betterley~~		~~Former Chief Financial Officer~~
• Jeffrey S. Points		Chief Financial ~~Officer~~
~~• Kevin J. Kenny~~		~~Former Chief Operating~~ Officer
• Rhonda J. Robb		Chief Operating Officer
• Laura J. Gillund		Former Chief Talent Officer
• Alexander Rosenstein		General Counsel and Corporate Secretary
• Sandra Sedo		Chief Compliance Officer

~~We experienced the following changes in our executive officers during the year ended June 30, 2018:~~

~~Mr. Kenny’s employment with us ended effective January 31, 2018, and on January 24, 2018, Ms. Robb was appointed as our Chief Operating Officer.~~

On ~~February 6, 2018,~~January 9, 2019, we announced the retirement of ~~Mr. Betterley~~Ms. Gillund and entered into a transition agreement with ~~him.~~her. Under the transition agreement, ~~Mr. Betterley~~Ms. Gillund ceased to be our Chief ~~Financial~~Talent Officer on ~~February~~May 6, ~~2018,~~2019, at which time heshe ceased to be an executive officer of the Company and became our Vice President, Administration, through August ~~15, 2018.~~

~~Effective February 7, 2018, we appointed Mr. Points, previously our Vice President, Controller and Treasurer, as our Chief Financial Officer.~~30, 2019.

Executive Summary

Fiscal ~~2018~~2019 included several key strategic milestones:

Revenue increased ~~5.9%~~14.3% to ~~$217.0~~$248.0 million. Peripheral revenue grew 5%10.8% to ~~$161.4~~$178.9 million. Coronary revenue grew ~~8.7%~~24.2% to ~~$55.6~~$69.1 million.

~~Net income improved~~Gross margin decreased to ~~$1.7 million, representing~~80.8% for the ~~first~~ year ended June 30, 2019 from 81.8% for the year ended June 30, 2018 due to increased sales of ~~positive net income in the Company’s history.~~lower margin products and a greater percentage of sales into international markets, partially offset by a reduction of unit costs.

Operating expenses increased ~~$8.3~~$25.8 million, or 5%14.7%, to ~~$175.3~~$201.2 million, reflecting the expansion of our sales organization, ~~and increased enrollment~~international expansion, investments in medical education, progression in the ECLIPSE clinical ~~trial.~~

~~Cash position improved to $116.3 million due to increased earnings~~trial, and ~~positive cash flows.~~

~~In February 2018, the Coronary OAS Micro Crown received reimbursement approval in Japan, followed by the first commercial sales in Japan.~~new product development costs.


•	~~In January 2018, we~~We announced the first commercial use of Peripheral OAS outside of the United States, which occurred in Hong Kong, Germany, and the Middle East through our ~~relationship with~~international distributor, OrbusNeich^® ~~to be the exclusive U.S. distributor of OrbusNeich balloon products.~~.

In January 2019, we announced that Japan’s Ministry of Health, Labor and Welfare approved our Coronary OAS Classic Crown, and in the third quarter of fiscal 2019, sales of this product commenced in Japan.

Enrollment in our ECLIPSE clinical trial ~~approached 400~~exceeded 900 as of June 30, ~~2018.~~2019. ECLIPSE is a prospective, multi-center, randomized clinical trial of approximately 2,000 subjects with severely calcified coronary lesions in the United States.

Our performance in fiscal ~~2018~~2019 was ~~very~~ strong. ~~However, we~~We set aggressive performance targets for our executive cash incentive compensation program for the year and ~~did not meet these targets. Our~~while we exceeded our adjusted EBITDA target, we fell slightly short of our revenue target. When combined, our overall performance in relation to the target levels of cash incentive compensation that were established at the beginning of the year resulted in achievement at ~~55.9%~~109.6% of target. However, as described below under “Annual Incentive,” the Compensation Committee and the Board adjusted the adjusted EBITDA portion of the annual incentive with respect to certain unplanned, one-time expenses, resulting in a payout at ~~63.9%~~115% of target. In addition, as described below under “Long-Term Incentives,” our first three-year relative total shareholder return cycle ended on June 30, 2019, with respect to the performance-based shares granted in August 2016. Given our strong stock performance, our three-year total stockholder return of 178.9% was at the 82nd percentile of the applicable peer group, which resulted in an above target payout of 192% of target.

We believe our compensation programs appropriately rewarded our executive team for the Company’s performance in fiscal ~~2018.~~2019. The Compensation Committee believes that the most effective compensation program is one that is designed to reward the achievement of specific annual, long-term and strategic goals by the Company and that aligns executives’ interests with those of the stockholders by rewarding performance above established goals, with the ultimate objective of improving stockholder value. The Compensation Committee evaluates both performance and compensation to ensure that we maintain our ability to attract and retain superior employees in key positions and that compensation provided to key employees remains

competitive relative to the compensation paid to similarly situated executives of our peer companies. Accordingly, the Compensation Committee believes executive compensation packages that we provide to our executives should include both cash and stock-based compensation that reward performance as measured against established goals.

Say on Pay Results and Stockholder Engagement

At our Annual Meeting held November ~~15, 2017,~~14, 2018, our stockholders had the opportunity to cast a non-binding advisory vote on our executive compensation. Approximately ~~92%~~90% of the shares voted at the meeting approved our executive compensation. The Compensation Committee welcomed this feedback and intends to continue its practice of linking Company performance with executive compensation decisions. In addition to this vote result, the Compensation Committee and management gather direct input and feedback from our stockholders. We will continue to engage in discussions with stockholders who seek to provide input on executive compensation matters. We appreciate and consider all feedback and strive to provide clear and understandable information about our compensation design and performance measures.

Overview of Compensation and Process

The Compensation Committee worked with management and with our independent compensation consultant Willis Towers Watson to design the executive compensation programs for fiscal ~~2018,~~2019, following the belief that compensation should reflect the value created for the stockholders while furthering the company’s strategic goals. In doing so, we instituted our compensation programs to achieve the following goals:

align the interests of management with those of stockholders;

provide fair and competitive compensation;

integrate compensation with our business plans;

reward both business and individual performance; and

attract and retain key executives that are critical to our success.

These objectives emphasize pay for performance by ~~providing an incentive opportunity for performance at or above plan, and for threshold performance below plan but at~~structuring the compensation elements such that a ~~level determined by the Compensation Committee to merit rewarding.~~higher percentage of compensation is variable based upon Company performance. The compensation package for each executive officer is comprised of three elements: (i) base salary that reflects individual performance and is designed primarily to be competitive with salary levels in the industry; (ii) annual incentive awards contingent upon specific corporate revenue and adjusted EBITDA goals; and (iii) long-term, stock-based incentive awards that strengthen the alignment of interests between the executive officers and our stockholders.

Our Compensation Committee, in consultation with its independent compensation consultant, administers our compensation program for the Named Executive Officers. The Compensation Committee regularly invites a representative of its independent compensation consultant to participate in Compensation Committee meetings and seeks the consultant’s views regarding various compensation related issues. In connection with the annual review of executive officer and director compensation, at the request of the Compensation Committee, the compensation consultant provides the Committee with data regarding the compensation paid to executive officers and directors of companies deemed to be comparable to us (the “Compensation Peer Group”).

In establishing relevant peers that are similar to us, the Compensation Committee considered several factors, namely: companies in the healthcare equipment industry with an emphasis on research and development, companies with similar financial scope (e.g., revenue, EBITDA and market capitalization), and companies with a significant sales force. The Compensation Committee believes that the companies listed below generally meet some or all of these criteria.

For fiscal ~~2018,~~2019, the Compensation Peer Group consisted of the following companies:



Accuray Incorporated	Cutera, Inc.	LeMaitre Vascular, Inc.
ABIOMED, Inc.	Endologix, Inc.	Natus Medical, Inc.
~~ABIOMED,~~AngioDynamics Inc.	Fluidigm Corporation	Nxstage Medical, Inc.**
~~AngioDynamics~~AtriCure, Inc.	Glaukos Corporation	Penumbra, Inc.
~~AtriCure, Inc.~~ATRION Corp	Insulet Corporation	SeaSpine Holdings Corporation
~~ATRION Corp~~CryoLife Inc.	K2M Group Holdings, Inc.	The Spectranetics Corporation*
~~CryoLife Inc.~~	~~LeMaitre Vascular, Inc.~~*

* ~~The Spectranetics Corporation~~K2M Group Holdings, Inc. was acquired in ~~August 2017.~~November 2018.

** Nxstage Medical, Inc. was acquired in February 2019.

In setting fiscal ~~2018~~2019 compensation, the Compensation Committee used the data assembled by Willis Towers Watson from the Compensation Peer Group set forth above, supplemented by industry survey data as determined appropriate by Willis Towers Watson for certain positions, to assist in its determination of base salaries, target incentive compensation under the Fiscal ~~2018~~2019 Executive Officer Bonus Plan, and target equity awards.

In making compensation decisions, the Compensation Committee compares all elements of total compensation to the companies in the Compensation Peer Group. The Compensation Committee reviews the compensation paid to executives in the Compensation Peer Group and performance evaluations presented by management in determining the appropriate aggregate and individual compensation levels for the performance year. In conducting its review, the Compensation Committee considers quantitative performance results of the Company and the overall need of the Company to attract, retain and motivate the executive team.

Base Salaries

Base salary is an important element of our executive compensation program as it provides executives with a competitive, fixed, non-contingent earnings stream to support annual living and other expenses. As a component of total compensation, we generally target base salaries at the median of Compensation Peer Group salaries for comparable positions, a level that we believe is sufficient to attract and retain an experienced management team that will successfully grow our business and create stockholder value. Base salaries are reviewed regularly and adjusted to reward individual performance and contributions to our overall business objectives. We seek to do so in a manner that does not detract from the executives’ incentive to realize additional compensation through our performance-based compensation programs.

The Compensation Committee reviews the Chief Executive Officer’s salary annually at the end of each fiscal year. The Compensation Committee may recommend that the Board make adjustments to the Chief Executive Officer’s base salary based upon the Compensation Committee’s review of his current base salary, incentive cash compensation and equity-based compensation, as well as his performance and comparative market data. The Compensation Committee reviews other executives’ salaries at the end of each fiscal year, with input from the Chief Executive Officer. The Compensation Committee may approve adjustments to other executives’ base salary based upon the Chief Executive Officer’s recommendations and the reviewed executive’s responsibilities, experience and performance, as well as comparative market data.

In utilizing comparative data, the Compensation Committee seeks to approve or recommend to the Board, as the case may be, salaries for each executive at a level that is appropriate after giving consideration to experience for the relevant position and the executive’s performance. The Compensation Committee reviews performance for both the Company (based upon achievement of strategic initiatives) and each individual executive. Based upon these factors, the Compensation Committee may approve or recommend to the Board, as the case may be, adjustments to base salaries to better align individual compensation with comparative market compensation, to provide merit-based increases based upon individual or Company achievement, or to account for changes in roles and responsibilities.

For fiscal ~~2018,~~2019, the Named Executive Officers received the base salary increases noted below. The Board approved the base salary for Mr. Ward, and the Compensation Committee approved the base salaries for each of the other Named Executive Officers, for the fiscal year ended June 30, ~~2018:~~2019:

Name
2018 Base
Salary

2017 Base
Salary

Percentage
Increase
Scott R. Ward $ 650,000
$ 630,000
3.2 %
Laurence L. Betterley $ 379,212
$ 375,457
1.0 %
Jeffrey S. Points⁽¹⁾
$ 275,000
N/A
N/A
Kevin J. Kenny⁽²⁾
$ 430,000
$ 430,000
— %
Rhonda J. Robb⁽³⁾
$ 450,000
N/A
N/A
Laura J. Gillund $ 312,530
$ 300,510
4.0 %
Alexander Rosenstein⁽¹⁾
$ 283,592
N/A
N/A



Name	2019 Base Salary		2018 Base Salary		Percentage Increase
Scott R. Ward	$	670,000	$	650,000	3.1	%
Jeffrey S. Points	$	302,500	$	275,000	10.0	%
Rhonda J. Robb⁽¹⁾	$	463,500	$	450,000	3.0	%
Laura J. Gillund	$	315,655	$	312,530	1.0	%
Alexander Rosenstein	$	317,623	$	283,592	12.0	%
Sandra Sedo⁽²⁾	$	283,608	N/A		N/A

(1) Ms. Robb was appointed as the Company’s Chief Operating Officer on January 24, 2018.


~~(1)~~	~~Mr. Points and Mr. Rosenstein were not Named Executive Officers for the fiscal year ended June 30, 2017.~~


~~(2)~~	~~Mr. Kenny’s employment with the Company ended effective January 31, 2018.~~


~~(3)~~	~~Ms. Robb was appointed as the Company’s Chief Operating Officer on January 24, 2018.~~

(2) Ms. Sedo was not a Named Executive Officer for the fiscal year ended June 30, 2018.

Annual Incentive

Each Named Executive Officer has a target cash incentive that is a percentage of his or her base salary. In fiscal ~~2018,~~2019, target incentive levels as a percentage of base salary were:

115% for the President and Chief Executive Officer;

90% for the ~~former and current~~ Chief Operating Officer;

75% for the ~~former~~ Chief Financial Officer;

65% for the former Chief Talent ~~Officer;~~

~~60% for the current Chief Financial Officer;~~Officer and

~~50% for~~ the General Counsel and Corporate ~~Secretary.~~Secretary; and

50% for the Chief Compliance Officer

The Compensation Committee structures the Company’s annual cash incentive program to reward its Named Executive Officers based on the Company’s fiscal year performance. Each year, after the Company’s annual financial planning process, the Compensation Committee and the Board establish the financial objectives that need to be achieved by the Company for the Named Executive Officers to earn the cash incentive. These financial objectives vary from year to year, depending on the Company’s business goals. In fiscal ~~2018,~~2019, the cash incentive compensation program was based on the Company’s achievement of revenue and adjusted EBITDA financial goals in order to continue to align executive compensation with the interests of our stockholders.

Target amounts were split ~~one-half~~75% for achievement of revenue targets and ~~one-half~~25% for achievement of adjusted EBITDA targets. ~~For the purposes of the performance goal measurement, adjusted~~Adjusted EBITDA is defined as EBITDA with stock compensation added ~~back into the calculation and~~back. For purposes of annual incentive compensation, an adjustment is also made for cash incentive compensation paid to management above or below 100% target levels for that particular fiscal year.

The fiscal ~~2018~~2019 performance goals were aggressive and structured to encourage significant growth:


	Revenue (in millions)	Adjusted EBITDA ⁽¹⁾ (in millions)	Achievement as a % of Target	Revenue (in millions)	Adjusted EBITDA ⁽¹⁾ (in millions)	Achievement as a % of Target
Threshold	$215.9	$14.0	50%	$236.5	$2.0	50%
Target	$232.0	$21.0	100%	$251.5	$12.5	100%
Maximum	$243.5	$27.9	200%	$260.5	$15.5	200%
Actual	$217.0	$16.5	55.9%	$248.0	$13.9	109.6%

(1) The following is a reconciliation of the actual adjusted EBITDA result to the most comparable U.S. GAAP measure (in thousands):


	Year Ended		Year Ended
	June 30, 2018		June 30, 2019
Net income	$	1,712	$	(255	)
Other (income) and expense, net	390		(760		)
Provision for income taxes	132		190
Income from operations	2,234		(825		)
Add: Stock-based compensation	10,302		11,266
Add: Depreciation and amortization	3,934		3,446
Adjusted EBITDA	$	16,470	$	13,887

The actual achievement under the criteria established at the beginning of fiscal ~~2018~~2019 by measure was ~~53.6%~~88.4% of target for revenue and ~~58.3%~~173.3% of target for adjusted EBITDA. ~~Since these measures are equally weighted,~~As the fiscal 2019 criteria assigned a 75% weighting to revenue and a 25% weighting to adjusted EBITDA, the total achievement under the annual incentive plan was ~~55.9% of target,~~109.6%, as noted above. However, the Compensation Committee and the Board considered that there were various unplanned, one-time ~~severance and legal~~ expenses of ~~$2.2 million~~$649,000 in the aggregate relating to corporate development and legal activities incurred in fiscal ~~2018~~2019 that affected the Company’s adjusted EBITDA, and determined to use their discretion to add these expenses back into adjusted EBITDA for purposes of calculating the payout to the executive officers. As a result of this adjustment, the payout for the adjusted EBITDA portion of the annual incentive was ~~74.2%~~194.9% of target, and the total payout was ~~63.9%~~115% of target. As part of their determination, and in accordance with the Company’s 2014 Equity Incentive Plan, the Compensation Committee and the Board determined that it was advisable for the awards not to qualify as “performance-based” compensation under Section 162(m) of the Internal Revenue Code.

Incentive compensation amounts earned under the criteria established at the beginning of fiscal ~~2018,~~2019, and as adjusted in accordance with the determination described above, were as follows:

Fiscal 2018
Target $ Incentive Compensation $ Incentive Compensation Achievement Incentive as a % of Base Salary Achievement $ Incentive Compensation Actual Payout Actual Incentive as a % of Base Salary
Scott R. Ward $ 747,500
$ 418,208
64.3 % $ 477,728
73.5 %
Laurence L. Betterley $ 284,409
$ 159,120
42.0 % $ 181,766
47.9 %
Jeffrey S. Points⁽¹⁾
$ 131,469
$ 77,791
28.3 % $ 88,862
32.3 %
Kevin J. Kenny⁽²⁾
$ 387,000
$ 126,301
29.4 % $ 144,277
33.6 %
Rhonda J. Robb⁽³⁾
$ 172,934
$ 94,412
21.0 % $ 107,848
24.0 %
Laura J. Gillund $ 203,145
$ 113,655
36.4 % $ 129,830
41.5 %
Alexander Rosenstein $ 141,796
$ 79,331
28.0 % $ 90,622
32.0 %



	Fiscal 2019
	Target $ Incentive Compensation		Actual $ Incentive Compensation		Actual Incentive as a % of Base Salary
Scott R. Ward	$	770,500	$	886,210	136.3	%
Jeffrey S. Points	$	226,875	$	260,946	94.9	%
Rhonda J. Robb	$	417,150	$	479,795	106.6	%
Laura J. Gillund	$	205,176	$	235,988	75.5	%
Alexander Rosenstein	$	206,455	$	237,459	83.7	%
Sandra Sedo	$	141,804	$	163,099	57.5	%


~~(1)~~	~~Target bonus level as a percentage of base salary for Mr. Points was 50% from July 1, 2017 through February 6, 2018, and 60% from February 7, 2018 through June 30, 2018.~~


~~(2)~~	~~Mr. Kenny’s incentive compensation for fiscal year 2018 was pro-rated for the portion of the year in which he was employed by the Company, resulting in a payout of $144,277.~~


~~(3)~~	~~Ms. Robb’s target for fiscal 2018 was pro-rated for the portion of the year in which she was employed by the Company.~~

The Compensation Committee approved a clawback feature for the fiscal ~~2018~~2019 annual incentive program in the event of a required restatement of the Company’s financial statements.

Discretionary Bonuses

The Board and the Compensation Committee have the authority to grant discretionary bonuses. In making a determination to grant a discretionary bonus, the Board and the Compensation Committee will consider several factors, such as extraordinary individual or Company performance, achievement of major Company milestones, contribution to increase in stockholder value, amount of total compensation compared to the Compensation Peer Group, and retention. There were no discretionary bonuses granted for fiscal ~~2018.~~2019.

Long-Term Incentives

We provide long-term incentives to the Named Executive Officers through grants of equity. Under our 2017 Equity Incentive Plan (the “2017 Plan”) ~~and our prior equity incentive plans, which the 2017 Plan replaced,~~, we may make grants of restricted stock awards, stock options, restricted stock units, performance share awards, performance unit awards and stock appreciation rights to officers and other employees. We adopted ~~these~~the 2017 Plan and our prior equity incentive plans to give us flexibility in the types of awards that we could grant to our executive officers and other employees in order to meet our business needs. In fiscal ~~2018,~~2019, we used equity vehicles to emphasize performance, stockholder alignment and retention.

In fiscal ~~2018,~~2019, the Compensation Committee approved equity grants to the Named Executive Officers, other than Mr. Ward, and recommended to the Board for approval equity grants to Mr. Ward. In each case, the Compensation Committee or the Board, as applicable, approved an aggregate dollar amount of equity for each Named Executive Officer, which awards were granted in the share amounts set forth in the table below based on the grant date closing price of our common ~~stock.~~stock on August 28, 2018.

Each Named Executive Officer has a target equity incentive ~~that is~~expressed as a fixed percentage of his or her base salary. In fiscal ~~2018,~~2019, target equity incentive levels as a percentage of base salaries were:

•~~375%~~400% for the President and Chief Executive Officer,

•~~225%~~150% for the ~~former~~ Chief Financial Officer,

•~~225%~~200% for the ~~former~~ Chief Operating Officer, and

•125% for the other Named Executive Officers.

Beginning in fiscal 2019, Ms. Robb and Mr. Points will be eligible for a target equity incentive of 200% and 150%, respectively, of their annual base salaries. During fiscal 2018, Mr. Points had a target equity incentive of 50% of his annual base salary.

The value was then split to provide 60% of the value in performance-based vesting shares, based on target level performance, and 40% in time-based restricted stock in order to more heavily align these incentives with performance and stakeholder interests. Prior to his appointment as Chief Financial Officer, Mr. Points received grants of restricted stock for fiscal 2018 with a target equity incentive value that was split to provide 40% of the value in performance-based vesting shares, based on target level performance, and 60% in time-based restricted stock.

For fiscal ~~2018,~~2019, the Board and the Compensation Committee determined that the performance-vesting restricted stock would vest entirely based on total stockholder return and the measurement period would be three years, in each case in order to align executive incentives with long-term stockholder interests. Accordingly, the performance-vesting restricted stock granted in fiscal ~~2018~~2019 will vest based on our total stockholder return relative to total stockholder return of the Compensation Peer Group,

as measured by the closing prices of our stock and the Compensation Peer Group members for the 90 trading days preceding

July 1, ~~2017~~2018 compared to the closing prices of our stock and the Compensation Peer Group members for the 90 trading days preceding July 1, ~~2020,~~2021, as follows:

If our total stockholder return is below the 25th percentile of total stockholder return of the Compensation Peer Group, the Named Executive Officer will forfeit all shares of stock subject to the award;

•

If our total stockholder return is at least equal to the 25^th percentile of total stockholder return of the Compensation Peer Group, the risks of forfeiture on the shares will lapse with respect to 25% of the shares of stock subject to the award, plus a pro rata portion of the remaining shares, interpolated to the median total stockholder return of the Compensation Peer Group, such that the risks of forfeiture will lapse with respect to 50% of the shares subject to the award if our total stockholder return is equal to the median total stockholder return of the Compensation Peer Group; and

•

If our total stockholder return is greater than the median total stockholder return of the Compensation Peer Group, the risks of forfeiture on the shares will lapse with respect to greater than 50% of the remaining shares of stock subject to the award, such that the risks of forfeiture will lapse with respect to 100% of the remaining shares subject to the award if our total stockholder return is equal to or greater than the 85^th percentile of total stockholder return of the Compensation Peer Group.

Vesting of the performance-vesting restricted stock will be determined on the date that our Annual Report on Form 10-K for the fiscal year ending June 30, ~~2020~~2021 is filed.

The performance-vesting restricted stock was granted to each Named Executive Officer at the maximum number of shares that could be earned, which is 200% of the target number of shares allocated to performance-vesting restricted stock. Any shares not earned will be forfeited upon confirmation of the performance level actually achieved.

The maximum number of shares subject to each type of award is set forth in the table below:


	2018 Restricted Stock Awards		2019 Restricted Stock Awards
Name	Time⁽¹⁾	Stockholder Return⁽²⁾	Time⁽¹⁾	Stockholder Return⁽²⁾
Scott R. Ward	31,432	94,295	28,005	84,013
Laurence L. Betterley⁽³⁾	11,003	33,007
Jeffrey S. Points	8,352	2,829	4,742	14,225
Kevin J. Kenny⁽⁴⁾	12,476	37,428
Rhonda J. Robb	58,140	—	9,687	29,060
Laura J. Gillund	5,038	15,113
Laura J. Gillund⁽³⁾			4,123	12,369
Alexander Rosenstein	4,572	13,714	4,149	12,447
Sandra Sedo			3,705	11,114

(2) The award vests based on the Company's total stockholder return relative to total stockholder return of the Compensation Peer Group, as described above.

(3) In accordance with Ms. Gillund’s retirement, the time-based shares will vest in accordance with their terms through August 30, 2020 (and any unvested shares as of such time will be forfeited) and the performance-based shares will vest in accordance with the terms of the award.

Stock Ownership Guidelines and Certain Restrictions on Stock Ownership

On August 18, 2014, the Board established minimum stock ownership guidelines for our executive officers. These guidelines require executive officers to hold shares of the Company’s common stock with the following values:

New officers will have five years from the date of their appointment to the applicable role to reach this ownership level. The Compensation Committee is authorized to administer such guidelines, including the authority to make such guidelines applicable to other officers of the Company and resolve any questions of interpretation or application. The Board believes that stock ownership by executive officers is important to align their interests more closely with those of stockholders.

Under our Insider Trading Policy, executive officers and other employees may not pledge or sell short Company stock, and they are prohibited from engaging in hedging or monetization transactions with respect to their Company stock. All of our executive officers are in compliance with these guidelines.

Limited Perquisites; Other Benefits

We generally do not extend significant perquisites to our executives beyond the benefits that are available to our employees generally, such as our 401(k) plan and health, dental and life insurance benefits. ~~However, as it was~~Beginning January 1, 2019, our executives became eligible for the Executive Health Program at the Mayo Clinic. This benefit is intended to support the health and wellness of our executives through a ~~business need,~~comprehensive, expedited healthcare evaluation. In addition, Mr. Ward and Ms. Robb have participated in the Company’s President’s Club sales award trips at our expense and we paid the ~~commuting~~associated taxes on behalf of each of Mr. Ward and Ms. Robb for such expenses. We have also paid for the travel-related expenses of Mr. ~~Kenny from his home state to our headquarters in Minnesota (including housing, automobile and related expenses in Minnesota) during his employment. We had offered~~Ward’s spouse, who accompanied Mr. Ward on these ~~perquisites to Mr. Kenny in connection with his acceptance of the Chief Operating Officer position.~~trips.

Nonqualified Deferred Compensation Plans

Compensation Consultant

In preparation for fiscal ~~2018,~~2019, the Compensation Committee engaged Willis Towers Watson, a third-party compensation consulting firm, to advise the Compensation Committee in connection with its determination of competitive compensation levels for our executive officers, including base salary, annual incentive compensation, and equity-based compensation. As noted above, in fiscal ~~2018,~~2019, Willis Towers Watson also provided consulting services to the Company’s human resources department. However, the Willis Towers Watson executive compensation practice reported exclusively to the Compensation Committee.

Termination or Change of Control Plans and Agreements

~~Stock Options and Other~~ Equity Awards

The majority of our equity incentive agreements provide that in the event of a change of control (defined in such agreements as the sale by us of substantially all of our assets and the consequent discontinuation of our business, or a merger, exchange or liquidation), the vesting of all equity grants will automatically accelerate. ~~Options become immediately exercisable and our restricted~~Restricted stock becomes immediately vested as of the effective date of the change of control.

Employment Agreements

Executive Officer Severance Plan

Effective June 28, 2010, we adopted the Cardiovascular Systems, Inc. Executive Officer Severance Plan (as amended, the “Severance Plan”), which has been subsequently amended. Each of our Named Executive Officers is covered by this Severance Plan. Under the Severance Plan, if we terminate an executive officer other than for cause, as defined in the Severance Plan, the executive will receive certain severance benefits during the severance period. The severance period is 24 months for the Chief Executive Officer, 18 months for all officers (within the meaning of Section 16 of the Exchange Act); 15 months for Senior

Vice Presidents and Executive Vice Presidents; 12 months for Vice Presidents and other corporate officers; and 6 months or another period designed by the Compensation Committee for Area Vice Presidents and other employees designated by the Compensation Committee. For purposes of the Severance Plan, “cause” is generally defined as the executive’s (i) failure to perform his or her material duties; (ii) willful or deliberate misconduct; (iii) false or materially misleading representation made to the Board; or (iv) commission of any felony. The severance benefits generally consist of the continued payment of (i) the executive’s then-current base salary; and (ii) our share of the costs of the executive’s coverage under our medical, dental, and life insurance plans. In addition, the Board or Compensation Committee must take action to provide for the acceleration of the vesting for any outstanding stock options, restricted stock awards, restricted stock unit awards or other equity awards previously granted to the executive that would have vested within the 12-month period immediately following the executive’s termination of employment, and permit any outstanding stock options to remain exercisable for 180 days following the executive’s termination of employment. The Severance Plan also provides that, in the event of the participant’s termination within 24 months following a change in control (the sale by us of substantially all of our assets and the consequent discontinuance of our business; a merger, exchange, liquidation or certain acquisitions; certain changes in the composition of the Board; or a definitive agreement relating to any of these), the base salary payable during the applicable severance period will be increased to include the participant’s target bonus for the year of termination. In addition, if a participant in the Severance Plan resigns his or her employment for “good reason” within 24 months of a change of control, then that participant is entitled to the same payments as if such participant’s employment is terminated without cause, for the same severance period previously set forth in the Severance Plan. For purposes of the Severance Plan, “good reason” is generally defined as (i) a material diminution in an executive’s base salary; (ii) a material diminution in the executive’s authority, duties or responsibilities; (iii) a material diminution in the authority, duties, or responsibilities of the supervisor to whom the executive reports; (iv) a material diminution in the budget over which the executive retains authority; (v) requiring executive to be based at a location that is more than 50 miles from the location of the executive’s principal office; (vi) our failure to provide the executive with the same target bonus opportunity as in effect prior to the change in control; (vii) our failure to provide the executive with employee benefit plans that provide substantially similar benefits in the aggregate as the benefits provided to the executive immediately prior to a change of control; or (viii) any other action or inaction that constitutes a material breach by us of any agreement under which the executive provides services.

As a condition to receiving these severance benefits, the executive is required to execute a release of claims agreement in favor of the Company. The executive is not entitled to severance benefits if his termination is due to death or disability; if the executive is on military leave, sick leave, or another bona fide leave of absence generally not exceeding six months; or if the executive continues to provide services to us in excess of 20% of the average level of services he performed over the immediately preceding 36-month period.

The Severance Plan does not affect any other rights our executives may have to severance benefits in their employment agreements. However, an executive will be eligible for severance benefits under the Severance Plan only to the extent the severance is not duplicative of the benefits received by the executive under his or her employment agreement. The executive will receive benefits under his or her employment agreement first, and then will be eligible for severance benefits under the Severance Plan; provided, however, that the combined benefit will not exceed the maximum benefit available under the Severance Plan.

Although we have the right to amend or terminate the Severance Plan, we may not do so in any manner that diminishes the severance benefits (i) within 24 months of a change of control; (ii) if such amendment or termination was requested by a party other than the Board, that had previously taken other steps reasonably calculated to result in a change of control and that ultimately resulted in a change of control; or (iii) if such amendment or termination arose in connection with or in anticipation of a change of control that ultimately occurs.

Nonqualified Deferred Compensation Plan

~~Separation of Mr. Kenny~~

~~We entered into~~ a separation agreement with Mr. Kenny effective on January 31, 2018. This separation agreement provides Mr. Kenny with benefits substantially consistent with the Severance Plan, which include 18 months of salary continuation benefits in the gross amount of $645,000, a pro-rated bonus under our fiscal 2018 bonus plan in the amount of $144,277, payment for accrued but unused paid time off in accordance with Company policy, and COBRA premiums paid by us for up to 18 months. The vesting of 15,122 shares of Mr. Kenny’s time-based restricted stock that would have otherwise vested within the 12 month period following January 31, 2018 was accelerated, and up to 33,203 shares of Mr. Kenny’s performance-based restricted stock will vest, provided, and only to the extent, if any, that the performance criteria for such shares is met, as determined by the Company in or around August or September 2019 and 2020 (as applicable). Additionally, we paid Mr. Kenny a gross amount of $75,000 and reimbursed him for certain travel expenses.

Retirement of ~~Mr. Betterley~~Ms. Gillund

Compliance with Internal Revenue Code Section 162(m)

The Human Resources and Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based upon this review and discussion, the Human Resources and Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and in our Annual Report on Form 10-K for the fiscal year ended June 30, ~~2018.~~2019.

Summary Compensation Table for Fiscal ~~2018~~2019

The following table provides information regarding the compensation earned during the fiscal years ended June 30, ~~2018,~~2019, June 30, ~~2017~~2018 and June 30, ~~2016~~2017 by each of the Named Executive Officers for each year in which each was a Named Executive Officer.

Scott R. Ward⁽⁴⁾

Jeffrey S. Points⁽⁴⁾

Kevin J. Kenny⁽⁵⁾

Rhonda J. Robb⁽⁷⁾

Rhonda J. Robb⁽⁵⁾

Grants of Plan-Based Awards for Fiscal ~~2018~~2019

The following table sets forth certain information regarding grants of plan-based awards during the fiscal year ended June 30, ~~2018.~~2019. The performance-based restricted stock awards are granted at the maximum performance values, which are subject to forfeiture based on achievement of performance measures.

non-equity incentive

2018. Adjusted EBITDA is defined as EBITDA with stock compensation added back into the calculation, in addition to an add-back of depreciation and amortization. Target bonus amounts are weighted 50% for the revenue goal and 50% for the adjusted EBITDA goal.

Employment and Separation Agreements of the Named Executive Officers

On August 15, 2016, we entered into an employment agreement with Mr. Ward that provides for an initial base salary of $630,000, which base salary may be subject to review and adjustment by the Board from time to time. Mr. Ward is eligible to participate in all retirement plans and other employee benefits and policies, including paid time off, made available by the Company to its full-time employees, to the extent Mr. Ward meets the applicable eligibility requirements. Additionally, Mr. Ward is eligible to participate in the Severance Plan. The employment agreement is terminable by either party at any time for any reason. Under the terms of the employment agreement, if he is terminated by the Company without cause or terminates his employment for good reason, as each is defined in the employment agreement, the Company will pay Mr. Ward an amount equal to twice his then current base salary (payable over 24 months), a pro-rata portion of any performance bonus for which the performance period has not yet expired, and 24 months of the Company’s share of health insurance costs. If he is terminated by the Company without cause or terminates his employment for good reason following a change in control, as defined in the Severance Plan, and before the second anniversary of the change in control, the Company will pay Mr. Ward an amount equal to twice the sum of his then current base salary plus the target bonus amount he was eligible to earn under the cash bonus plan then in effect (payable over 24 months), a pro-rata portion of any performance bonus for which the performance period has not yet expired, and 24 months of the Company’s share of health insurance costs. As a condition to receiving his severance benefits, Mr. Ward is required to execute, and not rescind by the 60th day after termination, a release of claims agreement in favor of the Company. The employment agreement also contains confidentiality, noncompetition and assignment of inventions provisions. The employment agreement provides that Mr. Ward will be eligible to participate in the Company’s bonus programs for executive officers in effect from time to time.

We entered into an employment agreement with Ms. Gillund on September 24, 2013. The agreement was in our standard form for employees and is terminable by either party at any time for any reason. The agreement contains standard confidentiality, noncompetition and assignment of inventions provisions.

~~Alexander Rosenstein~~

We entered into an employment agreement with Mr. Rosenstein on August 19, 2014. The agreement was in our standard form for employees and is terminable by either party at any time for any reason. The agreement contains standard confidentiality, noncompetition and assignment of inventions provisions.

~~Laurence L. Betterley~~

The Transition Agreement and Separation Agreement for ~~Mr. Betterley~~Ms. Gillund are discussed above under “Termination or Change of Control Plans and Agreements.”

~~Kevin J. Kenny~~Alexander Rosenstein and Sandra Sedo

We entered into employment agreements with Mr. Rosenstein and Ms. Sedo on August 19, 2014 and June 13, 2016, respectively. The ~~Separation Agreement~~agreements were in our standard form for ~~Mr. Kenny is discussed above under “Termination or Change~~employees and are terminable by either party at any time for any reason. The agreements contain standard confidentiality, noncompetition and assignment of ~~Control Plans and Agreements.”~~inventions provisions.

Outstanding Equity Awards at Fiscal Year-end for Fiscal ~~2018~~2019

The following table sets forth certain information regarding outstanding equity awards held by the Named Executive Officers as of June 30, ~~2018.~~2019.

Option Exercise Price⁽¹⁾

Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested ⁽⁸⁾

Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested ⁽⁷⁾

Laurence L. Betterley⁽⁶⁾

Kevin J. Kenny⁽⁷⁾

Laura J. Gillund⁽⁹⁾

Option Exercises and Stock Vested for Fiscal ~~2018~~2019

The following table sets forth certain information regarding restricted stock award vesting by the Named Executive Officers during the fiscal year ended June 30, ~~2018.~~2019. There were no option exercises by the Named Executive Officers during the fiscal ~~year~~year.

1,004 were attributable to restricted stock granted on August 8, 2016, 708 were attributable to restricted stock granted on August 7, 2017, and 2,077 were attributable to restricted stock granted on November 8, 2017.

Nonqualified Deferred Compensation

Name
Executive Contributions in Last Fiscal Year⁽¹⁾
Registrant Contributions in Last Fiscal Year Aggregate Earnings in Last Fiscal Year Aggregate Withdrawals
Aggregate Balance at Last Fiscal Year End⁽¹⁾
Scott R. Ward $ —
$ —
$ —
$ —
$ —
Laurence L. Betterley $ —
$ —
$ —
$ —
$ —
Jeffrey S. Points $ —
$ —
$ —
$ —
$ —
Kevin J. Kenny $ —
$ —
$ 10,867
$ —
$ 395,316
Rhonda J. Robb $ —
$ —
$ —
$ —
$ —
Laura J. Gillund $ —
$ —
$ —
$ —
$ —
Alexander Rosenstein $ —
$ —
$ —
$ —
$ —

Potential Payments Upon Termination or Change in Control

As provided under “Termination or Change of Control Plans and Agreements,” many of the Company’s plans and agreements provide the Named Executive Officers with certain rights or the right to receive payments in the event of the termination of their employment or upon a change in control of the Company. The amounts payable to each of the Named Executive Officers, assuming that each individual’s employment had terminated and/or a change in control of the Company had occurred on June 30, ~~2018,~~2019, are as follows:

By Company following Termination Not for Cause⁽¹⁾

Upon Change in Control⁽²⁾

By Company following Termination Not for Cause⁽³⁾

By Company following Termination Not for Cause or by NEO for Good Reason in Connection with Change in Control⁽⁴⁾

By NEO for Good Reason⁽⁵⁾

By Company following Termination Not for Cause⁽¹⁾

Upon Change in Control⁽²⁾

By Company following Termination Not for Cause⁽³⁾

By Company following Termination Not for Cause or by NEO for Good Reason in Connection with Change in Control⁽⁴⁾

By NEO for Good Reason⁽⁵⁾

Laurence L. Betterley⁽⁶⁾

Laura J. Gillund⁽⁶⁾

has not yet expired, and health insurance costs pursuant to the Severance Plan (over a period of 24 months for Mr. Ward and 18 months for Messrs. Points and Rosenstein and Mses. Robb, Gillund and Sedo) and each respective Named Executive Officer’s employment agreement (to the extent not duplicative with the Severance Plan), if any.

CHIEF EXECUTIVE OFFICER PAY RATIO

ToUnder the SEC’s rules, a company is required to identify its median employee only once every three years so long as there have been minimal changes to its employee population or employee compensation arrangements that the company reasonably believes would not have a meaningful impact on its pay ratio. We believe that we have not had any such changes in fiscal 2019 that would have impacted our pay ratio. As such, we continue to use the median ~~of the annual total compensation of all our employees, as well as to determine the annual total compensation of our median~~ employee ~~we took~~originally identified in fiscal 2018 using the following ~~steps:~~methodology:

DIRECTOR COMPENSATION

During the fiscal year ended June 30, ~~2018,~~2019, each of our non-employee members of the Board received the following compensation:

In addition, the Lead Director receives an additional annual retainer of $40,000, and may irrevocably elect, in advance of each fiscal year, to receive this retainer in cash, in common stock of the Company or a combination thereof, or in RSUs. The non-employee members of the Board are also reimbursed for travel, lodging and other reasonable expenses incurred in attending board or committee meetings.

In setting director compensation for ~~the~~ fiscal year ~~ended June 30, 2018,~~2019, the Compensation Committee used data assembled by Willis Towers Watson to assist in its recommendations to the Board, which approves director compensation. The Compensation Committee considered this data and determined that the compensation of the non-employee members of the Board was ~~generally below~~to remain the ~~compensation~~same for fiscal 2020, except it approved an increase to the value of the ~~directors of peer group companies but approved a modest increase of $5,000 in the~~ annual ~~retainer from the director compensation program in fiscal 2017,~~RSU award to $145,000, keeping all other elements of director compensation the same as in the prior year.

All elements of director compensation will remain the same for fiscal 2019, except that the retainer for the chair of the Audit Committee has increased to $22,000, and the value of the annual RSU award has increased to $135,000.

Director Compensation Table for Fiscal ~~2018~~2019

The following table summarizes the compensation paid to each non-employee director in the fiscal year ended June 30, ~~2018.~~2019.

Fees Earned or Paid in Cash or Stock ($)⁽¹⁾

Stock Awards⁽²⁾⁽³⁾ ($)

Fees Earned or Paid in Cash or Stock ($)⁽¹⁾

Stock Awards⁽²⁾⁽³⁾ ($)



Potential Payments Upon Termination or Change in Control	34
CHIEF EXECUTIVE OFFICER PAY RATIO	35
DIRECTOR COMPENSATION	3635
Director Compensation Table ~~for Fiscal 2018~~	3736
PROPOSAL 3 - ADVISORY VOTE ON EXECUTIVE COMPENSATION	3937
VOTE REQUIRED	3937
TRANSACTIONS WITH RELATED PERSONS	4038
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	4038
DELINQUENT SECTION 16(a) ~~BENEFICIAL OWNERSHIP REPORTING COMPLIANCE~~REPORTS	4240
EQUITY COMPENSATION PLAN INFORMATION	4240
FORM 10-K INFORMATION	4240
OTHER MATTERS	4241


Name	Type of Grant	Grant date	Estimated future payouts under non-equity incentive plan awards			Estimated future payouts under equity incentive plan awards			All other stock awards: Number of shares of stock or units (#)	Grant date fair value of stock and option awards ($)	Type of Grant	Grant date	Estimated future payouts under non-equity incentive plan awards			Estimated future payouts under equity incentive plan awards			All other stock awards: Number of shares of stock or units (#)	Grant date fair value of stock and option awards ($)
Name	Type of Grant	Grant date	Threshold ($)	Target ($)	Maximum ($)	Threshold (#)	Target (#)	Maximum (#)		Grant date fair value of stock and option awards ($)	Type of Grant	Grant date	Threshold ($)	Target ($)	Maximum ($)	Threshold (#)	Target (#)	Maximum (#)		Grant date fair value of stock and option awards ($)
Scott R. Ward	Performance⁽¹⁾	N/A	373,750	747,500	1,495,000						Performance⁽¹⁾	N/A	385,250	770,500	1,541,000
	RSA⁽²⁾	8/7/2017							31,432	975,021	RSA⁽²⁾	8/28/2018							28,005	1,072,031
	PBRSA⁽³⁾	8/7/2017				23,574	47,148	94,295		1,345,590	PBRSA⁽³⁾	8/28/2018				21,003	42,007	84,013		1,907,935

Laurence L. Betterley	Performance⁽¹⁾	N/A	142,205	284,409	568,818
	RSA⁽²⁾	8/7/2017							11,003	341,313
	PBRSA⁽³⁾	8/7/2017				8,252	16,504	33,007		471,010

Jeffrey S. Points	Performance⁽¹⁾	N/A	65,735	131,469	262,938						Performance⁽¹⁾	N/A	113,438	226,875	453,750
	RSA⁽²⁾	8/7/2017							2,122	65,824
	RSA⁽⁴⁾	11/8/2017							6,230	147,215
	PBRSA⁽³⁾	8/7/2017				707	1,415	2,829		40,370

Kevin J. Kenny	Performance⁽¹⁾	N/A	193,500	387,000	774,000
	RSA⁽²⁾	8/7/2017							12,476	387,006	RSA⁽²⁾	8/28/2018							4,742	181,524
	PBRSA⁽³⁾	8/7/2017				9,357	18,714	37,428		534,098	PBRSA⁽³⁾	8/28/2018				3,556	7,113	14,225		323,050

Rhonda J. Robb	Performance⁽¹⁾	N/A	86,467	172,934	345,868						Performance⁽¹⁾	N/A	208,575	417,150	834,300
	RSA⁽⁵⁾	1/24/2018							29,070	750,000	RSA⁽²⁾	8/28/2018							9,687	370,818
	RSA⁽⁶⁾	1/24/2018							29,070	750,000	PBRSA⁽³⁾	8/28/2018				7,265	14,530	29,060		659,953

Laura J. Gillund	Performance⁽¹⁾	N/A	101,573	203,145	406,290						Performance⁽¹⁾	N/A	102,588	205,176	410,352
	RSA⁽²⁾	8/7/2017							5,038	156,279	RSA⁽²⁾	8/28/2018							4,123	157,828
	PBRSA⁽³⁾	8/7/2017				3,778	7,557	15,113		215,663	PBRSA⁽³⁾	8/28/2018				3,092	6,185	12,369		280,900

Alexander Rosenstein	Performance⁽¹⁾	N/A	70,898	141,796	283,592						Performance⁽¹⁾	N/A	103,228	206,455	412,910
	RSA⁽²⁾	8/7/2017							4,572	141,823	RSA⁽²⁾	8/28/2018							4,149	158,824
	PBRSA⁽³⁾	8/7/2017				3,429	6,857	13,714		195,699	PBRSA⁽³⁾	8/28/2018				3,112	6,224	12,447		282,671

Sandra Sedo											Performance⁽¹⁾	N/A	70,902	141,804	283,608
											RSA⁽²⁾	8/28/2018							3,705	141,827
											PBRSA⁽³⁾	8/28/2018				2,779	5,557	11,114		252,399


Name		Option Awards					Stock Awards							Stock Awards
	Grant Date	Number of Securities Underlying Unexercised Options Exercisable	Number of Securities Underlying Unexercised Options Unexercisable	Option Exercise Price⁽¹⁾		Option Expiration Date	Number of Shares or Units of Stock That Have Not Vested	Market Value of Shares or Units of Stock That Have Not Vested		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested ⁽⁸⁾	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested		Grant Date	Number of Shares or Units of Stock That Have Not Vested	Market Value of Shares or Units of Stock That Have Not Vested		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested ⁽⁷⁾	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
Scott R. Ward	⁽²⁾						34,297	$	1,109,165				⁽²⁾	34,297	$	1,472,370
	8/17/2016⁽³⁾						22,660	$	732,824				8/17/2016⁽³⁾	11,330	$	486,397
	8/17/2016⁽⁴⁾									29,704	$	960,627
	8/7/2017⁽³⁾						31,432	$	1,016,511
	8/7/2017⁽⁵⁾									23,574	$	762,383

Laurence L. Betterley⁽⁶⁾	3/2/2009	14,234		$	8.75	3/2/2019
	8/10/2015⁽³⁾						4,677	$	151,254				8/17/2016⁽⁴⁾				29,704	$	1,275,193
	8/8/2016⁽³⁾						10,722	$	346,749				8/7/2017⁽³⁾	20,954	$	899,555
	8/8/2016⁽⁴⁾									12,063	$	390,117	8/7/2017⁽⁵⁾				23,574	$	1,012,032
	8/8/2017⁽³⁾						11,003	$	355,837				8/28/2018⁽³⁾	28,005	$	1,202,255
	8/8/2017⁽⁵⁾									8,252	$	266,870	8/28/2018⁽⁶⁾				21,003	$	901,659

Jeffrey S. Points	8/10/2015⁽³⁾						601	$	19,436				8/8/2016⁽³⁾	1,004	$	43,102
	8/8/2016⁽³⁾						2,008	$	64,939				8/8/2016⁽⁴⁾				1,004	$	43,102
	8/8/2016⁽⁴⁾									1,004	$	32,469	8/7/2017⁽³⁾	1,414	$	60,703
	8/7/2017⁽³⁾						2,122	$	68,625				8/7/2017⁽⁵⁾				707	$	30,352
	8/7/2017⁽⁵⁾									707	$	22,864	11/8/2017⁽³⁾	4,153	$	178,288
	11/8/2017⁽³⁾						6,230	$	201,478				8/28/2018⁽³⁾	4,742	$	203,574
													8/28/2018⁽⁶⁾				3,556	$	152,659
Kevin J. Kenny⁽⁷⁾	8/8/2016⁽⁴⁾									6,481	$	209,596
	8/7/2017⁽⁵⁾									1,820	$	58,859

Rhonda J. Robb	1/26/2018⁽³⁾						29,070	$	940,124				1/26/2018⁽³⁾	19,380	$	831,983
	1/26/2018⁽³⁾						29,070	$	940,124				1/26/2018⁽⁸⁾	29,070	$	1,247,975
													8/28/2018⁽³⁾	9,687	$	415,863
Laura J. Gillund	8/10/2015⁽³⁾						3,002	$	97,085
													8/28/2018⁽⁶⁾				7,265	$	311,886

Laura J. Gillund⁽⁹⁾													8/8/2016⁽³⁾	2,384	$	102,345
													8/8/2016⁽⁴⁾				5,364	$	230,277
	8/8/2016⁽³⁾						4,768	$	154,197				8/7/2017⁽³⁾	3,358	$	144,159
	8/8/2016⁽⁴⁾									5,364	$	173,472	8/7/2017⁽⁵⁾				3,778	$	162,190
	8/7/2017⁽³⁾						5,038	$	162,929				8/28/2018⁽³⁾	4,123	$	177,000
	8/7/2017⁽⁵⁾									3,778	$	122,181	8/28/2018⁽⁶⁾				3,092	$	132,740

Alexander Rosenstein	8/10/2015⁽³⁾						755	$	24,417				8/8/2016⁽³⁾	2,142	$	91,956
	8/8/2016⁽³⁾						4,285	$	138,577				8/8/2016⁽⁴⁾				4,821	$	206,966
	8/8/2016⁽⁴⁾									4,821	$	155,911	8/7/2017⁽³⁾	3,048	$	130,851
	8/7/2017⁽³⁾						4,572	$	147,858				8/7/2017⁽⁵⁾				3,429	$	147,207
	8/7/2017⁽⁵⁾									3,429	$	110,894	8/28/2018⁽³⁾	4,149	$	178,117
													8/28/2018⁽⁶⁾				3,112	$	133,598

Sandra Sedo													8/8/2016⁽³⁾	1,388	$	59,587
													8/7/2017⁽³⁾	2,930	$	125,785
													8/7/2017⁽⁵⁾				3,297	$	141,540
													8/28/2018⁽³⁾	3,705	$	159,056
													8/28/2018⁽⁶⁾				2,779	$	119,302


	Stock awards				Stock awards
Name	Number of shares acquired on vesting (#)		Value realized on vesting ($)		Number of shares acquired on vesting (#)		Value realized on vesting ($)
Scott R. Ward	11,331	⁽¹⁾	$	346,389	21,808	⁽¹⁾	$	812,130
Laurence L. Betterley	13,195	⁽²⁾	$	403,371
Jeffrey S. Points	2,950	⁽³⁾	$	88,733	4,390	⁽²⁾	$	148,758
Kevin J. Kenny	26,958	⁽⁴⁾	$	702,071
Rhonda J. Robb	—		$	—	9,690	⁽³⁾	$	331,398
Laura J. Gillund	6,919	⁽⁵⁾	$	211,514	7,066	⁽⁴⁾	$	263,138
Alexander Rosenstein	5,131	⁽⁶⁾	$	144,011	4,422	⁽⁵⁾	$	164,675
Sandra Sedo					2,854	⁽⁶⁾	$	106,283


	Acceleration of Restricted Stock					Payment Upon Termination							Acceleration of Restricted Stock				Payment Upon Termination
Name	By Company following Termination Not for Cause⁽¹⁾			Upon Change in Control⁽²⁾		By Company following Termination Not for Cause⁽³⁾			By Company following Termination Not for Cause or by NEO for Good Reason in Connection with Change in Control⁽⁴⁾		By NEO for Good Reason⁽⁵⁾		By Company following Termination Not for Cause⁽¹⁾		Upon Change in Control⁽²⁾		By Company following Termination Not for Cause⁽³⁾		By Company following Termination Not for Cause or by NEO for Good Reason in Connection with Change in Control⁽⁴⁾		By NEO for Good Reason⁽⁵⁾
Scott R. Ward	$	705,271		$	8,641,280	$	1,813,102		$	3,308,102	$	1,813,102	$	6,437,611	$	15,343,654	$	2,253,899	$	3,794,899	$	2,253,899
Laurence L. Betterley⁽⁶⁾	$	443,252		$	3,481,724	$	773,478		$	1,200,092	$	394,475
Jeffrey S. Points	$	141,973		$	575,846	$	527,892		$	775,392	$	390,392	$	402,862	$	1,390,202	$	738,786	$	1,079,098	$	587,536
Kevin J. Kenny	$	340,245	⁽⁷⁾	$	1,073,785	$	993,291	⁽⁸⁾	$	—	$	—
Rhonda J. Robb	$	313,375		$	1,880,248	$	809,378		$	1,416,878	$	809,378	$	554,613	$	3,743,367	$	1,199,135	$	1,824,860	$	1,199,135
Laura J. Gillund	$	228,514		$	1,596,820	$	625,155		$	929,872	$	—
Laura J. Gillund⁽⁶⁾													$	1,154,488	$	2,524,370	$	733,560	$	1,041,324	$	—
Alexander Rosenstein	$	143,007		$	1,377,975	$	467,221		$	644,466	$	—	$	1,044,573	$	2,351,834	$	654,562	$	853,077	$	—
Sandra Sedo													$	175,498	$	1,387,669	$	537,684	$	714,939	$	—


(1)	Title of each class of securities to which transaction applies:


(2)	Aggregate number of securities to which transaction applies:


(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):




INFORMATION CONCERNING SOLICITATION AND VOTING	1
QUESTIONS AND ANSWERS ABOUT THIS PROXY MATERIAL AND VOTING	1
PROPOSAL 1—ELECTION OF DIRECTORS	56
~~NOMINEES~~NOMINEE FOR ELECTION FOR A THREE-YEAR TERM EXPIRING AT THE FISCAL 2022 ANNUAL MEETING	8
DIRECTORS CONTINUING IN OFFICE UNTIL THE FISCAL 2021 ANNUAL MEETING	78
DIRECTORS CONTINUING IN OFFICE UNTIL THE FISCAL 2020 ~~ANNUAL MEETING~~	7
~~DIRECTORS CONTINUING IN OFFICE UNTIL THE FISCAL 2019~~ ANNUAL MEETING	8
INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE	89
INDEPENDENCE OF THE BOARD OF DIRECTORS	9
BOARD LEADERSHIP STRUCTURE	109
OVERSIGHT OF RISK MANAGEMENT	10
CODE OF ETHICS AND BUSINESS CONDUCT	10
STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS	1110
DIRECTOR ATTENDANCE AT ANNUAL MEETINGS OF STOCKHOLDERS	1110
MEETINGS OF THE BOARD OF DIRECTORS	11
INFORMATION REGARDING COMMITTEES OF THE BOARD OF DIRECTORS	11
Audit, Risk Management and Finance Committee	11
Audit Committee Financial Expert	12
Report of the Audit Committee of the Board of Directors	12
Human Resources and Compensation Committee	1312
Compensation Committee Interlocks and Insider Participation	1413
Governance/Nominating Committee	14
Corporate Responsibility	15
VOTE REQUIRED	15
PROPOSAL 2 - RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS	16
PRINCIPAL ACCOUNTANT FEES AND SERVICES	16
PRE-APPROVAL POLICIES AND PROCEDURES	16
VOTE REQUIRED	17
EXECUTIVE COMPENSATION	18
Compensation Discussion and Analysis	18
Executive Summary	18
~~2017~~2018 Say on Pay Results	19
Overview of Compensation and Process	19
Base Salaries	20
Annual Incentive	20
Discretionary Bonus	22
Long-Term Incentives	22
Limited Perquisites; Other Benefits	24
Nonqualified Deferred Compensation Plans	24
Compensation Consultant	25
Termination or Change of Control Plans and Agreements	25
Compliance with Internal Revenue Code Section 162(m)	27
Human Resources and Compensation Committee Report	27
Summary Compensation Table ~~for Fiscal 2018~~	2928
Grants of Plan-Based Awards ~~for Fiscal 2018~~	3029
Employment Agreements of the Named Executive Officers	30
Outstanding Equity Awards at Fiscal Year-End ~~for Fiscal 2018~~	31
Option Exercises and Stock Vested ~~for Fiscal 2018~~	33


⁽³⁾	Member of the Human Resources and Compensation Committee.


⁽⁴⁾	Member of the Audit, Risk Management and Finance Committee.



Name	2018 Base Salary		2017 Base Salary		Percentage Increase
Scott R. Ward	$	650,000	$	630,000	3.2	%
Laurence L. Betterley	$	379,212	$	375,457	1.0	%
Jeffrey S. Points⁽¹⁾	$	275,000	N/A		N/A
Kevin J. Kenny⁽²⁾	$	430,000	$	430,000	—	%
Rhonda J. Robb⁽³⁾	$	450,000	N/A		N/A
Laura J. Gillund	$	312,530	$	300,510	4.0	%
Alexander Rosenstein⁽¹⁾	$	283,592	N/A		N/A



	Fiscal 2018
	Target $ Incentive Compensation		$ Incentive Compensation Achievement		Incentive as a % of Base Salary Achievement		$ Incentive Compensation Actual Payout		Actual Incentive as a % of Base Salary
Scott R. Ward	$	747,500	$	418,208	64.3	%	$	477,728	73.5	%
Laurence L. Betterley	$	284,409	$	159,120	42.0	%	$	181,766	47.9	%
Jeffrey S. Points⁽¹⁾	$	131,469	$	77,791	28.3	%	$	88,862	32.3	%
Kevin J. Kenny⁽²⁾	$	387,000	$	126,301	29.4	%	$	144,277	33.6	%
Rhonda J. Robb⁽³⁾	$	172,934	$	94,412	21.0	%	$	107,848	24.0	%
Laura J. Gillund	$	203,145	$	113,655	36.4	%	$	129,830	41.5	%
Alexander Rosenstein	$	141,796	$	79,331	28.0	%	$	90,622	32.0	%


~~(1)~~	~~The award vests as to one-third of the shares at each of the first three anniversaries of August 13, 2017.~~


~~(2)~~	~~The award vests based on the Company's total stockholder return relative to total stockholder return of the Compensation Peer Group, as described above.~~



þ	No fee required.


(4)	Proposed maximum aggregate value of transaction:


(5)	Total fee paid:


(1)	Amount Previously Paid:


~~(3)~~	In accordance with Mr. Betterley’s retirement, the time-based shares will vest in accordance with their terms through August 15, 2019 (and any unvested shares as of such time will be forfeited) and the performance-based shares will vest in accordance with the terms of the award.


~~(4)~~	In accordance with Mr. Kenny’s termination of employment, the vesting was accelerated for 4,160 of these time-based shares and up to 7,278 of the performance-based shares may vest in accordance with the terms of the award.


Name and Principal Position	Fiscal Year	Salary ($)	Bonus ($)	Stock awards ($)^(1)(2)(6)	Nonequity incentive plan compensation ($)⁽³⁾	All other compensation ($)	Total ($)	Fiscal Year	Salary ($)	Bonus ($)	Stock awards ($)⁽¹⁾⁽²⁾	Nonequity incentive plan compensation ($)⁽³⁾	All other compensation ($)⁽⁶⁾	Total ($)
Scott R. Ward⁽⁴⁾	2018	650,000	—	2,320,611	477,728	—	3,448,339	2019	669,615	—	2,979,967	886,210	39,790	4,575,582
President and Chief Executive Officer	2017	630,000	—	2,179,183	1,216,617	—	4,025,800	2018	650,239	—	2,320,611	477,728	14,342	3,462,920
	2016	363,461	185,000	360,000	—	—	908,461	2017	630,000	—	2,179,183	1,216,617	—	4,025,800
Laurence L. Betterley	2018	379,212	—	812,323	181,766	—	1,373,301
Former Chief Financial Officer	2017	375,344	—	915,489	472,865	—	1,763,698
Former Chief Financial Officer	2016	368,643	88,343	1,033,026	36,810	—	1,526,822
Jeffrey S. Points	2018	275,000	—	253,409	88,862	—	617,271
Jeffrey S. Points⁽⁴⁾								2019	301,971	—	504,574	260,946	—	1,067,491
Chief Financial Officer								2018	248,448	—	253,409	88,862	—	590,719
Kevin J. Kenny⁽⁵⁾	2018	261,692	—	921,104	144,277	1,229,121	2,556,194
Former Chief Operating Officer	2017	430,000	—	931,984	649,870	69,840	2,081,694
Former Chief Operating Officer	2016	441,174	129,000	938,588	43,000	38,129	1,589,891
Rhonda J. Robb⁽⁷⁾	2018	450,000	450,000	1,500,000	104,848	—	2,504,848
Rhonda J. Robb⁽⁵⁾								2019	463,240	—	1,030,771	479,795	12,851	1,986,657
Chief Operating Officer								2018	183,702	450,000	1,500,000	107,848	—	2,241,550
Laura J. Gillund	2018	312,530	—	371,942	129,830	—	814,302	2019	315,595	—	440,500	235,988	—	992,083
Chief Talent Officer	2017	300,248	—	407,080	328,011	—	1,035,339
Former Chief Talent Officer								2018	312,923	—	371,942	129,830	—	814,695
Former Chief Talent Officer								2017	300,248	—	407,080	328,011	—	1,035,339
Alexander Rosenstein	2018	283,592	—	337,522	90,622	—	711,736	2019	316,968	—	441,495	237,459	—	995,922
General Counsel and Corporate Secretary								2018	284,950	—	337,522	90,622	—	713,094
Sandra Sedo								2019	283,398	—	394,226	163,099	—	840,723
Chief Compliance Officer


(3)	The amount under “Non-Equity Incentive Plan Compensation” consists of incentive compensation paid to each Named Executive Officer for Company performance under our cash incentive plan for the applicable fiscal year, as adjusted as described under “Annual Incentive” above.


a.	Mr. Ward elected to receive 4,659 RSAs in lieu of cash relating to his director compensation of $110,000 for fiscal 2016. The RSAs were granted under the Company’s 2014 Equity Incentive Plan on August 10, 2015 and were fully vested upon grant.


b.	On August 10, 2015, Mr. Ward was granted 5,294 RSUs relating to his director compensation of $125,000 for fiscal 2016. The RSUs are payable in cash or shares of our common stock, at our discretion, within 30 days after the six month anniversary of the termination of Mr. Ward’s Board membership.


c.	Mr. Ward was granted 7,987 RSUs with a value of $125,000, effective December 1, 2015 related to Mr. Ward’s service as our Interim Chief Executive Officer and President. The RSUs are payable in cash or shares of our common stock, at our discretion, within 30 days after the six month anniversary of the termination of Mr. Ward’s Board membership.


~~(7)~~	~~In connection with Ms. Robb’s employment, she received a $450,000 sign-on bonus.~~adjusted accordingly.


(1)	Performance bonus based on the Company’s achievement of revenue and adjusted EBITDA financial goals for fiscal 2019. Adjusted EBITDA is defined as EBITDA with stock compensation added back into the calculation, in addition to an add-back of depreciation and amortization. Target bonus amounts are weighted 75% for the revenue goal and 25% for the adjusted EBITDA goal.


(2)	Represents RSAs granted pursuant to the Company’s ~~2014~~2017 Equity Incentive Plan that vest 1/3 on each of August 13, ~~2018,~~ 2019, 2020 and ~~2020.~~2021.


~~(4)~~	~~Represents RSAs granted pursuant to the Company’s 2014 Equity Incentive Plan that will vest 1/3 on each of November 12, 2019, 2020 and 2021.~~


~~(5)~~	~~Represents RSAs granted pursuant to the Company’s 2017 Equity Incentive Plan that will vest 1/3 on each of February 12, 2019, 2020 and 2021.~~


~~(6)~~	~~Represents RSAs granted pursuant to the Company’s 2017 Equity Incentive Plan that will vest 100% on February 12, 2021.~~


(1)	See Note 5 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, ~~2018,~~2019, filed with the SEC on August ~~23, 2018,~~22, 2019, for a discussion of the methodology for determining the exercise price.


(2)	Mr. Ward holds an aggregate of 34,297 vested RSUs, granted on various dates in connection with his Board compensation prior to his service as our Chief Executive Officer, that are payable in cash or shares of our common stock, at our discretion, within 30 days after the six-month anniversary of the termination of Mr. Ward’s Board membership.


(7)	Performance based share awards are presented at threshold award levels.


~~(7)~~	Per the terms of Mr. Kenny’s Separation Agreement, Mr. Kenny’s performance-based restricted stock will vest, provided, and only to the extent, if any, that the performance criteria for such shares is met, as determined by the Company in or around August or September 2019 and 2020 (as applicable).


~~(8)~~	~~Performance based share awards are presented at threshold award levels.~~


(1)	These shares were acquired by Mr. Ward upon the vesting of restricted stock granted to him under the 2014 Equity Incentive Plan. ~~The~~Of this total number of shares 11,330 were attributable to restricted stock granted on August ~~8, 2016.~~


(6)	These shares were acquired by Ms. Sedo upon the vesting of restricted stock granted to her under the 2014 Equity Incentive Plan. Of this total number of shares, 1,388 were attributable to restricted stock granted on August 8, 2016, and 1,466 were attributable to restricted stock granted on August 7, 2017.