Equity Compensation Plan Information

The following table summarizes our equity compensation plan information as of January 3, 2015:

CORPORATE GOVERNANCE

BOARD OF DIRECTORS AND COMMITTEES

Board of Directors

Our Board of Directors is comprised of nine11 members. The Board of Directors is divided into three classes, equal in number, with each director serving a three-year term and one class being elected at each year’s annual meeting of shareholders. We expect directors to attend and participate in all meetings of the Board of Directors and of the committees of the Board of Directors on which they serve. We understand, however, that occasionally a director may be unable to attend a meeting.

The Board of Directors held 711 meetings in fiscal 2014. Each then current2017. In fiscal 2017, each then-current director attended at least 75% of the aggregate number of the meetings of the Board of Directors and of the committees thereof on which he or she served during the period for which he or she was a director or committee member, respectively. We also expect directors to attend our 2015 Annual Meeting. Allannual meetings of shareholders in the absence of a scheduling conflict or other valid reason. With the exception of Ms. Winfrey, all then-current directors attended the Company’s 2014 annual meeting of shareholders.2017 Annual Meeting. In addition to attending and participating in meetings of the Board of Directors, the committees thereof and annual meetings of shareholders, the directors communicate with our executive management team to remain informed about the Company’s business and for such other purposes as may be helpful to the Board of Directors in fulfilling its responsibilities.

Directors of Weight Watchers International, Inc.

Set forth below in the section entitled “Executive Officers and Directors of the Company” are the names and certain information with respect to each of our current directors and our director nominee.directors.

Corporate Governance Guidelines

We have adopted Corporate Governance Guidelines that include guidelines for determining director independence and qualifications for directors. The Company’s corporate governance materials, including the Corporate Governance Guidelines and charters of the committees of the Board of Directors, are available on the Corporate Governance – Governance Documents page of our corporate website at www.weightwatchersinternational.com. The Board of DirectorsNCG Committee periodically reviews corporate governance developments and modifiesrecommends to the Board any amendments that may be appropriate to our Corporate Governance Guidelines and committee charters as warranted.

Committees of the Board of Directors

The standing committees of the Board of Directors consist of the Audit Committee, the Compensation Committee and the CompensationNCG Committee. Due toAs a result of Artal beneficially holding more than 50%Luxembourg S.A. (“Artal Luxembourg”) entering into a Voting Agreement with Ms. Winfrey on October 18, 2015, Artal and Ms. Winfrey are acting as a “group” within the meaning of Section 13(d)(3) or Section 14(d)(2) of the voting power for the election of the Company’s directors,Exchange Act. Accordingly, we arecontinue to be considered a “controlled company” as defined in the listing standards of the NYSE. As such, we have elected to be exempt from the requirements to have a nominating/nominating and corporate governance committee and a compensation committee each composed entirely of independent directors and a majority of independent directors on our Board of Directors. Notwithstanding this election, the Board of Directors has determined that a majority of our directors are independent under the applicable listing standards of the NYSE and our Corporate Governance Guidelines. For additional details regarding this independence determination, see“—Director Independence”.

Audit Committee

We have an Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act, the rules and regulations of the SEC and the listing standards of the NYSE. The current members of the Audit

Committee are Ms. Evans,Mr. Kelly, Dr. Altschuler and Ms. Elkins. Ms. Evans, who will be retiring from the Board of Directors effective upon the conclusion of the 2015 Annual Meeting, is the ChairThe Chairman of the Audit Committee.Committee is Mr. John F. Bard was the Chair and a member of our Audit Committee until his death on November 10, 2013. Ms. Elkins joined our Audit Committee on March 30, 2014 to fill the vacancy created by Mr. Bard’s death.Kelly. The

Audit Committee held 1310 meetings during fiscal 2014.2017.

The principal duties of the Audit Committee are as follows:include:

The Audit Committee has the power to investigate any matter brought to its attention within the scope of its dutiesinterest or concern that it deems appropriate and to retain counsel for this purpose where appropriate.such purpose.

The Board of Directors has determined that Ms. EvansMr. Kelly is an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of RegulationS-K of the Exchange Act and that each of Ms. Evans,Mr. Kelly, Dr. Altschuler and Ms. Elkins has satisfied the financial literacy requirements of the NYSE and has no direct or indirect material relationship with us and thus is independent under applicable listing standards of the NYSE, Rule10A-3 under the Exchange Act and our Corporate Governance Guidelines. The Audit Committee operates under a written charter, which is available on the Corporate Governance – Governance Documents page of our corporate website at www.weightwatchersinternational.com.

Compensation Committee

The current members of the Compensation Committee are Messrs. Debbane and Amouyal and Dr. Altschuler. The Chairman of the Compensation Committee is Mr. Debbane. The Compensation Committee held 86 meetings during fiscal 2014. 2017.

The principal duties of the Compensation Committee are as follows:include:

Theday-to-day administration of savings plans, profit sharing plans, stock plans, health, welfare and paidtime-off plans and policies applicable to salaried employees in general are handled by the Company’s human resources, finance and legal department employees. The responsibility for certain fundamental changes outside theday-to-day requirements necessary to maintain these plans and policies belongs to the Compensation Committee. The Compensation Committee operates under a written charter, which is available on the Corporate Governance – Governance Documents page of our corporate website at www.weightwatchersinternational.com.

For additional information on the Compensation Committee’s activities, its use of outside advisors and its consideration and determination of executive compensation, as well as the role of our Chief Executive Officer in recommending the amount or form of compensation paid to the other named executive officers, other than himself, see“Compensation Discussion and Analysis”.

Nominating and Corporate Governance Committee

The current members of the NCG Committee are Messrs. Semmelbauer and Sobecki and Ms. Elkins. The Chairman of the NCG Committee is Mr. Semmelbauer. The NCG Committee was established in March 2018 and accordingly held no meetings during fiscal 2017.

The principal duties of the NCG Committee include:

The NCG Committee operates under a written charter, which is available on the Corporate Governance – Governance Documents page of our corporate website at www.weightwatchersinternational.com.

Board Structure

It has been the policy of the Company for many years to separate the positions of Chief Executive Officer and Chairman of the Board of Directors. While we recognize that different board leadership structures may be appropriate for companies in different situations, we believe that our current policy of separation of these two positions is most appropriate for the Company. To meet their responsibilities of overseeing management and setting strategic direction, as well as fostering the long-term value of the Company, among their other responsibilities, directors are required to spend time and energy in successfully navigating a wide variety of issues and guiding the policies and practices of the companies they oversee. To that end, we believe that having a separatenon-executive Chairman of the Board of Directors Mr. Debbane, who is solely responsible for leading the Board of Directors allows the focus of our Chief Executive Officer, Mr. Chambers, to focus hisOfficer’s time and energy onto be running theday-to-day operations of the Company. We believe that our Chief Executive Officer and our Chairman of the Board of Directors have an excellent working relationship and open lines of communication. In addition, our Chairman of the Board of Directors does not have any relationships with Mr. Chambers or other members of management that would compromise his ability to act free from the control of the Chief Executive Officer and management.

Oversight of Risk Management

We are exposed to a number of risks, including financial risks, credit risks, operational risks and risks relating to regulatory and legal compliance. Our executive management team is responsible for identifying and evaluating these risks and developing plans to manage them effectively. Risk management is a Company-wide initiative that involves each of our operating segments. We take a multi-disciplinary approach to risk and our risk management function includes senior executives with backgrounds in finance, operations, human resources, technology, internal audit and legal and regulatory compliance. For example, our Chief Financial Officer advises our executive management team on both financial and credit risks faced by the Company and our General Counsel advises our executive management team on the Company’s legal and regulatory compliance. Our Chief

Executive Officer is advised of and oversees these risk management efforts by the Company’s executive management team. The Board of Directors actively supervisesoversees the Company’s risk management. For example, the Board of Directors and Audit Committee routinely meet with our Chief Technology Officer, Senior Vice President of Engineering and Vice President of Global Cybersecurity as well as outside experts from time to time to assess cyber security risks and to evaluate the status of the Company’s cyber security efforts, which include a broad range of tools and training initiatives that work together to protect the data and systems used in our businesses. Both the Audit Committee and Compensation Committee play a significant role in the oversight of the Company’s risk management. For example, the Audit

Committee oversees our risk management efforts related to the Company’s audit function while the Compensation Committee oversees our risk management efforts related to employment and compensation matters. In addition, the NCG Committee oversees risks related to corporate governance, including Board of Directors and committee composition and director independence. Members of our executive management team meet with the Board of Directors, Audit Committee and Compensation Committee regularly to discuss, as well as provide reports relating to, the risks facing the Company.

Compensation Committee Interlocks and Insider Participation

Each of Messrs. Debbane and Amouyal and Dr. Altschuler served as a member of the Compensation Committee during fiscal 2014.2017. There were no Compensation Committee interlocks or insider (employee) participation during fiscal 2014.2017. See “Transactions with Related Persons and Certain Control Persons—Transactions with Related PersonsPersons—Registration Rights Agreement” and “ —Other Related Person Transactions” for a description of the relationships that Messrs. Debbane and Amouyal have with the Company.

Director Nominations

Because the Board of Directors believes that all of the directors of the Company should be involved in the process of nominating persons for election as directors and the Company is not required to have a nominating committee under the listing standards of the NYSE as described above under “—Committees of the Board of Directors”, the Board of Directors as a whole performs the functions of a nominating committee and is responsible for reviewing the requisite skills and characteristics of the nominees for the Board of Directors.

Identifying and Evaluating Nominees for Directors

ThePursuant to our Corporate Governance Guidelines and the NCG Committee Charter, the NCG Committee is responsible for nominating, or recommending to the Board of Directors, a slate of nominees for election as directors. The NCG Committee will consider candidates for nomination as a director recommended by the Company’s shareholders, current directors, officers and officers,employees and third-party search firms and other sources. Insources it deems appropriate. Considerations in evaluating candidates the Board of Directors considersinclude the candidate’s minimum individual qualifications, including integrity, accountability, experience and an ability to work collegially with the other members of the Board of Directors. In addition, the NCG Committee and Board of Directors will take into account all other factors it considersthey consider appropriate, including a candidate’s skills and experience, legal and regulatory requirements and the needs of the Board of Directors. While neither the NCG Committee nor the Board of Directors has not adopted a formal policy regarding diversity, the Board of Directors evaluatesthey evaluate each candidate in the context of the Board of Directors’ membership as a whole and seeksseek to achieve a mix of members that represents a diversity of background and experience in order to promote the representation of diverse views on the Board of Directors. The Board of Directors will review allAll candidates are reviewed in the same manner, regardless of the source of the recommendation. The Board of DirectorsNCG Committee will consider individuals recommended by shareholders for nomination as a director in accordance with the procedures described below. The Board of DirectorsNCG Committee may engage consultants or third-party search firms to assist in identifying and evaluating potential candidates. While the Board of Directors has not adopted a separate charter setting forth the guidelines for its nomination duties, the guidelines for determining director independence and qualifications for directors are described in Articles II and III, respectively, of our Corporate Governance Guidelines.

Recommendation of the Nominee Class II Director. The General Counsel and Secretary of the Company, Mr. Colosi, identified Mr. Kelly as a possible candidate for election to the Company’s Board of Directors. The Board of Directors considered Mr. Kelly’s qualifications, met with him to determine his suitability for the Board of Directors and subsequently discussed and evaluated his candidacy. In April 2015, the Company’s Board of Directors unanimously nominated Mr. Kelly for election as a Class II director at the 2015 Annual Meeting.

Procedures for Submitting Director Recommendations and Nominations

The Company’s Amended and Restated Bylaws (the “Bylaws”) provide that shareholders may nominate persons for election as directors at the Company’s shareholder meetings by giving timely written notice to the Corporate Secretary of the Company containing required information. The Bylaws require that, to be timely and

proper, notice of a nomination by a shareholder must be personally delivered to, or mailed to and received at, the Company’s principal executive offices as follows: (a) for elections to be held at an annual meeting of shareholders, (i) at least 120 days and no more than 150 days before the first anniversary of the date of the proxy statement in conjunction with the annual meeting of shareholders for the prior year or (ii) if the date of the annual meeting is more than 30 days earlier or later than the anniversary date of the prior year’s annual meeting, not less

than 60 days prior to such annual meeting; and (b) for elections that are going to take place at a special meeting of shareholders, no later than the close of business on the seventh day after the day on which notice of the date of the special meeting is first given to shareholders. Notwithstanding the foregoing, so long as Artal owns a majority of our Common Stock, notice by Artal shall be timely and proper if delivered in writing or orally at least five business days prior to the date the Company mails its proxy statement in connection with the applicable meeting of shareholders.

In notifying the Corporate Secretary, the shareholder making the submission must provide the following information: (i) the name and the address of the shareholder, as they appear on the Company’s stock transfer books, and the name, age and business address (and, if known, residential address) of the candidate to be considered; (ii) a representation by the shareholder that the shareholder is a shareholder of record and intends to appear in person or by proxy at the meeting to nominate the candidate; (iii) the class or series and number of shares of the Company’s stock that are beneficially owned by the shareholder and by the candidate; (iv) a description of all arrangements or understandings between the shareholder and the candidate and any other person (naming such person(s)) pursuant to which such nomination is to be made by such shareholder; (v) an executed written consent of the candidate to be named in the proxy statement as a nominee and to serve as a director of the Company if so elected; (vi) the principal occupation or employment of the candidate; and (vii) any other information relating to the candidate required to be disclosed in accordance with the Bylaws and the Exchange Act. For the 2016Company’s 2019 annual meeting of shareholders (the “2019 Annual Meeting”), the foregoing information must be submitted to the Board of Directors through Weight Watchers International, Inc., Attention: Corporate Secretary, 675 Avenue of the Americas, 6^th Floor, New York, New York 10010.

The Board of DirectorsNCG Committee will also consider director candidates recommended by shareholders. All recommendations for nomination received by the Corporate Secretary that are made in accordance with the requirements in our Bylaws relating to director nominations, as described above, will be presented to the Board of Directors for its consideration.considered.

Director Independence

The Board of Directors has affirmatively determined that three of our nine current directors, Dr. Altschuler, Ms. Elkins and Ms. Evans, and director nominee, Mr. Kelly, are independent under applicable listing standards of the NYSE and our Corporate Governance Guidelines. For a director to be considered independent, the Board of Directors must determine that the director does not have any direct or indirect material relationship with the Company. The Board of Directors has established guidelines to assist it in determining director independence, which conform to the independence requirements in the NYSE listing standards. In addition to applying these guidelines, which are set forth in Article II of our Corporate Governance Guidelines, the Board of Directors will consider all relevant facts and circumstances in making an independence determination.

In March 2018, the Board of Directors and the NCG Committee undertook a review of the independence of the Company’s current directors. Following this review, the Board of Directors affirmatively determined that the following current directors are independent under applicable listing standards of the NYSE and our Corporate Governance Guidelines: Dr. Altschuler, Messrs. Debbane, Amouyal, Fajgenbaum, Kelly, Lainovic, Semmelbauer and Sobecki and Ms. Elkins. In making the independence determinations, the Board of Directors and the NCG Committee considered all relevant facts and circumstances. In particular, in the case of Messrs. Semmelbauer and Sobecki, the Board of Directors and the NCG Committee considered their prior service as members of the former Interim Office of the Chief Executive Officer of the Company from September 12, 2016 to July 5, 2017, as well as the compensation Messrs. Semmelbauer and Sobecki received for such service. The Board of Directors and the NCG Committee concluded that such former interim service and the compensation each received therefor would not interfere with the exercise of independent judgment by Messrs. Semmelbauer and Sobecki in carrying out their respective responsibilities as a director. Additionally, in the case of Messrs. Debbane and Semmelbauer, the Board of Directors and the NCG Committee considered their service as chairman andco-chairman, respectively, of the board of directors of Action Against Hunger, a charitable organization to which the Company made an aggregate donation of less than $120,000 in fiscal 2017. The Board of Directors and the NCG Committee concluded that such relationship with Action Against Hunger would not interfere with the exercise of independent judgment by Messrs. Debbane and Semmelbauer in carrying out their respective responsibilities as a director.

All members of the Audit Committee must be independent directors based on our Corporate Governance Guidelines and under the listing standards of the NYSE. Members of the Audit Committee must also satisfy a separate SEC independence requirement pursuant to Rule10A-3 under the Exchange Act, which provides that they may not (i) accept directly or indirectly any consulting, advisory or other compensatory fee from the Company or any of its subsidiaries other than their directors’ compensation and (ii) be an affiliate of the Company.Company or any of its subsidiaries. The Board of Directors has determined that each of the Audit Committee members, Ms. Evans,Mr. Kelly, Dr. Altschuler and Ms. Elkins, has no material relationship with us and satisfies the independence requirements under our Corporate Governance Guidelines, the listing standards of the NYSE and Rule10A-3 under the Exchange Act.

Code of Business Conduct and Ethics

We have adopted athe Code of Business Conduct and Ethics for our officers, including our principal executive officer, principal financial officer, principal accounting officer andor controller, and our employees and directors. Our Code of Business Conduct and Ethics is available on the Corporate Governance – Governance Documents page of our corporate website at www.weightwatchersinternational.com.

In addition to any disclosures required under the Exchange Act, the date and nature of any substantive amendment of our Code of Business Conduct and Ethics or waiver thereof applicable to any of our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions, and that relates to any element of the code of ethics definition enumerated in Item 406(b) of RegulationS-K of the Exchange Act, will be disclosed on our corporate website at www.weightwatchersinternational.com within four business days of the date of such amendment or waiver.waiver on the Corporate Governance – Governance Documents and Corporate Governance – Corporate Actions pages, respectively, of our corporate website at www.weightwatchersinternational.com. In the case of a waiver, the name of the person to whom the waiver was granted will also be disclosed on our corporate website within four business days of the date of such waiver.

Executive Sessions ofNon-Management and Independent Directors

Non-management directors meet in executive sessions of the Board of Directors in which management directors and other members of management do not participate. These sessions are periodically scheduled fornon-management directors at meetings of the Board of Directors. The Chairman of the Board of Directors, Mr. Debbane, presides over the meetings of thenon-management directors. In addition, the directors who the Board of Directors affirmatively determined are independent under applicable listing standards of the NYSE and our Corporate Governance Guidelines hold executive sessions at least once a year. Ms. EvansMr. Kelly presided over these sessions in fiscal 2014.2017.

EXECUTIVE OFFICERS AND DIRECTORS OF THE COMPANY

Set forth below are the names, ages, and current positions with us as of April 1, 20155, 2018 of our executive officers and directors. Directors are elected at the annual meeting of shareholders. Executive officers are appointed by, and hold office at, the discretion of the Board of Directors.

James R. Chambers.Mindy Grossman. Mr. ChambersMs. Grossman has served as a director and our President and Chief Executive Officer since July 2013. He served as our President and Chief Operating Officer from January 2013 to July 2013.2017. Prior to joining us, Mr. Chambersshe served as PresidentChief Executive Officer of the U.S. SnacksHSN, Inc., an interactive, multichannel retailer of fashion, household and Confectionary business unitlifestyle products, and General Managera member of the Immediate Consumption Channelits Board of Kraft Foods Inc., a global food and beverage company,Directors from January 2010August 2008 to July 2011.May 2017. Prior to joining Kraft, Mr. ChambersHSN, she served as Chief Executive Officer of IAC Retailing, a business segment of HSN’s former parent company, IAC/InterActiveCorp, a media and Internet company, from April 2006 to August 2008, and Global Vice President of Nike, Inc.’s apparel business from October 2000 to March 2006. Earlier in her career, Ms. Grossman held various other executive positions in the North America business unit at Cadbury plc, a beverage and confectionary company, from September 2005 to January 2010, most recently as theretail industry, including President and Chief Executive Officer. Mr. Chambers began his careerCEO of Polo Jeans Company, Vice President of New Business Development at Nabisco,Polo Ralph Lauren Corporation, President of Chaps Ralph Lauren, and Senior Vice President of Menswear for Warnaco, Inc. and also held various executive positions with Rémy Cointreau USA, Paxonix Inc., NetGrocer.com, Inc. and Information Resources, Inc. Mr. Chambers received a Bachelor’s degree in Civil Engineering from Princeton University and an M.B.A. from the Wharton School of Business of the University of Pennsylvania. Mr. ChambersMs. Grossman is a director of Big Lots,Bloomin’ Brands, Inc. Mr. Chambers was previously a director of B&G Foods.

Michael F. Colosi. Mr. Colosi has servedand Fanatics, Inc. She also serves as our General Counsel and Secretary since May 2014. Prior to joining us, Mr. Colosi most recently served as Senior Vice President, General Counsel and Corporate Secretary of Kenneth Cole Productions, Inc. (KCP), a multi-brand retail, wholesale and licensing company, from March 2007 to February 2014. His service as General Counsel and Secretary of KCP commenced in July 2000 and July 2004, respectively. He also served as Corporate Vice President of KCP from July 2000 to February 2007. Prior to joining KCP, Mr. Colosi was Associate General Counsel and Assistant SecretaryChairman for The Warnaco Group, Inc., an international apparel company, from 1996 to 2000. Mr. Colosi received a Bachelor of Arts in Economics and English from Cornell University and a Juris Doctor from The University of Michigan Law School.UNICEF USA.

Nicholas P. Hotchkin.Mr. Hotchkin has served as our Chief Financial Officer since August 2012. In addition to his role as Chief Financial Officer, he was appointed as our President, Emerging Markets in March 2018. He also served as a member of our former Interim Office of the Chief Executive Officer from September 2016 to July 2017. Prior to joining us, Mr. Hotchkin had spent several years at Staples, Inc., a global leader in the office supply industry. Most recently, Mr. Hotchkin served as Senior Vice President of Finance for the U.S. Retail division of Staples based in Massachusetts, a position he held from May 2010 to August 2012. Before assuming that position, he had been Senior Vice President of Finance and Treasurer of Staples, a position he held from November 2006 to April 2010. Prior to joining Staples, Mr. Hotchkin held several corporate finance positions with Delphi Corporation and General Motors Corporation including assignments in the United States, Asia and Europe. Mr. Hotchkin received a B.A. in Economics from Harvard College and an M.B.A. from the Harvard Business School.

Jeanine Lemmens.Michael F. Colosi. Mr. Colosi has served as our General Counsel and Secretary since May 2014. Prior to joining us, Mr. Colosi most recently served as Senior Vice President, General Counsel and Corporate Secretary of Kenneth Cole Productions, Inc. (KCP), a multi-brand retail, wholesale and licensing company, from March 2007 to February 2014. His service as General Counsel and Secretary of KCP commenced in July 2000 and July 2004, respectively. He also served as Corporate Vice President of KCP from July 2000 to February 2007. Prior to joining KCP, Mr. Colosi was Associate General Counsel and Assistant Secretary for The Warnaco Group, Inc., an international apparel company, from 1996 to 2000. Mr. Colosi received a B.A. in Economics and English from Cornell University and a J.D. from The University of Michigan Law School.

Stacey Mowbray.Ms. LemmensMowbray has served as our President, United KingdomNorth America (previously called President, Americas) since May 2013.March 2016. Prior to that time, Ms. LemmensMowbray served as our Managing Director, BeneluxPresident and General Manager of Weight Watchers Canada from July 2006November 2014 to May 2013.March 2016. Prior to joining us, beginning in December 1999, Ms. LemmensMowbray was with Second Cup Ltd., a Canadian, publicly traded, specialty coffee business, where she served as Chief Executive Officer from May 2009 to February 2014 and President from February 2008 to May 2009. Prior to joining Second Cup Ltd., Ms. Mowbray was Chief Marketing Officer at Molson Coors Brewing Company and held various senior managementroles at Cara Operations Limited and strategic positions with Center Parcs Europe, an operatorPepsiCo Canada. Ms. Mowbray received a Bachelor of European short holiday break villages, including most recently serving as the Director B2B Strategy / Marketing from November 2005 to July 2006. Prior to joining Center Parcs Europe, Ms. Lemmens was working as an accountant in the audit practice with Ernst & Young LLP where she serviced a range of clients including many commercial clients. Ms. Lemmens holds a Certified Public AccountantBusiness degree from ErasmusWilfrid Laurier University inand an M.B.A. from the Netherlands, an M.S. inSchulich School of Business Administration from Nyenrode Business University in the Netherlands and a Bachelors of Art degree in Hospitality Management from Hotel School, The Hague, Hospitality Business School in the Netherlands.at York University.

Corinne Pollier(-Bousquet).Ms. Pollier has served as our President, Continental Europe & Australia–New ZealandInternational since January 2014.March 2016. Prior to that time, Ms. Pollier served as our President, Continental Europe &Australia-New Zealand from January 2014 to March 2016, our President, Continental Europe from May 2013 to January 2014, our Senior Vice President of France and Switzerland from October 2008 to May 2013 and our General Manager of France from October 2003 to October 2008. Prior to joining us, from 1991 to 2003, Ms. Pollier was with VIVARTE Group (France), a European retailer of footwear and apparel, where she held various positions in the finance and planning analysis department from 1991 to 1995, various senior positions in the organization and strategy department from 1995 to 2000 and as General Manager of Kookai from 2001 to 2003. Ms. Pollier also held various product management and project management positions for the central buying office of Le Printemps department stores from 1987 to 1991. Ms. Pollier isholds a graduate ofMasters in Management from the HEC Business School Paris.

Raymond Debbane. Mr. Debbane has been the Chairman of our Board of Directors since our acquisition by Artal Luxembourg S.A. on September 29, 1999. Mr. Debbane is aco-founder and the Chief Executive Officer of The Invus Group, LLC. Prior to forming The Invus Group, LLC in 1985, Mr. Debbane was a manager and consultant for The Boston Consulting Group in Paris, France. He holds an M.B.A. from Stanford Graduate School of Business, an M.S. in Food Science and Technology from the University of California, Davis and a B.S. in Agricultural Sciences and Agricultural Engineering from American University of Beirut. Mr. Debbane is the Chairman of the Board of Directors of Lexicon Pharmaceuticals, Inc. and a director of Blue Buffalo Pet Products, Inc. He is also the Chief Executive Officer and a director of Artal Group S.A., and the Chairman of the Board of Directors of a number of private companies of which Artal or Invus, L.P. are shareholders. Mr. Debbane was previously a director of Ceres, Inc.

Steven M. Altschuler, M.D.Dr. Altschuler has been a director since September 2012. Dr. Altschuler hascurrently serves as Chair of the Board of Directors of Spark Therapeutics, Inc. He previously served as a consultant to the University of Miami Health Care System from September 2017 through December 2017, the Chief Executive Officer of University of Miami Health Care System and continuesExecutive Vice President for Healthcare at the University of Miami from January 2016 to serve asSeptember 2017, and the Chief Executive Officer of The Children’s Hospital of Philadelphia (CHOP), one of the leading children’s hospitals in the United States, since from April 2000.2000 until June 2015. Prior to assuming the role of Chief Executive Officer, Dr. Altschuler held several positions at CHOP and the Perelman School of Medicine at the University of Pennsylvania, including Physician-in-ChiefPhysician-in-Chief/ Chair of Pediatrics and chief of the Division of Gastroenterology, Hepatology and Nutrition. Prior to joining CHOP, Dr. Altschuler was faculty member and chair of the Department of Pediatrics at the Perelman School of Medicine at the University of Pennsylvania. Dr. Altschuler received a B.A. in mathematics and an M.D. from Case Western Reserve University. Dr. Altschuler is a director of Mead Johnson Nutrition Company, serves on its Compensation and Management Development Committee and is also Chair of its Nutrition Science and Technology Committee. Dr. Altschuler is also the Chair of the Board of Directors of Spark Therapeutics, Inc.

Philippe J. Amouyal.Mr. Amouyal has been a director since November 2002. Mr. Amouyal is a Managing Director of The Invus Group, LLC, a position he has held since 1999. Previously, Mr. Amouyal was a Vice President and directorDirector of The Boston Consulting Group in Boston, MA. He holds an M.S. in Engineering and a DEA in Management from Ecole Centrale de Paris and was a Research Fellow at the Center for Policy Alternatives of the Massachusetts Institute of Technology. Mr. Amouyal is a director and member of the Compensation Committee of Lexicon Pharmaceuticals, Inc. and Blue Buffalo Pet Products, Inc., as well as a number of private companies of which Artal or Invus, L.P. are shareholders.

Cynthia Elkins. Ms. Elkins has been a director since March 2014. Since March 2011,December 2017, Ms. Elkins has served as theChief Information Officer and Executive Vice President at Juno Therapeutics, Inc., a biopharmaceutical company. Previously, Ms. Elkins served as Vice President of IT Americas at Genentech, Inc., a member of the Roche Group, a leading biotechnology

company. She previously served as Genentech’sfrom March 2011 through December 2016 and Senior Director of IT Enterprise Applications from December 2007 to February 2011.2011 at Genentech, Inc., a biotechnology company and member of the Roche Group. Prior to joining Genentech, Ms. Elkins was Vice President and General Manager of Supplier Solutions and Commerce Services at Ariba, Inc. and Vice President of Product Engineering at ATP Inc. Prior to that, she held various ITtechnology leadership positions at Aspect Telecommunications, VeriFone and Digital Equipment Corporation. Ms. Elkins received a B.S. in Applied Mathematics from the University of California, Los Angeles and an M.B.A. from Santa Clara University.

Marsha Johnson Evans. Ms. Evans has been a director since February 2002. Ms. Evans served as President and Chief Executive Officer of the American Red Cross, the preeminent humanitarian organization in the United States, from August 2002 to December 2005, and previously served as the National Executive Director of Girl Scouts of the U.S.A. from January 1998 to July 2002. A retired Rear Admiral in the United States Navy, Ms. Evans served as superintendent of the Naval Postgraduate School in Monterey, California from 1995 to 1998 and headed the Navy’s worldwide recruiting organization from 1993 to 1995. Ms. Evans also served as the Acting Commissioner of the Ladies Professional Golf Association from July 2009 to January 2010. Ms. Evans received a B.A. from Occidental College and a Master’s Degree from the Fletcher School of Law and Diplomacy at Tufts University. Ms. Evans is also a director of The North Highland Company and The First Tee. Ms. Evans was previously a director of Huntsman Corporation, Office Depot, Inc. and the Estate of Lehman Brothers Holdings, Inc.

Jonas M. Fajgenbaum. Mr. Fajgenbaum has been a director since our acquisition by Artal Luxembourg S.A. on September 29, 1999. Mr. Fajgenbaum is a Managing Director of The Invus Group, LLC, which he joined in 1996. Prior to joining The Invus Group, LLC, Mr. Fajgenbaum was a consultant for McKinsey & Company in New York from 1994 to 1996. He graduated with a B.S. in Economics with a concentration in Finance from The Wharton School of the University of Pennsylvania and a B.A. in Economics from the University of Pennsylvania. Mr. Fajgenbaum is a director of a number of private companies of which Artal or Invus, L.P. are shareholders.

Denis F. Kelly.Mr. Kelly has been a director since May 2015. Mr. Kelly is affiliated with, and has served as a Managing Partner of, Scura Partners Securities LLC, a private investment banking firm which heco-founded, since 2001. From 1993 to 2001, he was a Managing Director of Prudential Securities Incorporated. Previously, he served as the President and Chief Executive Officer of Denbrook Capital Corporation, a merchant banking firm, from 1991 to 1993. From 1980 to 1991, Mr. Kelly held various positions at Merrill Lynch, including Managing Director of Mergers and Acquisitions and Managing Director of Merchant Banking. Mr. Kelly began his investment banking career at Lehman Brothers in 1974. Mr. Kelly received a B.A. from Amherst College and an M.B.A. from the Wharton School of Business of the University of Pennsylvania. Mr. Kelly is also a director of MSC Industrial Direct Co., Inc., where he serves as a member of the Audit Committee and the chairman of the Compensation Committee. Mr. Kelly previously served as a director of Kenneth Cole Productions, Inc., which is no longer a public company.

Sacha Lainovic. Mr. Lainovic has been a director since our acquisition by Artal Luxembourg S.A. on September 29, 1999. Since 2007, Mr. Lainovic has been Managing Partner of Invus Financial Advisors, LLC, a New York-based investment firm, which heco-founded. From 1985 to 2006, Mr. Lainovic was Executive Vice President of The Invus Group, LLC, which heco-founded. Prior to forming The Invus Group, LLC in 1985, Mr. Lainovic was a manager and consultant for The Boston Consulting Group in Paris, France. He holds an M.B.A. from Stanford Graduate School of Business and an M.S. in Engineering from Insa de Lyon in Lyon, France.

Thilo Semmelbauer. Mr. Semmelbauer has been a director since September 2016. He served as a member of our former Interim Office of the Chief Executive Officer from September 2016 to July 2017. He has been involved in technology ventures for over 25 years. From 2015 to 2017, Mr. Semmelbauer was a Venture Partner of Insight Venture Partners, a global private equity and venture capital firm, and he currently continues to act as Senior Advisor to Insight. From 2010 to 2015, he served as President and Chief Operating Officer of Shutterstock, Inc., a global marketplace for licensing images, videos, and music to businesses worldwide. From

2009 to 2010, he served as Executive Vice President, Consumer Business, of TheLadders.com, a career management company. Mr. Semmelbauer was also Weight Watchers International, Inc.’s Global Chief Operating Officer from 2006 to 2008 and Chief Operating Officer for North America from 2004 to 2006, after serving as President and Chief Operating Officer of WeightWatchers.com from 2000 to 2004 where he was part of the founding team. He holds an A.B. in Electrical Engineering and Computer Science from Dartmouth College and a dual M.S. in Management and Electrical Engineering from the Massachusetts Institute of Technology.

Christopher J. Sobecki.Mr. Sobecki has been a director since our acquisition by Artal Luxembourg S.A. on September 29, 1999. He served as a member of our former Interim Office of the Chief Executive Officer from September 2016 to July 2017. Mr. Sobecki is a Managing Director of The Invus Group, LLC, which he joined in 1989. He received an M.B.A. from the Harvard Business School. He also obtained a B.S. in Industrial Engineering from Purdue University. Mr. Sobecki is a director of Lexicon Pharmaceuticals, Inc. and a number of private companies of which Artal or Invus, L.P. are shareholders.

Oprah Winfrey.Ms. Winfrey has been a director since October 2015. Since January 2009, Ms. Winfrey has served as the Chairman of her cable network, OWN: Oprah Winfrey Network, taking on the role of Chief Executive Officer in July 2011. Previously, she founded Harpo, Inc. in 1986, under which she has launched numerous media and entertainment businesses, including O, The Oprah Magazine and Harpo Films, in addition to producing the award-winning talk show ‘The Oprah Winfrey Show’ for 25 years. Ms. Winfrey is a global media leader, philanthropist, producer and actress. She also has been serving as a member of the Smithsonian’s advisory council since 2004.

Director Qualifications

When considering whether directors and nominees have the experience, qualifications, attributes and skills, taken as a whole, to enable the Board of Directors to satisfy its oversight responsibilities effectively in light of the Company’s business and structure, the Board of Directors and NCG Committee focused primarily on each person’s background and experience as reflected in the information discussed in each of the directors’ individual biographies set forth immediately above or in Proposal 1 (Election of Class II Directors).above. In particular, the Board of Directors and NCG Committee considered:

In addition, with regard to each of Messrs. Debbane, Amouyal, Fajgenbaum, Lainovic and Sobecki, the Board of Directors and NCG Committee also considered their respective positions with The Invus Group, LLC, the exclusive investment advisor to Artal. Mr. Lainovic was a principal with The Invus Group, LLC, but since 2007 has been the Managing Partner of Invus Financial Advisors, LLC, a New York-based investment firm.

Arrangements and Understandings

As previously disclosed, the Share Purchase Agreement the Company entered into with Ms. Winfrey on October 18, 2015 provides Ms. Winfrey with the right to be nominated as director of the Company for so long as she and certain permitted transferees own at least 3% of the Company’s issued and outstanding Common Stock. Additionally, pursuant to the Corporate Agreement the Company entered into with Artal in November 2001, which was amended in July 2005, the Company agreed that so long as Artal beneficially owns 10% or more, but less than a majority, of its then outstanding voting stock, Artal has the right to nominate a number of directors approximately equal to that percentage multiplied by the number of directors on the Board of Directors. This right to nominate directors does not restrict Artal from nominating a greater number of directors. See “Transactions with Related Persons and Certain Control Persons—Transactions with Related Persons” for further information on these arrangements.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

Audit fees for fiscal 20142017 and fiscal 20132016 were for professional services rendered by PricewaterhouseCoopers in connection with its (i) integrated audits of our consolidated financial statements and internal control over financial reporting as of and for fiscal 20142017 and fiscal 2013,2016, including statutory audits of the financial statements of our subsidiaries, (ii) reviews of our unaudited consolidated interim financial statements as of and for each of the quarterly interim periods within fiscal 20142017 and fiscal 20132016 and (iii)  reviews of documents filed with the SEC.

Audit-Related Fees

The audit-related fees for fiscal 20142017 and fiscal 20132016 were for professional services rendered by PricewaterhouseCoopers related to the issuance of various special reports.reports (including the comfort letter issued in connection with our November 2017 debt refinancing).

Tax Fees

Tax fees for fiscal 20142017 and fiscal 20132016 were for services rendered by PricewaterhouseCoopers primarily related to tax compliance. Tax fees for fiscal 2013 also included internationalcompliance and various special projects (including advice on tax planning and strategies.examinations).

All Other Fees

All other fees for fiscal 20142017 and fiscal 20132016 were for services rendered by PricewaterhouseCoopers primarily related to assistance with statutory account filings and other miscellaneous professional services.

All audit-related services, tax services and other services werepre-approved by the Audit Committee, which concluded that the provision of such services by PricewaterhouseCoopers was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions. The Audit Committee’sPre-Approval Policy for Audit andNon-Audit Services Pre-Approval Policy provides forpre-approval of audit, audit-related, tax and other services by category so long as suchspecifically described in appendices to the policy. Such services are specifically describedpre-approved up to a specified fee limit and for a term of 12 months from the date ofpre-approval, unless the Audit Committee provides for a different period. All other permitted services, as well as proposed services exceeding thepre-approved fee limit, must be separatelypre-approved by the Audit Committee. Requests for services that require the specific approval by the Audit Committee must be submitted to the Audit Committee on an annual basis (e.g., in the engagement letter) (“general pre-approval”). In addition, individual engagements that have not received general pre-approvalby both our independent registered public accounting firm and our Chief Financial Officer and/or are anticipatedSVP Corporate Controller, and must include a joint statement as to exceed pre-established thresholds must be separately approvedwhether, in advancetheir view, the request is consistent with the SEC’s rules on a case-by-case basis (“specific pre-approval”). The Audit Committee is mindful of the relationship between fees for audit and non-audit services in deciding whether to pre-approve any such services and may choose to determine, for a particular year, an appropriate ratio between the total amount of fees for audit, audit-related and tax services and the total amount of fees for certain permissible non-audit services classified as “all other fees”.auditor independence. The policy authorizes the Audit Committee to delegate to one or more of its memberspre-approval authority with respect to permitted services. In its Audit and Non-Audit Services Pre-Approval Policy, theThe Audit Committee delegated specificpre-approval authority to its chairperson, provided that the estimated fee for any such proposedpre-approved service does not exceed $50,000.$75,000 in the aggregate. Pursuant to this delegation, the chairperson must report anypre-approval decision to the Audit Committee at theits next scheduled meeting.

Principal Accountant Fees and Services

Aggregate fees for professional services rendered to us by PricewaterhouseCoopers for fiscal 20142017 and fiscal 2013:2016:

AUDIT COMMITTEE REPORT

The following is the report of the Audit Committee of the Board of Directors with respect to the Company’s audited financial statements for fiscal 2014.2017.

The Audit Committee is governed by the Audit Committee Charter adopted by the Company’s Board of Directors. Our Board of Directors has determined that each current member of the Audit Committee, Marsha Johnson Evans,Denis F. Kelly, Steven M. Altschuler and Cynthia Elkins, is an “independent” director based on Rule10A-3 of the Exchange Act, the listing standards of the NYSE and our Corporate Governance Guidelines, and that Ms. EvansMr. Kelly is an “audit committee financial expert” as defined by SEC rules.

The Audit Committee reviews the Company’s financial reporting process on behalf of the Board of Directors. The Audit Committee has met, reviewed and discussed the Company’s audited financial statements with management, which has primary responsibility for the financial statements and the reporting process, including the system of internal controls. In this context, the Audit Committee has held discussions with management and PricewaterhouseCoopers, the Company’s independent registered public accounting firm for fiscal 2014,2017, regarding the fair and complete presentation of the Company’s financial position and results of operations in accordance with accounting principles generally accepted in the United States of America and regulations of the SEC. The Audit Committee also has held discussions with management and PricewaterhouseCoopers regarding the effectiveness of the Company’s internal control over financial reporting in accordance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002. The Audit Committee has discussed significant accounting policies applied by the Company in its financial statements, as well as alternative treatments. Management has represented to the Audit Committee that the Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. PricewaterhouseCoopers is responsible for expressing an opinion on the conformity of the Company’s financial statements with accounting principles generally accepted in the United States of America. The Audit Committee has also discussed with PricewaterhouseCoopers the matters required to be discussed by Public Company Accounting Oversight Board Auditing Standard No. 161301 “Communications with Audit Committees”.

In addition, the Audit Committee has received the written disclosures and the letter from PricewaterhouseCoopers required by the applicable requirements of the Public Company Accounting Oversight Board, regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and has discussed with the independent registered public accounting firm its independence. The Audit Committee has also considered whether the independent registered public accounting firm’s provision ofnon-audit services to the Company is compatible with the auditor’s independence. The Audit Committee has concluded that PricewaterhouseCoopers is independent from the Company and its management. The Audit Committee haspre-approved all fiscal 20142017 audit and permissiblenon-audit services and the fees associated with those services. Further, the Audit Committee has discussed with PricewaterhouseCoopers the overall scope and plans for the audit.

Based upon the review and discussions referred to above, the Audit Committee recommended to the Company’s Board of Directors, and the Board of Directors approved, that the Company’s audited financial statements be included in the Company’s Annual Report on Form10-K for fiscal 2014.2017.

The Audit Committee has selected PricewaterhouseCoopers as the Company’s independent registered public accounting firm for fiscal 2015,2018, and the Board of Directors has approved submitting such selection to the shareholders for ratification.

This report is being provided by the following independent directors who constituted the Audit Committee as of April 15, 2015,March 5, 2018, the date of the approval of this report by the Audit Committee.

Respectfully submitted,

Audit Committee

Marsha Johnson Evans,Denis F. Kelly, Chair

Steven M. Altschuler

Cynthia Elkins

COMPENSATION COMMITTEE REPORT

The Compensation and Benefits Committee has reviewed and discussed the section entitled “Compensation Discussion and Analysis” with management. Based on the review and discussion, the Compensation Committee recommended to the Board of Directors that the section entitled “Compensation Discussion and Analysis” be incorporated by reference in the Company’s Annual Report on Form10-K for fiscal 20142017 and included in this Proxy Statement.

Respectfully submitted,

Compensation and Benefits Committee

Raymond Debbane, Chair

Steven M. Altschuler

Philippe J. Amouyal

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This discussion explains the Company’s executive compensation program with respect to fiscal 20142017 as it relates to the following “named executive officers”:

In connection with James Chambers’ resignation as President and Chief Executive Officer of the Company in September 2016, Messrs. Semmelbauer and Sobecki, bothnon-employee directors of the Company, were appointed at such time by the Board of Directors to serve, together with Mr. Hotchkin, as members of the Company’s former Interim Office of the Chief Executive Officer (the “IOCEO”). The IOCEO was dissolved on July 5, 2017, the date Ms. Grossman commenced employment as the Company’s President and Chief Executive Officer. As former members of the IOCEO, Messrs. Semmelbauer and Sobecki are named executive officers of the Company. For details on the compensation Messrs. Semmelbauer and Sobecki received for their services asnon-employee directors of the Company andnon-employee director members of the IOCEO, see“Director Compensation”. In fiscal 2017, Messrs. Semmelbauer and Sobecki did not receive any of the compensation elements discussed below in“—Executive Compensation Approach—Elements of Executive Compensation”.

The following discussion explains the Company’s executive compensation program with respect to fiscal 2017 as it relates to the following employee named executive officers: Mindy Grossman, Nicholas Hotchkin, Stacey Mowbray, Corinne Pollier and Michael Colosi. This discussion has three sections with respect to fiscal 20142017 executive compensation. In the first section, we discuss our approach to executive compensation, including our philosophy, objectives and general policiesprinciples as they relate to thesuch named executive officers. In the second section, we discuss specific practices as they relate to the five elements of our executive compensation program. In the third section, we provide analysis of decisions regarding compensation for thesuch named executive officers with respect to fiscal 2014. We have also included a brief discussion of certain elements of the Company’s 2015 executive compensation program that differ from the 2014 program.2017.

The Compensation Committee considered the voting results of the advisory,non-binding “say-on-pay”“say-on-pay” vote at our 20142017 annual meeting of shareholders in connection with the discharge of its responsibilities. Our shareholders expressed their support of our named executive officer compensation with a substantial majority of the votes cast voting to approve the compensation of our named executive officers described in our 20142017 proxy statement. Following the Compensation Committee’s review and consideration of this shareholder support, as well as the other factors discussed in more detail in“—Determination of Executive Compensation”, the Compensation Committee determined to make no changes to its approach to executive compensation except as discussed further in this “Compensation Discussion and Analysis”.

At our 2011 annual meeting of shareholders, a majority of our shareholders voted for “say-on-pay” proposals to occur every three years. In light of this voting result on the frequency of “say-on-pay” proposals, the Board of Directors decided that the Company will present “say-on-pay” proposals every three years until the next required vote on the frequency of shareholder votes to approve named executive officer compensation.

Accordingly, we currently expect to hold the next “say-on-pay” vote at the Company’s 2017 annual meeting of shareholders (the “2017 Annual Meeting”). We also currently expect the next shareholder vote on the frequency of shareholder votes to approve named executive officer compensation to occur at the 2017 Annual Meeting.

Executive Compensation Approach

Our Philosophy, Objectives and Principles

The Company’s executive compensation philosophy is to attract, motivate and retain exceptionally talented executives who are passionate about the Company’s mission to inspire people to adopt healthy habits and to help consumers manage their weight in a healthy, sensible, efficaciouspeople lead healthier, more active and sustainable manner. Inmore fulfilling lives.In furtherance of this philosophy, our executive compensation program is designed to achieve the following key objectives:

The following principles guide us in developing executive compensation programs and setting total compensation levels for executives:

Elements of Executive Compensation

In furtherance of our compensation philosophy and in order to achieve the key objectives listed above, for the Company’s executive compensation program in fiscal 2014,2017, we used the following compensation elements:

These elements combine to promote the Company’s compensation philosophy and achieve the Company’s compensation objectives as described above. Base salary, retirement and deferred compensation plans, change of control and other termination payments and benefits, and perquisites and other benefits provide a basic level of compensation that helps attract, motivate and retain exceptionally talented executives. Increases in base salary

and annual, performance-based cash bonuses reward achievement of annual and multi-year goals important to the Company’s near- and long-term financial and strategic success and the executive’s adherence to, and demonstration of, the Company’s values.success. Equity-based incentive compensation aligns an executive’s compensation directly with the creation of shareholder value by rewarding performance and the achievement of goals important to the Company’s strategic objectives and serves as a form of compensation to attract, to motivate, and to help retain the executive over time.

For senior executives, including the employee named executive officers, the Company believes that variable compensation such as equity-based and performance-based compensation should be a higher percentage of total compensation than for less senior executives. We feel that this type of compensation relates most directly to the achievement of business, strategic and financial objectives and goals and to building shareholder value, and the performance of senior executives has a strong and direct impact on achieving these objectives and goals.goals and building shareholder value.

In making decisions with respect to any element of an executive’s compensation, the Company considers the total current compensation that may be awarded to the executive, including base salary, annual, performance-based cash bonus and long-term equity incentive compensation. The Company’s goal is to award compensation that is reasonable in relation to the Company’s compensation philosophy and objectives when all elements of potential compensation are considered.

Competitive Considerations

The Company is a unique, global organization that operates and recruits across diverse markets and types of business lines and necessarily must make each compensation decision in the context of the particular situation, including the characteristics of the executive’s specific role, responsibilities, qualifications and experience. The Company takes into account general information about the competitive market for talent, but because of the uniqueness and mix of business in which the Company is engaged, the Company believes that strict benchmarking against a select group of companies does not provide a meaningful basis for establishing compensation. Therefore, the Company does not attempt to maintain a specific target percentile with respect to a specific list of peer or benchmark companies in determining compensation for senior executives, including employee named executive officers. However, the Company does periodically review information regarding compensation trends and levels from a variety of sources in order to obtain a general understanding of current compensation practices. These sources vary depending on the position as well as geography. These sources include broad public company indexes and resources and market data provided by outside executive recruiting and consulting firms. For example, in fiscal 2013, the Compensation Committee reviewed general market data related to performance-vesting option awards provided by Frederic W. Cook & Co., Inc. (“FW Cook”), an independent executive compensation consulting firm, in connection with the Compensation Committee’s engagement of FW Cook as further discussed below.third parties.

Policy Regarding Executive Common Stock Ownership

The Company has no formal policy regarding Common Stock ownership or retention by the Company’s senior executives, including the employee named executive officers. However, the Company encourages senior executives to retain ownership of a portion of the equity-based incentive compensation that they have been awarded. The Company encourages this equity retention so that our senior executives’ interests are more closely aligned with the interests of our shareholders. For a discussion of the restrictions on transfers of Common Stock awarded tonon-employee directors, including Messrs. Semmelbauer and Sobecki, as compensation, see “Director Compensation—Transfer Restrictions on Director Equity-Based Compensation”.

Determination of Executive Compensation

Roles and Responsibilities

The Compensation Committee determines the compensation for each of the employee named executive officers. All three Compensation Committee members are non-managementnon-employee directors of the Company. From time to time during the fiscal year, the Compensation Committee reviews the base salary, bonus,cash bonuses, equity-based incentive compensation and other material benefits, direct and indirect, of the employee named executive officers.

The Chief Executive Officer does not participate in the Compensation Committee’s deliberations or decisions with regard to hisher compensation. At the Compensation Committee’s request, the Chief Executive Officer reviews the performance of the other employee named executive officers. NoTypically, no other senior executive, except the Company’s principal human resources executive, has any regular input into executive

compensation decisions. During fiscal 2017, the role of the Chief Executive Officer was held by the members of the IOCEO from January 1, 2017 to July 5, 2017 and thereafter by Ms. Grossman. The Compensation Committee gives consideration, when determining appropriate executive compensation, to the employee named executive officer’s impact on the Company’s results, scope of responsibility, past accomplishments and prior experience, data on prevailing compensation levels and other similar factors. The Compensation Committee also gives considerable weight to the Chief Executive Officer’s evaluation of the other employee named executive officers because of hisher direct knowledge of each executive’s performance, responsibilities and contributions. For each employee named executive officer, the Compensation Committee determines each component of compensation based on its assessment of the executive’s achievement of his or her individual performance goals and objectives, as applicable, as well as the Company’s overall achievement of its goals and objectives.

From time to time, the Compensation Committee has engaged outside executive recruiting and consulting firms to review aspects of the executive compensation program for the Company’s executives. The Compensation Committee periodically seeks input from these outside consulting firms on a range of external market factors, including evolving compensation trends and market survey data. These outside consulting firms may also provide general observations on the Company’s compensation programs, but do not determine the amount or form of compensation for any executive. The Compensation Committee considers these inputs, observations and information as one factor in making decisions with respect to compensation matters along with information and analyses it receives from management and its own judgment and experience. The Compensation Committee has the ultimate authority to engage compensation consultants.

The Compensation Committee engaged FW CookMs. Grossman is employed by the Company pursuant to an employment agreement she entered into with the Company on April 21, 2017 (the “Grossman Employment Agreement”). In accordance with local practice in fiscal 2013Canada and France, Mses. Mowbray and Pollier, respectively, are also employed by the Company pursuant to provide information onemployment agreements. None of the design and financial implications of performance-vesting option awards for employees, including theother employee named executive officers. FW Cook also advisedofficers has an employment agreement with the Compensation Committee with respect to the number of shares subject to the 2014 Plan. This engagement commenced during the second half of fiscal 2013 and continued through the third quarter of fiscal 2014.Company.

Base Salary

The objective of base salary is to provide fixed compensation to an executive that reflects his or her job responsibilities and performance. Base salary is determined for the employee named executive officers by the Compensation Committee based on its subjective evaluation of a variety of factors, including the executive’s position, level and scope of responsibility, prior experience and past accomplishments. In addition, the Compensation Committee reviews data on prevailing compensation levels to obtain a general understanding of current base salary practices.

Base salary levels are reviewed and approved by the Compensation Committee annually, typically in the first fiscal quarter, as part of the Company’s performance review process as well as upon a hiring, promotion or other change in job responsibilities. Base salary levels are based on the Compensation Committee’s evaluation of the individual’s strengths, performance, development and expected future contributions with respect to the Company’s goals and objectives, including those related to strategic initiatives, relevant to the individual’s compensation, as well as the Company’s overall financial performance and other general economic factors in the marketplace such as inflation. In addition, the Compensation Committee compares the base salaries of the employee named executive officers to ensure internal equity.

Cash Bonuses

Annual, Performance-Based Cash Bonus

The Company’s executive compensation program provides for a variable cash bonus that is linked to annual performance. The objective of this compensation element is to compensate executives annually based on the achievement of specific individual and Company annual performance objectives.objectives, as applicable.

Each employee named executive officer’s annual cash bonus is determined as a percentage of the executive’s base salary. As with base salary, the Compensation Committee determines each such named executive officer’s annual target bonus percentage based on its subjective evaluation of a variety of factors, including the executive’s position, level, and scope of responsibility and expected future contributions, and review of competitive conditions and data on prevailing compensation practices and levels. From time to time, the Compensation Committee reviews executives’ annual target bonus percentages and may make adjustments based on the Compensation Committee’s evaluation of an executive’s strengths, development and expected future contributions, changes in the executive’s responsibilities, and internal pay equity, as well as its review of data on prevailing compensation practices and levels.

Each year,In most years, the target bonus percentage for each employee named executive officer may be over- or under-achieved based on a combination of the achievement of the Company’s financial performance goals in the fiscal year and the employee named executive officer’s performance during the fiscal year against his or her individual performance goals, except in the case of the Company’s Chief Executive Officer and Chief Financial Officer, whose annual, performance-based cash bonuses are based solely on the achievement of the Company’s financial performance goals in the fiscal year. In fiscal 2017, the Company weighted its financial performance goals as follows: (i) in the case of Ms. Grossman, 100% with respect to second half fiscal 2017 operating income objectives and (ii) in the case of the other employee named executive officers, 33.3% with respect to revenue trends in the first quarter of fiscal 2017 and 66.7% with respect to operating income objectives for fiscal 2017.

In fiscal 2014,2017, for each of Mr. ChambersMs. Grossman and Mr. Hotchkin, the Company’s overall financial performance of the Company for the fiscal year (second half of the fiscal year with respect to Ms. Grossman) determined 100% of her and his annual, performance-based cash bonus. Pursuant to the terms of the Grossman Employment Agreement, Ms. Grossman received a pro rata portion of her fiscal 2017 annual performance-based cash bonus based on the number of days she was employed by the Company in fiscal 2017. In fiscal 2014,2017, for Ms. Lysyj, a combination of the Company’s overall financial performance (33%) andMowbray, the financial performance of the North AmericaCompany and the Americas business (67%) for the fiscal year determined 75% of her annual, performance-based cash bonus as follows: (i) with respect to the applicable Q1 Revenue Goals (as defined hereafter), a combination of the overall financial performance of the Company (50%) and the financial performance of the Americas business (50%) and (ii) with respect to the applicable OI Goals (as defined hereafter), a combination of the overall financial performance of the Company (25%) and the financial performance of the Americas business (75%), and her individual performance determined the remaining 25%. In fiscal 2014,2017, for Ms. Lemmens, a combination of the Company’s overall financial performance (33%) andPollier, the financial performance of the United Kingdom business (67%)Company and the CE, ANZ and UK businesses for the fiscal year determined 75% of her annual, performance-based cash bonus as follows: (i) with respect to the applicable Q1 Revenue Goals, a combination of the overall financial performance of the Company (50%) and the financial performance of the CE, ANZ and UK businesses (50%) and (ii) with respect to the applicable OI Goals, a combination of the overall financial performance of the Company (25%) and the financial performance of the CE, ANZ and UK businesses (75%), and her individual performance determined the remaining 25%. In fiscal 2014,2017, for Mr. Colosi, the Company’s overall financial performance of the Company for the fiscal year determined 75% of his annual, performance-based cash bonus and his individual performance determined the remaining 25%.

Deductibility of Annual, Performance-Based Cash Bonus under Section 162(m)

The Compensation Committee believes it is in the best interests of the Company and its shareholders for the Company to provide an annual, performance-based cash bonus to executive officers that can be deducted by the Company for federal income tax purposes. Therefore, with respect to fiscal 2014, the Compensation Committee approved an annual, performance-based cash bonus structure which provides certain of the Company’s senior executive officers selected by the Compensation Committee the opportunity to receive an annual, performance-based cash bonus with respect to fiscal 2014 that is intended to qualify as tax-deductible “performance-based compensation” within the meaning of Section 162(m). All of our named executive officers, other than Mr. Colosi who commenced employment with us in May 2014, were selected by the Compensation Committee to participate in this annual, performance-based cash bonus structure. While Mr. Hotchkin was selected to participate, given his position as Chief Financial Officer, his annual, performance-based cash bonus is not subject to the deduction limitations under Section 162(m).

Annual, performance-based cash bonuses that are intended to qualify as “performance-based compensation” under Section 162(m) are funded upon the Company achieving a minimum of $100.0 million of operating income, as reported in the Company’s audited financial statements, for fiscal 2014. The Compensation Committee selected this financial measure because it is an important indicator of the Company’s financial performance during the fiscal year and shareholder value. Upon achievement of this financial measure, the maximum award payable to a participating senior executive is 200% of his or her target bonus percentage. However, this maximum award amount is not an expectation of the actual annual, performance-based cash bonus that will be paid. Rather, these amounts represent the maximum amount of bonus awards that the Compensation Committee may approve as “qualified performance-based compensation” for tax purposes pursuant to Section 162(m). Once the operating income financial measure is determined to be met by the Compensation Committee following the close of the fiscal year, the Compensation Committee exercises its “negative

discretion” as permitted under Section 162(m) to determine the actual annual, performance-based cash bonus for each participating senior executive officer using the guidelines and performance criteria for annual, performance-based cash bonuses generally applicable to all executives as described below. If the operating income financial measure threshold had not been met for fiscal 2014, no participating senior executive officer would have received an annual, performance-based cash bonus.

General Guidelines and Performance Criteria for Annual, Performance-Based Cash Bonuses

In general, for each fiscal year, each executive, including participating employee named executive officers and other senior executive officers for whom the Compensation Committee exercises “negative discretion” as permitted by Section 162(m) as described above,below, receives an annual, performance-based cash bonus payment between 0% and 200% of his or her target bonus percentage. In fiscal 2014, the Compensation Committee approved certain modifications to the bonus plan such that each executive over which the Compensation Committee exercised “negative discretion” as permitted by Section 162(m) had the opportunity to receive an annual, performance-based cash bonus payment between 0% and 162.5% (in the case of Mr. Chambers and Mr. Hotchkin, between 0% and 150%) of his or her target bonus percentage. The Compensation Committee determined that this reduction of the caps on bonus payments was appropriate to recalibrate the bonus plan based on its review in August 2014 of the Company’s financial performance to date and expected performance for the remainder of the year. An executive’s annual, performance-based cash bonus payment is determined and computed based on the financial performance goal ratingratings applicable to the executive and resulting financial percentage payout amountamounts for the fiscal year and, except for the Chief Executive Officer and the Chief Financial Officer, the executive’s individual performance rating and resulting individual percentage payout amount for the fiscal year.

The methodology and approach used by the Compensation Committee to determine these financial performance goal and individual performance ratings and related percentage payout amounts are as follows:

Determination of Financial Performance Goal RatingRatings and Financial Performance Percentage PayoutPayouts

The Compensation Committee generally establishes the financial performance goals each year based on the Company’s internal annual operating plan. Historically, the Compensation Committee has generally selected target operating income objectives in the Company’s internal annual operating plan.for financial performance goals. The Compensation Committee has selected these operating income performance goals because they are important indicators of the Company’s financial performance during the fiscal year and shareholder value. Taking into account the Company’s strategic initiative to return the Company to sustained revenue and operating income growth, the Compensation Committee determined that the 2017 financial performance goals should be based on the following objectives with the specified percentage allocations:

(i) in the case of Ms. Grossman, 100% with respect to operating income objectives, based on the achievement of certain second half fiscal 2017 operating income goals for the Company globally (collectively, the “2^nd Half OI Goal”); and

(ii) in the case of the other employee named executive officers,

Upon completion of the fiscal year, the Compensation Committee assesses the performance of the Company against the Company’s applicable financial performance goals by comparing the actual fiscal year results to thepre-determined target operating income objectives. TheIn the case of Ms. Grossman, the Compensation Committee has reserved the abilitydetermined to adjust the actual 2017 fiscal year results to exclude, if any, the effects of extraordinary, unusual or infrequently occurring events or changes in accounting principles. In the case of the other employee named executive officers, the Compensation Committee reserved the ability to adjust the actual fiscal year results to exclude, if any, the effects of extraordinary, unusual or infrequently occurring events or changes in accounting principles and to exercise discretion with respect to matters of accounting judgment, allocation and relative financial performance between business units. The Compensation Committee believes that the evaluation of the Company’s financial performance goals are best achieved if the actual fiscal year results are adjusted to exclude these items while the target operating income objectives remain fixed.

In fiscal 2014, a2017, the financial performance goal rating,ratings, and the corresponding financial performance percentage payout, between 0% and 150%payouts, for the portion of each employee named executive officer’s annual cash bonus determined by the Company’s achievement of its financial performance goals was determined based on the following scale:scales:

(i) in the case of Ms. Grossman, (x) a threshold financial performance goal rating/percentage payout of 50% upon the Company’s second half fiscal 2017 operating income being 80% of the Company’s second half fiscal 2016 operating income, ramping linearly to a financial performance goal rating/percentage payout of 100% upon the Company’s second half fiscal 2017 operating income equaling the Company’s second half fiscal 2016 operating income, (y) “plateau” at a financial performance goal rating/percentage payout of 100% so long as second half fiscal 2017 operating income equals any amount equal to or between the Company’s second half fiscal 2016 operating income and the Company’s budgeted second half fiscal 2017 operating income, and (z) upon and to the extent the Company’s second half fiscal 2017 operating income exceeds the Company’s budgeted second half fiscal 2017 operating income, a financial performance goal rating/percentage payout determined per the Company’s full year operating income performance grid for the other employee named executive officers as set forth below for achievement above 100% and up to a maximum payout of 200%; and

(ii) in the case of the other employee named executive officers:

Range of Financial Performance Goal Ratings/Percentage PayoutsPayouts—Q1 Revenues

Range of Financial Performance Goal Ratings/Percentage Payouts—Full Year Operating Income

The financial performance goal rating for a percentage of the operating income achieved for the fiscal year that falls between target percentages of operating income set forth above is calculated on a proportional, sliding scale between the target percentages. For example, if the Company achieves 95% of its target operating income for the fiscal year, the financial performance goal rating and corresponding financial performance percentage payout for the named executive officer would be 75%. In fiscal 2014, following its review in August 2014 of the Company’s financial performance to date and expected performance for the remainder of the year, in addition to the reduction of the caps on bonus payments discussed above, the Compensation Committee modified the scale of financial performance goal ratings and the corresponding financial performance percentage payouts to reduce the ratings and payouts associated with achieving greater than 100% of the target operating income for the fiscal year.

The Compensation Committee establishes the financial performance goals so that the minimum performance level is reasonably likely to be achieved, while the target financial performance goals are more challenging. InFor example, with respect to the global Q1 Revenue Goal, the target revenue assumed a successful winter season resulting in significant revenue growth versus the prior year period and the related percentage payout threshold aligned with such goal for the period.In recent fiscal years, the Company has met, exceeded and not achieved the target financial performance goals.

Determination of Individual Performance Rating and Individual Performance Percentage Payout

All executives, including employee named executive officers other than the Chief Executive Officer and Chief Financial Officer, have individual performance goals for each fiscal year. Typically, individual performance goals are set by the executive’s manager during each fiscal year and vary depending on the Company’s business and strategic plan and objectives and each executive’s individual responsibilities. The executive’s manager determines after the end of each fiscal year the executive’s individual performance rating for the past year based on the executive’s performance against his or her individual performance goals. The executive’s manager also determines the individual performance percentage payout for the executive based on his or her individual performance rating.

An executive can receive an individual performance percentage payout of between 0% and 200% for the portion of his or her annual cash bonus determined by the executive’s individual performance. However, performance may be over- or under-achieved by the executive. Achieving the target individual performance goal for all individual performance objectives would yield an individual performance percentage payout of between 80% and 110% as determined in the discretion of the executive’s

manager. IfAn executive is only eligible for an executive fails to achieve at least a threshold level of individual performance and beannual, performance-based cash bonus if he or she is awarded by his or her manager an individual performance percentage payout of at least 25%, he or she is not eligible for any annual, performance-based cash bonusmore, regardless of whether the Company achieves the threshold financial performance goals for the year. Typically, the Chief Executive Officer initially determines the individual performance percentage payouts for the other employee named executive officers.officers (other than the Chief Financial Officer whose payout is based solely on the Company’s financial performance percentage payout). These individual performance percentage payout determinations are then reviewed by the Compensation Committee when it approves the employee named executive officers’ annual, performance-based cash bonuses.

Payout of Annual, Performance-Based Cash Bonus

After the close of a fiscal year, the Compensation Committee determines and approves the amount of the annual, performance-based cash bonus to be paid to each employee named executive officer. The payout typicallygenerally occurs in March or April of the fiscal year following the fiscal year to which the annual, performance-based cash bonus relates. There is no provision for the adjustment or recovery of a cash bonus paid to aan employee named executive officer if the results in a previous year are subsequently restated or adjusted in a manner that would have originally resulted in a smaller or larger bonus. However, the annual, performance-based cash bonus is not paid until after the completion of the annual audit of the Company’s financial statements by the Company’s independent registered public accounting firm for the applicable fiscal year.

Other Cash Bonuses

From time to time, in order to attract or retain executive talent or reward performance outside of the executive’s individual responsibilities, the Compensation Committee may award other cash bonuses to executives. For example, in recognition of Mr. Hotchkin’s service as a member of the IOCEO in fiscal 2017, the Compensation Committee determined that it was appropriate to grant Mr. Hotchkin an additional discretionary cash bonus of $200,000.

Long-Term Equity Incentive Compensation

The Compensation Committee may periodically award executives, including the employee named executive officers, stock options, RSUs, PSUs and/or other equity-based awards. The principal objective of the Company’s long-term equity incentive compensation program is to align compensation for executives over a multi-year period directly with the interests of shareholders of the Company. The Company believes that granting equity-based awards provides executives with a strong financial incentive to maximize shareholder returns over the longer term. The Company also believes that the practice of granting equity-based awards is important in retaining, motivating and recruiting the key talent necessary to ensure the Company’s continued success.success and, in the case of performance equity-based awards, in aligning compensation with the Company’s long-term strategic goals.

Mix of Equity Incentive Compensation

The Company’s long-term equity incentive compensation has historically taken the form of a mix ofnon-qualified stock option and RSU awards and more recently a mix of RSU and PSU awards. These two vehiclesStock options and Stock Units reward shareholder value creation in slightly different ways. Stock options (which historically have generally only had time-vesting criteria to vest (“Time-Vesting Options”), terminated within ten years from date of grant, and had exercise prices equal to the average of the closing price of our Common Stock on the grant date and the four previous trading days on the NYSE) reward executives only if the stock price increases in comparison to the exercise price. Thus, stock options directly reward creation of shareholder value after the grant date. RSUsStock Units (which vary in value depending on the stock price of our Common Stock prior to vesting) are impacted by all stock price changes, so the value to executives is affected by both increases and decreases in stock price from the market price at the date of grant.

In fiscal 2015, the Compensation Committee continued its then-current practice of awarding solely RSUs for the annual, long-term equity incentive compensation awards. In fiscal 2016, the Compensation Committee decided to introduce performance-based vesting criteria into the annual award program to further align its long-term equity incentive compensation program with the Company’s long-term strategic goals. In connection with this determination, the annual awards for fiscal 2016 consisted of a mix of RSUs and PSUs. The Compensation Committee continued this practice of awarding a mix of RSUs and PSUs for the fiscal 2017 annual awards. For further details on this mix of RSUs and PSUs, see “—2017 Executive Compensation Determinations—Employee Named Executive Officers—Long-Term Equity Incentive Compensation—Annual Awards” below. The Compensation Committee continued to believe that an annual award consisting solely of Stock Units was the most appropriate form of long-term equity incentive compensation to award our executives. Although an RSU’s or PSU’s value may increase or decrease with changes in the stock price during the period before vesting, it will continue to have value in the long-term, encouraging retention as well as rewarding shareholder value creation.

In fiscal 2012, fiscal 2013 and fiscal 2014, long-term equity incentive compensationachievement of named executive officers took the form of a combination of non-qualified stock option and RSU awards. In fiscal 2014, the Compensation Committee determined that executives’ fiscal 2014 annual, long-term equity incentive compensation awards would consist solely of RSUs, as compared to the historic practice of awarding a mix of Time-Vesting Options (defined below) and RSUs. While the Compensation Committee has historically believed that a mixture of stock options and RSUs is the most appropriate form of long-term equity incentive compensation to award our executives, it believed that the annual award of solely RSUs was the most appropriate form of long-term equity incentive compensation to award our executives in fiscal 2014 because although an RSU’s value may increase or decrease with changes in the stock price during the period before vesting, it will have value in the long-term, encouraging retention,strategic goals, as well as rewarding shareholder value creation. The Compensation Committee may in the future adjust this mix of award types or approve different award types as part of the further development of its long-term equity incentive compensation program.

Stock Option Awards Generally

The vesting of stock options is generally solely time-based (“Time-Vesting Options”) and differs depending on whether the award is an annual award, a hiring award or a special award, as described below. In fiscal 2013 and fiscal 2014, the Compensation Committee made special performance-based stock option awards to certain executives, including the named executive officers, having both time- and performance-vesting criteria (“T&P Options”). See “—Types of Awards—Special Awards” for additional details on these awards. Generally, option vesting rights cease upon a holder’s termination of employment, death or disability, and exercise rights cease one year after the holder’s termination for death or permanent disability, 90 days after a holder’s termination for reasons other than for “cause,” death or permanent disability, or retirement, and immediately upon a termination for “cause.” Upon a termination for “cause” or a transfer in violation of the underlying terms

and conditions of the award, all options, whether vested or unvested, generally terminate. In addition, Time-Vesting Options generally vest and become exercisable immediately prior to a change of control, and generally terminate within ten years from date of grant depending on the type of award. With respect to the T&P Options, generally, upon a change in control, the time-vesting criteria will be deemed fully satisfied and any previously unsatisfied stock price hurdles will be deemed satisfied to the extent the per share consideration received by a holder of Common Stock in connection with such change in control, if any, or otherwise the closing price of the Common Stock on the NYSE (or other national securities exchange) on the last trading day immediately prior to the date of such change in control, equals or exceeds any such stock price hurdles. The change in control treatment described in the preceding sentence applies in lieu of any other rights to equity award acceleration in connection with a change in control pursuant to the terms of any executives’ continuity agreements with the Company. The T&P Options also generally terminate within five years of the date of grant. Prior to the exercise of a stock option, the holder has no rights as a shareholder with respect to the shares subject to such option, including voting rights and the right to receive dividends or dividend equivalents.

RSU Awards Generally

The vesting of RSUs is generally time-based and differs depending on whether the award is an annual award, a hiring award or a special award, as described below. Generally, upon a holder’s termination of employment or transfer in violation of the underlying terms and conditions of the award, all vesting in the holder’s RSUs shall cease and the unvested portion of the RSUs shall be cancelled without payment. However, RSUs generally immediately vest on the first to occur of (1) the vesting date, (2) a change of control, (3) death of the holder and (4) the date the holder’s employment with the Company is terminated due to permanent disability. In addition, prior to the vesting of an RSU, the holder has no rights as a shareholder with respect to the shares subject to such RSU, including voting rights, except that the holder has the right to receive accrued cash dividend equivalents upon the date the RSU vests.

Types of Awards

Annual Awards. AnnualHistorically, annual awards may consistconsisted of Time-Vesting Options, RSUs or a combination of both. As discussed above, most recently, the annual awards consisted of RSUs and PSUs. Stock options granted with respect to annual awards generally have exercise prices equal to the average of the closing price of our Common Stock on the grant date and the four previous trading days on the NYSE as well as three-year cliff vesting, and are not subject to Company performance targets. RSUs granted with respect to annual awards generally have three-year cliff vestingtime-vesting criteria and are not subject to Company performance targets. PSUs granted with respect to annual awards have time- and performance-vesting criteria. Annual awards constituting stock options generally terminate on the tenth anniversary of their grant date. The Company’s historicrecent practice was to grant annual awards in March of each year. In fiscal 2012, the Compensation Committee determinedhas been to grant annual awards in two equal installments: the first on May 15^th of each year and the second on November 15^th of each year; provided, however, in the event such date falls on a weekend, the applicable grant is made on the trading day of the NYSE immediately preceding that date. However, with respect to the fiscal 2015 annual award, RSUs were granted in one installment on June 15, 2015 and vested 50% on each of April 1, 2016 and April 1, 2017. With respect to the fiscal 2017 annual award, the Company granted the RSUs in two installments on May 15, 2017 (except in the case of Ms. Grossman’s award, the first installment of which was granted on July 5, 2017, her employment commencement date) and November 15, 2017 consistent with its historical practice and granted the PSUs in one installment on May 15, 2017 (except in the case of Ms. Grossman’s award, whichone-time installment was granted on July 5, 2017). See “—Annual Equity Grant Procedures”for additional details on annual awards.

Hiring Awards. HiringHistorically, hiring awards may consistconsisted of Time-Vesting Options, RSUs or a combination of both. Historically, hiringHiring awards for newly-hired employee named executive officers, if granted, were granted promptly following their hire with their first day of employment coinciding with the grant date of the award. Stock options granted with respect to hiring awards generally have exercise prices equal to the average of the closing price of our Common Stock on the grant date and the four previous trading days on the NYSE. These stock options and RSUs granted on the first day of employment vest proportionately and become exercisable in annual increments over a three- to five-year period. In addition, from time to time, hiring awards for newly-hired employee named executive officers are structured such that the stock options and/or RSUs awarded are granted in two equal installments with grant dates that align with the grant dates of the annual awards made in the fiscal year of hire. In such cases, when a newly-hired employee named executive officer commences employment after May 15th,15^th, the grant date of the first installment has typically been the first day of employment or the 15th15^th day of the calendar month following the first day of employment. These stock options and RSUs that are aligned with annual awards generally vest proportionately

and become exercisable in annual increments over a three- to five-year period and/or have three-year cliff vesting. The Compensation Committee may establish separate vesting

and exercisability for each installment. Hiring awards constituting stock options generally terminate on the tenth anniversary of their grant date.

Ms. Grossman’s recent hiring award consisted of a combination of Time-Vesting Options and RSUs which were all granted in one installment on her first day of employment, July 5, 2017. These options and RSUs vest proportionately per year over four years on each anniversary of the grant date. The exercise prices for these options were not established per the Company’s historical practice but were fixed prices agreed upon by the Compensation Committee in connection with the negotiation of the Grossman Employment Agreement to incentivize performance and creation of shareholder value. Additionally, unlike the Company’s historical practice, these options terminate on the seventh anniversary of their grant date. For additional details on the hiring award for Ms. Grossman, see“—2017 Executive Compensation Determinations—Employee Named Executive Officers—Long-Term Equity Incentive Compensation—Hiring Awards”.

Special Awards. From time to time, special awards of stock options, RSUs or a combination of both may be made to certain employee named executive officers in connection with a promotion or other special circumstance. With respect to stock options and RSUs granted, vesting and exercisabilityexercise prices are established at the time the Compensation Committee grants special awards. Historically, these special awards generally have time-based vesting criteria in the form of annual increments over three to five years and any such stock option awards terminate on the tenth anniversary of their grant date.

In the second half of fiscal 2013, the Compensation Committee reviewed the benefits and market trends related to performance-based long-term equity awards. The Compensation Committee considered the current transformational strategy of the Company and the role that certain executives would play in executing that strategy, information on general market long-term equity incentive compensation trends and design alternatives provided by FW Cook, current market trends in our Common Stock, as well as the Compensation Committee’s members’ experience with equity compensation programs at other companies. See “—Determination of Executive Compensation—Risks and Responsibilities” for additional details on our engagement of FW Cook. Following this review, the Compensation Committee determined to grant special T&P Option awards to certain executives, including the named executive officers. The exercise price of these T&P Options is the higher of the average of the closing price of our Common Stock on the grant date and the four previous trading days on the NYSE and the grant date close price. The time-vesting criteria of these T&P Options fully vest on the third anniversary of the grant date. With respect to the performance-vesting criteria, these T&P Options fully vest in 20% increments upon the first date that the average closing price of our Common Stock on the NYSE (or other national securities exchange) for the 20 consecutive preceding trading days is equal to or greater than the following stock price hurdles: (i) 150% of the exercise price, (ii) 175% of the exercise price, (iii) 200% of the exercise price, (iv) 225% of the exercise price, and (v) 250% of the exercise price. These T&P Options expire on the fifth anniversary of their grant date.

Annual Equity Grant Procedures

The Compensation Committee administers our stock plans. In fiscal 2012,2017, pursuant to its equity grant procedures, the Compensation Committee determined that the Company’s equity grant procedures should be revised to no longer base awards on a particular amount of shares but to basebased annual awards on an aggregate dollar amountvalue based on a percentage of an executive’s base salary which would then be converted into a number of stock optionsRSUs and/or RSUsPSUs as described below. ForPursuant to its equity grant procedures, for awards that include bothare a mix of stock options, and RSUs and/or PSUs, the aggregate dollar amountvalue is typically divided between stock options and RSUsthe forms of equity based on percentage amounts approved by the Compensation Committee, with the dollar value for stock options being a higher percentage of the aggregate dollar amount in the case of senior executives given their performance has a more direct impact on the Company achieving its objectives and goals.Committee.

Additionally, the Compensation Committee determined that toTo reduce the exposure of annual awards to market volatility, among other things, the Compensation Committee determined several years ago that annual awards would no longer be granted in one installment but, starting with annual awards made in fiscal 2012, would be granted in two equal installments. TheHistorically, the first installment of an annual award is generally granted on May 15^th of each year (except in the case of a new employee who is granted the right to participate in the annual award program in his or her year of hire and whose employment start date is after May 15^th, in which case the first installment is granted on the 15^th day of the calendar month following such start date) and the second installment of an annual award is generally granted on November 15^th of each year; provided, however, in the event such grant date falls on a weekend, the applicable grant is made on the trading day of the NYSE immediately preceding that date. To provide for these two grant dates for annual awards, and any hiring award or special award that contemplates two or more grant dates, the aggregate dollar amounts allocated to either stock options, RSUs and/or RSUs,PSUs, as applicable, is divided evenly by the applicable number of grant dates and the resulting dollar amounts are then converted into stock options, RSUs and/or RSUsPSUs per grant date as described below. In the case of the annual awards for the employee named executive officers in fiscal 2015, the Compensation Committee determined to not provide for two grant dates but to grant these annual awards in one installment on June 15, 2015 to create better incentives for employees to contribute to the execution of the Company’s transformation plan. With respect to the fiscal 2017 annual award, the Company granted the RSUs in two installments on May 15, 2017 (except in the case of Ms. Grossman’s award, the first installment of which was granted on July 5, 2017, her employment commencement date) and November 15, 2017 consistent with its historical practice and granted the PSUs in one installment on May 15, 2017 (except in the case of Ms. Grossman’s award, whichone-time installment was granted on July 5, 2017) to create better incentives for employees to contribute to the Company achieving its long-term strategic goals.

Generally, when converting the aggregate dollar value for an annual award into a number of RSUs, PSUs or Time-Vesting Options, as applicable, the number of RSUs and PSUs granted has been determined based on the

Theclosing price of our Common Stock one week before the applicable grant date and the number of Time-Vesting Options granted ishas been determined based on the Black-Scholes value of an option with respect to our Common Stock one week before the applicable grant date. The number of T&P

Time-Vesting Options granted is determined based on the Monte Carlo simulation value ofas an option with respect to our Common Stock one week before the applicable grant date. The number of RSUs granted is determined based on the closing price of our Common Stock one week before the applicable grant date.

Our stock optionsannual award have historically been generally granted at an exercise price determined as follows: (i) with respect to Time-Vesting Options, by calculating the average of the closing price of our Common Stock on the grant date and the four previous trading days on the NYSE, and (ii) with respect to T&P Options, by calculating the higher of the average of the closing price of our Common Stock on the grant date and the four previous trading days on the NYSE and the grant date close price. InNYSE.In certain circumstances, thisthese calculations may result in an exercise price in excess of or less than the closing price of our Common Stock on the grant date.

All equity awards granted to employee named executive officers require the approval of the Compensation Committee or the Board of Directors.

Retirement and Deferred Compensation Plans, Termination Payments and Other Arrangements

The objectives of the Company’s retirement and deferred compensation plans and other retirement arrangements are to help provide financial security into retirement, reward and motivate tenure, and retain talent in a competitive market. In addition, the objective of the Company’s termination payments to senior executives is to help attract talent in a competitive market and, in the event of payments upon a change of control, is to motivate certain executives to remain with the Company despite the uncertainty that may arise in the context of change of control situations.

Savings Plans

We sponsor a savings plan for salaried and certain hourly U.S. employees, including our U.S. employee named executive officers. The savings plan is atax-qualified 401(k) retirement savings plan pursuant to which participants are able to contribute, on apre-tax basis, up to the lesser of 50% of their eligible earnings and the limit prescribed by the Internal Revenue Service. TheTo encourage a higher level of contribution by participants, in fiscal 2017, the Company will match dollar-for-dollar 100%matched 50 cents on each dollar of the participant’s tax deferred contributions up to 3%6% of the participant’s eligible earnings. All participant contributions to the savings plan are fully vested upon contribution. All matching contributions by the Company become vested on the date on which the participant’s aggregate service to the Company totals three years. Matching contributions also fully vest immediately upon the participant reaching the age of 65, becoming permanently disabled or dying, or being terminated by the Company without “cause”.

We also provide a Group Personal Pension SchemeRegistered Retirement Savings Plan for eligible, salaried U.K.full-time Canadian employees, includingin which Ms. Lemmens.Mowbray participates. Contributions to this schemeplan by participating employees are madetax deductible. The Canada Revenue Agency imposes a limit on a pre-tax basis. Her Majesty’s Revenue & Customs has anthe aggregate annual tax free allowance for the total contribution that thean employee can make, and his or her employer and any third party can make for the employee’s benefit, to the plan during a given period (currentlytax year. For the 2017 tax year, 2014/15this annual limit is £40,000)was $20,688⁽¹⁾. Generally, the Company contributes between 5% and 9% (in the case of Ms. Lemmens, 9%) ofmatches an employee’s contributions up to 5% of the employee’s annual base salaryeligible earnings. In fiscal 2017, pursuant to the Group Personal Pension Scheme, provided thatterms of her employment agreement, the employee contributes a minimumCompany made monthly flat rate contributions to the plan for Ms. Mowbray’s benefit of 2% of his or her annual base salary into$20,090⁽²⁾ in the scheme.aggregate. All Company and employee contributions to the schemethis plan are fully-vestedfully vested upon contribution.

Executive Profit Sharing Plan

We have also established anon-qualified executive profit sharing plan for U.S. management personnel,highly compensated employees, including the U.S. employee named executive officers. The executive profit sharing plan provides for

a guaranteed monthly Company contribution for each participant based on the participant’s age and the participant’s eligible earnings. In addition, the executive profit sharing plan provides for supplemental Company contributions to be made at the discretion of the Company under certain circumstances.circumstances which the Company has not made in recent years. The Company will also credit each participant’s executive profit sharing account with interest at an annual rate equal to the sum of (a) 2% plus (b) the annualized prime rate, as published in The Wall Street Journal, compounded as of the end of each fiscal month, subject to a cap of 15%.

The following table sets forth the guaranteed monthly contribution amounts based on selected ages of a participant:

Historically, the Company has generally approved supplemental contributions ranging from 50% to 100% of the aggregate guaranteed contribution amount for the applicable fiscal year. For fiscal 2014, the Company did not approve a supplemental contribution.

Contributions to a participant’s executive profit sharing account are fully vested upon the date on which the participant’s aggregate service to the Company totals three years. Contributions also generally fully vest immediately upon the participant reaching the age of 65, becoming permanently disabled or dying, or being terminated by the Company without “cause”. Generally, the vested contributions to a participant’s executive profit sharing account are paid to the participant, or his or her beneficiary or legal representative, as the case may be, following the participant’s termination of employment with the Company other than termination by the Company for “cause” in which case all benefits are forfeited by the participant. The timing of any such distribution following termination is subject to the terms of the executive profit sharing plan. The executive profit sharing plan also provides for certain early payments from a participant’s executive profit sharing account in limited hardship situations subject to the terms of the plan.

Termination Payments upon a Change of Control

The Company has determined that it is in the best interests of its shareholders to reinforce and encourage the continued attention and dedication of our key executives to their duties, without personal distraction or conflict of interest in circumstances that could arise in connection with any change of control of the Company. Therefore, the Company has entered into continuity agreements with our U.S.employee named executive officers and certain other U.S. senior executives.

Each agreement generally has an initial termexecutives which provide for certain severance payments and provision of two to three years frombenefits upon a termination in connection with a change in control or, in the date of execution and continues to renew annually thereafter unless the Company provides 180-day advance written notice to the executive that the termcase of the agreement will not renew. However,employee named executive officers (other than Ms. Grossman) and such other executives, upon the occurrencea termination for long-term disability, retirement or death. For a more fulsome discussion of a “change in control” (as defined in the agreement) of the Company, the term of the agreement may not terminate until the second anniversary of the date of the change in control.

The continuity agreements for Mr. Chambers, Mr. Hotchkin and Mr. Colosi provide that, among otherthese benefits, discussed more fully below in the section entitledsee “Potential Payments upon Termination, Retirement or Change of Control—Employee Named Executive Officers—Payments Made Upon a Change of Control—Continuity AgreementsAgreements””, if (a) during the two-year period following a change in control of the Company, such named executive officer’s employment is terminated (other than termination by the Company for “cause” or by reason of death, disability or retirement), (b) during the three-month period prior to, but in connection with, or during the two-year period following, a change in control of the Company, such named executive officer voluntarily terminates his employment for “good reason”, or (c) an agreement is signed which would result in a change in control of the Company and during the period between the effective date of the agreement and a change in control of the Company, such named executive officer’s employment is terminated in connection with the change in control (other than termination by the Company for “cause” or by reason of death, disability or retirement), then he is entitled to receive, among certain other payments and benefits, a lump sum cash payment equal to three times the sum of.

(x) the named executive officer’s annual base salary on the date of the change in control (or, if higher, the annual base salary in effect immediately prior to when the notice of termination is given), and (y) the named executive officer’s target annual bonus under our bonus plan in respect of the fiscal year in which the termination occurs (or, if higher, the average annual bonus actually earned by the named executive officer in respect of the three full fiscal years prior to the year in which the notice of termination is given).

The continuity agreement for Ms. Lysyj and certain other senior executives who are not named executive officers have similar terms and conditions as described above but entitle the executive to receive, among certain other payments and benefits, a lump sum cash payment equal to two times the sum of (x) the executive’s annual base salary on the date of the change in control (or, if higher, the annual base salary in effect immediately prior to when the notice of termination is given), and (y) the executive’s target annual bonus under our bonus plan in respect of the fiscal year in which the termination occurs (or, if higher, the average annual bonus actually earned by the executive in respect of the three full fiscal years prior to the year in which the notice of termination is given).

Other Retirement, Separation, Retention or Severance Arrangements

The Company has no formal policy regarding retirement, arrangements. From time to time, the Compensation Committeeretention or the Board of Directors in its discretion, based upon the nature and circumstances of the individual retiring, has approved retirement arrangements for certain named executive officers and other senior executives. Additionally, with respect to those executives, including the applicable named executive officers, with whom the Company has entered into a continuity agreement as described above, the Company has agreed to pay such executives upon their retirements amounts unvested in the Company’s qualified defined contribution plan and a pro rata portion of their annual, performance-based cash bonuses as set forth therein.

The Company also has no formal policy regarding separation arrangements. From time to time, the Compensation Committee or the Board of Directors in its discretion, based upon the nature and circumstances of the individual’s separation from the Company, has approved separation arrangements for certain named executive officers. The Company also has no formal policy regarding retention arrangements. From time to time, the Compensation Committee or the Board of Directors in its discretion, based upon the role and skill set of the individual as well as the transition needs of the Company, has approved retention arrangements for certain named executive officers and other senior executives.

Additionally, the Company has no formal policy regarding severance arrangements. From time to time, the Compensation Committee or the Board of Directors in its discretion, based upon the nature andor circumstances surrounding the hiring, promotion, retention or departure of an individual, or upon review of the individual being hired, has approved separatetransition and skill needs of the Company, competitive conditions and/or the relationship of a senior executive’s compensation to the compensation of other senior executives of the Company, enters into retirement, retention and/or severance arrangements with certain senior executives, including certain employee named executive officers. Additionally, the Company is subject to certain statutory and, in some cases, common law requirements of the countries in which it operates that may give rise to certain benefits for certainits senior executives upon

retirement, termination or other events. For additional details on these arrangements with and requirements with respect to the employee named executive officers, and other senior executives. For example, in connection with Mr. Chambers being appointed President and Chief Executive Officer, the Company and Mr. Chambers entered into a letter agreement on July 30, 2013 amending his offer letter dated December 6, 2012 to provide for the following severance benefits upon his termination by the Company for any reason other than those set forth in his continuity agreement or for “cause”: (x) a lump sum cash payment equal to 12 months of base salary plus his target annual bonus for the year in which such termination occurred and (y) 12 months of continued health coverage under Company-sponsored health plans on the same basis available to him immediately prior to termination, subject to the execution and non-revocation of a general release of claims in favor of the Company and its affiliates. In addition, to the extent that any restrictive covenants Mr. Chambers may be subject to expire by their terms prior to the 12-month anniversary of any such termination, he agrees that such covenants shall be extended through such date. In accordance with Mr. Hotchkin’s offer letter dated July 2, 2012, upon termination by the Company for any reason other than those set forth in his continuity agreement or for “cause”, Mr. Hotchkin will receive a lump sum cash payment equal to six months of salary and six months of continued health coverage under the Company-sponsored health plans on the same basis available to him immediately prior to termination. In accordance with Ms. Lemmens’ employment agreement dated June 5, 2013, upon termination by the Company for any reason other than for gross misconduct, Ms. Lemmens will receive either six months notice or a payment equal to the aggregate amount of six months of

salary, car allowance, pension and private healthcare (less any required deductions for tax and national income contributions) multiplied by the number of days not worked of her notice entitlement. In addition, in accordance with the terms of Ms. Lemmens’ offer letter dated July 4, 2013, Ms. Lemmens will also be reimbursed for repatriation expenses provided her employment is not voluntarily terminated. In accordance with Mr. Colosi’s offer letter dated March 3, 2014, upon termination by the Company for any reason other than those set forth in his continuity agreement or for “cause”, Mr. Colosi will receive a lump sum cash payment equal to 12 months of salary and 12 months of continued health coverage under the Company-sponsored health plans on the same basis available to him immediately prior to termination, subject to the execution and non-revocation of a general release of claims in favor of the Company and its affiliates.

In connection with Ms. Lysyj’s departure from the Company effective March 31, 2015, and pursuant to her offer letter dated September 30, 2013, Ms. Lysyj will receive a lump sum cash payment equal to 12 months of salary and 12 months of continued health coverage under the Company-sponsored health plans on the same basis available to her immediately prior to her departure. See see“Potential Payments uponUpon Termination, Retirement or Change of Control—Payments Made Upon Termination—Departure ofEmployee Named Executive Officer”Officers” for additional details..

Benefits and Perquisites

The Company provides benefits to its salaried employees including health care coverage, life and disability insurance protection, reimbursement for educational expenses, a wellness-related allowance and access to favorably-priced group insurance coverage. The Company provides these benefits to help alleviate the financial costs and loss of income arising from illness, death or disability, to encourage ongoing education injob-related areas, to promote the wellness of and an active lifestyle for its employees and to allow employees to take advantage of reduced insurance rates available for group policies. In addition to the benefits provided to salaried employees generally, the Company provides employee named executive officers with certain perquisites that the Company and the Compensation Committee believe are reasonable and consistent with the Company’s overall compensation program to better enable the Company to attract and retain employees for key positions. These perquisites may include, as applicable, cost of living, housing, car and/or transportation allowances and reimbursement of costs associated with relocation, dependents’ education, temporary living arrangements, home leave travel and mobile devices (which are permitted to be used for personal matters) as well as taxgross-up payments with respect to such allowances and reimbursements. The Compensation Committee periodically reviews the levels of benefits and perquisites provided to employee named executive officers.

Tax and Accounting Implications

Excess Parachute Payment Excise Taxes

Under the terms of a continuity agreement (other than Ms. Grossman’s continuity agreement) (i) if it is determined that certain payments and benefits provided under the agreement and under any other plan or arrangement with the Company and its affiliates in the aggregate (the “parachute payment”) would be subject to the excise tax imposed under Section 4999 of the Internal Revenue Code (the “280G excise tax”), or to any similar tax, and the aggregate value of the parachute payment exceeds a certain threshold amount calculated under the Internal Revenue Code by 5% or less, then (ii) the parachute payment will be reduced to the extent necessary so that the aggregate value of the parachute payment is equal to an amount that is less than such threshold amount; provided, however, that if the aggregate value of the parachute payment exceeds the threshold amount by more than 5%, then the executive will be entitled to receive an additional payment or payments in an amount such that, after payment by the executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any excise tax imposed upon this payment, the executive retains an amount equal to the excise tax imposed upon the parachute payment. Under the terms of Ms. Grossman’s continuity agreement (i) if it is determined that the parachute payments would be subject to the 280G excise tax and the net after tax amount of such parachute payments (after the payment of all taxes) is less than the netafter-tax amount of the parachute payments reduced to the maximum amount payable such that none of the parachute payments would be subject to the 280G excise tax (the “reduced amount”), then the aggregate amount of such parachute payments to Ms. Grossman shall be reduced to such reduced amount and (ii) if it is determined that the net after tax amount of the full payment of such parachute payments is greater than the net after tax amount of the reduced amount, Ms. Grossman shall receive the aggregate parachute payments; provided that Ms. Grossman shall not be entitled to a receive an additional taxgross-up payment.

Internal Revenue Code Section 409A

If, under the continuity agreements or our stock plans, any payments or benefits that the Company would be required to provide under the continuity agreements or any of our stock plans cannot be provided in the manner

contemplated in the continuity agreements or under the applicable plan without subjecting the executive to income tax under Section 409A of the Internal Revenue Code, the Company shall provide such intended payments or benefits to the executive in an alternative manner that conveys an equivalent economic benefit to the executive without materially increasing the aggregate cost to the Company.

The Section 162(m) of the Internal Revenue Code $1 Million Deduction Limit

Section 162(m) of the Internal Revenue Code (“Section 162(m)”) generally disallows a tax deduction to a public corporation for compensation over $1.0 million paid in any fiscal year to thea company’s chief executive officer or to any of up to three other named executive officers (excluding the company’s principal financial officer) whose compensation must be includedofficer, in the proxy statementcase of tax years preceding 2018). However, in the company because they are the most highly compensated executive officers. However,case of tax years preceding 2018, the statute exemptsexempted qualifying performance-based compensation from the deduction limit if certain requirements arewere met. OurSection 162(m) was amended in December 2017 by the Tax Cuts and Jobs Act to eliminate the exception for performance-based compensation (other than with respect to payments made pursuant to certain “grandfathered” arrangements entered into prior to November 2, 2017) and to expand the group of current and former executive officers who may be covered by the deduction limit under Section 162(m). For the Company’s fiscal years prior to 2018, its shareholder approved incentive plans arewere structured to provide that certain awards maycould be made in a manner to qualify for this exemption. Thethe performance-based compensation exemption and the Compensation Committee seeksgenerally sought to structure performance-based compensation for our named executive officers in a manner that compliescomplied with the corresponding Section 162(m) of the Internal Revenue Code in order to provide for the deductibility of such compensation. However, theexemption. The Compensation Committee mayexpects in the future to authorize compensation in excess of $1.0 million to named executive officers that iswill not performance-basedbe deductible under Section 162(m) of the Internal Revenue Code ifwhen it believes doing so is in the best interests of the Company and its shareholders.

Accounting Considerations

The Compensation Committee also considers the accounting and cash flow implications of various forms of executive compensation. In its financial statements, the Company records salaries and performance-based compensation incentives as expenses in the amount paid, or to be paid, to the named executive officers. Accounting rules also require the Company to record an expense in its financial statements for equity awards, even though equity awards are not paid as cash to employees. The accounting expense of equity awards to employees is calculated in accordance with FASB ASCthe provisions of the Financial Accounting Standards Board (FASB) Accounting Standards Codification, Topic 718.718, Compensation—Stock Compensation. The Compensation Committee believes, however, that the many advantages of equity-based compensation, as discussed above, more than compensate for thenon-cash accounting expense associated with them.

20142017 Executive Compensation Determinations

Non-Employee Named Executive Officers

As former members of the IOCEO, Messrs. Semmelbauer and Sobecki are named executive officers of the Company. For details on the compensation Messrs. Semmelbauer and Sobecki receive for their services asnon-employee directors of the Company, as well as the compensation they received asnon-employee director members of the IOCEO, see“Director Compensation”. In fiscal 2017, Messrs. Semmelbauer and Sobecki did not receive any of the compensation elements discussed below with respect to the employee named executive officers.

Employee Named Executive Officers

The following is a discussion of the specific factors considered in determining base salary, cash bonuses and other payments and long-term equity incentive compensation for fiscal 2017 as well as other compensation matters for the following employee named executive officers for fiscal 2014. There were no material changes in fiscal 2014 for the named executive officers in the policies governing retirementofficers: Mindy Grossman, Nicholas P. Hotchkin, Stacey Mowbray, Corinne Pollier(-Bousquet) and deferred compensation plans, termination payments upon a change of control of the Company, perquisites or other benefits.Michael F. Colosi.

Base Salary

The following table below identifies actions taken during fiscal 20142017 with respect to the base salaries of the specified named executive officers:officers.

Ms. Grossman’s employment with the Company commenced on July 5, 2017. In determining her base salary, the Compensation Committee reviewed the job responsibilities of her position, expected future contributions, publicly available information regarding her compensation at her prior employer, competitive conditions for a candidate with her experience and skills, and the relationship of her compensation to the compensation of other senior executives at the Company and determined that the base salary was appropriate to attract her to the position of President and Chief Executive Officer given her experience and skills and the competitive environment, to ensure retention and to motivate her future performance against the Company’s strategic initiatives.

The Compensation Committee decided to increase the base salary of the named executive officers, other than Mr.Messrs. Hotchkin and Colosi and Mses. Mowbray and Pollier effective April 1, 2014.on or about March 27, 2017. In determining each such named executive officer’s increased base salary, the Compensation Committee reviewed his or her past performance of his or her job responsibilities and contributions made to the Company, competitive conditions and the relationship of his or her compensation to the compensation of other senior executives at the Company and determined that the increase in base salary was appropriate to reward performance, ensure retention and motivate performance against the Company’s strategic initiatives.

Mr. Colosi’s employment with the Company commenced on May 19, 2014. In determining Mr. Colosi’s base salary, the Compensation Committee reviewed the job responsibilities of his position, expected future contributions, his compensation at his prior employer, competitive conditions for a candidate with his experience and skills, and the relationship of his compensation to the compensation of other senior executives at the Company and determined that the base salary was appropriate to attract him to the position of General Counsel and Secretary given his experience and skills and the competitive environment, to ensure retention and to motivate his future performance.

Cash Bonuses and Payments

Annual, Performance-Based Cash Bonus

Annual Target Bonus PercentagesPercentages.

The following table identifies actions taken during fiscal 20142017 with respect to the annual target bonus percentages of the employee named executive officers, as applicable:applicable.

In determining each of Mses. Mowbray’s and Pollier’s increased annual target bonus percentage, the Compensation Committee reviewed the increased demands of her job responsibilities since the percentage was last fixed, the relationship of her compensation to the compensation of other senior executives at the Company and competitive conditions and determined that the increase in annual target bonus percentage was appropriate to reward performance, ensure retention and motivate further performance against the Company’s strategic initiatives.

Annual, Performance-Based Cash Bonus PlanFiscal 2017 Plan.

For fiscal 2014,2017, the Company had to achieve at least $100.0 million of operating income for the named executive officers other(other than Mr. Colosi,Ms. Grossman) specified in the table below to be eligible to receive an annual, performance-based cash bonus. The

bonus.The Company reported operating income of $273.3$267.3 million. The Compensation Committee then exercised its “negative discretion” to determine the actual annual, performance-based cash bonus for each such named executive officer using the guidelines and performance criteria generally applicable to all executives of the Company. The Compensation Committee also used suchMs. Grossman had unique guidelines and performance criteria which were set forth in the Grossman Employment Agreement. In the case of Ms. Grossman, the determination of the Company’s financial performance bonus component was based 100% on the 2^nd Half OI Goal.The Compensation Committee adjusted the reported operating income of the Company for the second half of fiscal 2017 up $13.3 million to determineexclude the annual, performance-based cashone-time $13.3 million impairment charge for the Company’s goodwill related to its Brazil operations (the “Brazil Charge”). In the case of Messrs. Hotchkin and Colosi and Mses. Mowbray and Pollier, the determination of the Company’s financial performance bonus component was based on the following objectives with the specified percentage allocations: (i) 33.3% with respect to improving the Company’s revenue trends, based on the achievement of certain revenue goals as reflected by target revenues in the first quarter of fiscal 2017 for Mr. Colosi.the Company globally and for specified geographies; and (ii) 66.7% with respect to operating income objectives, based on the achievement of certain full year operating income goals for the Company globally and for specified geographies. The Q1 Revenue Goals were determined in December 2016 and the fiscal 2017 OI Goals were determined in March 2017 by the Compensation Committee. The Compensation Committee adjusted (i) the reported revenues of CE, ANZ and UK for the first quarter of fiscal 2017 up $906,000 in the aggregate to exclude theone-time impacts of (x) an accounting change with respect to rebate offers ($546,000) and (y) the cessation of our Spanish operations ($360,000) and (ii) the reported operating income of the Company and specified geographies for fiscal 2017 to exclude certainone-time events or impacts as follows: (x) in the case of the Company’s reported operating income, up $16.8 million in the aggregate to exclude the Brazil Charge and certain compensation expense associated with the hiring of Ms. Grossman ($3.4 million), (y) in the case of CE, ANZ and UK’s reported operating income, down $1.4 million to exclude theone-time impact of the reallocation of costs as determined by management to align cost savings initiatives and (z) in the case of the Americas, up $9.7 million in the aggregate to exclude the Brazil Charge and the reallocation of costs as determined by management to align cost savings initiatives ($3.6 million). Such adjustments impacted the Company’s and specified geographies’ performances against the relevant financial performance targets.

With respect to Ms. Grossman, the Company’s second half fiscal 2017 operating income, as adjusted by the Compensation Committee as discussed above, exceeded the Company’s budgeted second half fiscal 2017 operating income of $141.7 million. As a result, Ms. Grossman achieved a 158.5% financial performance percentage payout.

The Company’s global financial performance goal for fiscal 2014Q1 Revenue Goal, CE, ANZ and UK Q1 Revenue Goal and Americas Q1 Revenue Goal for annual, performance-based cash bonuses paid to executives generally was equal to $317.7 million, $90.1 million and $223.9 million, respectively. Based on the Company’s target operating income of $255.0 million. The operating income of the Company,Q1 Revenue Goals and actual results, as adjusted by the Compensation Committee as discussed above, the Company achieved the following financial performance percentage payouts with respect to take into account the unusual occurring events of the impairment chargethis financial performance goal: global, 159.5% (53.1% weighted), CE, ANZ and UK, 143.0% (47.6% weighted), and Americas, 179.2% (59.7% weighted).

The Company’s global OI Goal, CE, ANZ and UK OI Goal and Americas OI Goal for the Company’s franchise rights acquired relatedannual, performance-based cash bonuses paid to its Canadian operationsexecutives generally was equal to $247.0 million, $66.9 million and the restructuring charges in connection with the Company’s previously disclosed 2014 restructuring plan, was $311.2 million.$225.6 million, respectively. Based on the global financial performance goalOI Goals and adjusted operating incomeactual results, the Company achieved a global financial performance percentage payout of 150% with respect to fiscal 2014. The Company’s fiscal 2014 North America financial performance goal was equal to North America’s target operating income of $216.7 million. The operating income of North America, as adjusted by the Compensation Committee to take into accountas discussed above, the unusual occurring event ofCompany achieved the impairment charge for the Company’s franchise rights acquired related to its Canadian operations, was $248.3 million. Based on the North America financial performance goal and adjusted operating income results, North America achieved afollowing financial performance percentage payout of 150%payouts with respect to fiscal 2014. The Company’s fiscal 2014 United Kingdomthis financial performance goal was equal to the United Kingdom’s target operating income of £8.4 million. Based on the United Kingdom financial performance goalgoal: global, 200.0% (133.4% weighted), CE, ANZ and operating income results, the United Kingdom achieved a financial performance percentage payout of 150% with respect to fiscal 2014.UK, 200.0% (133.4% weighted) and Americas, 148.0% (98.7% weighted).

The following table shows the annual target bonus percentage and the overall bonus percentage payout for, and the related actual bonus paid forto, each of the employee named executive officers for fiscal 2014:2017:

EachOther Cash Payments

In recognition of Mr. Chambers and Mr. Hotchkin voluntarily elected to receive one third of his annual, performance-based cash bonus for fiscal 2014 in fully vested Common Stock, resulting in his receipt of 52,423 and 17,168 shares of Common Stock, respectively. The number of shares of Common Stock received was determined by averaging the closing priceHotchkin’s prior service as a member of the Common Stock on the approval date of such bonus byIOCEO, the Compensation Committee and the four previous trading days on the NYSE. This average pricedetermined that it was then usedappropriate to determine the number of shares required to constitute one third of the value of their respective annual, performance-based cash bonuses for fiscal 2014. Any fractional shares were paid in cash.

Other Cash Bonuses and Payments

Nogrant Mr. Hotchkin an additional discretionary cash bonus other than his or her annual, performance-based cash bonus, or other special payments were paid to a named executive officer in fiscal 2014.of $200,000.

Long-Term Equity Incentive Compensation

Annual Awards

In fiscal 2017, the Compensation Committee determined that the annual award would consist of a mix of RSUs and PSUs and increased the allocation of PSUs to 33.3% of the annual value for senior executives in the Company. The Compensation Committee believed that including PSUs in the annual award program would further align executive compensation, including that of the employee named executive officers, with the Company’s long-term strategic goals. In determining the size and mix of employee named executive officers’ annual equity grant awards for fiscal 2014,2017, the Compensation Committee reviewed the total current compensation that may be awarded to the executive, the potential impact the executive’s position could have on the Company achieving the relevant goal, the achievement of business, strategic, individual, and financial objectives during the prior fiscal year, competitive conditions and the relationship of the executive’s compensation to the compensation of other senior executives, and determined the size of the award in an aggregate dollar amount based on a percentage of the executive’s base salary as appropriate to reward and incentivize performance against strategic goals, ensure retention, and maintain appropriate compensation differentials among senior executives. Other thanSee “—Determination of Executive Compensation—Long-Term Equity Incentive Compensation—Annual Equity Grant Procedures” above for additional details on the Compensation Committee’s deliberations. All employee named executive officers received an annual award in the case of Mr. Colosi, thefiscal 2017.

All annual award dollar amount wasamounts for the recipient named executive officers in fiscal 2017 were allocated 66.7% to RSUs which were granted in two equal installments, on May 15, 2014 and on November 14, 2014. In the case of Mr. Colosi’s fiscal 2014 annual award,33.3% to PSUs, which annual award dollar amount was alsowere granted in two equal installments, his first installment was granted on June 13, 2014 and the second installment was granted on November 14, 2014.one

installment. The dollar amount for each installment was then converted into a numberanumber of RSUs and PSUs, as applicable, in accordance with procedures established by the Compensation Committee. See “—Long-Term Equity Incentive Compensation—Equity Grant Procedures” above.

All annual awards to the recipient named executive officers in fiscal 2014 were allocated 100% to RSUs. In fiscal 2014,2017, the recipient named executive officers received the following annual awards (the number of PSUs shown represents the applicable PSUs at the “target” level of performance) based on the percentage of his or her base salary,dollar amounts, and on the grant dates, specified: Ms. Grossman ($4,800,000) received (i) 47,928 RSUs and 47,856 PSUs on July 5, 2017, her employment commencement date and (ii) 35,692 RSUs on November 15, 2017; Mr. Chambers (400% of his base salary)Hotchkin ($950,369) received 91,701(i) 13,744 RSUs and 13,723 PSUs on May 15, 20142017 and 78,740(ii) 7,066 RSUs on November 14, 2014; Mr. Hotchkin (175% of his base salary)15, 2017; Ms. Mowbray ($545,854) received 19,056(i) 7,894 RSUs and 7,882 PSUs on May 15, 20142017 and 16,363(ii) 4,058 RSUs on November 14, 2014;15, 2017; Ms. Lysyj (125% of her base salary)Pollier ($501,184)) received 15,044(i) 7,248 RSUs and 7,237 PSUs on May 15, 20142017 and 12,918(ii) 3,726 RSUs on November 14, 2014; Ms. Lemmens (125% of her base salary)15, 2017; and Mr. Colosi ($553,744) received 9,445(i) 8,008 RSUs and 7,996 PSUs on May 15, 20142017 and 8,110(ii) 4,117 RSUs on November 14, 2014; and Mr. Colosi (125% of his pro-rated base salary) received 12,201 RSUs on June 13, 2014 and 10,457 RSUs on November 14, 2014. 15, 2017.

All RSUs granted to named executive officers as part of an annual award in fiscal 2014 vest 100% on the third anniversary of the applicable grant date. As a result of Ms. Lysyj’s departure on March 31, 2015, the above RSUs that were granted as her annual award in fiscal 2014 were forfeited upon her departure. See “Potential Payments upon Termination, Retirement or Change of Control—Payments Made Upon Termination—Departure of Named Executive Officer” for additional details on her departure.

Special Performance-Based Stock Option Awards

In fiscal 2013, the Compensation Committee determined that providing special performance-based stock option awards to certain executives, including the named executive officers other than Mr. Colosi, having both time- and performance-vesting criteria would further align the interests of our shareholders with management incentives to execute a successful transformation of the Company’s business. In the case of Mr. Colosi, the Compensation Committee determined that he should also be provided such an award to similarly align his interests. In determining the size of the recipient named executive officers’ special T&P Option award, the Compensation Committee reviewed the total current compensation that may be awarded to the executive, expected future contributions to the transformation of the Company’s business, competitive conditions and the relationship of the executive’s compensation to the compensation of other senior executives, and determined the size of the award in an aggregate dollar amount based on a percentage of the executive’s base salary as appropriate to incentivize performance to achieve such transformation, ensure retention, and maintain appropriate compensation differentials among senior executives. The percentages for the recipient named executive officers were as follows: for Mr. Chambers, 400%their annual award in fiscal 2017 will (i) in the case of base salary; for Mr. Hotchkin, 175%the first installment, vestone-third on each of base salary; for Ms. Lysyj, 125%May 15, 2018, May 15, 2019 and May 15, 2020 and (ii) in the case of base salary; for Ms. Lemmens, 125%the second installment, vestone-third per year over three years on each anniversary of base salary; and for Mr. Colosi, 125% of base salary. Except

for Mr. Colosi, the special T&P Option award dollar amount wasgrant date. All PSUs granted to the recipient named executive officers in two equal installments, the first of which occurredas their annual award in fiscal 2013 on December 12, 2013, and the second of which occurred in fiscal 2014 on April 2, 2014. Mr. Colosi’s special T&P Option award was granted in one installment on June 13, 2014. The dollar amount for each installment was then converted 100% into a number of stock options in accordance with procedures established by the Compensation Committee. See “—Long-Term Equity Incentive Compensation—Equity Grant Procedures” above.

Pursuant to their respective special T&P Option award, the named executive officers received the following T&P Options on the grant dates specified: Mr. Chambers received 213,675 stock options on December 12, 2013 and 328,407 stock options on April 2, 2014; Mr. Hotchkin received 44,404 stock options on December 12, 2013 and 68,247 stock options on April 2, 2014; Ms. Lysyj received 35,056 stock options on December 12, 2013 and 53,879 stock options on April 2, 2014; Ms. Lemmens received 22,470 stock options on December 12, 2013 and 34,536 stock options on April 2, 2014; and Mr. Colosi received 80,614 stock options on June 13, 2014. These stock options vest upon the achievement of2017 have both time- and performance-vesting criteria. The time-vesting criteria will fully vestbe satisfied on May 15, 2020. When determining the performance-vesting criteria, the Compensation Committee considered the Company’s strategic initiative to return the Company to sustained growth and management’s commitment to strong cost management. The performance-vesting criteria will be satisfied if the Company has achieved Adjusted Operating Income (as defined in the Company’s applicable term sheet for PSU awards) objectives in each fiscal year over a three-year period (i.e., fiscal 2017, fiscal 2018 and fiscal 2019 (each, a “Performance Year”)). When the performance measure has been met for a particular Performance Year during the three-year period of the award, that portion of units is “banked” for potential issuance following satisfaction of the time-vesting criteria. The total number of PSUs, if any, that become “banked” with respect to each Performance Year upon the satisfaction of the applicable performance criteria, shall be equal to (x) for such Performance Year,one-third of the total target number of PSUs grantedmultiplied by (y) the applicable Achievement Percentage (as defined in the Company’s applicable term sheet for PSU awards) (determined using linear interpolation if actual performance falls between any two levels) for such Performance Year, determined as follows, and rounded down to avoid the issuance of fractional shares:

The total number of PSUs that shall be subject to vesting upon satisfaction of thetime-vesting criteria with respect to the PSU award shall be the sum of PSUs “banked” with respect to the three Performance Years subject to the terms and conditions of the applicable award.

At the time the performance goals were established, the metrics that were selected for the target performance were reasonably attainable, yet provide management with appropriate incentives to support the Company’s financial goals. The Company believes that achievement of maximum performance against the goals would require exceptional corporate performance over the three-year performance period. On February 26, 2018, the Compensation Committee certified that the performance criteria established in connection with the third of the award relating to the fiscal 2017 Performance Year had been satisfied at the “maximum” level of achievement of 166.67% based on the thirdfiscal 2017 target amount of $247 million and the corresponding number of PSUs were “banked” for each employee named executive officer.

Hiring Awards

The Compensation Committee also decided to grant Ms. Grossman a hiring award consisting of both Time-Vesting Options and RSUs to attract her to the position of President and Chief Executive Officer and to compensate her for the forfeiture of equity awards arising from her voluntary departure from her prior employer, as well as to ensure retention and to reward and incentivize performance and creation of shareholder value. Ms. Grossman received her hiring award consisting of a combination of Time-Vesting Options and RSUs in the following amounts and with the specified option exercise prices, as applicable, on July 5, 2017: 300,000 Time-Vesting Options with an exercise price of $32.67 per share, 500,000 Time-Vesting Options with an exercise price of $40.00 per share, 500,000 Time-Vesting Options with an exercise price of $60.00 per share and 200,000 RSUs. These stock options and RSUs granted to Ms. Grossman vest proportionately over four years on each anniversary of the grant date. With respect todate and the performance-vesting criteria, these stock options will fully vest in 20% increments upon the first date that the average closing price of our Common Stockterminate on the NYSE (or other national securities exchange) for the 20 consecutive preceding trading days is equal to or greater than the following stock price hurdles: (i) 150% of the exercise price, (ii) 175% of the exercise price, (iii) 200% of the exercise price, (iv) 225% of the exercise price, and (v) 250% of the exercise price. These stock options expire on the five-yearseventh anniversary of the grant date. The above-referenced stock options with exercise prices of $40.00 per share and $60.00 per share were allout-of-the-money options on the stock options granted were as follows: for grants on December 12, 2013, $32.65 per share; for grants on April 2, 2014, $21.19 per share; and for grants on June 13, 2014, $22.33 per share.date of grant.

Hiring AwardsRetirement and Deferred Compensation Plans, Termination Payments and Other Arrangements

NoThe Compensation Committee decided to grant Ms. Grossman certain severance benefits, including with respect to the vesting and exercise, as applicable, of her hiring and other equity awards, were grantedas set forth in fiscal 2014.the Grossman Employment Agreement to attract her to the position of President and Chief Executive Officer as well as to ensure retention. See“Potential Payments Upon Termination, Retirement or Change of Control—Employee Named Executive Officers—Payments Made Upon Termination”, for additional details on Ms. Grossman’s severance benefits. Additionally, Ms. Grossman entered into a continuity agreement with the Company upon her commencement of employment. For details on the terms and conditions of Ms. Grossman’s continuity agreement, see“Potential Payments Upon Termination, Retirement or Change of Control—Employee Named Executive Officers—Payments Made Upon a Change of Control—Continuity Agreements”.

The Compensation Committee determined that, in lieu of any matching contributions by the Company to the savings plan for eligible, full-time Canadian employees for Ms. Mowbray’s benefit, the Company would increase its contribution to the maximum amount permitted by law to such plan for Ms. Mowbray’s benefit.

Benefits and Perquisites

In connection with attracting Ms. Grossman to the position of President and Chief Executive Officer and facilitating discussions regarding her terms of employment with the Company, as well as assisting in her relocation to the New York area where the Company’s headquarters is located, the Compensation Committee decided to grant Ms. Grossman temporary housing and expense reimbursement up to an aggregate cap of $200,000, subject to a tax gross up, and to pay for her legal fees incurred in the negotiation of the Grossman Employment Agreement.    

The Compensation Committee determined to increase Ms. Mowbray’s life insurance coverage to the greater of two times her base salary and that level of coverage as similarly situated executives in the United States.

Mix of Compensation Elements

As discussed above in “—Executive Compensation Approach—Elements of Executive Compensation”, the Company weights compensation for the employee named executive officers who participate in the Company’s executive compensation program more toward variable, performance-based compensation. Approximately 79%91% of fiscal 20142017 total compensation for employee named executive officers was variable, performance-based compensation (which includes short-term variable performance-based compensation and long-term variable performance-based compensation). As reflected in theSummary Compensation Table, aggregate fiscal 20142017 compensation for the employee named executive officers was allocated as follows:

Certain Elements of 2015 Executive Compensation

Base Salary

Neither Mr. Chambers nor Mr. Hotchkin will receive an increase in base salary for fiscal 2015.

Annual, Performance-Based Cash Bonus

Given the Company’s intent to focus on improving its recruitment trends and generating positive cash flow to maintain strong liquidity in fiscal 2015, the Compensation Committee determined that the 2015 annual, performance-based cash bonus plan relating to the Company’s financial performance should be based on the following financial performance goals:

In recent years, the Company’s financial performance percentage payouts were based solely on the achievement of operating income targets. For fiscal 2015, the Company’s financial performance percentage payouts will be based 50% on the achievement of recruitment targets and 50% on the achievement of cash targets. In addition, the financial performance goal ratings and corresponding financial performance percentage payouts with respect to fiscal 2015 for certain executives of the Company, including the named executive officers, will be no greater than 75%.

Option Exchange

The Board of Directors has determined that it would be in the best interests of the Company and its stockholders to amend the 2014 Plan to allow us to authorize and conduct a one-time option exchange with respect to eligible T&P Options, whereby eligible employees, including our named executive officers, would have the opportunity to exchange such T&P Options for new Time-Vesting Options as further described above under “Proposal 3—Approval of an Amendment to the Company’s 2014 Stock Incentive Plan to Permit a One-Time Option Exchange.”

SUMMARY COMPENSATION TABLE

The table below summarizes the total compensation paid to or earned by each of the named executive officers as follows: for fiscal 20142017, fiscal 2016 and fiscal 20132015 with respect to Mr. ChambersMessrs. Hotchkin and Colosi and Ms. Lysyj;Pollier; for fiscal 2014, fiscal 20132017 and fiscal 20122016 with respect to Mr. Hotchkin;Messrs. Semmelbauer and Sobecki and Ms. Mowbray; and for fiscal 20142017 with respect to Ms. Lemmens and Mr. Colosi.Grossman.