SCHEDULE 14A

(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES

EXCHANGE ACT OF 1934

Filed by the Registrant    ☒

Filed by a Party other than the Registrant    ☐

Check the appropriate box:

 

☐    Preliminary Proxy  Statement

 

☐    Confidential, for Use of  the Commission Only (as permitted by Rule 14a-6(e)(2))

☒    Definitive   Proxy Statement

 

☐    Definitive Additional Materials

 

☐    Soliciting Material Under Rule 14a-12

 

THE COOPER COMPANIES, INC.

 

(Name of Registrant as Specified in Its Charter)

 

 

(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

☒    No fee required.

☐    Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

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

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

 

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

 

 (4) Proposed maximum aggregate value of transaction:

 

 (5) Total fee paid:

 

 ☐ 

Fee paid previously with preliminary materials:

 

 ☐ Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.

 

 (1) Amount previously paid:

 

 (2) Form, Schedule or Registration Statement No.:

 

 (3) Filing Party:

 

 (4) Date Filed:

LOGOLOGO

February 1, 20194, 2020

Dear Stockholder:

You are cordially invited to join us at the 20192020 Annual Meeting of Stockholders (the “Annual Meeting”) of The Cooper Companies, Inc. (the “Company” or “Cooper”), which will be held at 8:00 a.m. (PDT)(Pacific time) on March 18, 20192020 at the offices of The Cooper Companies, Inc., 6140 Stoneridge Mallour corporate headquarters at 6101 Bollinger Canyon Road, Suite 590, Pleasanton,500, San Ramon, California.

At the Annual Meeting we will ask our stockholders to vote on the proposals detailed in our Proxy Statement and related materials.

We will be providing access to our proxy materials electronically under the U.S. Securities and Exchange Commission’s “notice and access” rules. As a result, beginning on or about February 6, 2019,2020, we are mailing a Notice of Internet Availability of Proxy Materials (the “Notice”) to many of our stockholders instead of a paper copy of this Proxy Statement and of our 20182019 Annual Report on Form10-K (the “Annual Report”). This approach conserves natural resources and reduces our printing and distribution costs, while providing a timely and convenient method of accessing the materials and voting.

The Notice contains instructions on how to access our materials through the internet and also contains instructions on how to receive a paper copy of our proxy materials, including thisthe Proxy Statement, our 20182019 Annual Report, and a form of proxy card or voting instruction card. All stockholders who do not receive a Notice, including stockholders who have previously requested to receive paper copies of proxy materials, will receive a paper copy of the proxy materials by mail.

Your vote is important. Regardless of whether you plan to attend the Annual Meeting, we hope you will vote as soon as possible. You may vote by proxy by following the instructions on the proxy card or voting instruction card. Voting may be done over the internet, by telephone, or by mail (if you received paper copies of the proxy materials). Voting by proxy will ensure your representation at the Annual Meeting regardless of whether you attend.

We look forward to seeing you at the Annual Meeting.

Sincerely,

Sincerely,
LOGO
A. Thomas Bender
Chairman of the Board of Directors

LOGO

A. Thomas Bender

Chairman of the Board of Directors

THE COOPER COMPANIES, INC.

6140 Stoneridge Mall Road, Suite 590

Pleasanton, CA 94588

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

 

THE COOPER COMPANIES, INC.

6101 Bollinger Canyon Road, Suite 500

San Ramon, CA 94583

 

Meeting Date:

  Monday,

Wednesday, March 18, 20192020

Meeting Time:

  

8:00 a.m. (PDT)(Pacific time)

Location:

  

The Cooper Companies, Inc.CooperCompanies headquarters

6140 Stoneridge Mall6101 Bollinger Canyon Road, Suite 590500

Pleasanton,San Ramon, California

Admission:

  

All stockholders are cordially invited to attend the Annual Meeting in person.

Agenda:

  

1.   Elect the nineeight directors named in the Proxy Statement;

2.   Ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending October 31, 2019;2020;

3.   Approve the 2019 Employee Stock Purchase Plan;2020 Long-Term Incentive Plan forNon-Employee Directors;

4.   Hold an advisory vote on the compensation of our Named Executive Officers; and

5.   Transact any other business that may properly come before the meeting.

Stockholders of record at the close of business on Tuesday,Thursday, January 22, 2019,23, 2020, or their legal proxy holders, will be entitled to vote at the Annual Meeting.

On or about February 6, 2019,2020, we will mail either (1) a Notice of Internet Availability of Proxy Materials (the “Notice”) or (2) a copy of this Proxy Statement and our Annual Report for the fiscal year ended October 31, 2018.2019. The Notice will also contain instructions on how to request a paper copy of our proxy materials.

You may vote by following the instructions on the Notice or by using the proxy card accompanying the paper copy of materials. If phone or internet voting is available to you, instructions will be included on your proxy card.

YOUR VOTE IS IMPORTANT TO US.US. Regardless of whether you plan to attend the Annual Meeting, we encourage you to vote your shares as soon as possible to ensure that your vote is recorded. We look forward to your participation.

By Order of the Board of Directors

 

 

LOGO

Randal L. Golden Esq.

Secretary

Dated: February 1, 20194, 2020

TABLE OF CONTENTS

 

 

PROPOSALS TO BE PRESENTED AT THE ANNUAL MEETING

  1 

ProposalsCORPORATE GOVERNANCE

  12 

Other Company InformationAbout Our Board of Directors

  12 

Voting Information

1

Other Q&ADirector Nomination Process

  3 

Stockholder Proposals and Nominations for DirectorBoard Committees

4

Corporate Governance Policies

  5 

OWNERSHIP OF THE COMPANY

6

Principal Securityholders

6

Securities Held by InsidersBoard of Directors’ Role in Risk Oversight

  7 

CORPORATE GOVERNANCEOWNERSHIP OF THE COMPANY

  910 

REPORT OF THE AUDIT COMMITTEE

  1613 

EXECUTIVE OFFICERS OF THE COMPANY

  1815 

REPORT OF THE ORGANIZATIONCOMPENSATION DISCUSSION AND COMPENSATION COMMITTEEANALYSIS

  2017 

REPORT OF THE ORGANIZATION & COMPENSATION DISCUSSION AND ANALYSISCOMMITTEE

  2033 

EXECUTIVE COMPENSATION TABLES

  3734 

Summary Compensation TableDIRECTOR COMPENSATION

37

Grants of Plan Based Awards Table

39

Outstanding Equity Awards at Fiscal Year End Table

42

Option Exercises and Stock Vested Table

  45 

Pension Benefits TablePROPOSAL 1 — ELECTION OF DIRECTORS

  4649 

CEO Pay Ratio

47

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

48

DIRECTOR COMPENSATION

50

PROPOSAL 1 — ELECTION OF DIRECTORS

53

PROPOSAL 2 — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

  5955 

PROPOSAL 3 —– APPROVAL OF THE 2019 EMPLOYEE STOCK PURCHASE2020 LONG-TERM INCENTIVE PLAN FORNON-EMPLOYEE DIRECTORS

  6056 

PROPOSAL 4 — ADVISORY VOTE ON EXECUTIVE COMPENSATION

  6561 

OTHER MATTERS

63
RECOMMENDATIONS63
VOTING INFORMATION63
STOCKHOLDER PROPOSALS AND NOMINATIONS FOR DIRECTOR  66 

RECOMMENDATIONS

66

EXHIBIT A – 2019 Employee Stock Purchase Plan2020 LONG-TERM INCENTIVE PLAN FORNON-EMPLOYEE DIRECTORS

  A-1 

PROPOSALS TO BE PRESENTED AT THE ANNUAL MEETING

 

Our 20192020 Annual Meeting will be held at 8:00 a.m. (PDT)(Pacific time) on Wednesday, March 18, 20192020 at the offices of The Cooper Companies, Inc., 6140 Stoneridge Mallour corporate headquarters at 6101 Bollinger Canyon Road, Suite 590, Pleasanton,500, San Ramon, California.

LOGO

This Proxy Statement was provided to all stockholders of record at Tuesday,Thursday, January 22, 201923, 2020 and is presented on our behalf by order of the Board of Directors. It contains information about our Company and the proposals to be presented at the Annual Meeting.

Throughout this Proxy Statement, we may also refer to various documents that are available on our website. The content posted on, or accessible through, our website is not incorporated by reference into this Proxy Statement or any of our filings with the SEC and may be revised by us (in whole or in part) at any time and from time to time.

We have also furnished our 2018 Annual Report to all stockholders of record. The Annual Report contains our financial statements for the fiscal year ended October 31, 20182019 and other useful information, but it is not part of the materials for the solicitation of proxies.

Proposals

 

 

No.

     Board Recommendation     Page
  1  ELECTION OF NINE DIRECTORS IDENTIFIED BELOW  LOGO     FOR each director     53
  2  RATIFICATION OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  LOGO     FOR     59
  3  APPROVAL OF THE 2019 EMPLOYEE STOCK PURCHASE PLAN  LOGO     FOR     60
  4  ADVISORY VOTE ON EXECUTIVE COMPENSATION  LOGO     FOR     65
  No.Board
RECOMMENDATION		PAGE  

  1

ELECTION OF THE BOARD OF DIRECTORSLOGO FOR EACH DIRECTORp.49

  2

RATIFICATION OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMLOGO FORp.55

  3

APPROVAL OF THE 2020 LONG-TERM INCENTIVE PLANFOR NON-EMPLOYEE DIRECTORSLOGO FORp.56

  4

ADVISORY VOTE ON EXECUTIVE COMPENSATIONLOGO FORp.61

We are not aware of any other business to be brought before the meeting. If any additional business is properly brought before the meeting, the designated officers serving as proxies will vote in accordance with their best judgment.

LOGO

Other Company Information

 

 

Corporate Governance – page 92

Compensation Discussion & Analysis – page 2017

Executive Compensation Tables – page 3734

Director Compensation – page 5045

You may also find useful information about the Company on our website athttp://www.coopercos.com. Information contained on our website is not, and should not be considered, a part of this Proxy Statement or any other filing or report filed with or furnished to with the Securities and Exchange Commission (the “SEC”).

Voting Information

Your vote is important to us. Regardless of whether you plan to attend the meeting, we encourage you to read this Proxy Statement and the accompanying materials and to vote your shares as soon as possible to ensure that your vote is recorded. We look forward to your participation.

1 | Page   

Who is entitled to vote at the Annual Meeting?

 

 

Our Record Date for the Annual Meeting is January 22, 2019. All stockholders who owned our stock at the close of business on the Record Date are entitled to receive proxy materials and to vote at the Annual Meeting and any continuations, adjournments or postponements thereof.

As of the Record Date, there were 49,339,170 shares of our common stock outstanding and entitled to vote at the Annual Meeting.

How many votes do I have?

Each outstanding share of our common stock is entitled to one vote at the Annual Meeting. You have one vote per share that you owned at the close of business on the Record Date.

How do I vote my shares?

You can vote your shares in person at the Annual Meeting or vote by proxy. The method of voting by proxy differs for shares held as1 | P a record holder and shares held in “street name.” If you hold your shares of common stock as a record holder you may vote your shares by following the instructions on the Notice, or by completing, dating, and signing the proxy card included with this Proxy Statement and promptly returning it in thepre-addressed,g e postage paid envelope provided to you. If phone or internet voting is available to you, instructions are included in the Notice or on your proxy card.

If you hold your shares of common stock in “street name,” which means your shares are held of record by a broker, bank, or other nominee, you will receive the proxy materials from your broker, bank, or other nominee with instructions on how to vote your shares. Your broker, bank, or other nominee may allow you to deliver your voting instructions by phone or through the internet. If you wish to vote your shares in person you may do so by attending the Annual Meeting and requesting a ballot.

What happens if I vote my shares by proxy?

When you return a completed proxy card, or vote your shares by telephone or internet, you authorize our officers listed on the proxy card to vote your shares on your behalf as you direct.

If you sign and return a proxy card, but do not provide instructions on how to vote your shares, the designated officers will vote on your behalf as recommended by the Board:

Shares will be voted FOR each of the individuals nominated to serve as directors;

Shares will be voted FOR ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending October 31, 2019;

Shares will be voted FOR the approval of the 2019 Employee Stock Purchase Plan; and

Shares will be voted FOR the compensation of our Named Executive Officers as described in this Proxy Statement.

2 | Page   

Can I change or revoke my vote after I return my proxy card or voting instructions?

If you choose to vote your shares by proxy, you may revoke or change your vote at any time prior to the casting of votes at the Annual Meeting. To revoke or change your vote, you may take any of the following actions:

1.

Execute and submit a new proxy card;

2.

Submit new voting instructions through telephonic or internet voting, if available to you;

3.

Notify Randal L. Golden, Secretary of the Company, in writing that you wish to revoke your proxy; or

4.

Vote your shares in person at the Annual Meeting.

Attending the Annual Meeting in person will not automatically revoke your proxy.

How many votes must be present to hold the Annual Meeting?

In order to conduct business and have a valid vote at the Annual Meeting a quorum must be present in person or represented by proxies. A quorum is defined as a majority of the shares outstanding on the Record Date and entitled to vote. In accordance with Delaware law and our Bylaws, broker“non-votes” and proxies reflecting abstentions will be considered present and entitled to vote for purposes of determining whether a quorum is present.

What are broker“non-votes”?

Broker“non-votes” occur when a broker is not permitted to vote on behalf of shares it holds for a beneficial owner and the beneficial owner does not provide voting instructions. Shares held in a broker’s name may be voted by the broker, but only in accordance with the rules of the New York Stock Exchange. Under those rules, the broker must follow the instructions of the beneficial owner. If instructions are not provided, NYSE rules determine whether the broker may vote the shares based on its own judgment or if it is required to withhold its vote. This determination depends on the proposal being voted on. For the proposals to be presented at the Annual Meeting, broker discretionary voting is only permitted for the ratification of our independent registered public accounting firm.

Other Q&A

Why did I receive aone-page notice in the mail regarding the internet availability of proxy materials instead of a full set of proxy materials?

The SEC permits us to provide our proxy materials electronically if you have not previously requested to receive only printed materials on an ongoing basis. Accordingly, on or about February 6, 2019, we mailed a Notice of Internet Availability of Proxy Materials (“the Notice”). The Notice includes instructions on how to access the proxy materials over the internet or to request a printed copy.

The Notice was sent to our stockholders of record at January 22, 2019. All stockholders receiving the Notice have the ability to access the proxy materials electronically through the website referred to in the Notice, and they also have the option to request a printed set of the proxy materials. We encourage stockholders to take advantage of the availability of proxy materials on the internet.

3 | Page   

Can I vote my shares by filling out and returning the Notice of Internet Availability of Proxy Materials?

No. The Notice only identifies the items to be voted on at the Annual Meeting. You cannot vote by marking the Notice and returning it. The Notice provides instructions on how to cast your vote.

Who pays for the proxy solicitation and how will the Company solicit votes?

We pay all costs associated with the solicitation of proxies, including any costs incurred by brokers and other fiduciaries to forward proxy solicitation materials to beneficial owners.

We may solicit proxies in person or by mail, telephone, facsimile, ore-mail. Proxies may be solicited on our behalf by any of our directors, officers, or employees. Additionally, we have retained the firm of D.F. King & Co., Inc. to assist with the solicitation of proxies and will pay a fee of $16,500 for this service, plus reasonable costs and expenses.

How can I communicate with the Board of Directors?

Any interested party can contact our Board to provide comments, to report concerns, or to ask a question, at the following address:

Randal L. Golden

Vice President, Secretary & General Counsel

The Cooper Companies, Inc.

6140 Stoneridge Mall Road, Suite 590

Pleasanton, CA 94588

Communications are distributed to the Board, or to any individual directors as appropriate, depending on the facts and circumstances outlined in the communication. You may also communicate online with our Board of Directors as a group through our website. Please refer to our website athttp://www.coopercos.com for any changes in this process.

4 | Page   

Stockholder Proposals and Nominations for Director

SEC rules and our Bylaws permit stockholders to nominate directors for election and to propose other business to be considered by stockholders at the Annual Meeting under various mechanisms.

To be considered at the 2020 Annual Meeting, director nominations or other proposals must be submitted in writing to:

Randal L. Golden, Secretary

The Cooper Companies, Inc.

6140 Stoneridge Mall Road, Suite 590

Pleasanton, CA 94588

Proposals to be Presented Under Rule14a-8 and Director Nominations under Bylaw Article II, Section 16 (“Proxy Access”):

No later than October 9, 2019.

Proposals and Director Nominations Submitted Under Other Bylaw Provisions:

No earlier than November 18, 2019 and no later than December 18, 2019.

In the event that we set the date for the 2020 Annual Meeting more than 30 days before or more than 70 days after March 18, 2020, submissions may be made no earlier than the close of business on the 120th day prior to the announced meeting date and no later than the close of business on the later of the 90th day prior to the announced meeting date and the 10th day following our first public disclosure of the date of the meeting.

The Corporate Governance and Nominating Committee will consider director nominees suggested by stockholders on the same terms as nominees selected by the Committee. See page 9 for information about the Committee’s criteria for director nominations.

The person recommending the nominee must be a stockholder entitled to vote at the 2020 Annual Meeting. To be considered, recommendations must include:

(1)

the nominee’s written consent to being named in the Proxy Statement and to serve as a director if elected;

(2)

the name and address of the stockholder submitting the recommendation or the beneficial owner on whose behalf the proposed candidate is being suggested for nomination;

(3)

a statement of the proposed nominee’s qualifications to serve as director; and

(4)

the class and number of our shares owned by the stockholder or beneficial owner submitting the recommendation.

If we increase the number of directors to be elected at the 2020 Annual Meeting with less than 100 days’ notice prior to March 18, 2020, stating the size of the increase and naming all the nominees for director, then stockholder nominations for directors will be considered if the proposal is delivered to our Secretary at our principal offices no later than 10 days after we make a public announcement of the increased board size. This only applies to nominations for positions created by the increase and does not apply to nominations for current positions.

5 | Page   

OWNERSHIP OF THE COMPANY

Principal Securityholders

The following table contains information regarding all individuals or groups who have advised us that they own more than five percent (5%) of the outstanding shares of our common stock. Information is presented as of January 22, 2019.

  Name & Address of Beneficial Owner

 

  

Aggregate Number
of Shares Beneficially Held

 

  

Percentage

of Shares

 

  T. Rowe Price Associates, Inc. (1)

  100 E. Pratt Street

  Baltimore, MD 21202

 

  5,636,279  11.5%

  Vanguard Group, Inc. (2)

  100 Vanguard Blvd.

  Malvern, PA 19355

 

  5,122,120  10.48%

  BlackRock, Inc. (3)

  55 East 52nd Street

  New York, NY 10022

 

  3,616,339  7.4%

  Massachusetts Financial Services Company (4)

  111 Huntington Avenue

  Boston, MA 02199

 

  2,662,207  5.4%

  Generation Investment Management LLP (5)

  20 Air Street, 7th Floor

  London, United Kingdom W1B 5AN

 

  2,535,141  5.2%

  State Street Corporation (6)

  One Lincoln Street

  Boston, Massachusetts 02111

  2,507,949  5.12%

(1)

Based on information disclosed in a Schedule 13G/A filed by T. Rowe Price Associates, Inc. on January 10, 2018. According to this Schedule 13G/A, T. Rowe Price Associates beneficially owns and has the sole power to dispose of or direct the disposition of all 5,636,279 of these shares and has the sole power to vote or to direct the vote of 1,689,033 of these shares.

(2)

Based on information disclosed in a Schedule 13G/A filed by The Vanguard Group, Inc. on February 9, 2018. According to this Schedule 13G/A, The Vanguard Group beneficially owns and has the sole power to dispose of or direct the disposition of 5,044,983 of these shares and has the shared power to dispose of or direct the disposition of 77,137 of these shares; and has the sole power to vote or to direct the vote of 69,724 of these shares and has shared power to vote 10,530 of these shares.

(3)

Based on information disclosed in a Schedule 13G/A filed by BlackRock, Inc. on February 8, 2018. According to this Schedule 13G/A, BlackRock, Inc., directly and through its subsidiaries, beneficially owns, and has the sole power to dispose of or direct the disposition of all 3,616,339 of these shares and has the sole power to vote or direct the vote of 3,177,089 of these shares.

(4)

Based on information disclosed in a Schedule 13G/A filed by Massachusetts Financial Services Company (“MFS”) on February 9, 2018. MFS beneficially owns and has the sole power to dispose of or direct the disposition of all 2,662,207 of these shares and the sole power to vote or direct the vote of 2,459,886 of these shares.

(5)

Based on information disclosed in a Schedule 13G filed by Generation Investment Management LLP (“GIM”) on April 16, 2018. Generation Investment Management LLP beneficially owns and has the sole power to dispose of or direct the disposition of 19,433 of these shares and has the shared

6 | Page   

power to dispose of or direct the disposition of 2,515,708 of these shares; and has the sole power to vote or to direct the vote of 19,433 of these shares and has shared power to vote 2,515,708 of these shares. According to this Schedule 13G, Generation Investment Management US LLP, a wholly owned subsidiary of GIM, has the shared power to dispose of or direct the disposition of and the shared power to vote or direct the vote of 1,190,689 of these shares; Generation IM Fund PLC, a wholly owned subsidiary of GIM, has the shared power to dispose of or direct the disposition of and the shared power to vote or direct the vote of 750,249 of these shares; and Generation IM Global Equity Fund, LLC a wholly owned subsidiary of GIM, has the shared power to dispose of or direct the disposition of and the shared power to vote or direct the vote of 624,317 of these shares.
(6)

Based on information disclosed in a Schedule 13G filed by State Street Corporation on February 14, 2018. State Street Corporation has the shared power to dispose of or direct the disposition of and to vote or direct the voting of all 2,507,949 of these shares.

Securities Held by Insiders

The following table contains information regarding ownership of our common stock by each of our directors, the executives named in the Summary Compensation Table, and all of the current directors and executive officers as a group. The figures in this table represent sole voting and investment power except where otherwise indicated.

   Common Stock Beneficially
Owned as of January 22, 2019		 
Name of Beneficial Owner Number
of Shares		      Percentage
of Shares		 

Brian G. Andrews

 

  

 

11,686

 

 

 

  

 

(1

 

) 

 

  * 

Robert D. Auerbach, M.D.

 

  

 

9,125

 

 

 

  

 

(2

 

) 

 

  * 

A. Thomas Bender

 

  

 

33,087

 

 

 

  

 

(3

 

) 

 

  * 

Colleen E. Jay

 

  

 

4,987

 

 

 

  

 

(4

 

) 

 

  * 

Michael H. Kalkstein

 

  

 

36,062

 

 

 

  

 

(5

 

) 

 

  * 

Carol R. Kaufman

 

  

 

90,875

 

 

 

  

 

(6

 

) 

 

  * 

William A. Kozy

 

  

 

5,257

 

 

 

  

 

(7

 

) 

 

  * 

Jody S. Lindell

 

  

 

55,838

 

 

 

  

 

(8

 

) 

 

  * 

Daniel G. McBride

 

  

 

97,871

 

 

 

  

 

(9

 

) 

 

  * 

Gary S. Petersmeyer

 

  

 

8,169

 

 

 

  

 

(10

 

) 

 

  * 

Allan E. Rubenstein, M.D.

 

  

 

4,584

 

 

 

      

 

*

 

 

 

Holly R. Sheffield

 

  

 

-

 

 

 

      * 

Robert S. Weiss

 

  

 

312,491

 

 

 

  

 

(11

 

) 

 

  * 

Albert G. White III

 

  

 

            102,906

 

 

 

  

 

(12

 

) 

 

  * 

Stanley Zinberg, M.D.

 

  

 

30,619

 

 

 

  

 

(13

 

) 

 

  * 

All current directors and executive officers as a group (17 persons)

  833,833       1.7% 
*

Less than 1% ownership.

(1)

Includes 8,379 shares which Mr. Andrews could acquire upon the exercise of currently exercisable stock options.

(2)

Includes 5,326 shares which Dr. Auerbach could acquire upon the exercise of currently exercisable stock options.

(3)

Includes 14,950 shares which Mr. Bender could acquire upon the exercise of currently exercisable stock options.

(4)

Includes 1,766 shares which Ms. Jay could acquire upon the exercise of currently exercisable stock options.

(5)

Includes 26,591 shares which Mr. Kalkstein could acquire upon the exercise of currently exercisable stock options; all of these exercisable options are held by an estate planning trust in which Mr. Kalkstein maintains 50% or greater control.

7 | Page   

(6)

Includes 44,977 shares which Ms. Kaufman could acquire upon the exercise of currently exercisable stock options.

(7)

Includes 1,766 shares which Mr. Kozy could acquire upon the exercise of currently exercisable stock options.

(8)

Includes 34,091 shares which Ms. Lindell could acquire upon the exercise of currently available stock options; all of Ms. Lindell’s exercisable options are held by estate planning trusts in which Ms. Lindell maintains 50% or greater control.

(9)

Includes 66,627 shares which Mr. McBride could acquire upon the exercise of currently exercisable stock options.

(10)

Includes 5,864 shares which Mr. Petersmeyer could acquire upon the exercise of currently available stock options; all of these exercisable options are held by an estate planning trust in which Mr. Petersmeyer maintains 50% or greater control.

(11)

Includes 166,871 shares which Mr. Weiss could acquire upon the exercise of currently exercisable stock options.

(12)

Includes 65,467 shares which Mr. White could acquire upon the exercise of currently exercisable stock options.

(13)

Includes 20,091 shares which Dr. Zinberg could acquire upon the exercise of currently exercisable stock options; all of Dr. Zinberg’s exercisable options are held by estate planning trusts in which Dr. Zinberg maintains 50% or greater control.

8 | Page   

CORPORATE GOVERNANCE

About Our Board of Directors

 

Board Facts:

❖ Board size: 9 directors

❖ All directors are elected annually

•   7 independent directors

❖ Majority vote required for election

•   2 women

•   Separate Lead Director & Chairman

Our Board of Directors currently has nine members, each of whom stands for election annually. All of our directors, except Messrs. Weiss and White, have been determined by the Board to be independent. In making this determination, the Board has affirmed that each of the independent directors meets the objective requirements for independence set forth by the NYSE and the SEC, and that each has no relationship to the Company, either directly or indirectly, other than as a stockholder of the Company or through their service on the Board. The Board and its committees conduct regular self-evaluations and review director independence and committee composition to ensure continued compliance with regulations.

Directors who are not also employees, orNon-Employee Directors, are compensated for their services as described in the section headedDirector Compensation on page 50. Mr. White serves as our Chief Executive Officer and receives no additional compensation for his service on the Board. Mr. Weiss was compensated as an employee through December 2018 and is considered aNon-Employee Director as of January 1, 2019. Compensation for both Messrs. Weiss and White is discussed in more detail in ourCompensation Discussion & Analysis and executive compensation disclosures starting on page 37.

Under our Corporate Governance Principles, directors are not permitted to serve on the boards of more than two other public companies while they serve on our Board. We do not limit service on private company boards of directors or withnon-profit organizations.

Identification of Candidates

 

Current Directors     Since  Age  

Audit

 

  

Corporate
Governance &
Nominating

 

  

Organization &  
Compensation  

 

  A. Thomas Bender(Chairman)

  I  1994  80      

  Allan E. Rubenstein, M.D.(Lead Director)

  I  1992  75    ¨  

  Colleen E. Jay

  I  2016  57    ¨  ❖

  Michael H. Kalkstein*

  I  1992  77      

  William A. Kozy

  I  2016  67  ¨  ❖  ¨

  Jody S. Lindell

  I  2006  68  ❖  ¨  

  Gary S. Petersmeyer

  I  2013  72  ¨    ¨

  Robert S. Weiss

    1996  73      

  Albert G. White III(CEO)

     2018
  50
         

The Corporate Governance and NominatingI –Independent❖ - Committee is responsibleChair¨ –Committee Member

     * Mr. Kalkstein will not stand for identification and selection of qualified candidates for nomination to the Board. The Committee believes that nominees for election to the Board must possess certain minimum qualifications and attributes.

To be nominated for election, an individual must:re-election in 2020.

 

(i)

meet the objective independence requirements set forth by the SEC and NYSE (other than executive nominees);

(ii)

exhibit strong personal integrity, character, and ethics and a commitment to ethical business and accounting practices;

(iii)

not serve on more than two other public company boards;

(iv)

not be involved inon-going litigation with us or be employed by an entity which is engaged in such litigation; and

(v)

not be the subject of anyon-going criminal investigations, including investigations for fraud or financial misconduct.

The Corporate Governance and Nominating Committee does not currently maintain a separate diversity policy regarding nominees for director. Instead the Committee relies on diversity as one of many factors in the consideration of director nominees who meet these stated criteria. The Corporate Governance and Nominating

 

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Board Independence

LOGO

Gender Diversity

LOGO

Tenure

LOGO

Committee will consider suggestions from stockholders for nominees for election as directors at our Annual Meetings on the same terms as nominees selected by the Committee. Stockholder suggestions must be received on a timely basis and meet the criteria set forth in the information onStockholder Proposals and Nominations for Director on page 5.

As of the date of this Proxy Statement, no stockholder suggestions for director nominees have been received by the Corporate Governance and Nominating Committee. Except as set forth above, the Corporate Governance and Nominating Committee does not currently have a formal process for identifying and evaluating nominees for directors, including nominees recommended by stockholders.

Board Leadership Structure

We maintain separate positions for the Chairman and Chief Executive Officer (CEO). We also maintain an independent Lead Director position, which is currently held by Dr. Allan E. Rubenstein.

position. We feel this division provides a balance between the independence of our directors and the experience of our officers. Our current Chairman has significant business experience with the Company but has also been affirmatively determined to be independent by our Board. We feel that maintaining an independent Chair provides for strong, knowledgeable leadership of the Board separate from the CEO position’sCEO’s immediate,day-to-day involvement with the Company.

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Director Independence

All of our directors, except Messrs. Weiss and White, have been determined by the Board to be independent. Mr. White is our current CEO and Mr. Weiss served as our CEO until April 2018 and was compensated as an employee through December 2018. Mr. Weiss is considered aNon-Employee Director as of January 1, 2019.

In making determinations regarding independence, the Board considers the objective requirements for independence set forth by the NYSE and the SEC and has confirmed that each independent director has no relationship to the Company, either directly or indirectly, other than as a stockholder of the Company or through their service on the Board. The Board and its committees conduct regular self-evaluations and review director independence and committee composition to ensure continued compliance with regulations.

Additionally, under our Corporate Governance Principles, directors are not permitted to serve on the boards of more than two other public companies while they serve on our Board; provided, that the Board may make exceptions to this standard as it deems appropriate in the interest of our stockholders. We do not limit service on private company boards of directors or withnon-profit organizations. The Board considers these affiliations and professional relationships on a case by case basis to ensure no conflicts of interest with the Company or other factors that would impair the relevantNon-Employee Director’s independence from the Company.

Director Nomination Process

The Corporate Governance and Nominating Committee is responsible for identification and recommendation of qualified candidates to present to the Board for consideration as director nominees. As part of this responsibility, the Committee annually considers the size, composition and responsibilities of the Board. The Committee considers the background and skills of the current board members, the needs of the Board, and the qualifications of any potential candidates prior to making recommendations regarding nominations.

The Committee believes that nominees for election to the Board must, at a minimum:

(1)

meet the objective independence requirements set forth by the SEC and NYSE (other than executive nominees);

(2)

exhibit strong personal integrity, character, and ethics, and a commitment to ethical business and accounting practices;

(3)

demonstrate an understanding of and commitment to good governance practices and the fiduciary responsibilities expected of a director;

(4)

have an appropriate educational background and significant business or professional experience;

(5)

not serve on more than two other public company boards;

(6)

not be involved inon-going litigation with us or be employed by an entity which is engaged in such litigation; and

(7)

not be the subject of anyon-going criminal investigations, including investigations for fraud or financial misconduct.

The Committee also considers whether a candidate has any special expertise that would be of particular benefit to the Company and seeks candidates who demonstrate an understanding of

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financial statements and financial matters, and who offer business and managerial experience that will complement the experience of current directors and provide additional depth of knowledge in areas that will benefit the Board in its oversight of our business.

In addition to these minimum standards, the Committee believes it is important to have Directors from various backgrounds and professions in order to ensure that the Board has a wealth of experiences to inform its decisions. Consistent with this philosophy, the Committee is committed to including in each search, candidates who reflect diverse backgrounds, including, but not limited to, diversity of gender and race.

The Corporate Governance and Nominating Committee considers suggestions from stockholders for nominees for election as directors at our Annual Meetings on the same terms as nominees selected by the Committee. Stockholder suggestions must be received on a timely basis and meet the criteria set forth in the information onStockholder Proposals and Nominations for Director on page 66.

Board Committees

 

The Board currently maintains three standing committees as described below. Committee membership is determined by the Board and reviewed regularly. As required by the SEC and NYSE, all members of our Audit Committee, Corporate Governance and Nominating Committee, and Organization and& Compensation Committee are independent directors. At the Board’s discretion, other committees may include directors who have not been determined to be independent.

Audit

Corporate Governance &
Nominating

Organization &
Compensation

A. Thomas Bender (Chairman)

Allan E. Rubenstein, M.D. (Lead Director)

❖

Colleen E. Jay

◆◆

Michael H. Kalkstein

◆◆❖

William A. Kozy

◆◆

Jody S. Lindell

❖◆

Gary S. Petersmeyer

◆◆

Robert S. Weiss

Albert G. White III

Stanley Zinberg, M.D.

◆

❖

- Committee Chair

Each committee maintains a written charter detailing its authority and responsibilities. These charters are updated periodically as legislative and regulatory developments and business circumstances warrant. The

Our committee charters are available in their entirety on our website athttp://www.coopercos.cominvestor.coopercos.com/corporate-governance..

 

 

The Audit Committee provides advice with respect to our financial matters and assists the Board in fulfilling its oversight responsibilities regarding: (i) the quality and integrity of our financial statements, (ii) our compliance

10 | Page   

with legal and regulatory requirements, (iii) review of our potential risk factors, (iv) the qualifications, independence, and performance of the independent registered public accounting firm serving as auditors of the Company, (v) retention and engagement of the independent registered public accounting firm, and (vi) the performance of the Company’s Internal Audit function and internal controls. The Audit Committee advises and makes recommendations to the Board regarding our financial, investment, and accounting procedures and practices.

 

 

The Organization and & Compensation Committee (the “OCC”)reviews and approves all aspects of the compensation paid to our Chief Executive Officer and all executives identified by the Organization and Compensation CommitteeOCC as officers under Section 16(a) of the Securities Exchange Act.Act of 1934, as amended (the “Exchange Act”). The Organization and Compensation CommitteeOCC also approves all compensation for employees whose total combined annual base salary plus targetnon-equity incentive bonus is $750,000 or greater, regardless of whether they have been designated as officers under Section 16(a). of the Exchange Act. Members of the Organization and Compensation CommitteeOCC are not eligible to participate in any of our executive compensation programs.

The Organization and Compensation CommitteeOCC also approves the composition of our peer group for comparative compensation review, approves all awards under our equity andnon-equity incentive bonus plans, and has approval

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authority for all agreements providing for the payment of benefits following a change in control of the Company, severance following a termination of employment, or any other special arrangement with the executive officers or employees which would affect their compensation. The Organization and Compensation CommitteeOCC also oversees succession planning, diversity & inclusion, and management development programs designed to strengthen our internal pool of candidates for executive level positions and promote mentoring of senior level employees.

 

 

The Corporate Governance and Nominating Committee develops, implements, and maintains the corporate governance standards by which we conduct business, and advises and makes recommendations to the Board concerning our primary governance policies. The Corporate Governance and Nominating Committee meets with the Chief Executive Officer and senior corporate staff as it deems appropriate to fulfill its obligations with regard to our corporate governance standards. The Corporate Governance and Nominating Committee also performs the functions described underIdentification of CandidatesDirector Nomination Processon page 9.3.

Meetings

The Board and its committees met as follows during our most recent fiscal year:

 

   Number of Meetings

Board of Directors

  127

Audit Committee

  87

Organization &and Compensation Committee

  87

Corporate Governance &and Nominating Committee

  3

TheNon-Employee Directors hold executive sessions in connection with regular meetings of the Board and more often as they deem appropriate. Either Mr. Bender, as Chair, or Dr. Rubenstein, as Lead Director, presides over executive sessions.

During the 20182019 fiscal year, each director attended at least 90%all of the board meetings and meetings of committees on which the director served. Currently we do not maintain a formal policy regarding director attendance at the Annual Meeting.

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Corporate Governance Policies

 

We have an ongoing commitment to good governance and business practices. In furtherance of this commitment, we regularly monitor developments in the area of corporate governance and review our policies and procedures in light of such developments. We seek to comply with the rules and regulations promulgated by the SEC and the NYSE and implement other corporate governance practices we believe are in the best interest of the Company and its stockholders.

In keeping with this commitment,commitment:

All members of our Board are independent other than Mr. White and Mr. Weiss (our current and prior CEOs);

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All members of the committees of our Board are independent;

Board members stand forre-election annually and our corporate Bylaws include a majority voting standard for the election of our directorsdirectors;

We adopted amendments to our Bylaws early in the 2019 fiscal year to include proxy access provisions;

The Board is active in oversight of risk and risk management;

We do not maintain a stockholder rights plan (“poison pill”); and

We are committed to corporate social responsibility and sustainability.

Additionally, we maintain various corporate policies, discussed in more detail below, that reflect our dedication to good governance. Additionally, we allowed our stockholder rights plan to expire by its terms at the end of the 2017 fiscal year and we have recently adopted amendments to our Bylaws to include proxy access provisions. We believe that the policies and practices currently in place enhance our stockholders’ interests.

Corporate Governance Principles

The Board has approvedWe maintain a set of Corporate Governance Principles for the Company. The Principles are available in their entirety on our website athttp://www.coopercos.com. The Principles set outwhich specify our standards for director qualifications, director responsibilities, Board committees, director access to officers and employees, director orientation and continuing education, and performance evaluations of the Chief Executive Officer and of the Board and its committees.

The Principles also address compensation and stock ownership requirements for ourNon-Employee Directors. These topics are discussedDirectors (discussed in more detail in the section onDirector Compensation starting on page 50.45). The Principles are available in their entirety on our website athttp://investor.coopercos.com/corporate-governance.

Ethics and Business Conduct Policy

We have adopted anOur Ethics and Business Conduct Policy, or Ethics Policy, which is available in its entirety on our website athttp://www.coopercos.com. Allapplies to all of our employees, executive officers, andnon-employee directors, including the Chief Executive Officer and Chief Financial Officer, are required to adhere to the Ethics Policy in discharging their work-related responsibilities.Officer. Employees are encouraged to report any conduct that they believe in good faith to be an actual or apparent violation of the Ethics Policy.

The Ethics Policy includes provisions relating to: (i) conflicts of interest, (ii) the protection and proper use of Company assets, (iii) relationships with customers, suppliers, competitors and associates, (iv) government relations and anti-corruption regulations, and (v) compliance with laws and regulations, including laws and regulations relating to insider trading, equal employment opportunity, harassment, health and safety.

The Ethics Policy is translated into multiple languages to facilitate readability and all employees receive a copy of the Ethics Policy both at their date of hire and annually. The Ethics Policy is also posted on our internal web pages for ease of access.access and is available in its entirety on our website athttp://investor.coopercos.com/corporate-governance.

Amendments to the Ethics Policy and any waivers from the Ethics Policy granted to directors or executive officers will be made available through our website. As of the date of this proxy statement, no waivers or requests have been requested or granted.

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Stock Trading Policy: Hedging & Pledging

We have implemented a Stock Trading Policy that applies to our senior executives, including our Named Executive Officers and all members of the Board of Directors. Under this Policy, trading in Company securities is prohibited except during specifically designated windows. Additionally, executives and members of the Board are prohibited from engaging in various trading practices which would suggest speculation in our securities, including short sales, puts, calls, forward sales, equity swaps, or other hedging transactions. Our policy does permit executives and members of the Board to pledge securities as collateral, but only upon prior notice to, and approval from, the Company.

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Procedures for Handling Accounting Complaints

The Audit Committee has established procedures for receipt and handling of potential complaints we may receive regarding accounting, internal accounting controls, or auditing matters, and to allow for the confidential, anonymous submission by our employees of concerns regarding accounting or auditing matters. In furtherance of this goal, we have established a confidential reporting system managed by an independent third-party vendor through which employees may report concerns about our business practices. The reporting system provides both a telephone hotline and online reporting options in multiple languages.

Board of Directors’ Role in Risk Oversight

 

General

Our Board of Directors recognizes the importance of appropriate oversight of potential business risks in running a successful operation and meeting its fiduciary obligations to our business and our stockholders. While our management team has responsibility for theday-to-day assessment and management of potential business risks, the Board maintains responsibility for creating an appropriate culture of risk management and setting the proper “tone at the top.”

In this function, the Board, directly and through its committees, takes an active role in overseeing our aggregate risk potential and in assisting management with addressing specific risks, including competitive, legal, regulatory, operational, and financial risks. Each committee of the Board regularly reviews risks related to its area of focus as follows:

The Audit Committee reviews potential risks within our financial operations, information technology systems, and internal controls;

The Corporate Governance and Nominating Committee reviews potential risks in relation to general governance and compliance matters; and

The Organization and Compensation Committee reviews risks associated with retention of key executives, how our compensation practices influence executive risk taking, and matters of succession planning.

Each committee reports regularly to the Board on these topics and contributes to the overall Board review of potential business risks.

The Board believes that its current leadership structure and majority independent membership facilitate risk oversight by combining experienced leadership with independent directionreceives regular reports from the Board and committees. Our CEO’s day to day involvement with operations allows him to promptly identify and raisemanagement’s Global Risk Committee regarding key business risks and management efforts to the Board and our Chairman’s history with the Company provides the Board with an independent voice who can also provide insight into management decisions and market dynamics based on our specific business operations. The Board believes that the balance between our Chairman, CEO, Lead Director, and the independent committees of the Board enhances our risk oversight process and appropriately limits levels of risk within our enterprise.mitigate identified risks.

Additionally, we maintain an internal Risk Committee, composed of members of senior management, which is responsible for the review of our potential and identified business risks. The Risk Committee provides reports to the Board of Directors, and the Board feels that making senior management directly responsible for monitoring risk and compliance issues ensures management dedication to the identification of potential business risks. It also enhances the “tone at the top” message of the importance of risk oversight, governance, and compliance within the Company.

Risk and Executive Compensation

Our Organization and Compensation CommitteeThe OCC reviews and assesses the possible risks related to our executive compensation programs. Based on this assessment, the Organization and Compensation CommitteeOCC has

13 | Page   

concluded that the structure of our compensation program does not create unreasonable risk or the likelihood of a material adverse impact on the Company.

In making this determination, the Organization and Compensation CommitteeOCC considered possible compensation-based risks and means by which potential risks may be mitigated, including through the operation of our internal control

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structure and the Committee’s oversight. The Organization and Compensation CommitteeOCC also considered the structure of our compensation plans, including including:

the use of a combination of short- and long-term compensation programs to create a balanced mix of pay components for our executives;

equity ownership guidelines for our senior executives to strengthen the connection between executive and stockholder interests;

capped bonus targets and recoupment provisions under short-term incentive plans to reduce the risk that executives would be motivated to maximize performance in a specific period over long-term goals; and clawback provisions for short-term bonus awards.

•

double-triggerchange-in-control provisions in employment agreements with our Named Executive Officers to prevent guaranteed payouts (see “Potential Payments on Termination” on page 42).

Management Succession Planning

At least annually, and more often as deemed appropriate, the Organization and Compensation CommitteeOCC meets with management to discuss succession plans for our executive management, including our CEO. Succession plans are designed to allow for an orderly transition of the top executive posts either in the ordinary course of business or in response to emergency situations. Management develops and presents plans for identification, mentoring, and continuing development of potential internal candidates for executive leadership positions. The Committee provides oversight, input, and recommendations with regard to the criteria to be used for identification of potential candidates for succession to leadership positions. The Committee also meets with individual members of management occasionally throughout the year to assess leadership development within the executive team.

Related Party Transactions

 

We review all relationships and transactions in which the Company and our directors and executive officers or their immediate family members are participants. The Company’s legal and governance staff is primarily responsible for monitoring and obtaining information from the directors and executive officers with respect to related party transactions and for then determining, based on the facts and circumstances, whether the Company or a related party has a direct or indirect material interest in the transaction.

Management reports related party transactions to the Corporate Governance and Nominating Committee in accordance with written policy and the Committee reviews and approves (or ratifies) all transactions between the Company and related parties that are required to be disclosed under SEC rules.

Under this policy, certain transactions have been deemed by the Committee to bepre-approved or ratified even if the aggregate amount involved exceeds thresholds that would otherwise require disclosure as follows:

Compensation paid for service as aNon-Employee Director or executive officer of the Company;

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Transactions with other companies where the related person’s only relationship is as a director and/or beneficial owner of less than 10% of that company’s equity interests;

Transactions where the related person’s only interest arises from the ownership of the Company’s common stock and all holders of the Company’s common stock received the same benefit on a pro rata basis (such as payment of regular dividends or stock splits);

Transactions between parent and subsidiary entities within the Company’s subsidiary structure, joint ventures, equity investments, and limited liability entities;

Transactions where the rates or charges are regulated by law or government authority; and

Transactions involving services as a bank depositary of funds, transfer agent, registrar, trustee under a trust indenture, or similar services.

KPMG LLP, as our independent registered public accounting firm, reviews our controls around the identification and reporting of related party transactions as required by current accounting standards.

The Corporate Governance and Nominating Committee of our Board reviews and approves or ratifies all transactions between the Company and related parties that are required to be disclosed under SEC rules, and we disclose such transactions in our Proxy Statement.

We have determined that there were no material related party transactions during the 20182019 fiscal year.

Compensation Committee Interlocks and Insider Participation

 

During the 20182019 fiscal year, all of the members of the Organization and Compensation CommitteeOCC were independent directors, no member was an employee or former employee of the Company, and no Committee member had any relationship requiring disclosure as a related party transaction. Also, none of our executive officers served on the compensation committee (or its equivalent) or board of directors of another entity whose executive officer served on the Organization and Compensation Committee.OCC.

 

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Section 16(a) Beneficial Ownership Reporting ComplianceOWNERSHIP OF THE COMPANY

Principal Securityholders

 

Section 16(a)The following table contains information regarding all individuals or groups who have advised us that they own more than five percent (5%) of the Exchange Act requires our executive officers, directors, and anyone owning more than ten percent of a registered classoutstanding shares of our equity securities to file reports with the SEC detailing their ownership and any changes in ownership. SEC regulations also require these persons to provide us with a copy of all reports filed.

Based solely on our reviewcommon stock. Information is presented as of the copies of reports and related amendments we have received, we believe that during and with respect to the 2018 fiscal year, all Section 16(a) filing requirements applicable to our officers, directors andgreater-than-ten-percent owners were met.Record Date.

Name & Address of Beneficial OwnerAggregate #
of Shares Beneficially Held		Percentage
of Shares

  T. Rowe Price Associates, Inc.(1)

  100 E. Pratt Street

  Baltimore, MD 21202

6,028,50112.200%

  The Vanguard Group, Inc.(2)

  100 Vanguard Blvd.

  Malvern, PA 19355

5,155,96510.470%

  BlackRock, Inc.(3)

  55 East 52nd Street

  New York, NY 10022

3,732,7297.600%

  Generation Investment Management LLP (4)

  20 Air Street, 7th Floor

  London, United Kingdom W1B 5AN

3,279,1086.660%

  Janus Henderson Group PLC(5)

  201 Bishopsgate

  London, United Kingdom EC2M 3AE

2,756,8815.600%

  Massachusetts Financial Services Company (6)

  111 Huntington Avenue

  Boston, MA 02199

2,751,2965.600%

  State Street Corporation(7)

  One Lincoln Street

  Boston, MA 02111

2,548,4845.200%

 

(1)
15 | Page   

Based on information disclosed in a Schedule 13G/A filed by T. Rowe Price Associates, Inc. on February 14, 2019. T. Rowe Price Associates beneficially owns and has the sole power to dispose of or direct the disposition of all 6,028,501 of these shares and has the sole power to vote or to direct the vote of 1,971,189 of these shares.

(2)

Based on information disclosed in a Schedule 13G/A filed by The Vanguard Group, Inc. on February 11, 2019. The Vanguard Group beneficially owns and has the sole power to dispose of or direct the disposition of 5,087,978 of these shares and has the shared power to dispose of or direct the disposition of 67,987 of these shares; and has the sole power to vote or to direct the vote of 57,035 of these shares and has shared power to vote 12,050 of these shares.

(3)

Based on information disclosed in a Schedule 13G/A filed by BlackRock, Inc. on February 4, 2019. BlackRock, Inc., directly and through its subsidiaries, beneficially owns, and has the sole power to dispose of or direct the disposition of all 3,732,729 of these shares and has the sole power to vote or direct the vote of 3,290,042 of these shares.

(4)

Based on information disclosed in a Schedule 13G/A filed by Generation Investment Management LLP (“GIM”) on February 14, 2019. GIM beneficially owns and has the sole power to dispose of or direct the disposition of 24,608 of these shares and has the shared power to dispose of or direct the disposition of 3,254,500 of these shares; and has the sole power to vote or to direct the vote of 24,608 of these shares and has shared power to vote 3,254,500 of these shares. Generation Investment Management US LLP has the shared power to dispose of or direct the disposition of and the shared power to vote or direct the vote of 1,558,066 of these shares. Generation IM Fund PLC has the shared

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power to dispose of or direct the disposition of and the shared power to vote or direct the vote of 954,458 of these shares. Generation IM Global Equity Fund, LLC has the shared power to dispose of or direct the disposition of and the shared power to vote or direct the vote of 789,909 of these shares.

(5)

Based on information disclosed in a Schedule 13G filed by Janus Henderson Group PLC (“Janus”) on February 12, 2019. Janus has the shared power to dispose of or direct the disposition of and to vote or direct the voting of all 2,756,881 of these shares.

(6)

Based on information disclosed in a Schedule 13G/A filed by Massachusetts Financial Services Company (“MFS”) on February 13, 2019. MFS beneficially owns and has the sole power to dispose of or direct the disposition of all 2,751,296 of these shares and the sole power to vote or direct the vote of 2,591,933 of these shares.

(7)

Based on information disclosed in a Schedule 13G filed by State Street Corporation on February 11, 2019. State Street Corporation has the shared power to dispose of or direct the disposition of 2,411,730 of these shares and the shared power to vote or direct the vote of 2,333,241 of these shares.

Securities Held by Insiders

The following table contains information regarding ownership of our common stock by each of our directors, the executives named in the Summary Compensation Table, and all of the current directors and executive officers as a group. The figures in this table represent sole voting and investment power except where otherwise indicated.

   Common Stock Beneficially
Owned as of January 23, 2020
Name of Beneficial Owner  Number
of Shares		      Percentage
of Shares

  Brian G. Andrews

               17,213   (1)     *

  Robert D. Auerbach, M.D.

   8,282   (2)     *

  A. Thomas Bender

   28,618   (3)     *

  Colleen E. Jay

   5,424   (4)     *

  Michael H. Kalkstein

   19,429   (5)     *

  William A. Kozy

   5,694   (6)     *

  Jody S. Lindell

   38,895   (7)     *

  Daniel G. McBride

   122,602   (8)     *

  Gary S. Petersmeyer

   7,202   (9)     *

  Allan E. Rubenstein, M.D.

   3,191        *

  Holly R. Sheffield

   2,749   (10)     *

  Robert S. Weiss

   243,817   (11)     *

  Albert G. White III

   148,750   (12)     *

  All current directors and executive officers as a group (15 persons)

   687,290     1.4%
*

Less than 1% ownership.

(1)

Includes 14,532 shares which Mr. Andrews could acquire upon the exercise of currently exercisable stock options.

(2)

Includes 4,742 shares which Dr. Auerbach could acquire upon the exercise of currently exercisable stock options.

(3)

Includes 10,000 shares which Mr. Bender could acquire upon the exercise of currently exercisable stock options.

(4)

Includes 1,766 shares which Ms. Jay could acquire upon the exercise of currently exercisable stock options.

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(5)

Includes 13,591 shares which Mr. Kalkstein could acquire upon the exercise of currently exercisable stock options; all of these exercisable options are held by an estate planning trust in which Mr. Kalkstein maintains 50% or greater control.

(6)

Includes 1,766 shares which Mr. Kozy could acquire upon the exercise of currently exercisable stock options.

(7)

Includes 20,091 shares which Ms. Lindell could acquire upon the exercise of currently available stock options; all of Ms. Lindell’s exercisable options are held by estate planning trusts in which Ms. Lindell maintains 50% or greater control.

(8)

Includes 89,460 shares which Mr. McBride could acquire upon the exercise of currently exercisable stock options.

(9)

Includes 5,864 shares which Mr. Petersmeyer could acquire upon the exercise of currently available stock options; all of these exercisable options are held by an estate planning trust in which Mr. Petersmeyer maintains 50% or greater control.

(10)

Includes 2,471 shares which Ms. Sheffield could acquire upon the exercise of currently exercisable stock options.

(11)

Includes 103,545 shares which Mr. Weiss could acquire upon the exercise of currently exercisable stock options.

(12)

Includes 109,534 shares which Mr. White could acquire upon the exercise of currently exercisable stock options.

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REPORT OF THE AUDIT COMMITTEE

 

OurThe Audit Committee currently has four members: Jody S. Lindell (Chair), Michael H. Kalkstein, William A. Kozy,operates under a written charter adopted by the Board in December 2003 and Gary S. Petersmeyer. most recently amended in March 2017. The Audit Committee’s charter is available in its entirety on our website athttp://investor.coopercos.com/corporate-governance.

Our Board has determined that all members of the Audit Committee are independent directors and are financially literate as required by the NYSE. Our Board has also determined that Ms. Lindell meets the qualifications of an audit committee financial expert as defined by the SEC.

The Audit Committee operates under a written charter adopted by the Board in December 2003 and most recently amended in March 2017. The Audit Committee’s charter is available in its entirety on our website athttp://www.coopercos.com.

The Audit Committee’s primary duties and responsibilities relate to:

 

The reliability and integrity of our accounting policies and financial reporting and financial disclosure practices;

Establishment and maintenance of processes by management to assure that an adequate and effective system of internal controls exists within the Company; and

Engagement, retention, and termination of our independent registered public accounting firm.

The Audit Committee provides advice with respect to our financial matters and assists the Board in fulfilling its oversight responsibilities regarding: (i) the quality and integrity of our financial statements, (ii) our compliance with legal and regulatory requirements, (iii) review of our potential risk factors, (iv) the qualifications, independence and performance of KPMG LLP (“KPMG”), in its role as our independent registered public accounting firm, (v) retention and engagement of KPMG, and (vi) the performance of our internal audit function, and (vii) review of our internal controls.controls and risk management procedures.

Management is responsible for the Company’s internal controls and the financial reporting process. The Committee has engaged Ernst & Young LLP (“EY”) to assist in the assessment of the Company’s internal controls over financial reporting and to provide internal audit services. Such services provided by EY are jointly directed by management and the Audit Committee.

KPMG, as the Company’s independent registered public accounting firm, is responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) and to issue a report on the audit process. The Audit Committee’s responsibility is to monitor and oversee these processes. In this context, the Audit Committee has met and held discussions with management and KPMG regarding the fair and complete presentation of the Company’s financial results.

The Audit Committee held 87 meetings during the 20182019 fiscal year, including regular meetings in conjunction with the close of each fiscal quarter, during which the Audit Committee reviewed and discussed the Company’s financial statements with management and KPMG. These Audit Committee meetings routinely include executive sessions of the committee, as well as private sessions with each of KPMG, Internal Audit, EY, and management.

The Audit Committee reviewed and discussed the audited consolidated financial statements of the Company for the fiscal year ended October 31, 20182019 with management and KPMG, and management represented to the Audit Committee that the Company’s consolidated financial statements were prepared in accordance with United States generally accepted accounting principles (GAAP). The Audit Committee discussed with KPMG the matters required to be discussed by the Public Company Accounting Oversight Board Auditing Standard No. 161301 “Communication with Audit Committees.”

 

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The Audit Committee also reviewed and discussed with KPMG, Internal Audit, EY, and management the processes and procedures associated with our assessment of internal controls over financial reporting, including management’s assessment of such controls.

The Audit Committee maintains policies and procedures for thepre-approval of work performed by KPMG. Under its charter, the Audit Committee must approve all engagements in advance. All engagements with estimated fees above $150,000 require consideration and approval by the full Audit Committee. The Chair of the Audit Committee has the authority to approve on behalf of the full Audit Committee all engagements with fees estimated to be below $150,000. Management recommendations are considered in connection with such engagements, but management has no authority to approve engagements.

In the 20182019 fiscal year, the Audit Committee received both the written disclosures and the letter from KPMG that are mandated by applicable requirements regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence and the Audit Committee discussed KPMG’s independence from the Company with the lead engagement partner. The Audit Committee or its Chair approved all audit services provided by KPMG for the fiscal year ended October 31, 2018.2019. The total fees paid or payable to KPMG for the last two fiscal years are as follows:

 

Fiscal Year Ended
  Fiscal Year Ended
  October 31, 2018  October 31, 2017October 31, 2019October 31, 2018

Audit Fees

  $5,304,315  $4,539,800$5,404,750$5,304,315

Audit Related Fees

  $-0-    $-0-  $-0-$-0-

Tax Fees

  $-0-    $-0-  $-0-$-0-

All Other Fees

  $-0-    $-0-  $-0-$-0-

Based on the Audit Committee’s discussions with KPMG, Internal Audit, EY, and management, the Audit Committee’s review of the representations of management, the certifications of the Chief Executive Officer and Chief Financial Officer, and the written disclosures and the letter from KPMG to the Audit Committee, the Audit Committee recommended to the Board that our audited consolidated financial statements be included in our Annual Report on Form10-K for the fiscal year ended October 31, 20182019 for filing with the SEC.

THE AUDIT COMMITTEE

Jody S. Lindell (Chair)

Michael H. Kalkstein

William A. Kozy

Gary S. Petersmeyer

Michael H. Kalkstein (Former Member)

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EXECUTIVE OFFICERS OF THE COMPANY

 

Set forth below is information regarding our current executive officers and other senior employees named in this Proxy Statement who are not also directors. The individuals listed below served in the positions set forth as of the date the Notice was mailed.of this proxy statement.

 

DANIEL  DANIEL G. MCBRIDEBRIDE

  

Age: 54

55

Executive Vice President & Chief Operating Officer /

President, CooperVision, Inc.

Mr. McBride has served as Executive Vice President and Chief Operating Officer since November 2013 and as the President of CooperVision, our contact lens subsidiarybusiness, since February 2014. He previously served as our Chief Risk Officer from July 2011 through October 2013, as our General Counsel from November 2007 through January 2014, and as Vice President from July 2006 through October 2013. He also served as Senior Counsel from February 2005 through November 2007. Prior to joining Cooper, Mr. McBride was an attorney with Latham & Watkins LLP from October 1998 to February 2005, concentrating on mergers and acquisitions and corporate finance matters. He holds a B.S. in Finance from Santa Clara University and a J.D. from Stanford Law School.

 

BRIAN  BRIAN G. ANDREWSANDREWS

  

Age: 40

41

Senior Vice President, Chief Financial Officer & Treasurer

Mr. Andrews has served as Senior Vice President, Chief Financial Officer & Treasurer since May 2018. He has served as our Treasurer since January 2013 and Vice President since November 2014.2013. He also served as Vice President, Global Logistics and Service for CooperSurgical, our women’s healthcare business, a position he held from June 2017 to May 2018 and as Vice President of the Company from November 2014 to May 2018. Mr. Andrews previously served as Assistant Treasurer for the Company from April 2006 to December 2012. Prior to joining Cooper, he served held various corporate and investment banking positions at KeyBanc Capital Markets from 2002 to 2006 and at ING Barings from 2000 to 2001. He holds a B.A. in Economics from Columbia University.

 

HOLLY  HOLLY R. SHEFFIELDSHEFFIELD

  

Age: 48

49

Executive Vice President & Chief Strategy Officer

Ms. Sheffield joined Cooper as Executive Vice President & Chief Strategy Officer in June 2018. Prior to joining Cooper, Ms. Sheffield had over 20 years of experience in investment banking. She joined Cooper from UBS Securities LLC, where she was a Managing Director, Global Head of Medical Technology from 2009 to May 2018. From 2000 to 2009, Ms. Sheffield was at Credit Suisse and from 1997-2000, Ms. Sheffield was at Donaldson, Lufkin & Jenrette until it was acquired by Credit Suisse. Ms. Sheffield received a B.S. from Cornell University and an M.B.A. from Columbia Business School.

 

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RANDAL  RANDAL L. GOLDEN, ESQ.GOLDEN

  

Age: 57

58

Vice President, General Counsel & Secretary

Mr. Golden has served as Corporate Secretary since May 2018 and2018. He has also served as Vice President since November 2014 and as our General Counsel from February 2014. He previously served as our Assistant General Counsel from May 2013 through January 2014. He also served as Senior Counsel from March 2010, when he joined the Company, until May 2013. Prior to joining Cooper, he served as Senior Director & Legal Counsel at Align Technology, Inc. from 2005 through 2010 and as Director of Legal Affairs & Senior Counsel with Nokia, Inc. from 2000 to 2005. Mr. Golden also held various associate and senior legal positions prior to 2000, focusing on litigation and commercial and business law. He holds a B.S. in Finance from the University of Illinois and a J.D. from the U.C.L.A. School of Law.

 

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AGOSTINO RICUPATI  AGOSTINO RICUPATI

  Age: 5253

Senior Vice President, Finance & Tax AndTax; Chief Accounting Officer

Mr. Ricupati has served as our Chief Accounting Officer since October 2017 and as Senior Vice President, Finance & Tax since July 2017. Mr. Ricupati previously served as Vice President, Tax for the Company from July 2013 to July 2017. Prior to joining Cooper, he served as International Tax Director for Intel Corp. (NASDAQ: INTC) from 2010 to 2013 and in various other senior finance and tax positions over the past 20 years. He holds a mastersmaster’s degree from DePaul University and is a Certified Public Accountant.

 

ROBERT  ROBERT D. AUERBACH,AUERBACH, M.D.

  Age: 5859

President, CooperSurgical, Inc.

Dr. Auerbach has served as President of CooperSurgical, Inc., the Company’sour women’s healthcare division,business, since April 2018. Previously, he served as Executive Vice President, Chief Medical Officer & Chief Strategy Officer of CooperSurgical sincefrom May 2005.2005 to April 2018. Prior to joining CooperSurgical, Dr. Auerbach served as Associate Clinical Professor in the Department of Obstetrics, Gynecology & Reproductive Services at the Yale School of Medicine, New Haven, CT. In 2005 he was the recipient of Yale’s Francis Gilman Blake Award, as the most outstanding teacher of the medical sciences, and was elected to the Society of Distinguished Teachers. He remains an adjunct faculty member of the School of Medicine and as an Executive Board member of Yale University’s Center for Biomedical Innovation and Technology. Dr. Auerbach graduated Phi Beta Kappa and Alpha Omega Alpha with highest honors from the Lehigh-Hahnemann6-yearBA-MD program in Philadelphia (1984), and completed his internship and a residency in Obstetrics & Gynecology at the Yale School of Medicine, New Haven, CT.

 

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REPORT OF THE ORGANIZATION AND COMPENSATION COMMITTEE

The Organization and Compensation Committee of the Board has reviewed and discussed the Compensation Discussion and Analysis with management. Based on this review and discussion, the Organization and Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in our Annual Report on Form10-K for the fiscal year ended October 31, 2018.

ORGANIZATION AND COMPENSATION COMMITTEE

Michael H. Kalkstein (Chair)

Colleen E. Jay

Jody S. Lindell

Gary S. Petersmeyer

COMPENSATION DISCUSSION AND ANALYSIS

 

This Compensation Discussion and Analysis describes our philosophy, strategies, policies and practices for compensating our Named Executive Officers (“NEOs”).

The Organization and Compensation Committee of our Board of Directors (referred to below as the “OCC”) oversees our executive compensation program. In this capacity, the OCC regularly reviews our program to ensure that we maintain an effective and appropriate link between pay and performance, and that our compensation practices do not encourage practices that could have a material adverse effect on the Company.

This oversight responsibility is described in more detail throughout this Compensation Discussion and Analysis which also includes information regarding(“CD&A”) describes our compensation governance policies and practices, the outcome of our most recent stockholder advisory vote on NEO compensation (the“Say-on-Pay” vote), the use of compensation consultants,program and the selection and compositioncompensation decisions made by the OCC with regard to compensation of our peer group.

Ourthe following Named Executive Officers

Our NEOs (“NEOs”) for the 2018 fiscal year are listed below with the titles they held at the end of the fiscal year.2019:

 

2018
Named Executive Officers

Name

  

Title

  Albert G. White III

  President & Chief Executive Officer

  Brian G. Andrews

  Senior Vice President, Chief Financial Officer & Treasurer

  Daniel G. McBride

  

Executive Vice President & Chief Operating Officer /

President, of CooperVision, Inc.

  Holly R. Sheffield

  Executive Vice President & Chief Strategy Officer

  Robert D. Auerbach, M.D.

  President, CooperSurgical, Inc.

Robert S. Weiss

Former President & Chief Executive Officer

Carol R. Kaufman

Former Executive Vice President, Secretary, Chief Administrative Officer & Chief Governance Officer

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Fiscal 2019 Performance - The Year in Review

 

Management Transition – Succession Planning Implementation

The 2018 fiscal year included significant management transitions for Cooper. Robert S. Weiss and Carol R. Kaufman announced their retirements in the second quarter of 2018. Mr. Weiss served as our President & Chief Executive Officer and Ms. Kaufman served as our Executive Vice President, Secretary, Chief Administrative Officer & Chief Governance Officer until May 1, 2018. Both continued as employees, in anon-executive advisory capacity, through the end of December 2018 to assist with the executive transition. Additionally, Paul Remmell stepped down in May 2018 as President of CooperSurgical.

As a result of ongoing succession planning efforts, overseen by the OCC, we were able to promote internal talent to address most open positions. Mr. White was promoted to replace Mr. Weiss as President & Chief Executive Officer in May 2018. Mr. Andrews, our Vice President & Treasurer, was selected to succeed Mr. White as Chief Financial Officer, and Dr. Auerbach was promoted from Executive Vice President, Chief Strategy Officer & Chief Medical Officer of CooperSurgical to take the role of President, CooperSurgical. Additionally, Ms. Sheffield was hired as our Executive Vice President & Chief Strategy Officer, taking on responsibility for corporate strategy, business development and global human resources, and Randal Golden was appointed as our corporate Secretary in addition to his role as our Vice President & General Counsel.

Financial Performance Against 20182019 Goals

Our annual targets are set based on both annual and long-term objectives focused on revenue growth, strategic investment, and continued market share growth. We achieved at least 97% ofdelivered solid financial results for fiscal 2019, exceeding our financial targets for all 2018 executive compensationnon-GAAP Earnings Per Share (“EPS”) and exceeded our free cash flow goal. We also continued to setsetting new records for revenuenon-GAAP earnings per share, and cash flow.operating income. Our 2019 results continue a trend of consistent growth over the past 5 years.

 

2018 Financial Highlights

 

    

Budget Target

 

  

Actual

 

  

Change YoY*

 

  

% of Budget Target

 

       Revenue:

 

  $2.542 billion    

 

  $2.533 billion    

 

  Up 7%

 

  99.4%

 

           CooperVision:

 

  $1.874 billion     

 

  $1.882 billion     

 

  Up 8%

 

  100.1%

 

           CooperSurgical:

 

  $668.2 million     

 

  $650.8 million     

 

  Up 2%

 

  97.5%

 

       EPS(1):

 

     $2.81    

 

  Down 63%

 

   

       Non-GAAP EPS(1):

 

  $11.61    

 

  $11.50    

 

  Up 19%

 

  99.1%

 

       Free Cash Flow:

 

  $463.0 million    

 

  $475.3 million    

 

  Up 2%

 

  102.7%

 

       Stock Price (10/31):

 

     $258.31    

 

  Up 8%

 

   
2019 Financial Highlights 
  
  Budget
Target		  FY2019
Results		  

Change

YoY

   

FY2019 Results

(Constant Currency)

   

Change YoY

(Constant Currency)

 
  

  Revenue:

  $2.681 billion   $2.653 billion   Up 5%    $2.692 billion    Up 7% 
  

CooperVision:

  $2.003 billion   $1.973 billion   Up 5%    $2.006 billion    Up 7% 

CooperSurgical:

  $677.5 million   $680.5 million   Up 5%    $685.8 million    Up 6% 
  

  Non-GAAP(1) EPS:

  $11.79   $12.35   Up 7%    $12.76    Up 13% 
  

  Stock Price (10/31/19):

   $291.00   Up 13%           
       
 *(1)

YoY comparison presented pro formaFor a reconciliation between GAAP andnon-GAAP measures, see the “Reconciliation ofNon-GAAP Financial Measures” section of this proxy statement.

 

 

(1)

Earnings per share were impacted by charges related to the 2017 Tax Cuts & Jobs Act.Non-GAAP earnings per share includes adjustments for these impacts, as well as cost of sales, operating expenses (excluding amortization), amortization of intangibles, interest expense, and other expenses as detailed in our earnings release published on December 6, 2018.

Based on our results for revenue, cash flow and earnings per share, annual cash bonuses under the 2018 Incentive Payment Plan were paid at99-115% of target for our NEOs. (Discussed in more detail below starting on page 29.)

Additionally, performance share awards granted in fiscal 2016 were certified at Target achievement based on growth innon-GAAP earnings per share (EPS) over a three-year period. The NEOs received 100% of target shares under these awards. (Discussed in more detail below starting on page 34.)

 

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LOGO

In addition to positive overall results, we also:

Significantly enhanced our environmental, social and governance (“ESG”) efforts, including:

o

Enhanced commitment to environmental and social responsibility including our announcement of support for the United Nations Sustainability Goals;

o

Continued development of our employee engagement, including inclusion and diversity programs and expansion of our wellness programs; and

o

Received U.S. certification as a Great Place to Work™ for the second consecutive year.

Positively amended certain debt agreements and resolved certain tax matters, resulting in interest savings and tax refunds; and

Implemented our employee stock purchase plan as a benefit for our US employees, with expectations to expand the program globally.

More information about our corporate responsibility efforts can be found on our website atOperational Performancehttps://www.coopercos.com/corporate-responsibility.

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Both the CooperVision and CooperSurgical divisions continued their operationalhad strong performance in fiscal 20182019 as well, with a number of accomplishments, including:

CooperVision:

Strong revenue growth across all global regions, supportedled by prior year product launches, as well as strong operating income and free cash flowour daily silicone hydrogel contact lens portfolio;

Significant infrastructure investments including important expansion and upgradesprogress towards U.S. FDA approval for our MiSight product, a myopia management treatment (resulting in final approval in early fiscal 2020);

Successful execution of succession planning programs to our distribution facilities to support premium levels of customer serviceaddress key executive retirements within the CooperVision organization;

Acquisition of Paragon Vision Sciences,Blanchard Contact Lens, expanding the specialty lens care and myopia management segment of the CooperVision businessbusiness;

Substantially expanded and upgraded our distribution and packaging facilities, including opening several new facilities;

Completed significant infrastructure investment to begin key expansions in manufacturing capacity;

Ongoing improvements to our IT infrastructure, including updating numerous systems, improving our global system integration activity, and enhancing our data management practices; and

Expansion of sustainability programs leading to receipt of globally-recognized sustainability certifications for our facilities in Costa Rica and Spain.

CooperSurgical:

Significant infrastructure investing throughout the company to support continued global growth

 • 

Acquisition of theStrong revenues driven by Paragard® intrauterine device product, driving revenue growth for the CooperSurgical Office & Surgical Products businessand our Fertility business;

AcquisitionSuccessful launch of internally developed new products for both the Office & Surgical Products business and the Genomics & Fertility business;

Realignment of the LifeGlobal Group, expandingorganizational and management structures from regional divisions to a product line model;

Completed successful acquisitions, investments, and divestitures, including the invitro fertilization business globallyacquisition of Incisive Surgical, Inc.; and

Continued investment in infrastructure to significantly expand both manufacturing and distribution capabilities.

Fiscal 2019 Compensation Highlights

The design of our executive compensation program for CooperSurgicalfiscal 2019 reflects our ongoing commitment topay-for-performance and the continued strong alignment of the interests of our NEOs with those of our stockholders. The key elements of our executive compensation program include base salary, a cash bonus plan, and long-term incentives in the form of stock options and/or RSUs.

•

Launch of the PGTai(sm) technology platform and ERPeak(sm) endometrial receptivity test through the CooperGenomics business to provide new tools for invitro fertilization

Executive Compensation Highlights – 2018 Fiscal Yearof our executive compensation program for fiscal 2019 included the following:

 

The OCC initially approved target executive compensation for the NEOs for the 2018 fiscal year in December 2017. Due to the executive transitions highlighted above, the OCC subsequently approved adjustments to compensation for Messrs. White, McBride and Andrews and for Dr. Auerbach, as well as an initial compensation package for Ms. Sheffield. The OCC also reviewed and approved the terms of arrangements with Mr. Weiss and Ms. Kaufman in connection with their planned retirements.

CEO Compensation

Target total direct compensationBase salaries for our CEO recognizes the significant role of the CEO in drivingNEOs were increased between 5% and 18%, with adjustments for select executives, including our performance and future growth, as well as overall responsibility for our strategic direction, management, and leadership. The practices of our peer group and our industry sector are also considered.

In setting compensation for fiscal 2018, the OCC considered the following factors:

(i)

Past performance by each of Messrs. Weiss and White against approved objectives;

(ii)

Our financial and operational results for the prior fiscal year and targets for the 2018 fiscal year;

(iii)

Compensation of CEOs at our peer companies; and

(iv)

Advice from the OCC’s independent compensation consultant.

For fiscal 2018, the OCC held target compensation for Mr. Weiss to the same level as approved for fiscal 2017.

Mr. White’s compensation was initially approved in December 2017 based on his role as Executive Vice President, Chief Financial Officer & Chief Strategy Officer and Chief Executive Officer, targeting increased alignment with peer group practices following recent promotions and expanded responsibilities;

Annual cash bonuses under the 2019 Incentive Payment Plan were paid between100-125%of Cooper Medical, Inc. (the parent of CooperSurgical). His compensation was adjustedtarget for our NEOs (discussed in May 2018 in connectionmore detail below starting on page 28);

Long-term incentive awards granted to our executives create strong alignment with his promotion to CEO.long-term stockholder interests; and

 

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Mr. Weiss:

    

2017 Target
  Compensation  

 

 

    

2018 Target
  Compensation  

 

 

  Base Salary

 

  $925,000

 

    $925,000

 

  Annual Cash Incentive

  (Target / % of Base Salary) (1)

 

  $925,000

(100%)

 

    $925,000

(100%)

 

  Equity Awards (Approved GDFV)

 

        

Performance Share Awards

(at Target)

 

  $937,132

(5,046 shares)

 

    $937,132

(4,081 shares)

 

Time-Vested Stock Options (2)

  $3,492,500

(79,370 options)

 

    $3,492,500

(60,322 options)

 

  TOTAL TARGET COMPENSATION

 

 

  $6,279,632

 

 

    $6,279,632

 

 

(1)

Represents the target annual cash incentive opportunity under our Incentive Payment Plan. For both years,Performance share awards granted in fiscal 2017 were certified at 110% of target achievement was set at 100% of Mr. Weiss’ base salary. Actual achievement under the 2017 IPP was $1,138,675 (123.1% of $925,000) and achievement under the 2018 IPP was $939,800 (101.6% of $925,000).

(2)

Equity award amounts represent the grant values approved by the OCC and may vary from recognized compensation expense (presented in theSummary Compensation Table on page 37). Options are valued using a Black-Scholes option pricing model.

Mr. White:

   

2018 Target

Compensation

  (December 2017)  

 

 

Adjusted Target
Compensation

(On Promotion) (1)

 

  

2018 Target
Compensation

(Total) (2)

 

  Base Salary

 

 $577,000

 

  

 

$800,000

 

 

 

 $688,500

 

  Annual Cash Incentive

  (Target / % of Base Salary) (3)

 

 

 $461,600

(80%)

 

  

 

$800,000

(100%)

 

 

 

 

 $630,800

(92%)

 

  Equity Awards (Approved GDFV)

 

     

Performance Share Awards

(at Target)

 

 $432,907

(1,885 shares)

 

   $432,907

(1,885 shares)

 

Time-Vested Stock Options (4)

 $2,265,000

(39,121 options)

 

  

 

$2,000,000

(34,479 options)

 

 

 

 

 $4,265,000

(73,600 options)

 

  TOTAL TARGET COMPENSATION

 

 $3,736,507

 

 

     $6,017,207

 

 

(1)

Represents increased salary and target annual cash incentive on promotion to CEO. Also represents an incremental grant of equity on promotion discussed in more detail below.

(2)

Represents the actual salary and bonus targets for fiscal 2018 based on a blended rate of initially approved and subsequently adjusted targets. Also represents the total value of equity awards approved for Mr. White in the 2018 fiscal year.

(3)

Represents the target annual cash incentive opportunity under our Incentive Payment Plan. For the 2018 fiscal year, Mr. White’s base salary, and target achievement as a percentage of salary, were adjusted midyear on his promotion to CEO as detailed above. Actual achievement under the 2018 IPP was determined based on a blended salary and target rate, resulting in payment of $661,709 (104.9% of $630,800).

(4)

Equity award amounts represent the grant values approved by the OCC and may vary from recognized compensation expense (presented in theSummary Compensation Tableon page 37). Options are valued using a Black-Scholes option pricing model.

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Other NEO Compensation

Compensation for our other NEOs is determined based on their current role, recent changes to their responsibilities, and overall execution of duties throughout the prior fiscal year. Company performance, internal alignment among our executive officers, peer group compensation practices, and competitive market changes and conditions are also taken into account.

Initial Fiscal Year Changes

Mid-year Changes

Rationale

Brian G. Andrews

•  4% increase in base salary

•  Additional 20% increase in base salary

•  Increase on promotion to CFO

Daniel G. McBride

•  10% increase in base salary

•  Increase annual cash incentive target to 80% from 70%

•  Additional 13% increase in base salary

•  Recognize importance through leadership transition and ongoing critical role within Company

Robert D. Auerbach, M.D.

•  6% increase in base salary

•  Additional 11% increase in base salary

•  Increase annual cash incentive target to 60%

•  Increase on promotion to President, CooperSurgical

Changes approved at the beginning of the fiscal year were based on individual performancegrowth in prior years, comparison to peers, management recommendations and recommendations from the OCC’s compensation consultants.Mid-yearnon-GAAP adjustments to executive compensation for the 2018 fiscal year were primarily driven by promotions and other executive transitions and were based on review of peer compensation and recommendations from management and its compensation consultant.

Ms. Sheffield’s compensation was set at the time of her hireEPS over a three-year period (discussed in June 2018 based on management recommendations and alignment to peers.

Amounts discussedmore detail below in thisCompensation Discussion and Analysis and the compensation tables starting on page 20 reflect prorated or blended amounts based on start of employment (for Ms. Sheffield) or mid-year adjustments.31).

Executive Retirements – Mr. Weiss & Ms. Kaufman

Each of Mr. Weiss and Ms. Kaufman resigned their executive titles at the beginning of May 2018. Per agreement with the Company, both Mr. Weiss and Ms. Kaufman remained employed with the Company through December 31, 2018 with no change in their respective levels of compensation.

Amounts payable to Mr. Weiss and Ms. Kaufman on retirement are discussed in more detail in the section titledPotential Payments Upon Termination or Change In Control below on page 48. Mr. Weiss continues to serve on our Board of Directors and will be compensated as aNon-Executive Director starting January 1, 2019.

Compensation Governance

 

The OCC works closely with management, management’s consultant, the OCC’s independent compensation consultant, and such other advisors as the Committee considers appropriateseeks to ensure that we maintain sound governance and compensation policies and practices. In designing and overseeing our executive compensation program, we strive to employ best practices.practices and the OCC works closely with its compensation consultants, management, and such other advisors as the OCC considers appropriate to properly assess our practices and policies.

 

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THINGS WE DO:

        THINGS WE DON’T DO:

✓

 

Entirely independent OCC

LOGO

No guaranteed annual salary increases

✓

Thorough assessment of individual and Company performance and linkage to compensation

✓

Independent compensation consultant, retained by and reporting only to the OCC

✓

Limited use of employment andchange-in-control agreements; allchange-in-control payments and benefits subject to “double-trigger” requirements

✓

A majority of NEO compensation is “at risk”

✓

Robust succession planning process with annual review by the OCC

✓

Stock ownership guidelines applicable to our NEOs, with our CEO required to hold five times his annual base salary

✓

Perquisites are limited in scope and have specific business rationale

✓

Compensation recovery (“clawback”) provision incorporated in our annual incentive plan

✓

 

Annual reviewassessment of executivelink between compensation program and individual compensation packages

performance

 THINGS WE DON’T DO:

LOGO

❖

 

No loans to NEOs

guaranteed annual bonuses or long-term incentive awards

❖

✓

 

No taxgross-ups for NEOs

Use of independent compensation consultants

❖ 

NoLOGO

Prohibition on hedging orand speculative transactions in Company securities; no purchases of Company securities on margin

❖

✓

“Double-trigger” requirements for “change in control” payments in employment agreements

LOGO

 

No Supplemental Executive Retirement Plan or other exceptional deferred compensation options. Also no defined benefit or other actuarial plans which are not available generally to our employees

options

❖

✓

Annual review of management succession planning process

LOGO

 

No related party transactions without approval from our Corporate Governance and Nominating Committee

❖✓

Robust stock ownership guidelines applicable to our NEOs

LOGO

 

No stock option repricing reload options, or option exchangesof long-term incentives without stockholder approval

✓

Limited perquisites based on specific business rationale

LOGO

No taxgross-ups for NEOs

✓

Compensation recovery (“claw back”) provision incorporated in our annual incentive plan

✓

Annual review of executive compensation program and individual compensation packages

In addition to these policies and practices, theThe OCC stays informed andalso regularly assesses the alignment between our compensation packages and our performance as follows:through:

 

Regular updates from management on our business results from management;results;

Review of our quarterly financial statements, management projections, and long-range plans;

Review of performance and market information regarding our peer group, including reported revenues, profit levels, market capitalization, stockholder returns, compensation components, and disclosed governance policies and practices;group; and

Review of broader general industry compensation data relative to our market and other companies of comparable size.

The OCC considers management input, the advice of compensation consultants, and publicly available peer information to be valuable tools in its evaluation of the relationship between executive compensation and Company performance.

 

 

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Compensation Objectives / Pay for Performance

Our executive compensation program is designed to provide competitivemarket-competitive target compensation packages to attractthat focuses on pay for performance and retaintop-tier talent and closely link potential compensationaligns NEO interests with those of our financial performance. To meet these objectives our program emphasizesstockholders by emphasizing certain principles:

 

ConnectAligning compensation with performance by connecting executive compensation to financial measures that correlate strongly with stockholder returns;

BalanceBalancing short-term operational goals andfinancial results with long-term strategic objectives;

 

25 | Page   

RewardRewarding achievement of challenging corporate objectives, without encouraging inappropriate risk-taking;

Recognize the significant roleProviding competitive pay packages aligned to compensation practices of our executive officers play in our overall performance and the responsibilities associated with their roles;market peers; and

MaintainMaintaining sufficient flexibility to allow recognition of significant individual achievements by our executive officers.

The compensation packages for our NEOs are designed to reward
achievement of both short-term and long-term goals, as reflected
in specific financial measures, and continued service to the
Company. Encouraging long-term service and continued financial
achievement has created strong results for us and we have
maintained steady growth and returns for our stockholders. We		Annual MeasuresLong-Term Measures
Revenue

Non-GAAP EPS

over three-year period

Cash Flow
Non-GAAP EPS

The compensation packages for our NEOs are designed to reward achievement of our goals and encourage continued service to the Company. This strategy has created strong results and we have maintained steady growth and returns for our stockholders. We consider our executive compensation program design to be integral to our success and believe the selected performance measures serve as significant indicators fordrivers of our continued success.

Say-on-Pay Vote

The OCC considers the outcome of our annual“Say-on-Pay” vote in determining the design of our executive compensation program and the composition and levels of individual compensation packages.

At our 20172018 Annual Meeting of Stockholders, 94% of the votes cast on ourSay-on-Pay proposal were voted in favor of the compensation program for our NEOs. The OCC viewed this result as a strong affirmation of our program structure and considered these results in December 2018 when developing the compensation packages for fiscal 20182019 as described in this Compensation Discussion and Analysis.CD&A.

Stock Ownership Guidelines

We maintain guidelines for stock ownership by our
NEOs and certain other senior executives. Under
these guidelines the designated executives are
expected to hold a portion of the shares acquired
upon the exercise of stock options or vesting of full-		NameTarget ValueHold on
Vest/Exercise

Albert G. White, III

5x base salary

100%

Other Sec. 16 officers

2x base salary

50%

value stock awards if their ownership level is below the established guidelines.

The OCC reviewed and updated the guidelines in fiscal 2018. As amended, the guidelines require minimum ownership equal to 2 times base salary for all Section 16 identified officers and 5 times base salary for the CEO. In addition to directly held shares, the potential value of vested stock options and unvested restricted stock units are credited in consideration of whether ownership requirements have been met.

All NEOs were in compliance with the applicable ownership guidelines during fiscal 2018.

Use of Compensation Consultants

The OCC retains Compensia, a national compensation consulting firm,Inc. (“Compensia”) to provide advice on compensation of our executive officers and thenon-employee members of our Board of Directors. Under this engagement, theThe OCC also maintains sole authority to determine the terms of Compensia’s retention and services. Aservices and a representative of the firm generally attends OCC meetings.

26 | Page   

The OCC has reviewed the nature of the relationship between itself and Compensia as an independent consulting firm, and its relationship with the members of Compensia as individuals, for potential conflicts of interest. In conducting this review, the OCC gave consideration toconsidered the factors identified by the SEC and the NYSE as possibly contributing to conflicts, including the scope of work performed for the OCC by Compensia, the fees paid to Compensia for services, and any personal or business relationships between our executive officers or members of the OCC and Compensia or its individual members. Based on its review, the OCC has determined there are no conflicts of interest or potential conflicts of interest arising in connection with the OCC’s engagement of Compensia.

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Role of Management

The OCC considers input from management to be a valuable tool in setting appropriate compensation. Management separately retains Frederic W. Cook & Co., Inc. (“Frederic Cook”) to serve as itsa compensation consultant andto assist in the preparation of information provided to the OCC. Mr. White has final authority for the retention of Frederic Cook.management’s recommendations on NEO compensation. A representative of the engaged firm generally attendsmay attend OCC meetings as an invited guest, and the OCC considers recommendations from Frederic Cookmanagement’s consultants on the same basis as recommendations from management.

Role of Management

On behalf ofThrough early 2019, management retained Frederic W. Cook & Co., Inc. (“Frederic Cook”) as its compensation consultant and Frederic Cook provides an annual report analyzing executive officer compensation. This report presents comparativeprovided compensation information basedrecommendations for fiscal 2019. In early 2019, management chose to change firms and engaged Semler Brossy Consulting Group LLC (“Semler”) to serve as its consultant. Semler serves on peer group data and contains information regarding key trends in executive compensation for other comparable publicly-traded companies. This information is one factor in evaluating the design of our executive compensation program and the compensation elements and levels provided to our executive officers. Compensia evaluates the recommendations provided bysame basis as Frederic Cook and advises the OCC on these findings.Cook.

In addition to therecommendations regarding annual NEO compensation, report, management also provides recommendations to the OCC regarding:

 

(i)

selection of companies for our peer group (as described further below);

Selection of companies for our peer group (as described further below);

 

(ii)

appropriate structure for our Incentive Payment Plans, including financial targets and calculation of achievement;

Appropriate structure for our annual incentive payment plans, including financial targets and calculation of achievement;

 

(iii)

overall compensation packages for executive officers, including the NEOs;

Long-term incentive plan design and annual award allocations;

 

(iv)

annual equity award levels, plan design and specific award allocations for employees, including the NEOs; and

Employment terms and arrangements; and

 

(v)

employment terms and arrangements, stock ownership guidelines, and special compensation awards to executive officers who have demonstrated outstanding performance during the fiscal year or on special projects.

Management uses Frederic Cook’s analysesStock trading policies and guidance to develop these recommendations. ownership guidelines.

The OCC gives full consideration to thesereviews management recommendations and reviews them with Compensia before making its own decisions on the compensation of our executive officers. The CEO does not generally participate in discussions of his own compensation.NEOs.

Peer Group

The OCC uses a peer group for understanding and assessing competitive compensation levels and practices within our industry. It reviews this peer group annually, with consideration given to the recommendations and input of management, Frederic Cook, and Compensia.

27 | Page   

Our peer group is drawn from publicly-traded companies headquartered in the United States. States and is reviewed annually.

Recommendations for peer group companies are based on similarity of product lines or industry and similarity in company size as measured by annual revenue, market capitalization, operating margins, and other financial measures of organizational scope and complexity.

For fiscal 2018,2019, companies were considered for inclusion in the peer group that: (i) had revenue and/or market capitalization between 0.5x and 2.0x of the Company in the past fiscal year, (ii) were in the medical device industry, and (iii) were identified as a peer by at least three other current peer companies, used the Company as a peer, or had been identified as a peer by one of the major proxy advisory firms.

The

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Our peer group for fiscal 20182019 was comprised of the following companies:

 

Bio-Rad Laboratories,Align Technology, Inc.

  Integra Lifesciences Holding Corporation

Bruker Corporation

Bio-Rad Laboratories, Inc.		  Mettler-ToledoMasimo Corporation
Dentsply Sirona International, Inc.

Conmed Corporation

  PerkinElmer, Inc.

Dentsply Sirona International, Inc.

Edwards Lifesciences Corporation		  Resmed, Inc.

Edwards Lifesciences Corporation

Steris Corporation plc

Haemonetics Corporation

  Teleflex, Inc.

Hologic,Hill-Rom Holdings, Inc.

  Varian Medical Systems, Inc.

IDEXX Laboratories

Hologic, Inc.		  Waters Corporation

Illumina, Inc.

IDEXX Laboratories		  West Pharmaceutical Services, Inc.
Illumina, Inc.

For fiscal 2019, the OCC removed Bruker Corporation, Conmed Corporation, Mettler-Toledo International, Inc., and STERIS plc, and added Align Technologies, Inc.,Hill-Rom Holdings, Inc., and Masimo Corporation as more appropriate peers based on revenue, business type, and primary executive location.

Stock Ownership Guidelines

 

We maintain guidelines for stock ownership by our NEOs which require minimum stock ownership equal to 5 times base salary for the CEO and 2 times base salary for all other NEOs. In addition to directly held shares, the potential value of vested stock options and unvested restricted stock units are credited in consideration of whether ownership requirements have been met.

NameTarget Value
CEO5x base salary
Other NEOs2x base salary

There is no required time period for the NEOs to achieve the required ownership, but while ownership is below the established guidelines the NEO is expected to hold a portion of the shares acquired upon the exercise of stock options or vesting of full-value stock awards until the guidelines are met. Under this requirement the CEO must hold 75% of the shares acquired, net of taxes and any exercise cost, and all other NEOs must hold 50% of such shares acquired.

All NEOs complied with the applicable ownership guidelines during fiscal 2019.

Executive Compensation ElementsStructure

 

Compensation Elements

The primary elements of our executive compensation program are:are designed to connect NEO compensation to stockholder returns and company objectives.

 

Cash salary intended to provide a minimum level of competitive compensation for our executives;

  Cash Salary

Provides a minimum level of competitive compensation for our executives

  Annual Cash Incentive

Encourages achievement of short-term business goals as reflected in our annual operating budget

  Long-Term Equity Incentives

Connects executive compensation to strategic objectives and priorities linked to long-term success, supports alignment between executives and stockholders, and encourages executive retention

 

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Annual cash incentive designed to encourageThe majority of NEO compensation is a combination of annual and long-term incentives. These compensation elements require achievement of short-term business goals as reflected in our annual operating plan; and

Equity awards granted in the form of time-vested stock options, time-vested restricted stock units, and performance based awards, intended to connect executive compensation to long-term stockholder value, support alignment between executives and stockholders, and encourage executive retention.

Each of these elements, other than base salary, depend on specific financial metrics (in the case of performance based equity and annual bonus) and significant increases in our stock price (in the case of time-based equity), creatingfor our NEOs to realize compensation. This creates a direct link between our performance and NEO compensation. Additionally, compensation is balanced between short-term and long-term factors to encourage attention to both annual objectives and long-term strategic goals.goals and is intended to drive long-term stockholder value creation.

28 | Page   

In the 20182019 fiscal year, approximately 70% of Mr. Weiss’s, and approximately 88%72% of Mr. White’s, total direct compensation was in the form of long-term equity awards providing valuevesting over a three- to five-year time frame. Approximately 69%58-60% of our other NEO’s target total direct compensation (on average) was long-term equity awards.

 

LOGO

LOGO

*

“Other Compensation” represents 3%approximately 1% of compensation for the average NEO and less than 1% for Mr. Weiss.White, as discussed in footnote 4 to the Summary Compensation Table.

NEO Compensation – 2019 Fiscal Year

Compensation for our NEOs is determined based on their current role, recent changes to their responsibilities, and overall execution of duties throughout the prior fiscal year. Company performance, internal alignment among our executive officers, peer group compensation practices, and competitive market changes and conditions are also considered.

The OCC initially approved target executive compensation for the NEOs for the 2019 fiscal year in December 2018 as follows:

NEO 

Base

Salary

 Target Bonus (1) 

Equity Awards(2)

(Grant Date Fair Value)

 

Total Target

Compensation

 ($) (%)

  White

 $925,000 $925,000 100% $5,500,000 $7,350,000

  Andrews

 $425,000 $276,250 65% $1,100,000 $1,801,250

  McBride

 $700,000 $560,000 80% $2,000,000 $3,260,000

  Sheffield

 $525,000 $341,250 65% $1,500,000 $2,366,250

  Auerbach

 $425,000 $276,250 65% $1,000,000 $1,701,250
(1)

Represents the target annual cash incentive opportunity under our Incentive Payment Plan. Actual achievement for fiscal 2019 is discussed in more detail below at page 28.

��

(2)

Equity award amounts represent the grant values approved by the OCC and may vary from recognized compensation expense presented in theSummary Compensation Tableon page 34 due to mathematical rounding of fractional shares. Stock options are valued using a Black-Scholes option pricing model.

 

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Changes approved at the beginning of the fiscal year were based on recommendations from the CEO, Semler, and Compensia. These recommendations were based on prior year performance and alignment with peer compensation.

Change in Compensation – 2018 to 2019
NEOSalaryTarget BonusEquity Value (1)Total Change in
Compensation

White (2)

Up 16%No changeUp 17%Up 17%

Andrews

Up 18%Up from 45% to 65%Up 57%Up 47%

McBride

Up 8%No changeDown 26%Down 16%

Sheffield

Up 5%Up from 60% to 65%Down 25%Down 15%

Auerbach

Up 6%Up from 60% to 65%Up 20%Up 15%
(1)

Change in equity value reflects the impact of grants made in fiscal 2018 on promotion for Messrs. White, Andrews and Auerbach, anon-recurring retention grant for Mr. McBride, and the grant at start of employment for Ms. Sheffield.

(2)

Mr. White was promoted to CEO in May 2018 and his compensation was adjusted to reflect this increased responsibility. Changes presented here reflect adjustments from his base compensation after his promotion in order to more directly compare his target direct compensation as our CEO.

The changes in total target compensation for fiscal 2018 and fiscal 2019 were based on recognition of prior year performance by our NEOs and ongoing efforts to align compensation to our peers. Changes also reflect the impact of certainone-time grants in fiscal 2018 tied to promotion, retention or start of employment.

CEO Compensation

Target total direct compensation for our CEO recognizes the significant role of the CEO in driving our performance and future growth, as well as overall responsibility for our strategic direction, management, and leadership.

In setting Mr. White’s compensation for fiscal 2019, the OCC considered:

(1)

Mr. White’s overall performance in fiscal 2018;

(2)

Financial and operational results for fiscal 2018 and targets for fiscal 2019;

(3)

Mr. White’s experience and tenure in the CEO role;

(4)

Peer company practices and market alignment; and

(5)

Recommendations from the OCC’s independent compensation consultant.

 

2018 Target Direct Compensation

(Blended Rate) (1)

2019 Target Direct
Compensation

  Base Salary

$688,500$925,000

  Annual Cash Incentive

$630,800$925,000

  (Target / % of Base Salary) (2)

(92%)(100%)

  Equity Awards(Approved GDFV)(3)

Performance Share Awards

(at Target)

$432,907

(1,885 shares)

n/a

Time-Vested Stock Options

$4,265,000

(73,600 options)

$5,500,000

(90,592)

  TOTAL TARGET DIRECT COMPENSATION

$6,017,207$7,350,000

25 | P a g e

(1)

Mr. White was promoted to CEO in fiscal 2018 and his compensation was adjustedmid-year to reflect this increase in responsibilities. Presented compensation represents the actual salary and bonus targets for fiscal 2018 based on a blended rate of initially approved and subsequently adjusted targets, and the total value of equity awards approved for Mr. White in the 2018 fiscal year. Fiscal 2019 compensation reflects Mr. White’s first full year of service as our CEO.

(2)

Represents the target annual cash incentive opportunity under our Incentive Payment Plan. For fiscal 2018, Mr. White’s target bonus was adjusted from 80% of base salary to 100% of base salary on his promotion to CEO in May 2018. For fiscal 2019, his target bonus was set at 100% of base salary. Actual achievement under the 2018 IPP was determined based on a blended salary and target rate, resulting in payment of $661,709 (104.9% of $630,800). Achievement under the 2019 IPP was $1,154,400 (124.8% of $925,000).

(3)

Equity award amounts represent the grant values approved by the OCC and may vary from recognized compensation expense (presented in theSummary Compensation Table on page 34). Options are valued using a Black-Scholes option pricing model.

Annual Cash Incentives – 2019 Incentive Payment Plan (“IPP”)

Fiscal 2018 Performance Measurement

At the beginning of each fiscal year, the OCC approves an annual Incentive Payment Plan or IPP, to provide annual performance-based cash incentive opportunities. Target levels for thepre-established performance measures used in the IPP are based on budgeted goals reflected in our annual operating plan.budget. The IPP is discussed in more detail in the narrative to theGrants of Plan Based Awards Table on page 39.36.

Each NEO’s opportunity under the IPP is allocated into two components:

 (i)(1)

75% of the target award is tied to quantitative,pre-established financial performance targets; and

 (ii)(2)

25% of the target award is at the discretion of the OCC and intended to recognize other strategic, operational, and individual accomplishments not specifically quantified elsewhere in the IPP.

Taken together, the IPP encourages our executive officers, including our NEOs, to focus on both immediate business objectives and financial performance, as well as other factors that support longer-term performance.

FinancialQuantitative Performance Measurement

Quantitative financial targets for the 20182019 IPP were based on our annual operating plan,budget, as approved by our Board of Directors at the beginning of fiscal 2018. Targets2019. Achievement for Messrs. White and Andrews and for Ms. Sheffield were subject to adjustmentbased on overall Revenue andNon-GAAP EPS, adjusted for acquisitions and/or divestitures or other items during the fiscal year as determined by the Board. currency fluctuations. Achievement for Mr. McBride and Dr. Auerbach was based on Revenue and Operating Income, adjusted for currency fluctuations, for each of CooperVision and CooperSurgical, respectively.

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The table below describes the relationship between the earned award and Company performance for each of the finance measures included in the 20182019 IPP. No award was payable with respect to any financial performance measure that did not reach its minimum achievement threshold. For each NEO, the incentive that can be paid for any individual financial performance measure was capped at 200%. Specific achievement for fiscal 2019 is discussed in detail below.

IPP Achievement Required to Attain Payout (1)

 

       Performance Measure   Threshold  Target    Maximum  

           Revenue

 90%  100%  110%

           Earnings Per Share

 85%  100%  120%

           Cash Flow

 85%  100%  120%
Performance Measure  Threshold  Target  Maximum

  Revenue(Constant Currency)

  95%  100%  105%

  Non-GAAP EPS(Constant Currency)

  90%  100%  110%

  Operating Income

  90%  100%  110%
 (1)

The IPP threshold payout is equal to approximately 10%Potential payments at each of Threshold, Target achievement, asand Maximum are presented in theGrants of Plan Based Awards table on page 39.36. Target achievement provides for payout of 100% of target bonus amounts and Maximum is capped at 200% of Target.

 

 

29 | Page   

Adjustments to Quantitative Achievement and Clawbacks

Further, any twoQuantitative financial targets were subject to adjustment for acquisitions and/or divestitures, or other items during the fiscal year as determined by the Board. In making such adjustments, the OCC considers a report provided by management on variances to the budgets for Revenue, Operating Income, andNon-GAAP EPS that highlights key variances includingnon-recurring,non-controllable, and/or discretionary items. The OCC may elect to include or exclude certain of these items for purposes of determining the threeoverall quantitative measures were required to exceed 95% of their target achievement before awards for quantitative performance could exceed 100% of target.

In addition to approving the calculation of achievement based on financial results under the 2018 IPP (discussed in more detail below), the2019 IPP.

The OCC also has the separate authority to reduce the quantitative portion of the bonus by up to 25%. This determination would be, regardless of reported budget achievement, based on any facts and circumstances the OCC consideredconsiders to be in the Company’s best interests. Award payments could also be reduced or cancelledwholly recouped by the OCC if a review of the results for the first two months of fiscal 20192020 reflected anomalous unfavorable events that were attributable to fiscal 2018. 2019.

The OCC did not determine that any adjustments to awards for fiscal 20182019 were necessary under these provisions.

Discretionary Components

As discussed above, the 2019 IPP provides for 25% of each NEO’s target annual cash incentive opportunity to be entirely at the discretion of the OCC and not linked to the quantitative financial measures under the 2019 IPP. The IPP achievement of this discretionary portion may range from 0% to a percentage deemed appropriate by the OCC, subject to a cap on the total bonus earned by any NEO equal to 200% of their target award.

The discretionary component of individual IPP awards is based entirely on the OCC’s assessment of executiveindividual NEO performance during the fiscal year. The discretionary component allows the OCC the flexibility to recognize factors such as:

 

The personal contributions of the NEOs to the performance of the Company during the fiscal year;

27 | P a g e

Leadership and operational achievements of each NEO, including those that may not be explicitly reflected in current year financial results (e.g. leadership development and succession planning, identification and/or execution of business development opportunities, etc)etc.);

BusinessStrategic business achievements that may not be fully reflected in the Company’s financial performance during the fiscal year; and

Special circumstances that may have impacted the determination of the quantitative portion of the bonus.

The OCC believes this flexibility, which can account for factors that impact our results either positively or negatively, is important to connect cash incentive awards with its assessment of executive achievement in individual roles.

20182019 IPP Results

Financial Measure Achievement

In approving the actual achievement levels for fiscal 2018,2019, the OCC reviewed management’s presentation of our financial results and gave consideration toconsidered the events during the fiscal year that impacted budget targets. On review, the OCC approved achievement under the 20182019 IPP based on the financial results as reported for the Company with no adjustments.

The target levels for each of the financial performance measures, our actual achievement as approved by the OCC, and the associated award amounts earned with respect to each of these measures under the 20182019 IPP is set out below,below. As approved by the OCC, we exceeded budget targets for Revenue and anon-GAAP EPS across all three divisions and each of CooperVision and CooperSurgical achieved at least 94% of target operating income.

A full discussion of our financial results can be found in Item 7,Management’s Discussion and Analysis ofFinancial Condition and Results of Operations of our Annual Report on Form10-K for the fiscal year ended October 31, 2018.2019. For a reconciliation between reported GAAP andnon-GAAP measures, see the “Reconciliation ofNon-GAAP Financial Measures” section of this proxy statement.

 

30 | Page   

Achievement by Division

(Basis of Awards Paid to NEOs)

Corporate:

 

Award Factor   Budget Target  
($ in Millions;
except EPS)		  

  Achievement  
($ in Millions;

except EPS)

(% of Target)

  

  Achievement  
Under  

2018 IPP  

 Target  
Achievement  
/ Weighting  		 Weighted  
Achievement  

Revenue

  $2,542.3   $2,527.9 (99.4%)    96.2% 25% 24.1%

EPS(Non-GAAP)

  $11.61   $11.50 (99.1%)    96.8% 25% 24.2%

Cash Flow (consolidated)

  $463.0   $475.3 (102.7%)    113.3% 25% 28.3%

    Total Achievement

           75% 76.6%
Award Factor 

Budget Target

($ in Millions;
except EPS)

  

Achievement

($ in Millions;

except EPS)

(% of Target)

  

Achievement
Under

2019 IPP

  Target
Achievement/
Weighting		  Weighted
Achievement		 

  Revenue

  (Constant Currency)

  $2,680.9   $2,692.1 (100.4%)   108.4%   50%   54.2% 

  Non-GAAP EPS

  (Constant Currency)

  $11.79   $12.76 (108.2%)   182.4%   25%   45.6% 

  Total Achievement

     75%   99.8% 

CooperVision:

 

Award Factor   Budget Target  
($ in Millions;
except EPS)		  

Achievement
($ in Millions;

except EPS)

(% of Target)

  

  Achievement  
Under  

2018 IPP  

 Target  
  Achievement  
/ Weighting  		 Weighted  
Achievement  

Revenue

  $1,874.1   $1,876.1 (100.1%)    101.1% 25% 25.3%

Operating Income

  $549.7   $542.3 (98.6%)    95.5% 20% 19.1%

EPS(Non-GAAP)

  $11.61   $11.50 (99.1%)    96.8% 5% 4.8%

Cash Flow

  $443.0   $434.7 (98.1%)    93.8% 25% 23.4%

    Total Achievement

           75% 72.6%

CooperSurgical:28 | P a g e

(1)

Revenue as reported was $2,653.4 million versus 2019 IPP achievement of $2,692.1 million. The difference is due to adjustment to the foreign exchange rate used in connection with our annual budget. The foreign exchange rate used to compute the budget target was the same rate used for the IPP achievement calculation.

(2)

Non-GAAP EPS as reported to investors was $12.35 versus 2019 IPP achievement of $12.76. The difference is due to adjustment to the foreign exchange rate used in connection with our annual budget.

CooperVision:

 

Award Factor 

  Budget Target  

($ in Millions;
except EPS)

  

  Achievement  
($ in Millions;

except EPS)

(% of Target)

  

  Achievement  
Under  

2018 IPP  

   Target  
Achievement  
/ Weighting  		   Weighted  
Achievement  

Revenue

  $668.2   $651.8 (97.5%)    83.6% 25% 20.9%

Operating Income

  $227.2   $207.1 (91.2%)    70.4% 20% 14.1%

EPS(Non-GAAP)

  $11.61   $11.50 (99.1%)    96.8% 5% 4.8%

Cash Flow

  $73.5   $94.2 (128.2%)    200% 25% 50.0%

    Total Achievement

           75% 89.8%
Award Factor

Budget Target

($ in Millions;
except EPS)

Achievement

($ in Millions;

except EPS)

(% of Target)

Achievement
Under

2019 IPP

Target
Achievement/
Weighting		Weighted  
Achievement  

  Revenue

  (Constant Currency)

$2,003.3$2,006.2 (100.1%)102.9%50%51.4%  

  Operating Income

  (Constant Currency)

$595.0$589.2 (99%)95.2%25%23.8%  

  Total Achievement

 

75%

 

75.2%  

 

(1)

Revenue for CooperVision as reported was $1,972.9 million versus 2019 IPP achievement of $2,006.2 million. The difference is due to adjustment to the foreign exchange rate used in connection with our annual budget. The foreign exchange rate used to compute the budget target was the same rate used for the IPP achievement calculation.

(2)

Operating income for CooperVision was $506.4 million versus 2019 IPP achievement of $589.2 million. The difference is due to adjustment to the foreign exchange rate used in connection with our annual budget and adjustments to primarily reflect the impact of amortization.

CooperSurgical:

Award Factor 

Budget Target

($ in Millions;
except EPS)

 

Achievement

($ in Millions;

except EPS)

(% of Target)

 

Achievement
Under

2019 IPP

 Target
Achievement/
Weighting		 Weighted  
Achievement  

  Revenue

  (Constant Currency)

 $677.5 $685.8 (101.2%) 124.6% 50% 62.3%  

  Operating Income

  (Constant Currency)

 $221.3 $208.9 (94.4%) 72.0% 25% 18.0%  

  Total Achievement

 

    75%

 

 80.3%  

 

(1)

Revenue for CooperSurgical as reported was $680.5 million versus 2019 IPP achievement of $685.8 million. The difference is due to adjustment to the foreign exchange rate used in connection with our annual budget. The foreign exchange rate used to compute the budget target was the same rate used for the IPP achievement calculation.

(2)

Operating income for CooperSurgical was $87.9 million versus 2019 IPP achievement of $208.9 million. The difference is due to adjustment to the foreign exchange rate used in connection with our annual budget and adjustments to primarily reflect the impact of amortization.

Discretionary Award Determinations

As discussed above, the 2018 IPP provides for 25% of each NEO’s target annual cash incentive opportunity to be entirely at the discretion of the OCC and not linked to the quantitative financial measures under the 2018 IPP. The IPP achievement of the discretionary portion may range from 0% to a percentage deemed appropriate by the OCC, subject to a cap on the total bonus earned by any NEO equal to 200% of their target award.

In determining the discretionary payout for each NEO, the OCC made an independent assessment of individual performance and leadership, operational achievements not otherwise enumerated in the 20182019 IPP, and such other factors as the OCC considers indicative of executive performance, including operational achievement indicators such as market share growth, new product launches, business development, and executive leadership.

 

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There is no formulaic relationship between the OCC’s assessment of each NEO and the payout of the discretionary component of the IPP. The OCC does not rely on a formal performance evaluation or consider achievement ofpre-established goals for each NEO, other than the Chief Executive Officer.NEO. The OCC does consider, among other factors, the input of our Chief Executive Officer regarding recommended award levels (other than in respect to his own IPP award) and the performance of the other NEOs, and each executive’s self-assessment of accomplishments within their area of responsibility. Generally, an award of the target 25% reflects satisfactory performance by an executive officer during the fiscal year and awards in excess of 25% are only made in recognition of significant additional accomplishments.

For fiscal 2019, the OCC approved discretionary awards at the target level for NEOs other than Mr. McBride. The OCC approved a discretionary award for Mr. McBride at a value equal to 200% of target amount in recognition of his personal performance and leadership for CooperVision, Inc. during the fiscal year. In making this determination, the OCC noted Mr. McBride’s successful execution of succession planning for his leadership organization following the retirement of certain key executives.

Named Executive Officer Awards Under the 20182019 IPP

ForBased on the above financial results for fiscal 2018,2019, the OCC approved the following awards for each NEO.

 

Executive (1)

 

 

Quantitative
Factor
Achievement 

 

 

Discretionary  
Award  

 

 

Total Award

Achievement (1)

 

 

Target Award

 

 

 

Actual Award Paid

 

 

 ($)  (% of Base 
Salary)		 ($) (% of Base
Salary)

  Albert G. White III  

 79.9% 25% 104.9% $630,800  92%  $661,709  96.1% 

  Brian G. Andrews  

 76.6% 25% 101.6% $147,899  45%  $150,265  45.7% 

  Daniel G. McBride

 74.6% 25% 99.6% $490,800  80%  $488,837  79.7% 

  Holly R. Sheffield

 76.6% 25% 101.6% $124,462  60%  $126,453  61%

  Robert D. Auerbach, M.D. 

 89.8% 25% 114.8% $201,000  53%  $230,748  60.7% 

  Robert S. Weiss

 76.6% 25% 101.6% $925,000  100%  $939,800  101.6% 

  Carol R. Kaufman  

 76.6% 25% 101.6% $289,224  60%  $293,852  61%
Named Executive Officer Quantitative
Factor
Achievement		 Discretionary
Award		 Total Award
Achievement		 Target Award Actual Award Paid
 ($) (% of Base
Salary)		 ($) (% of Base  
Salary)  

  Albert G. White III

 

99.8%

 

25%

 

124.8%

 

$925,000

 

100%

 

$1,154,400

 

124.8%  

  Brian G. Andrews

 

99.8%

 

25%

 

124.8%

 

$276,250

 

65%

 

$344,760

 

81.1%  

  Daniel G. McBride(1)

 

75.2%

 

50%

 

125.2%

 

$560,000

 

80%

 

$701,120

 

100.2%  

  Holly R. Sheffield

 

99.8%

 

25%

 

124.8%

 

$341,250

 

65%

 

$425,880

 

81.1%  

  Robert D. Auerbach, M.D.(1)

 

80.3%

 

25%

 

105.3%

 

$276,250

 

65%

 

$290,891

 

68.4%  

               
(1)

Mr. McBride’s achievement reflects weighting based onis tied to CooperVision performance due to his role as President of CooperVision and Mr. White’s achievement reflects weighting based on CooperSurgical performance based on his role as Chief Executive Officer of Cooper Medical through May 2018. Dr. Auerbach’s achievement is wholly determined bytied to CooperSurgical results and allperformance due to his role as President of CooperSurgical. All other NEOs are wholly determined by Corporate results.

 

 

Long-Term Incentive Compensation

TheFor fiscal 2019, the OCC uses a combination of performance-based andused time-vested equity awards to deliver long-term incentive compensation to our executive officers, including our NEOs. The OCC believes long-term equity compensation should be designed to maximize retention value, effectively link NEO compensation opportunities to stockholder gains, and control cost to the Company. The OCC discusses appropriate award design with its compensation consultant and management to drive long-term focus on strategic objectives.

In setting equity compensation for our executive officers, including our NEOs, the OCC considers recommendations from management and Frederic Cook, as well as advice from Compensia. The OCC also reviews historical grant levels based on the role and position of each executive officer, as well as economic and accounting implications, when determining the type and appropriate size of individual awards. Equity awards are generally granted in the first quarter of each fiscal year, after financial results for the prior fiscal year are available, and vest over three to five years.

The OCC may also grant equity awards periodically to new hires, upon a promotion or other circumstances, or to accomplish specific retention goals. When such awards are approved, the grant date is set by the OCC. Grant dates are never set prior to the date of approval by the OCC.

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Time-Vested Stock Options and Restricted Stock Units

The OCC also uses equity awards with time-based vesting to encourage executive retention while maintaining a link to long-term Company performance. Time-based vesting requires continued service to benefit from these equity awards, and the potential compensation realizable by our executive officers, including our NEOs, is dependent on increases in the market price of our common stock over time.

In fiscal 2018 our NEOs were granted eitherthat time-vested stock option awards or a combination of time-vested stock options and time-vested RSUs. The OCC believes that these award types have strong retention value while also closely linking executive compensation to stockholder gains. Stock options only have value to the recipient if we also seehave growth in our stock price, putting a portion of the executives’ compensation at risk of no return, and RSUs provide guaranteed value if the executive remains with the Company. Both award types provide the opportunity for long-term gain tied to stockholder returns while also encouraging longevity and stable management for the Company.

In setting equity compensation for our NEOs, the OCC discusses appropriate award design with Compensia and management to drive long-term focus on strategic objectives. The OCC also reviews historical grant levels based on the role and position of each executive officer, as well as economic and accounting implications, when determining the type and appropriate size of individual awards.

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Equity awards are generally granted in the first quarter of each fiscal year, after financial results for the prior fiscal year are available, and vest over three to five years. Equity grants made in fiscal 2019 vest over five years and the amount of equity grants was determined based on target accounting value and our stock price at the time of grant.

The OCC may also grant equity awards periodically to new hires, upon a promotion or other circumstances, or to accomplish specific retention goals. When such awards are approved, the grant date is set by the OCC. Grant dates are not set prior to the date of approval by the OCC and no such grants were made to NEOs during fiscal 2019.

Time-Vested Stock Options and Restricted Stock Units

Equity grants for our NEOs are made in the form of stock options and restricted stock units which vest over a set period of time. Grant size is based on target accounting value and our stock price at the time of grant. In setting award levels, the OCC considered competitive market practices, management recommendations, and the recommendations provided byadvice from Compensia. In addition, the OCC considered recommendations provided by Mr. White and input from Frederic Cook. These awards generally vest ratably over a five-year period starting on the first anniversary of

Before the date of grant.

Equity compensation awardedgrant, each NEO can choose to both Mr. White and Mr. McBride in December 2017 consistedreceive their award as stock options, restricted stock units, or a 50/50 combination of the two components.award types. The first was a stock optionOCC retains the authority to purchase 21,849 shares with a target Black Scholesset awards as it determines appropriate, regardless of management elections, but it believes that soliciting executive input enhances the retention value of $1,265,000 and vesting in five equal annual installments. The second grant was a stock option with a target Black Scholes value on the grant date equal to $1M and vests 100% on the third anniversary of the grant date. When finalizing thislong-term equity compensation, the OCC considered the recommendations of Mr. Weiss, who was CEO at the time, and the desire to retain Mr. White and Mr. McBride during a critical succession period in the leadership of the Company as well as to recognize their strong performance and expected contributions to the ongoing success of the Company.

Separately, in connection with Mr. White’s promotion to CEO in May 2018, the OCC approved an option grant with a target Black Scholes value of $2M. This grant vests in equalone-third installments on the third, fourth and fifth anniversaries of the grant date. This option was awarded to recognize Mr. White’s promotion and to better align his compensation with competitive market practice as a Chief Executive Officer.compensation.

 

Grants to NEOs in 2018 Fiscal Year (1)
Grants to NEOs in 2019 Fiscal YearGrants to NEOs in 2019 Fiscal Year
Name  Stock Options RSUs    Stock Options    RSUs
Grant Date
    Fair Value    		 Options
    Granted    		 Grant Date
    Fair Value    		 RSUs
    Granted    		 Grant Date
Fair Value (1)		    Options
Granted (2)		    Grant Date
Fair Value (1)		  RSUs
    Granted (3)    

Albert G. White III

  $4,265,000 73,600 -- -0-    

$5,500,000

    

90,592

    

—

  

—

Brian G. Andrews

  $575,000 9,975 $125,000 544    

$1,100,000

    

18,118

    

—

  

—

Daniel G. McBride

  $2,265,000 39,121 -- -0-    

$2,000,000

    

32,943

    

—

  

—

Holly R. Sheffield

  $1,000,000 17,528 $1,000,000 4,419    

$750,000

    

12,353

    

$750,000

  

2,944

Robert D. Auerbach, M.D.

  $350,000 6,057 $500,000 2,116    

$500,000

    

8,236

    

$500,000

  

1,963

Robert S. Weiss

  $3,492,500 60,322 -- -0-

Carol R. Kaufman

  $956,641 16,523 -- -0-
                  
 (1)

Amounts represent the grant values approved by the OCC and may vary slightly from recognized compensation expense (presented in theSummary Compensation Table on page 37).34) due to mathematical rounding of fractional shares.

(2)

Stock options vest ratably over a five-year period starting on the first anniversary of the date of grant.

(3)

Restricted stock units vest over 5 years in equal portions on each of January 8, 2020, January 8, 2021, January 8, 2022, January 8, 2023, and January 8, 2024.

 

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Performance Share Awards

In 2018, our NEOs received performance based equity awards that require achievement ofpre-established increases in EPS over a three-year performance period. These awards are designed to reflect the direct influence of our NEOs on our long-term financial performance. The OCC revisited the use of performance share awards for fiscal 2019. With input from Compensia, the OCC concluded that the current combination of performance driven annual incentive plans, and equity award compensation reliant on stock price growth with a5-year vesting time horizon, provides appropriate incentives to the NEOs to drive meaningful stockholder value. Based on this determination, the OCC has selected compounded EPS growth over a three-year period as thediscontinued use of performance measure for these awards due to its belief thatshare awards. At this measure provides a strong link to stockholder returns.

Fiscal 2018 Performance Share Awards

Thetime, there is one outstanding grant of performance share awards, granted in fiscal 2018 are based on compounded GAAP EPS growth over the designated three-year performance cycle. The awards have three possible achievement levelsto Messrs. White and no sharesMcBride, which will be earned under these awards unless threshold achievement is reached. Once this threshold is achieved, the number of shares awarded will be prorated between achievement levels depending on actual achievement. The maximum payout under these awards is capped at 150% of Target shares.complete its cycle in fiscal 2020.

 

2018 Performance Share Award Targets
Performance
Level		 Award
    Achievement    		       Required EPS      
Growth:

FY2018 - 20

   GAAP EPS Target for  
Achievement
Outstanding 150% 15% ³ $11.44
Target 100% 12% $10.57 to < $11.44
Threshold 50% 9% $9.74 to < $10.57

In setting targets for performance share awards, the OCC considers our ongoing performance and the level of achievement under prior performance share awards. Target levels are set to require significantly challenging, but attainable, levels of growth. The OCC reviews these target achievement levels with its compensation consultant to ensure that they are reasonable and appropriate. The OCC also considers the objectives for long-term growth set by our Board of Directors, the Company’s historical achievements, and the OCC’s goals for executive compensation. The amount of these performance share awards was determined based on their target accounting value. In setting award levels, the OCC considered competitive market practices and the recommendations provided by Compensia.

 

2018 Performance Share Awards
      Name  Grant Date Fair Value Shares at Achievement
  Threshold  Target  Maximum Threshold Target Maximum

      Albert G. White III

  $216,454  $432,907  $649,361 943 1,885 2,828

      Daniel G. McBride

  $216,454  $432,907  $649,361 943 1,885 2,828

      Robert S. Weiss

  $468,566  $937,132  $1,405,698 2,041 4,081 6,122

      Carol R. Kaufman

  $189,576  $379,152  $568,728 826 1,651 2,477

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Results for Fiscal 20162017 Performance Share Awards

Performance share awards granted in fiscal 20162017 completed their performance cycle at the end of fiscal 2018.2019. Of our NEOs, only Messrs. White and McBride received these awards.

These awards were eligible to be earned based on our3-yearnon-GAAP EPS growth on a constant currency basis, as modified by the OCC for extraordinary,non-recurring, and/or unusual events. Based on ournon-GAAP EPS growth, adjusted for currency fluctuations, over the three-year performance period, the OCC certified achievement of 12.6% compounded growth, which was in excess of the “Target” level for these awards.Target achievement goal of 12%.

As granted, these awards provide for achievement based onnon-GAAP EPS, as modified by the Committee for extraordinary,non-recurring, and/or unusual events. Compounded EPS growth was confirmed at $10.53 and

34 | Page   

achievement was certified to be at or above the requirements for Target payout. As granted, these awards do not provide for proration between levels of achievement. Therefore, the NEOs will receive 100%110% of the targetTarget shares with no adjustments as follows:

 

Achievement under 2016 Performance Share Awards
(Performance Cycle: November 2015 to October 2018)
Name Possible Shares
 

Threshold    

(10% growth)    

$9.90 to <$10.45    

 

Target    

(12% growth)    

$10.45 to <$11.32    

 

Maximum    

(15% growth)    

³ $11.32    

Albert G. White III

 1,651     3,301     4,952    

Brian G. Andrews

 786     1,571     2,357    

Daniel G. McBride

 1,651     3,301     4,952    

Robert D. Auerbach, M.D.

 943     1,885     2,828    

Robert S. Weiss

 3,573     7,145     10,718    

Carol R. Kaufman

 1,446     2,891     4,337    

Achievement under 2017 Performance Share Awards

(Performance Cycle: November 2016 to October 2019)

 
    

Threshold

(9% growth)

$10.93

  

Target

(12% growth)

$11.86

  

Maximum

  (15% growth)    

> $12.84

 

Actual

(12.6% growth)

  (110% of Target)  

 

Name

  

Possible Shares

 

Actual Shares

  Albert G. White III

  

1,166

  

2,331

  

3,497

 

2,564

 

  Daniel G. McBride

  

1,166

  

2,331

  

3,497

 

2,564

           

 

 

Employee Benefits & Perquisites

Our NEOs are eligible to receive benefits under programs provided to our employees generally, including participation in our 401(k) plan (with matching contributions up to a specified dollar value, set annually), benefits under our Retirement Income Plan (a defined benefit plan), and our health, life and disability insurance and severance payments and benefits in accordance with our standard separation policy.programs. Matching contributions to our 401(k) plan are equal to the matching contributions provided to employees generally. Benefits under the Retirement Income Plan are discussed in more detail in the Narrative to the Pension Benefits Table on page 46.41.

WithThe Company has entered into Employment Agreements with each of the exceptionNEOs as of Mr. White and Dr. Auerbach, our NEOs also participate in ourChange-in-Control Severance Plan, under which they have change in controlthe beginning of the 2019 fiscal year. These agreements that provide for severance benefits if the participating executives were to be terminated within a specified time afterpayments on termination of employment for various reasons, including on a change in control, of the Company. Mr. White has a separate change in control agreement outside theChange-in-Control Severance Plan, and Dr. Auerbach has an employment agreement with terms controlling his separation from the Company. These agreements are discussed in more detail in the section titledPotential Payments on Termination or a Change in Controlon page 48.42.

Our NEOs also receive limited perquisites or other personal benefits, generally in the form of automobile allowances and expenses, income attributable to life insurance policies, and some limited reimbursement for spousalpartner travel to business functions. In 2018, Ms. Sheffield also received amounts in connection with her relocation to California from New York. In all cases, the OCC reviews these amounts and takes them into consideration when reviewing overall executive compensation. We only provide perquisites or other personal benefits to our executive officers, including our NEOs, in situations where we believe it is appropriate to assist an individual in the performance of his or her duties, to make our executive officers more efficient and effective, and for recruitment and retention purposes.

 

 

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Tax Deductibility of Compensation

Section 162(m) of

Due to the Internal Revenue Code generally provided that publicly held companies may not deduct compensationchanges in excess of $1 million paid in any fiscal year to its chief executive officer and the other three most highly compensated NEOs employed at the end of the year (other than its chief financial officer). For years prior to 2017 there was an exception to this deduction limit with respect to “qualified performance-based compensation.”

The OCC has historically considered ways to maintain the tax deductibility of the compensation for our NEOs under this qualified performance based compensation rule without limiting its discretion to compensate our executive officerslaws which went into effect in ways that will incentivize stockholder returns.

However, as part of the 2017 Tax Cuts & Jobs Act (“2017 Tax Reform”), the ability to rely on the qualified performance-based compensation exception was eliminated and the limitation on deductibility generally was expanded to include all NEOs. As a result of the 2017 Tax Reform, for compensation awarded or materially modified after November 2, 2017, the Company, generally, will no longernot be able to deduct any compensation paid to any of its NEOs in excess of $1 million. TheWhile the OCC continueshas historically considered ways to assess the impactmaintain tax deductibility of the 2017 Tax Reform to determine what adjustments tocompensation for our executive compensation practices, if any, it considers appropriate andNEOs, the impact on the deductibility of compensation awarded prior to the enactment of 2017 Tax Reform. The OCC has the discretion to provideapprove, and it is likely that the Company will pay, compensation which maywill not be deductible under the Internal Revenue Code.

Conclusion

 

Conclusion

The OCC believes that each element of executive compensation and the total compensation provided to each of our NEOs is reasonable, competitive, and appropriate. The amount of compensation payable to our NEOs depends largely on our financial performance and returns to our stockholders. The OCC believes that our executive compensation program provides an appropriate mix of elements that will allow us to continue to attract, retain, and motivate a top performing management team, without encouraging excessive or inappropriate risk-taking by our executive officers, and that its compensation arrangements create incentives that drive our continued strong financial performance.

 

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REPORT OF THE ORGANIZATION & COMPENSATION COMMITTEE

The Organization & Compensation Committee of the Board has reviewed and discussed the Compensation Discussion and Analysis with management. Based on this review and discussion, the OCC has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in our Annual Report on Form10-K for the fiscal year ended October 31, 2019.

ORGANIZATION & COMPENSATION COMMITTEE

Colleen E. Jay (Chair)

William A. Kozy

Gary S. Petersmeyer

Michael H. Kalkstein (Former Chair)

Jody S. Lindell (Former member)

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EXECUTIVE COMPENSATION TABLES

Summary Compensation Table

 

The table below shows compensation paid to the individuals who served as our Named Executive Officers during the past fiscal year.

 

Name and Principal Position

 

 

Year

 

  

Salary

 

  

Bonus (1)

 

  

Option
Awards (2)

 

  

Stock
Awards (2)

 

  

Non-Equity
Incentive Plan
Compensation
(1)

 

  

Change in
Pension
Value (3)

 

 

All Other
Compensation
(4)

 

  

Total

Compensation

 

 
Albert G. White III  2018   $688,500   $165,427   $4,265,233   $432,909   $496,282  -  $18,769   $6,067,120 
President & Chief Executive Officer  2017   $525,000   $98,662   $1,264,912   $432,890   $295,985  $28,074  $15,583   $2,661,105 
  2016   $475,000   $110,972   $1,999,862   $432,926   $332,916  $48,059  $19,164   $3,418,900 
                                   
                                   

Brian G. Andrews

  2018   $328,664   $37,566   $578,027   $124,935   $112,699  -  $15,588   $1,197,479 
Senior Vice President, Chief Financial Officer & Treasurer         
         
         
                                   
                                   

Daniel G. McBride

  2018   $613,500   $122,209   $2,265,106   $432,909   $366,628  -  $30,856   $3,831,208 

Executive Vice President &

Chief Operating Officer /President, CooperVision, Inc.

  2017   $525,000   $112,902   $1,264,912   $432,890   $338,707  $34,564  $32,622   $2,741,597 
  2016   $495,000   $108,671   $2,264,825   $432,926   $326,013  $56,270  $28,004   $3,711,709 
         
                                   
                                   

Holly R. Sheffield

  2018   $207,436   $31,613   $999,972   $1,000,020   $94,840  -  $255,553   $2,589,434 
Executive Vice President & Chief Strategy Officer         
                                   
                                   

Robert D. Auerbach, M.D.

  2018   $380,000   $57,687   $350,022   $485,961   $173,061  $9,033  $11,200   $1,466,964 

President, CooperSurgical, Inc.

         
                                   
                                   
                                   

Robert S. Weiss

  2018   $925,000   $234,950   $3,492,644   $937,242   $704,850  $12,693  $89,887   $6,397,267 
President & Chief Executive Officer (Former)  2017   $925,000   $284,669   $3,492,280   $937,093   $854,006  -  $64,066   $6,557,113 
  2016   $875,000   $279,344   $3,492,255   $937,067   $838,031  $35,700  $51,205   $6,508,603 
                                   
                                   

Carol R. Kaufman

  2018   $482,040   $181,922   $956,682   $379,169   $111,930  -  $763,278   $2,875,020 
Executive Vice President, Secretary, Chief Administrative Officer & Chief Governance Officer (Former)  2017   $468,000   $86,398   $956,560   $379,220   $259,193  $18,072  $65,213   $2,232,656 
  2016   $454,000   $86,964   $956,584   $379,155   $260,891  $51,681  $42,956   $2,232,230 
         
         
                                   

  Name and Principal

  Position

 Year  Salary  Bonus(1)  Stock
Awards (2)		  Option
Awards (2)		  Non-Equity
Incentive Plan
Compensation (1)		  Change in
Pension
Value (3)		  All Other
Compensation (4)		  Total 
Compensation 		 

  Albert G. White, III

  2019   $925,000   $288,600   $0   $5,499,840   $865,800   $126,711   $18,794   $7,724,746  

    President & Chief

    Executive Officer

  2018   $688,500   $165,427   $432,909   $4,265,233   $496,282   $0   $18,769   $6,067,120  
  2017   $525,000   $98,662   $432,890   $1,264,912   $295,985   $28,074   $15,583   $2,661,105  

  Brian G. Andrews

  2019   $425,000   $86,190   $0   $1,099,944   $258,570   $102,243   $19,324   $1,991,271  

    Senior Vice President,

    Chief Financial

    Officer & Treasurer

  2018   $328,664   $37,566   $124,935   $578,027   $112,699   $0   $15,588   $1,197,479  

  Daniel G. McBride

  2019   $700,000   $175,280   $0   $1,999,970   $525,840   $138,853   $41,363   $3,581,305  

    Executive Vice

    President & Chief

    Operating Officer

  2018   $613,500   $122,209   $432,909   $2,265,106   $366,628   $0   $30,856   $3,831,208  
  2017   $525,000   $112,902   $432,890   $1,264,912   $338,707   $34,564   $32,622   $2,741,597  

  Holly R. Sheffield

  2019   $525,000   $106,470   $750,043   $749,951   $319,410   $10,554   $44,146   $2,505,573  

    Executive Vice

    President & Chief

    Strategy Officer

  2018   $207,436   $31,613   $1,000,020   $999,972   $94,840   $0   $255,553   $2,589,434  
  Robert D. Auerbach, M.D.  2019   $425,000   $72,723   $500,114   $500,008   $218,168   $137,032   $8,304   $1,861,349  

    President,

    CooperSurgical, Inc.

  2018   $380,000   $57,687   $485,961   $350,022   $173,061   $9,033   $11,200   $1,466,964  

(1)

Amounts shown in the “Bonus” and “Non-Equity“Non-Equity Incentive Plan Compensation” columns reflect the cash incentive bonuses awarded under the 20182019 IPP. Amounts shown in the “Bonus” column represent the portion of the award based on the discretion of our Compensation Committeethe OCC and amounts shown in the “Non-Equity“Non-Equity Incentive Plan Compensation” column represent the portion of the bonus determined by quantitative factors.

Under the terms of her Separation Agreement and Mutual Release disclosed on Form 8-K in April 2018, Ms. Kaufman was guaranteed half of her cash incentive under the 2018 IPP at actual achievement and half at the greater of target or actual achievement. Amounts shown in the “Bonus” column for Ms. Kaufman reflect amounts attributable to the portions of her cash incentive which were either guaranteed by her Separation Agreement or the portion of awards based on the discretion of the Compensation Committee. Amounts shown in the “Non-Equity Incentive Plan Compensation” column are attributable to the portion of her bonus determined by quantitative factors.

The structure of our Incentive Payment Plan is discussed in more detail below in the narrative discussion following theGrants of Plan Based Awards Table on page 39. as well as in ourCompensation Discussion and Analysis on page 20.

The structure of our Incentive Payment Plan is discussed in more detail below in the narrative discussion following theGrants of Plan Based Awards Table on page 36 and in ourCompensation Discussion and Analysis on page 17.

 

(2)

Amounts shown in the “Option Awards” and “Stock Awards” columns reflect the aggregate grant date fair value of stock option, restricted stock unit, and performance share awards granted to each Named Executive Officer with respect to the 2019, 2018, 2017, and 20162017 fiscal years in accordance with FASB Accounting Standards Codification Topic 718 (ASC 718),Compensation-Stock Compensation. For a discussion of valuation assumptions, see Note 9,Stock Plans, in our Notes to Consolidated Financial Statements included in our Annual Report on Form10-K for the year ended October 31, 2018.2019. These awards are discussed in more detail below in the narrative discussion following theGrants of Plan Based AwardsTable on page 39.36 and in theCompensation Discussion and Analysis on page 20.17.

37 | Page   

(3)

Change in value of accumulated pension benefits for the 20182019 fiscal year was calculated as the difference between the value of accumulated benefits at October 31, 20182019 and the value of accumulated benefits at October 31, 2017.2018. The value of benefits at October 31, 2019 is based on a 3.13% discount rate and thePri-2012 mortality rates with projection scaleMP-2019; the value of benefits at October 31, 2018 is based on a 4.42% discount rate and the adjustedRP-2014 base mortality rates with projection scaleMP-2018; and the value of benefits at October 31, 2017 is based on a 3.75% discount rate and the adjustedRP-2014 base mortality rates with projection scale MP-2017; and the value of benefits at October 31, 2016 is based on a 3.74% discount rate and the adjusted RP-2014 base mortality rates with projection scale MP-2016.MP-2017.

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For the period from October 31, 2017 to October 31, 2018, the accumulated value of pension benefits reduced for the following Named Executive Officers:

Name  Benefit Reduced By:

Albert G. White, III

  $8,194

Brian G. Andrews

  $10,717

Daniel G. McBride

  $3,333
Kaufman$24,329

 

 (4)

Amounts included in the All Other Compensation column include the following:

 

Name

 

Year

 

Company’s
401(K)
Contributions 

 

Automobile
Allowance
and Expenses 

 

Income
Associated 
to Life
Insurance

 

Relocation
and Housing 

 

Severance / 
Retirement 
Payments 

 

Personal
Travel /
Other

 Year Company’s
401(k)
Contributions		 Automobile
allowance
and expenses		 Income
associated
to life
insurance		 Housing /
Relocation
Expense		 Personal
Travel /
Other		 

Albert G. White III

 2018 $4,000 $13,280 $1,350 - - $139

Albert G. White, III

  2019   $4,000      $12,844      $1,950      $0     $0   
  2018   $4,000      td3,280      td,350      $0     td39   
��2017 $4,000 td0,123 td,350 - - td10  2017   $4,000      td0,123      td,350       td10   
 2016 $3,700 $12,102 $1,344 - - $0

Brian G. Andrews

 2018 $4,000 $10,860 $718 $0 $0 $10  2019   $4,000      $14,436      $888      $0     $0   
  2018   $4,000      $10,860      $718      $0     $10   

Daniel G. McBride

 2018 $4,000 $9,106 $2,070 $0 $0 $15,680  2019   $4,000      $8,982      $3,570      $0     $24,811   
 2017 $4,000 $8,967 $2,070 - - $17,585  2018   $4,000      $9,106      td,070      $0     td5,680   
 2016 $3,700 $11,283 $2,156 - - $32,387  2017   $4,000      $8,967      td,070           td7,585   

Holly R. Sheffield

 2018 $4,000 $5,403 $562 $245,549 $0 $39  2019   $4,000      $10,416      $1,350      $28,380     $0   
  2018   $4,000      $5,403      $562      $245,549     $39   

Robert D. Auerbach, M.D.

 2018 $4,000 $7,200 - - - -  2019   $4,000      $0      $4,304      $0     $0   
               2018  $4,000     $7,200     $0     $0    $0   
              

Robert S. Weiss

 2018 $4,000 $8,884 $18,541 $0 $0 $58,462
 2017 $4,000 $9,256 $4,064 - - $46,745
 2016 $3,700 $9,754 $11,430 - - $48,729

Carol R. Kaufman

 2018 $4,000 $8,512 $11,430 $0 $711,811 $27,525
 2017 $4,000 $12,990 $11,430 - - $36,793
 2016 $3,700 $10,233 $11,430 - - $33,970

Personal Travel / Other amounts represent airfare, food, lodging, and other expenses paid for these executives in connection with Company events and other amounts which were determined to not be inherently related to the performance of these executive’s duties. Amounts in the “Relocation and Housing”“Housing/Relocation Expense” column representnon-recurring amounts paid by the Company in connection with Ms. Sheffield’s relocation from New York to California at the time of her hire in 2018. Amounts in the “Severance” column represent one-time amounts guaranteed to Ms. Kaufman under her Separation Agreement and Mutual Release.

 

38 | Page   

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Performance Share Awards

Amounts included in the “Stock Awards” column of theSummary Compensation Table include the value of deferred share awards granted to certain executives as Performance Share Awards. These awards are designed to deliver a variable number of shares depending on the achievement of specified levels of growth in our earnings per share over a three-year period. If these awards do not achieve at least the threshold level of achievement, no shares will be distributed.

The value of the awards presented in the Summary Compensation Table for fiscal 2018 is based on the target level of achievement. The following table shows the grant date value of these awards at each level of possible achievement. Each of these awards is subject to interpolation between levels of achievement.

Name 

Threshold
Achievement

(50% of Target)

 Target
Achievement		 

Maximum
Achievement

(150% of Target)

Albert G. White III $216,445 $432,890 $649,335
Daniel G. McBride $216,445 $432,890 $649,335
Robert S. Weiss $468,546 $937,093 $1,405,639
Carol R. Kaufman $189,610 $379,220 $568,830

Equity award grants to our Named Executive Officers are discussed in more detail in theCompensation Discussion and Analysis beginning on page 20.

Grants of Plan Based Awards Table

 

This table presents information regarding the possible awards payable under our 20182019 Incentive Payment Plan and the value of certain equity awards made in the 20182019 fiscal year. Our equity grant practices and calculation of awards under the 20182019 Incentive Payment Plan are discussed in more detail below and in theCompensation Discussion and Analysis on page 20.17.

 

    

Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards

(1)

 

Estimated Future Payouts
Under
Equity Incentive Plan Awards

(2)

 

All Other
Stock
Awards:
Number
of Shares
of Stock or
Units

(3)

 

All Other
Option
Awards:
Number of
Securities
Underlying
Options

(4)

 Exercise
or Base
Price of
Option
Awards
($/share)		 

Grant Date
Fair Value

of Stock

and
Option
Awards

(5)

Name Grant Date Threshold Target    Maximum    Threshold Target Maximum  

 

Estimated Future Payouts Under
Non-Equity Incentive Plan Awards (1)

  All Other
Stock
Awards:
Number of
Shares of
Stock or
Units(2)		  All Other
Option
Awards:
Number of
Securities
Underlying
Options(3)		  Exercise
or Base
Price of
Option
Awards
($/share)		  Grant Date
Fair Value
of Stock
and Option
Awards(4)

Albert G. White III

 12/12/2017 $62,828 $630,800 td,261,600 - - - - - - -
Name

 

Threshold

  

 

Target

  

 

Maximum

  All Other
Stock
Awards:
Number of
Shares of
Stock or
Units(2)		  All Other
Option
Awards:
Number of
Securities
Underlying
Options(3)		  Exercise
or Base
Price of
Option
Awards
($/share)		  Grant Date
Fair Value
of Stock
and Option
Awards(4)
 12/12/2017 - - - - - - - 21,849 td29.66 td,265,057
 12/12/2017 - - - - - - - 17,272 $229.66 $1,000,049

Albert G. White, III

  $115,625  $925,000  $1,850,000        
 12/12/2017 - - - 943 1,885 2,828 - -   $ 432,909          90,592  $254.77  $5,499,840
 5/1/2018

 

 -

 

 -

 

 -

 

 -

 

 -

 

 -

 

 -

 

 34,479

 

 $230.09

 

 $2,000,127

 

Brian G. Andrews

 12/12/2017 $18,413 $147,899 $295,798 - - - - -      $34,531  $276,250  $552,500        
 12/12/2017 - - - - - - - 5,665 $229.66 $ 328,004
 12/12/2017 - - - - - - 544 -   $ 124,935          18,118  $254.77  $1,099,944
 5/1/2018

 

 -

 

 -

 

 -

 

 -

 

 -

 

 -

 

 -

 

 4,310

 

 $230.09

 

 $ 250,023

 

Daniel G. McBride

 12/12/2017 $36,663 $490,800 $981,600 - - - - - - -  $70,000  $560,000  $1,120,000        
 12/12/2017 - - - - - - - 21,849 $229.66 $1,265,057          32,943  $254.77  $1,999,970
 12/12/2017 - - - - - - - 17,272 $229.66 $1,000,049

Holly R. Sheffield

  $42,656  $341,250  $682,500        
 12/12/2017

 

 -

 

 -

 

 -

 

 943

 

 1,885

 

 2,828

 

 -

 

 -

 

   $ 432,909

 

          12,353  $254.77  $749,951
        2,944      $750,043

Robert D. Auerbach, M.D.

  $34,531  $276,250  $552,500        
          8,236  $254.77  $500,008
           1,963        $500,114

 

39 | Page   

      

Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards

(1)

 

Estimated Future Payouts
Under
Equity Incentive Plan Awards

(2)

 

All Other
Stock
Awards:
Number
of Shares
of Stock or
Units

(3)

 

All Other
Option
Awards:
Number of
Securities
Underlying
Options

(4)

 Exercise
or Base
Price of
Option
Awards
($/share)		 

Grant Date
Fair Value

of Stock

and
Option
Awards

(5)

Name Grant Date Threshold Target Maximum Threshold Target Maximum

Holly R. Sheffield

 6/4/2018 $15,495 $124,462 $248,923           
  6/4/2018 - - - - - - - 17,528 $226.30 $ 999,972
  6/4/2018

 

       -

 

 -

 

 -

 

 4,419

 

 -

 

   $1,000,020

 

Robert D. Auerbach, M.D.

 12/12/2017 $5,005 $201,000 $402,000 - - - - -    
  12/12/2017 - - - - - - - 4,318 $229.66 $ 250,012
  12/12/2017 - - - - - - 2,116 -   $ 485,961
  6/1/2018

 

 -

 

 -

 

 -

 

 -

 

 -

 

 -

 

 -

 

 1,739

 

 $228.11

 

 $ 100,010

 

       
                       
                       

Robert S. Weiss

 12/12/2017 $115,163 $925,000 $1,850,000 - - - - - - -
  12/12/2017 - - - - - - - 60,322 $229.66 $3,492,644
  12/12/2017

 

 -

 

 -

 

 -

 

 2,041

 

 4,081

 

 6,122

 

 -

 

 -

 

 -

 

 $ 937,242

 

Carol R. Kaufman

 12/12/2017 $36,008 $289,224 $578,448 - - - - - - -
  12/12/2017 - - - - - - - 16,523 $229.66 $ 956,682
  12/12/2017

 

 -

 

 -

 

 -

 

 826

 

 1,651

 

 2,477

 

 -

 

 -

 

 -

 

 $ 379,169

 

(1)

Amounts represent the threshold, target, and maximum cash bonus amounts which could have been paid to each Named Executive Officer under our 20182019 Incentive Payment Plan, or IPP, which was approved on the date indicated in the “Grant Date” column.December 11, 2018. The final award amounts for the 20182019 IPP were approved on December 11, 201810, 2019 and the value of the final award amounts are included in the “Bonus” and“Non-Equity Incentive Plan Compensation” columns of theSummary Compensation Table on page 37.34.

(2)

Amounts represent the threshold, target, and maximum amounts of shares distributable under performance share awards granted on December 12, 2017 under our 2007 Long-Term Incentive Plan. Awards will vest on the achievement of specified levels of earnings per share in the 2020 fiscal year.

(3)

Awards listed in this column were granted on the date indicated in the Grant Date columnDecember 11, 2018 as restricted stock units. TheThese awards granted to Mr. Andrews and Dr. Auerbach vest in equal portions over five years Dr. Auerbach also received an award which will vest in full on the 3rd anniversary of the grant date. The award granted to Ms. Sheffield will vest in equal portions over five years starting on the second anniversary of the grant date.January 8, 2020.

(4)(3)

Option awards listed in this column were granted at 100% of fair market value on the date listed in the Grant Date columnDecember 11, 2018 and will expire on the tenth anniversary of the grant date.

Messrs. White and McBride each received a grant on December 12, 2017 of approximately $1,000,000 target value which will vest in full on the 3rd anniversary of the grant date. Mr. Andrews also received a grant of approximately $100,000 target value which will vest in full on the 3rd anniversary of the grant date. All other listed awards will vest as follows:

Grant Date

Vesting

December 12, 2017In equal portions These awards will vest over five years on each of the 1st – 5thfirst through fifth anniversaries of the date of grant
May 1, 2018In equal portions on the 3rd – 5th anniversaries of the date of grant
June 1, 2018In equal portions on the 3rd – 5th anniversaries of the date of grant
June 4, 2018In equal portions on the 2nd – 5th anniversaries of the date of grantgrant.

Due to provisions in the awards allowing the grants to continue vesting after their retirement, options granted to Mr. Weiss and Ms. Kaufman were considered vested for accounting purposes on the first anniversary of the date of grant, but exercisability of these awards is restricted to the same vesting schedule as other grants on this date. If either Mr. Weiss or Ms. Kaufman provides services to, or owns more than 5% of, a competitor after their date of retirement, they will forfeit any remaining outstanding options.

(5)(4)

Amounts included in the “Grant Date Fair Value of Stock and Option Awards” column represent the grant date fair value recognized with respect to the 20182019 fiscal year in accordance with ASC 718. For a discussion of valuation assumptions, see Note 9,Stock Plans,, in our Notes to Consolidated Financial Statements included in our Annual Report on Form10-K for the year ended October 31, 2018.2019.

40 | Page   

AnnualNon-Equity Incentives

The Compensation CommitteeOCC adopts an annual Incentive Payment Plan, or IPP, to provide for short-term cash incentive awards tied to the achievement of our business goals. Financial targets are derived from our approved fiscal year budget. The IPP is governed by the 2017 Executive Incentive Plan (the “2017 EIP”), as approved by stockholders in March 2017.

36 | P a g e

Participation levels in the IPP are set by the Compensation CommitteeOCC for our executives. Targets represent a designated percentage of base salary for the fiscal year and that percentage controls the potential award that can be achieved under the IPP as follows:

 

LOGO

Total Bonus Paid

  =  

Base Salary

  X  

IPP Participation Level (%)

  X  

Quantitative and Discretionary Achievement

As presented in theGrants of Plan Based Awards Table, target amounts represent the potential bonus that would be paid on 100% achievement of both quantitative factors and the discretionary portion of awards. Threshold amounts represent the minimum achievement necessary for payment on only the lowest weighted quantitative factor and no award of discretionary amounts. All awards are capped at a maximum of 200% of the target bonus opportunity.

Specific budget targets and actual achievement under the 20182019 IPP are discussed in more detail in theCompensation Discussion and Analysis on page 20.17.

Equity Awards

We grant equity incentive awards as a tool to promote retention and to connect compensation with our long-term performance and stockholder returns. These awards are granted under our 2007 Long-Term Incentive Plan (as restated and amended in March 2016) and may vest based on continued service over time and/or performance criteria.

The Compensation CommitteeOCC utilizes a mixture of equity award types, including stock options and performance shares.restricted stock units. Stock options are granted at 100% of fair market value on the date of grant and have a10-year life. Options and RSUs generally vest over a five-year period. Performance share awards vest on the achievement of specified levels of earnings per share over a three-year performance period.

Equity award grants to our Named Executive Officers are discussed in more detail in theCompensation Discussion and Analysis beginning on page 20.17.

 

 

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41 | Page   

Outstanding Equity Awards at Fiscal Year End Table

 

This table provides information regarding the equity award holdings of the Named Executive Officers as of the end of the 20182019 fiscal year.

 

 Option Awards Stock Awards 
 Option Awards    Stock Awards
Name Number of
Securities
Underlying
Unexercised
Options
(Exercisable)		 Number of
Securities
Underlying
Unexercised
Options
(Unexercisable)		 Option
Exercise
Price		 Option
Expiration
Date		       Number of
Shares or
Units of
Stock That
Have
Not Vested		 Market
Value of
Shares or
Units of
  Stock That
Have
Not Vested		 Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested		 Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested		 Number of
Securities
Underlying
Unexercised
Options
(Exercisable)		 Number of
Securities
Underlying
Unexercised
Options
(Unexercisable)		 Option
Exercise
Price		 Option
Expiration
Date		   Number
of Shares
or Units
of Stock
That
Have Not
Vested		 Market
Value of
Shares or
Units of
Stock That
Have Not
Vested		 Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested		 Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested		 

Albert G. White

 10,310 - $95.74 12/12/2022 (1)      

Albert G. White, III

  10,310   -   $95.74   12/12/2022   (1)   -   $-0-   -   $-0- 
 6,557 1,639 $119.89 12/11/2023 (2)        8,196   -   $119.89   12/11/2023   (2)   -   $-0-   -   $-0- 
     (3)  570 $147,237     6,030   1,507   $162.28   12/9/2024   (3)   -   $-0-   -   $-0- 
 4,523 3,014 $162.28 12/9/2024 (4)        -   -    -   (4)   452   $131,532   -   $-0- 
     (5)  904 $233,512     16,111   10,740   $131.60   12/9/2025   (5)   -   $-0-   -   $-0- 
 10,741 16,110 $131.60 12/9/2025 (6)        8,950   17,901   $131.60   12/9/2025   (6)   -   $-0-   -   $-0- 
 - 26,851 $131.60 12/9/2025 (7)        11,500   17,248   $175.31   12/13/2026   (8)   -   $-0-   -   $-0- 
     (9)    4,952 $1,279,151  -   -    -   (10)   -   $-0-   3,497   $1,017,627 
 5,750 22,998 $175.31 12/13/2026 (10)        -   17,272   $229.66   12/12/2027   (14)   -   $-0-   -   $ - 
     (12)    3,497 $903,310  4,370   17,479   $229.66   12/12/2027   (12)   -   $-0-   -   $ - 
 - 21,849 $229.66 12/12/2027 (14)        -   -    -   (15)   -   $-0-   2,828   $ 822,948 
 - 17,272 $229.66 12/12/2027 (17)        -   34,479   $230.09   5/1/2028   (18)   -   $-0-   -   $-0- 
     (15)    2,828 $730,501  -   90592   $254.77   12/11/2028   (22)   -   $-0-   -   $-0- 
 -

 

 34,479

 

 $230.09

 

 5/1/2028

 

 (20)

 

          

Brian G. Andrews

 1,917 479 $119.89 12/11/2023 (2)        2,396   -   $119.89   12/11/2023   (2)   -   $-0-   -   $-0- 
     (3)  166 $42,879     2,054   513   $162.28   12/9/2024   (3)   -   $-0-   -   $-0- 
 1,541 1,026 $162.28 12/9/2024 (4)        -   -    -   (4)   154   $44,814   -   $-0- 
     (5)  308 $79,559     2,014   1,342   $131.60   12/9/2025   (5)   -   $-0-   -   $-0- 
 1,343 2,013 $131.60 12/9/2025 (6)        -   -    -   (7)   380   $110,580   -   $-0- 
     (8)  570 $147,237     1,137   1,704   $175.31   12/13/2026   (8)   -   $-0-   -   $-0- 
     (9)    2,357 $608,837  -   -    12/13/2026   (9)   427   $124,257   -   $-0- 
 569 2,272 $175.31 12/13/2026 (10)        -   -    -   (11)   555   $161,505   -   $-0- 
     (11)  570 $147,237     -   1,779   $229.66   12/12/2027   (13)   -   $-0-   -   $-0- 
     (13)  555 $143,362     778   3,108   $229.66   12/12/2027   (12)   -   $-0-   -   $-0- 
 - 3,886 $229.66 12/12/2027 (14)        -   -    -   (16)   435   $126,585   -   $-0- 
 - 1,779 $229.66 12/12/2027 (18)        -   4,310   $230.09   5/1/2028   (18)   -   $-0-   -   $-0- 
     (16)  544 $140,521     -   18,118   $254.77   12/11/2028   (22)   -   $-0-   -   $-0- 
 -

 

 4,310

 

 $230.09

 

 5/1/2028

 

 (20)

 

          

Daniel G. McBride

 9,585 2,396 $119.89 12/11/2023 (2)        9,446   2,361   $162.28   12/9/2024   (3)   -   $-0-   -   $-0- 
     (3)  834 $215,431     -   -    -   (4)   708   $206,028   -   $-0- 
 7,085 4,722 $162.28 12/9/2024 (4)        20,380   13,586   $131.60   12/9/2025   (5)   -   $-0-   -   $-0- 
     (5)  1,417 $366,025     8,950   17,901   $131.60   12/9/2025   (6)   -   $-0-   -   $-0- 
 13,587 20,379 $131.60 12/9/2025 (6)        11,500   17,248   $175.31   12/13/2026   (8)   -   $-0-   -   $-0- 
 - 26,851 $131.60 12/9/2025 (7)        -   -    -   (10)   -   $-0-   3,497   $1,017,627 
     (9)    4,952 $1,279,151  -   17,272   $229.66   12/12/2027   (14)   -   $-0-   -   $ - 
 5,750 22,998 $175.31 12/13/2026 (10)        4,370   17,479   $229.66   12/12/2027   (12)   -   $-0-   -   $ - 
     (12)    3,497 $903,310  -   -    -   (15)   -   $-0-   2,828   $ 822,948 
 - 21,849 $229.66 12/12/2027 (14)        -  32,943  $254.77  12/11/2028  (22)   -  $-0-   -  $-0- 
 - 17,272 $229.66 12/12/2027 (17)      
         (15)       2,828 $730,501

 

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   Option Awards    Stock Awards
Name Number of
Securities
Underlying
Unexercised
Options
(Exercisable)		 Number of
Securities
Underlying
Unexercised
Options
(Unexercisable)		 Option
Exercise
Price		 Option
Expiration
Date		       Number of
Shares or
Units of
Stock That
Have
Not Vested		 Market
Value of
Shares or
Units of
  Stock That
Have
Not Vested		 Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested		 Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested

Holly R. Sheffield

 - 17,528 $226.30 6/4/2028 (22)      
      (23)  4,419 $1,141,472   

Robert D. Auerbach M.D.

     (3)  750 $193,733   
      (5)  1,109 $286,466   
  1,208 3,624 $131.60 12/9/2025 (6)      
      (8)  1,026 $265,026   
      (9)    2,828 $730,501
  1,023 4,090 $175.31 12/13/2026 (10)      
      (11)  1,254 $323,921   
      (13)  666 $172,034   
  - 4,318 $229.66 12/12/2027 (14)      
      (16)  435 $112,365   
      (19)  592 $152,920   
      (16)  1,089 $281,300   
  - 1,739 $228.11 6/1/2028 (21)      
                     
                     
                     

Robert S. Weiss

 - 14,635 $119.89 12/11/2023 (2)      
  39,117 26,078 $162.28 12/9/2024 (4)      
  37,511 56,266 $131.60 12/9/2025 (6)      
      (9)    10,718 $2,768,567
  15,874 63,496 $175.31 12/13/2026 (10)      
      (12)    7,569 $1,955,148
  — 60,322 $229.66 12/12/2027 (14)      
          (15)       6,122 $1,581,374

Carol R. Kaufman

 8,336 2,083 $119.89 12/11/2023 (2)      
      (3)  725 $187,275   
  5,358 3,571 $162.28 12/9/2024 (4)      
      (5)  1,072 $276,908   
  10,275 15,412 $131.60 12/9/2025 (6)      
      (9)    4,337 $1,120,290
  4,348 17,392 $175.31 12/13/2026 (10)      
      (12)    3,063 $791,204
  - 16,523 $229.66 12/12/2027 (14)      
          (15)

 

       2,477

 

 $639,834

 

  Option Awards  Stock Awards 
Name Number of
Securities
Underlying
Unexercised
Options
(Exercisable)		  Number of
Securities
Underlying
Unexercised
Options
(Unexercisable)		  Option
Exercise
Price		  Option
Expiration
Date		     Number
of Shares
or Units
of Stock
That
Have Not
Vested		  Market
Value of
Shares or
Units of
Stock That
Have Not
Vested		  Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested		  Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested		 

  Holly R. Sheffield

  -   17,528   $226.30   6/4/2028   (20)   -   $-0-   -   $-0- 
  -   -    6/4/2028   (21)   4,419   $1,285,929   -   $-0- 
  -   12,353   $254.77   12/11/2028   (22)   -   $-0-   -   $-0- 
  -   -    -   (23)   2,944   $856,704   -   $-0- 

  Robert D. Auerbach, M.D.

  -   -    -   (4)   554   $161,214   -   $-0- 
  -   2,416   $131.60   12/9/2025   (5)   -   $-0-   -   $-0- 
  -   -    -   (7)   684   $199,044   -   $-0- 
  -   3,067   $175.31   12/13/2026   (8)   -   $-0-   -   $-0- 
  -   -    -   (9)   940   $273,540   -   $-0- 
  -   -    -   (11)   666   $193,806   -   $-0- 
  -   3,454   $229.66   12/12/2027   (12)   -   $-0-   -   $-0- 
  -   -    -   (17)   592   $172,272   -   $-0- 
  -   -    -   (16)   1,219   $354,729   -   $-0- 
  -   1,739   $228.11   6/1/2028   (19)   -   $-0-   -   $-0- 
  -   8,236   $254.77   12/11/2028   (22)   -   $-0-   -   $-0- 
   -   -       -   (23)   1,963   $571,233   -   $-0- 

 (1)

Options were granted on December 12, 2012 and became vested and exercisable in equal portions on each of the first through fifth anniversaries of the date of grant.

 

 (2)

Options were granted on December 11, 2013 and become vested and exercisable in equal portions on each of the first through fifth anniversaries of the date of grant. Due to provisions in these awards allowing these grants to continue vesting after termination due to retirement, the options granted to Mr. Weiss and Ms. Kaufman were considered vested for accounting purposes on the first anniversary of their date of grant, but exercisability of these awards is restricted to the same vesting schedule as other grants on this date. If either Mr. Weiss or Ms. Kaufman provides services to, or owns more than 5% of, a competitor after their date of retirement, they will forfeit any remaining outstanding options.

 

43 | Page   

(3)

Award granted as RSUs on December 11, 2013 and valued at $258.31 per share, the closing price of our stock on October 31, 2018. The units vest in equal portions on each of January 8, 2015, January 8, 2016, January 8, 2017, January 8, 2018 and January 8, 2019. Due to provisions in the award allowing this grant to continue vesting after termination due to retirement, RSUs granted to Ms. Kaufman were considered vested for accounting purposes on the first anniversary of the date of grant, but release of shares under this award will occur on the same schedule as other grants on this date. If Ms. Kaufman provides services to, or owns more than 5% of, a competitor after her retirement, she will forfeit any right to the remaining outstanding shares under this award.

(4)

Options were granted on December 9, 2014 and become vested and exercisable in equal portions on each of the first through fifth anniversaries of the date of grant. Due to provisions in these awards allowing these grants to continue vesting after termination due to retirement, the options granted to Mr. Weiss and Ms. Kaufman were considered vested for accounting purposes on the first anniversary of their date of grant, but exercisability of these awards is restricted to the same vesting schedule as other grants on this date. If either Mr. Weiss or Ms. Kaufman provides services to, or owns more than 5% of, a competitor after their date of retirement, they will forfeit any remaining outstanding options.

 

(5)(4)

Award granted as RSUs on December 9, 2014 and valued at $258.31$291.00 per share, the closing price of our stock on October 31, 2018.2019. The units vest in equal portions on each of January 8, 2016, January 8, 2017, January 8, 2018, January 8, 2019, and January 8, 2020. Due to provisions in the award allowing this grant to continue vesting after termination due to retirement, RSUs granted to Ms. Kaufman were considered vested for accounting purposes on the first anniversary of the date of grant, but release of shares under this award will occur on the same schedule as other grants on this date. If Ms. Kaufman provides services to, or owns more than 5% of, a competitor after her retirement, she will forfeit any right to the remaining outstanding shares under this award.

 

(6)(5)

Options were granted on December 9, 2015 and become vested and exercisable in equal portions on each of the first through fifth anniversaries of the date of grant. Due to provisions in these awards allowing these grants to continue vesting after termination due to retirement, the options granted to Mr. Weiss and Ms. Kaufman were considered vested for accounting purposes on the first anniversary of their date of grant, but exercisability of these awards is restricted to the same vesting schedule as other grants on this date. If either Mr. Weiss or Ms. Kaufman provides services to, or owns more than 5% of, a competitor after their date of retirement, they will forfeit any remaining outstanding options.

 

(7)(6)

Options were granted on December 9, 2015 and become vested and exercisable in equal portions on each of the third, fourth and fifth anniversaries of the date of grant.

 

(8)(7)

Award granted as RSUs on December 9, 2015 and valued at $258.31$291.00 per share, the closing price of our stock on October 31, 2018.2019. The units vest in equal portions on each of January 8, 2017, January 8, 2018, January 8, 2019, January 8, 2020, and January 8, 2021.

 

(9)

Performance share awards granted on January 29, 2016 which will vest depending on the achievement of specified levels of growth in earnings per share for the 2018 fiscal year. Share amounts represent maximum payout amounts (150% of target) and are valued at $258.31 per share, the closing price of our stock on October 31, 2018.

(10)(8)

Options were granted on December 13, 2016 and become vested and exercisable in equal portions on each of the first through fifth anniversaries of the date of grant. Due to provisions in these awards allowing these grants to continue vesting after termination due to retirement, the options granted to Mr. Weiss and Ms. Kaufman were considered vested for accounting purposes on the first anniversary of their date of grant, but exercisability of these awards is restricted to the same vesting schedule as other grants on this date. If either Mr. Weiss or Ms. Kaufman provides services to, or owns more than 5% of, a competitor after their date of retirement, they will forfeit any remaining outstanding options.

 

(11)(9)

Award granted as RSUs on December 13, 2016 and valued at $258.31$291.00 per share, the closing price of our stock on October 31, 2018.2019. The units vest in equal portions on each of January 8, 2018, January 8, 2019, January 8, 2020, January 8, 2021, and January 8, 2022.

 

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(12)(10)

Performance share awards granted on February 1, 2017 which will vest depending on the achievement of specified levels of growth in earnings per share for the 2019 fiscal year. Share amounts represent maximum payout amounts (150% of target) and are valued at $258.31$291.00 per share, the closing price of our stock on October 31, 2018.2019.

 

(13)(11)

Award granted as RSUs on February 1, 2017 and valued at $258.31$291.00 per share, the closing price of our stock on October 31, 2018.2019. The units vest in full on February 1, 2020.

 

44 | Page   

(14)(12)

Options were granted on December 12, 2017 and become vested and exercisable in equal portions on each of the first through fifth anniversaries of the date of grant. Due to provisions in these awards allowing these grants to continue vesting after termination due to retirement, the options granted to Mr. Weiss and Ms. Kaufman were considered vested for accounting purposes on the first anniversary of their date of grant, but exercisability of these awards is restricted to the same vesting schedule as other grants on this date. If either Mr. Weiss or Ms. Kaufman provides services to, or owns more than 5% of, a competitor after their date of retirement, they will forfeit any remaining outstanding options.

 

(13)

Options were granted on December 12, 2017 and become vested and exercisable in full on February 1, 2021.

(14)

Options were granted on December 12, 2017 and become vested and exercisable in full on the third anniversary of the date of grant.

(15)

Performance share awards granted on December 12, 2017 which will vest depending on the achievement of specified levels of growth in earnings per share for the 2020 fiscal year. Share amounts represent maximum payout amounts (150% of target) and are valued at $258.31$291.00 per share, the closing price of our stock on October 31, 2018.2019.

 

(16)

Award granted as RSUs on December 12, 2017 and valued at $258.31$291.00 per share, the closing price of our stock on October 31, 2018.2019. The units vest in equal portions on each of January 8, 2019, January 8, 2020, January 8, 2021, January 8, 2022, and January 8, 2023.

 

(17)

Options were granted on December 12, 2017 and become vested and exercisable in full on the third anniversary of the date of grant.

(18)(17)

Award granted as optionsRSUs on December 12, 2017 and valued at $258.31$291.00 per share, the closing price of our stock on October 31, 2018.2019. The units vest in full on February 1, 2021.

 

(19)

Award granted as RSUs on December 12, 2017 and valued at $258.31 per share, the closing price of our stock on October 31, 2018. The units vest in full on February 1, 2021.

(20)(18)

Options were granted on May 1, 2018 and become vested and exercisable in equal portions on each of the third through fifth anniversaries of the date of grant.

 

(21)(19)

Options were granted on June 1, 2018 and become vested and exercisable in equal portions on each of the third through fifth anniversaries of the date of grant.

 

(22)(20)

Options were granted on June 4, 2018 and become vested and exercisable in equal portions on each of the second through fifth anniversaries of the date of grant.

 

(23)(21)

Award granted as RSUs on June 4, 2018 and valued at $258.31$291.00 per share, the closing price of our stock on October 31, 2018.2019. The units vest in equal portions on the second through fifth anniversaries of the date of grant.

 

(22)

Options were granted on December 11, 2018 and become vested and exercisable in equal portions on each of the first through fifth anniversaries of the date of grant.

 

(23)

Award granted as RSUs on December 11, 2018 and valued at $291.00 per share, the closing price of our stock on October 31, 2019. The units vest in equal portions on each of January 8, 2020, January 8, 2021, January 8, 2022, January 8, 2023, and January 8, 2024.

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Option Exercises and Stock Vested Table

 

The following table details the number of shares acquired by the Named Executive Officers on exercise of stock options or release of shares upon vesting of Performance Share and Restricted Stock Unit awards during the 20182019 fiscal year.

 

    Option Awards  Stock Awards
Name  Number of
Shares
Acquired on
Exercise		  Value Realized
on Exercise		  Number of
Shares
Acquired on
Vesting		  Value
Realized
   on Vesting   

  Albert G. White, III

  -  -  3,447  $819,344

  Brian G. Andrews

  -  -  2,272  $541,917

  Daniel G. McBride

  10,310  $1,739,327  4,716  $1,122,290

  Holly R. Sheffield

  -  -  -  -

  Robert D. Auerbach, M.D.

  -  -  4,429  $1,044,707
 

 

   

 

   

 

   

 

   

 

 

 

   

 

   

 

   

 

   

 

  Robert S. Weiss

  127,812  $18,588,461  5,398  $1,315,007

  Carol R. Kaufman

  13,362  $1,979,476  4,327  $1,028,470

45 | Page   

Name  Option Awards  Stock Awards
  Number of
Shares Acquired
on Exercise		  Value Realized
on Exercise		  Number of
Shares Acquired
on Vesting		  Value Realized  
on Vesting  

  Albert G. White, III

  -  $-0-  4,323  $1,176,168

  Brian G. Andrews

  -  $-0-  2,333  $629,717

  Daniel G. McBride

  11,981  $2,349,436  4,844  $1,308,413

  Holly R. Sheffield

  -  $-0-  -  $-0-

  Robert D. Auerbach, M.D.

  5,326  $722,744  4,151  $1,098,681

Pension Benefits Table

 

Credited service and value of the accumulated benefits payable to our Named Executive Officers as of October 31, 20182019 under our Retirement Income Plan at the normal retirement age of 65 are as follows:

 

Name Number of Years of
Credited Service		 Present Value of
Accumulated Benefit (1)		 Payments During
Last Fiscal Year		  Plan  

Years of

Credited
Service

  

Present Value of

Accumulated

Benefit(1)

  

Payments  

During  

Last Fiscal Year  

Albert G. White, III

 11.50 $215,732 -  Retirement Income Plan  12.50  $342,443  -

Brian G. Andrews

 11.50 $127,430 -  Retirement Income Plan  12.50  $229,673  -

Daniel G. McBride

 12.67 $290,032 -  Retirement Income Plan  13.67  $428,885  -

Holly R. Sheffield

 - - -

Holly R. Sheffield(2)

  Retirement Income Plan  0.33  $10,554  -

Robert D. Auerbach, M.D.

 12.50 $352,186 -  Retirement Income Plan  13.50  $489,218  -
   

 

 

 

   

 

 

 

   

 

 

 

Robert S. Weiss

 40.75 $932,032 -

Carol R. Kaufman

 23.07 $725,776 -
 (1)

Present value is calculated as of the October 31, 20182019 measurement date and is based on a 4.42%3.13% discount rate and the adjustedRP-2014Pri-2012 base mortality rates with projection scaleMP-2018.MP-2019.

 

 

 (2)

Mr. Weiss andAs of fiscal year end, Ms. Kaufman are both over 65 andSheffield is not yet vested in the present value of their individual accumulated benefits reflects the actual annual accrued benefit as of the end of the last fiscal year.retirement income plan.

 

Narrative to Pension Benefits Table

The Company’s Retirement Income Plan (the “Plan”) was adopted in December 1983. The majority of the Company’s U.S. employees who work at least 1,000 hours per year and were hired before August 1, 2019 are covered by the Plan. For services performed after December 31, 1988, members are entitled to an annual retirement benefit equal to 0.60% of base annual compensation up to $10,000 and 1.20% of base annual compensation which exceeds $10,000 but is not in excess of the applicable annual maximum compensation permitted to be taken into accountconsidered under Internal Revenue Service guidelines for each year of service. Furthermore, current active members are entitled to an

41 | P a g e

annual retirement benefit equal to 1.20% of base annual compensation up to the applicable annual maximum compensation for each year of service in excess of 35 Plan Years of service. For service prior to January 1, 1989, members are entitled to an annual retirement benefit equal to 0.75% of base annual compensation up to the Social Security Wage Base in effect that year and 1.50% of base annual compensation in excess of the Social Security Wage Base for each year of service.

Based on the current accumulated benefits for the Named Executive Officers, the estimated annual benefits payable under this Plan upon retirement (at the normal retirement age of 65) are as follows:

 

Officer  Estimated Annual
Benefits Payable (1)

Albert G. White, III

  $86,46187,341

Brian G. Andrews

  $110,461111,932

Daniel G. McBride

  $73,53974,129

Holly R. Sheffield (2)(1)

  $54,17555,130

Robert D. Auerbach, M.D.

  $57,801

Robert S. Weiss

$89,470

Carol R. Kaufman

$58,935
(1)

Mr. Weiss and Ms. Kaufman are both over 65 and the present value of their individual accumulated benefits reflects the actual annual accrued benefit as of the end of the last fiscal year.

58,121

 

 (2)(1)

As of fiscal year end, Ms. Sheffield is not yet vested in the retirement income plan.

Potential Payments Upon Termination on Change in Control

46 | Page   

We have agreements with our Named Executive Officers that provide for post-employment compensation in the event their employment terminates for specified reasons.

Termination Without Cause or Resignation for Good Reason. In the event of termination without Cause or resignation with Good Reason (as defined in the relevant agreements) each executive is entitled to a severance payment equal to 24 months of salary (paid in continuing installments on the Company’s ordinary payroll schedule), the target value of their annual cash bonus earned under our Incentive Payment Plan for the year in which employment terminates (paid as a lump sum), reimbursement of monthly COBRA premiums for up to 24 months, and the value of their accumulated pension benefits. Additionally, the executive will have one year to exercise any currently outstanding and exercisable stock options and all time-vesting equity award which would have vested within a specified period after the termination date will be accelerated.

Terminationin Connection with aChange in Control. In the event of termination without Cause, or resignation with Good Reason, within 3 months prior to or 12 months following a Change in Control (as defined in the relevant agreements), each executive is entitled to a severance payment equal to 36 months of salary (paid in continuing installments on the Company’s ordinary payroll schedule), the target value of their annual cash bonus earned under our Incentive Payment Plan for the year in which employment terminates (paid in a lump sum), reimbursement of monthly COBRA premiums for up to 36 months, and the value of their accumulated pension benefits. Additionally, all outstanding equity awards will be accelerated, with any performance share awards to be paid at the target value (unless otherwise specified in the underlying award agreement).

In addition, the executive employment agreements include an Internal Revenue Code (“Code”) Section 280G “best pay” provision pursuant to which in the event any payments or benefits received by the executive would be subject to an excise tax under Code Section 4999, the executive will receive either the full amount of such payments or a reduced amount such that no portion of the

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payments is subject to the excise tax, whichever results in the greaterafter-tax benefit to the executive.

Termination on Death or Disability. In the event employment is terminated due to the death or disability of the executive, the executive, or his or her estate, would be entitled to payment of the executive’s target cash bonus payable under the Incentive Payment Plan and any amounts due to the executive at the time of termination of employment. Additionally, outstanding equity awards will be accelerated on apro-rata basis and the executive, or the executive’s estate, will have one year to exercise any currently outstanding and exercisable stock options.

The receipt of all of the foregoing severance payments and benefits (excluding payments and benefits received upon death or disability) is subject to the executive’s continued compliance with all of his or her obligations to the Company, including under each executive’s confidential information agreement with the Company, and the executive’s execution and delivery of a release of claims in favor of the Company.

The following table provides estimated payments to our Named Executive Officers if termination of employment occurred on October 31, 2019:

 

   Termination
without Cause /
Resignation with Good
Reason		      Change in Control      Death / Disability  

 Albert G. White

  $22,983,113  $30,329,818  $21,675,713

 Brian G. Andrews

  $3,394,805  $5,352,722  $3,169,027

 Daniel G. McBride

  $18,973,583  $23,441,954  $17,896,750

 Holly R. Sheffield

  $2,374,126  $5,768,225  $2,064,624

 Robert D. Auerbach, M.D.

  $2,824,046  $3,285,394  $2,938,415

CEO Pay Ratio

 

The ratio of our CEO’s total annual compensation to the median annual total compensation of all employees excluding the CEO (the “CEO Pay Ratio”) is a reasonable estimate calculated in a manner consistent with Item 402(u) of RegulationS-K.

To determine the CEO Pay Ratio, we identifiedidentify the median employee, we evaluated the base salary of all employees globally (other than our Chief Executive Officer) as of November 30, 2018 using base salary for all employees globally.2018. We believe this measure most reasonably reflects the typical annual compensation of our employee population and was consistently applied for all employees.employees, and we have not had such significant changes to our employee population or employee compensation arrangements that a remeasurement would be necessary.

SalaryFor employees paid other than in U.S. dollars, salary amounts were converted from local currency to USD for comparison purposes. Conversions were based on exchange rates at November 30, 2018. We did not exclude anynon-U.S. employees under the de minimis or other exceptions set forth in Item 402(u) of RegulationS-K, and we did not makeany cost-of-living adjustments. Once the median employee was identified, we calculated the median employee’s total annual compensation in accordance with the requirements of the Summary Compensation Table. Additionally, we annualized Mr. White’s compensation to reflect his compensation as if he had served as CEO for the full fiscal year.

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As calculated, we determined:

 

The total compensation of our median-paid employee was $37,289.$39,775.

 

 • 

The total compensation of Mr. Whiteour Chief Executive Officer was $6,356,111$7,724,746 (as described above in theSummary Compensation Table and annualized to reflect compensation as CEO for the full 2018 fiscal year)on page 34).

 

The ratio of CEO compensation to the compensation of our median employee was 170 :194: 1.

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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

 

 

We have agreements with our Named Executive Officers that provide for post-employment compensation in the event their employment terminates for specified reasons. If their employment terminates other than as provided for in their agreements, our standard severance policies for all employees will apply.

Mr. White and Dr. Auerbach each have individual agreements with the Company. All other agreements with the Named Executive Officers are subject to our Change in Control Severance Plan adopted in May 2007. The Change in Control Severance Plan provides severance benefits to certain of our key employees if specific events occur. Agreements under this plan require prior approval of the Organization & Compensation Committee before they are offered to employees and the plan is designed to be an “employee welfare benefit plan,” as defined in Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended, or ERISA.

The following table provides estimated payments to our Named Executive Officers if termination of employment occurred on October 31, 2018. Upon termination of employment, all amounts due to the Named Executive Officers will be paid in monthly installments.

Amounts Payable on Termination or44 | P a Change in Controlg e

   Termination
without Cause (1)		 

Change in Control

(2)

 

        Death        

(3)

Albert G. White

 $5,957,853 $9,202,861 $7,076,697

Brian G. Andrews

 $999,690 $4,091,479 $1,293,280

Daniel G. McBride

 $5,231,089 $19,334,701 $6,327,810

Holly R. Sheffield

 $149,609 $2,828,996 $126,453

Robert D. Auerbach, M.D.

 $763,756 $1,276,551 $1,062,282
(1)

Amounts payable on termination without cause represent severance (including benefits coverage under COBRA) in accordance with standard company policy, annual cash bonus earned under the terms of the Incentive Payment Plan, realizable value of outstanding, exercisable stock options, and the value of accumulated pension benefits. All unvested stock options and all restricted stock unit and performance share awards would be forfeit on termination in accordance with the terms of their underlying agreements. Dr. Auerbach’s agreement includes a provision requiring 12 months’ notice prior to termination other than for Cause and presented amounts assume that such notice was provided on October 31, 2017.

(2)

Amounts payable on change in control represent 100% of base salary for each of Messrs. White and Andrews and 200% of base salary for Mr. McBride and Ms. Sheffield, in accordance with underlying agreements for these executives. Amounts also represent the value of the annual cash bonus earned under the terms of the Incentive Payment Plan, the value of outstanding stock options, restricted stock units and performance share awards which would accelerate vesting on a change in control, and the value of accumulated pension benefits for these executives.

Amounts payable on change in control for Dr. Auerbach represent severance in accordance with standard company policy, annual cash bonus earned under the terms of the Incentive Payment Plan, realizable value of outstanding, exercisable stock options and of performance share awards which would accelerate vesting on a change in control, and the value of accumulated pension benefits. All unvested stock options and all restricted stock units held by Dr. Auerbach would be forfeit on termination in accordance with the terms of their underlying agreements.

(3)

Amounts payable on the death of an executive represent the annual cash bonus earned under the terms of the Incentive Payment Plan, realizable value of outstanding, exercisable stock options and of performance share awards which would prorate, the value of accumulated pension benefits, and amounts payable under life insurance policies held through the Company.

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Retirement of Mr. Weiss and Ms. Kaufman

Mr. Weiss and Ms. Kaufman each announced their retirement during the 2018 fiscal year. Per agreement with the Company, both Mr. Weiss and Ms. Kaufman remained employed with the Company through December 31, 2018, in anon-executive capacity, to assist with the executive transition. Mr. Weiss continues to serve on our Board of Directors and will be compensated as aNon-Executive Director starting January 1, 2019.

As of December 31, 2018, Mr. Weiss and Ms. Kaufman were eligible to receive the following amounts:

   Severance
Payment		 Cash Bonus Current Value
of Pension		 Outstanding
Equity Awards		 Total

Robert S. Weiss

  $932,400 $932,032 $20,680,303 $22,544,735

Carol R. Kaufman

 $711,811 $345,591 $725,776 $10,086,536 $11,869,534

Equity award value is based on a stock price of $254.50, which was the closing price of our stock on December 31, 2018. Provisions in the award agreements for outstanding stock option and restricted stock unit awards granted to Mr. Weiss and Ms. Kaufman allow for continued vesting after retirement, however if either Mr. Weiss or Ms. Kaufman provides services to, or owns more than 5% of, a competitor after their date of retirement, they will forfeit any remaining outstanding equity awards.

Outstanding performance share awards will be released at the end of their respective performance periods. Awards granted to Mr. Weiss will be prorated based on the amount of the performance cycle completed at December 31, 2018 as per the underlying agreements. Performance share awards granted to Ms. Kaufman will be released in full with no proration in accordance with the terms of her Separation Agreement and Mutual Release disclosed on Form8-K in April 2018.

Ms. Kaufman will also receive a severance payment equivalent to 10 months of her 2018 base salary, 50% of target annual cash incentive under the 2019 Incentive Payment Plan (based on 2018 salary and target cash incentive), and the value of 10 months of benefits coverage under COBRA.

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DIRECTOR COMPENSATION

 

Directors of a publicly traded company have substantial responsibilities and time commitments, and with ongoing changes in corporate governance standards, highly qualified and experienced directors are in high demand; therefore, we seek to provide suitable economic incentives for our directors and to compensate them appropriately for their continued performance, increased responsibilities, and dedication. This compensation applies only to ourNon-Employee Directors. Members of the Board who are also our employees receive no additional compensation for their service as directors.

The Organization & Compensation CommitteeOCC reviews and recommends compensation amounts for ourNon-Employee Directors, and the full Board approves compensation based on these recommendations. The Organization & Compensation CommitteeOCC considers director responsibilities, compensation practices of our peer companies, and recommendations from itsCompensia (its independent compensation consultantconsultant) in makingNon-Employee Director compensation program recommendations to the Board. Compensation levels are reviewed at least annually and modified as the Board considers necessary or appropriate.

Components of Director Compensation

 

Cash Compensation

OurNon-Employee Directors receive an annual stipend for their service, and directors who also serve as the Chair of a committee of the Board receive an additional annual stipend in recognition of this additional responsibility. TheNon-Employee Directors also receive payment for each meeting attended, for time spent on company business, and for one day of travel in connection with meetings.

 

Annual Retainer:

  

Directors

   $30,000 

Non-Executive Lead Director

   $40,000 

Chairman of the Board

   

$125,000

Annual Retainer for Service as a Committee Chair:

  

Audit Committee

   $17,500 

Corporate Governance and Nominating Committee

   $10,000 

Organization and Compensation Committee

   $12,000 

Science and Technology Committee

$10,000

Attendance at Meetings of the Board & its Committees:

  

Attendance at Meetings of the Board:

   $1,000 – $2,000 (per meeting) 

Additional Cash Compensation for Service:

  

Travel Days (one per set of scheduled meetings)

   $2,000 

Other time spent on Company business (per hour)

   $250 

Directors appointed to, or resigning from, the Boardmid-year are entitled to a prorated portion of the annual stipend based on the number of months of service provided for the fiscal year in which they enter or leave service.service, rounded to the nearest whole month.

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Equity Compensation

TheHistorically ourNon-Employee Directors are alsowere eligible to receive annual equity awards. The Board believes that a significant equity component toNon-Employee Director compensation serves to align director and stockholder interests.

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Grant terms, including grant dates, award amounts,awards in the form of awards, and vesting criteria are set byrestricted stock units (“RSUs”) under the terms of theCompany’s 2006 Long-Term Incentive Plan forNon-ExecutiveDirectors’ Plan, which was originally approved by stockholders on March 21, 2006 and wasas amended and restated in March 2011. The 2006(the “2006 Directors’ Plan was most recently amended in March 2018.

The 2006 Directors’ Plan, as most recently amended, provides for a grant to eachNon-Employee Director of Restricted Stock Units (“RSUs”Plan”) with a total grant date value of $270,000 (or $283,500 and $297,000 in the case of the Lead Director and Chairman, respectively). These grants arewere awarded annually and vestvested in full on the first anniversary of the date of grant. If a director endsended their term of service prior to the vesting date, the number of shares released under the award will be prorated according to the amount of the year actually served and the prorated amountnumber of shares will be released on the original vesting date. If a director’s service was terminated for Cause, they would forfeit the award.

The 2006 Directors’ Plan also provides that,expired in March 2019, and in the absence of a replacement plan, the directors were each granted the right to receive a cash payment on appointmentApril 1, 2020 equivalent to the Board, newNon-Employee Directors will receive a grant of RSUs as specified above, prorated for the number of months of service remaining until the date of the next Annual Meeting. Additional awardsRSU award that would have been granted in April 2019 under the 2006 Directors’ Plan may be madehad it remained in effect. Going forward, if the 2020 Long-Term Incentive Plan forNon-Employee Directors is approved at the Board’s discretion.annual meeting, eachnon-employee director will receive an award on April 1 each year, commencing April 1, 2020. These awards will be granted in the form of RSUs with a grant date value of $270,000 (or $283,500 and $297,000 in the case of the Lead Director and Chairman, respectively).

Stock Ownership Requirements

 

The Board has adopted stock ownership requirements forNon-Employee Directors. The Board adopted this requirement to strengthen the relationship between director and stockholder interests, and under the current requirementsNon-Employee Directors must hold Cooper common stock valued at five times their annual retainer.

Shares held must be free of restrictions to meet ownership requirements, and until the required ownership values are met theNon-Employee Directors must retain 100% of shares received on vesting of stock awards or on exercise of stock options. All of theNon-Employee Directors were in compliancecomplied with the applicable ownership requirements during fiscal 2018.2019.

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Director Compensation Table

 

The following table sets forth the total compensation paid to theNon-Employee Directors for their service on the Board and its committees during the 20182019 fiscal year. At present, theNon-Employee Directors are not eligible to participate in our pension programs and no deferred compensation ornon-equity incentive plans are available to theNon-Employee Directors.

 

Name  Fees Earned or
Paid in Cash (1)		   Stock Awards (2)   Other
Compensation		   Total Fees Earned or Paid
in Cash(1)		Stock Awards (2)(3)Total    

A. Thomas Bender

   $193,500    $297,080    $993    $491,572 

$177,000

$417,398

$594,398    

Allan E. Rubenstein, M.D.

   $95,000    $283,469    -    $378,469 

$74,000

$398,284

$472,284    

Colleen E. Jay

   $92,000    $270,094    -    $362,094 

$69,000

$379,462

$448,462    

Michael H. Kalkstein

   $110,000    $270,094    -    $380,094 

$91,000

$379,462

$470,462    

William A. Kozy

   $87,500    $270,094    -    $357,594 

  $68,000

$379,462

$447,462    

Jody S. Lindell

   $108,000    $270,094    -    $378,094 

  $88,500

$379,462

$467,962    

Gary S. Petersmeyer

   $94,000    $270,094    -    $364,094 

  $73,000

$379,462

$452,462    

Stanley Zinberg, M.D.

   

 

$80,000

 

 

 

   

 

$270,094

 

 

 

   

 

-

 

 

 

   

 

$350,094

 

 

 

Robert S. Weiss

  $41,000

$334,481

$375,481    

Stanley Zinberg, M.D.(4)

  $19,000

$112,401

$131,401    

 

 (1)

Fees earned represent all cash compensation paid to theNon-Employee Directors for their service during the most recent fiscal year.

 

 

 (2)

Represents the aggregate grant date fair value of (i) restricted stock units granted on November 15, 20172018 under the 2006 Directors’ Plan. Plan to all of the NEDs except Mr. Weiss, who received a grant on January 2, 2019 on the termination of his employment with the company and commencement of service as a Non-Employee Director, and (ii) an award on May 21, 2019 to each Non-Employee Director, except Dr. Zinberg, granting the right to receive a cash payment equivalent to the value of 913 shares of our common stock (or 958 shares for Dr. Rubenstein and 1,004 shares for Mr. Bender) valued at the closing price on April 1, 2020. In 2018, the annual equity award timing was changed to move from annual grants in November each year to annual grants in April to align with our Annual Meeting. The grants made on November 15, 2018 were transitional and were prorated to cover the period from November 2018 to April 2019 to ensure the NEDs received the full grant value for fiscal 2019.

The November 2018 grants provided the right to receive 437 shares to all Non-Employee Directors on April 1, 2019, with the exception that:

•

Dr. Rubenstein, as Lead Director, received an award providing the right to receive 459 shares;

•

Mr. Bender, as Chairman of the Board, received an award providing the right to receive 481 shares; and

•

Mr. Weiss received an award providing the right to receive 269 shares.

The amounts shown reflect compensation costs recognized in our financial statements in accordance with ASC 718. For a discussion of valuation assumptions, see Note 9, Stock Plans, in our Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended October 31, 2019.

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(3)

At October 31, 2019, eachNon-Employee Director also had the following stock options outstanding from awards in prior years:

 

 

51 | Page   

financial statements in accordance with ASC 718. For a discussion of valuation assumptions, see Note 9, Stock Plans, in our Notes to Consolidated Financial Statements included in our Annual Report onForm 10-K for the year ended October 31, 2018.

Each director received an award providing the right to receive 1,151 shares on the satisfaction of vesting criteria. Dr. Rubenstein, as Lead Director, received an award providing the right to receive 1,208 shares and Mr. Bender, as Chairman of the Board, received an award providing the right to receive 1,266 shares.

At October 31, 2018, eachNon-Employee Director also had the following stock options outstanding from awards in prior years:

Name  Outstanding Stock    
Options    

  A. Thomas Bender

  14,950

  10,000

  Allan E. Rubenstein, M.D.

  

-

  Colleen E. Jay

  

1,766

  Michael H. Kalkstein

  26,591

  23,091

  William A. Kozy

  

1,766

  Jody S. Lindell

  34,091

  23,591

  Gary S. Petersmeyer

  

5,864

  Robert S. Weiss

190,241

  Stanley Zinberg, M.D.

  20,091

    9,091

 

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Dr. Zinberg served on our Board until his retirement in March 2019. Payments represent meeting fees and a pro rata stipend for service as a director.

 

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PROPOSAL 1 — ELECTION OF DIRECTORS

 

Our Bylaws require that we have a minimum of six and maximum of eleven directors serving on the Board. The Board sets the size of the board annually prior to the Annual Meeting and has fixed the number of directors to be elected at the 20192020 Annual Meeting at nine.eight.

The names of the nominees presented for election as directors are listed below, along with information regarding when they joined the Board, their present principal occupation, recent business experience, and their service on other companies’ boards of directors. Each nominee listed below currently serves on the Board and there are no family relationships between any of the nominees, or between the nominees and any of our officers.

Each nominee, if elected, will serve as a director until the next Annual Meeting or until his or her successor is duly elected and qualified. All of the nominees listed below have given their consent to be named as nominees for election and have indicated their intention to serve if they are elected. The Board does not anticipate that any of the nominees will be unable to serve as a director, but in the event that a nominee is unable to serve, the Board may either propose an alternate nominee or elect to reduce the size of the Board. If an alternative nominee is proposed, proxies will be voted for the alternative nominee.

Dr. Stanley Zinberg has indicated his intentionAfter many years of dedicated service to retirethe Company and its stockholders, Michael H. Kalkstein is going to be retiring from the Board and will not be standing forre-election at the 20192020 Annual Meeting.

The Nominees

 

 

Each nominee listed below currently serves on the Board and there are no family relationships between any of the nominees, or between the nominees and any of our officers.

 
A. THOMAS BENDER THOMAS BENDER

AGE: 80

                    AGE: 79

JOINED THE BOARD: 1994

JOINED THE BOARD: 1994    

INDEPENDENT DIRECTOR; CHAIRMAN OF THE BOARD

INDEPENDENT DIRECTOR; CHAIRMAN OF THE BOARD

Business Experience: Mr. Bender has served on our Board since 1994 and was elected Chairman in July 2002. He also served as our President and Chief Executive Officer from May 1995 until his retirement in October 2007. He previously served as President of CooperVision, our contact lens subsidiary, from June 1991 to December 2004. Between 1966 and June 1991, Mr. Bender held a variety of management positions at Allergan, Inc., a manufacturer of eye and skin care products, including Corporate Senior Vice President, and President and Chief Operating Officer of Herbert Laboratories, Allergan’s dermatology division.

Other Directorships and Memberships: Mr. Bender serves on the board of directors of Allegro Ophthalmics LLC, a private ophthalmic company focused on pharmaceutical treatment of eye disease. Mr. Bender currently serves on the compensation and audit committees at Allegro. He also serves on the board of Mission Hospital Foundation in Mission Viejo, CA.

Qualifications to Serve: Mr. Bender served as our CEO for 13 years, providing him with unique understanding of our operations and business, which is valuable to the Board, and his15-year tenure as Chairman of the Board has provided leadership continuity and stability to our Company. In addition to his history with the Company, Mr. Bender has over 50 years of experience in the

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pharmaceutical industry, providing him with a strong background and knowledge that assists the Board in analysis of our peer companies, markets, and industry. Additionally, Mr. Bender has served on the boards of other public and private medical device companies, including service as chairman of the compensation and organization committees for several medical device companies, allowing him to gain insight and perspective regarding business and regulatory issues facing our industry. The Corporate Governance and Nominating Committee considers these factors important to their decision to recommend Mr. Bender forre-election to the Board.

 

 

 

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COLLEEN E. JAY
 COLLEEN E. JAY

AGE: 57

JOINED THE BOARD: 2016

                    AGE: 56JOINED THE BOARD: 2016    

INDEPENDENT DIRECTOR; CHAIR – ORGANIZATIONAND COMPENSATION COMMITTEE

INDEPENDENT DIRECTOR

Business Experience: Ms. Jay served as a Global Division President for Procter and Gamble as a member of the Top 30 Global Executive Committee until her retirement in October 2017. Her most recent operational assignment was President, Global Beauty Specialty Business at Procter & Gamble from 2015 where she was responsible for the Wella Professional Salon, Cosmetics, Retail Hair Color, and Fragrance businesses, and the successful divestiture of them. Prior to taking leadership of the Beauty Specialty Business,that, Ms. Jay led the multi-billion dollar Global Retail Hair Care and Color division of Procter & Gamble from 2012 to 2015 and the Global Female Beauty division from 2010 to 2012. She also served as Vice President & General Manager, Greater China Feminine Care, Personal Cleansing, Oral Care & Entire China Marketing Function, based in Guangzhou, China, from 2006 to 2009, where she was responsible for businesses with a combined value of over $1 Billion. She has worked in various positions with Procter & Gamble since July 1985 and has led operational units in the United States, Canada, China, and Switzerland (including leading global businesses) during the course of her career. Ms. Jay has also volunteersvolunteered at Catalyst, Inc., anon-profit organization dedicated to improving workplace inclusion for women.

Other Directorships and Memberships: Ms. Jay serves on the board of Treasury Wine Estates (ASX:TWE), a publicly traded company making and selling wine for the global market.

Qualifications to Serve: Ms. Jay has almost 35 years of experience within the consumer goods industry, including over 15 years of experience as a senior executive. She has first-hand experience with leading large, complex international business operations, including direct responsibility for operations in China and Europe, giving her a strong background in international business, including strategy, sales and marketing, regulatory challenges, and cultural differences in various markets. She brings astrong operational, consumer branding and global perspective to the Board that assists with understanding and analyzing our marketmarkets and global expansion. The Corporate Governance and Nominating Committee considers these factors important to their decision to recommend Ms. Jay forre-election to the Board.

 

 

 

 MICHAEL H. KALKSTEIN                    AGE: 76JOINED THE BOARD: 1992    

INDEPENDENT DIRECTOR

Business Experience: Mr. Kalkstein was a partner at Dechert LLP, an international law firm, from June 2003 through June 2007, and wasCo-chair of the firm’s Intellectual Property Practice Group. He also served as the Managing Partner of Dechert’s Palo Alto office from June 2003 through December 2005. He retired from active practice in June 2007 and continues to be “Of Counsel” to Dechert at its Mountain View, CA office. Previously, from September 1999 through May 2003, he was a partner at Oppenheimer, Wolff & Donnelly, LLP, an international law firm, and a member of its Policy and Technologies Committees.

Other Directorships and Memberships: Mr. Kalkstein currently serves as a director on the board of the Merola Opera Program, anon-profit arts organization affiliated with the San Francisco Opera, and sits on its finance and governance committees and on San Francisco Opera’s Medallion Society committee. He also serves as Bailli of the Hillsborough Bailliage of the Chalne des Rôtisseurs, a non-profit food and wine organization. Previously he served as a member of the Board of Trustees of Opera San Jose from 1984 to October 2010, serving as its President from 1992 to 1994. He was a member of the Alliance of CEOs from 2001 to June 2007 and was a member of the board of directors of the Law Foundation of Silicon Valley from 2002 to June 2007. Until January 2007, he also served as a director of the Northern California Chapter of the National Association of Corporate Directors.

Qualifications to Serve: As a licensed attorney with experience in intellectual property law, Mr. Kalkstein brings the Board insight and perspective on legal issues that face our business and industry. Mr. Kalkstein also brings

 

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management experience, having served as a managing partner for a key office of an international law firm. His continued connections with the legal community, as well as his involvement with groups such as the Alliance of CEOs and National Association of Corporate Directors, and participation in NYSE/Euronext Corporate Board Member programs, provides the Board with insight into current issues facing both business executives and independent board members. Additionally, through his long-term service on our Board, Mr. Kalkstein has gained a good working knowledge and understanding of our business which provides efficiency and continuity for our Board. The Corporate Governance and Nominating Committee considers these factors important to their decision to recommend Mr. Kalkstein forre-election to the Board.

WILLIAM A. KOZY
 WILLIAM A. KOZY

AGE: 68

JOINED THE BOARD: 2016

                    AGE: 67JOINED THE BOARD: 2016    

INDEPENDENT DIRECTOR; CHAIR – CORPORATE GOVERNANCEAND NOMINATING COMMITTEE

INDEPENDENT DIRECTOR

Business Experience:Experience:Mr. Kozy served as the Chief Operating Officer of Becton Dickinson (NYSE: BDX) from 2012 until his retirement in 2016, and as its Executive Vice President from 2006 until 2016. He also served as a member of the corporate Leadership Team for Becton Dickinson and in various executive roles since 1988, including Senior Vice President of Company Operations from 1998 until 2002, President of BD Diagnostics from 2002 through 2006, President of the BD Biosciences segment from 2006 to 2009 and head of BD Medical from 2009 through 2011.

Other Directorships and mentorships:Memberships: Mr. Kozy is a member of the board of directors of LivaNova PLC (NASDAQ:LIVN), a publicly traded medical device company focused on neurological and cardiovascular medicine. He also serves on the nominating and corporate governance committee. He also serves as a senior advisor to McKinsey & Company, a global management firm, with a focus on mergers and acquisitions, and he is an active benefactor and volunteer for the Karen Ann Quinlan Hospice organization and the Immokalee Child Care Center (Naples, Florida).acquisitions.

Qualification to serve:Serve:Mr. Kozy has over 40 years of experience in the medical technology industry. Prior to serving as Chief Operating Officer for Becton Dickinson, key business worldwide leadership assignments included responsibilities for the Biosciences, Diagnostic, and Medical segments of the company. He is the only leader in Becton Dickinson history to have led all three segments of the company in his career. He also brings corporate experience leadership from Becton Dickinson in other areas: innovation systems, company manufacturing, and Becton Dickinson’s first ERP implementation. Overall, Mr. Kozy brings depth of general management experience in business strategy, operations, and financial performance to this role. Additionally, he has significant experience in merger and acquisition activity, with integration as an area of executive focus. The Corporate Governance and Nominating Committee considers these factors important to their decision to recommend Mr. Kozy forre-election to the Board.

 

 

 

JODY S. LINDELL
 JODY S. LINDELL

AGE: 68

JOINED THE BOARD: 2006

                    AGE: 67JOINED THE BOARD: 2006    

INDEPENDENT DIRECTOR; CHAIR – AUDIT COMMITTEE;

AUDIT COMMITTEE FINANCIAL EXPERT

INDEPENDENT DIRECTOR; AUDIT COMMITTEE FINANCIAL EXPERT

Business Experience: Ms. Lindell is President and Chief Executive Officer of S.G. Management, Inc., an asset management company she has headed since 2000. Until May 2000, Ms. Lindell was a partner with KPMG LLP where she served asPartner-In-Charge of the Industrial Markets and Healthcare and Life Sciences practices for the Western Area. Ms. Lindell is also a Certified Public Accountant (inactive).

Other Directorships and Memberships: Through September 2007, sheMs. Lindell served as a director, and on the audit and director’s loan committees, for First Republic Bank, a publicly traded financial institution.institution, until September 2007. First Republic Bank

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was acquired in 2007, underwent a management led buyout inmid-2010 and again became publicly traded (NYSE: FRC) in December 2010. Ms. Lindell continued to serve as a director for First Republic Bank through May 2017. She also served on the board of directors of PDL BioPharma (NasdaqGS: PDLI) from March 2009 through October 2018.

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Qualifications to Serve: Ms. Lindell’s experience as a partner with KPMG and her accounting background bring valuable knowledge of finance and accounting regulations to our Board and Audit Committee. She is qualified as an Audit Committee Financial Expert under the SEC rules and has experience with the review and analysis of financial statements and operational risk, both through her accounting background and her experience with public company audit committees. Ms. Lindell has also gained a good working knowledge and understanding of our business and operations during her term of service on the Board, which provides efficiency and continuity. The Corporate Governance and Nominating Committee considers these factors important to their decision to recommend Ms. Lindell forre-election to the Board.

 

 

 

GARY S. PETERSMEYER
 GARY S. PETERSMEYER

AGE: 72

JOINED THE BOARD: 2013

                    AGE: 71JOINED THE BOARD: 2013    

INDEPENDENT DIRECTOR

INDEPENDENT DIRECTOR

Business Experience: Mr. Petersmeyer currently serves as a consultant to companies in the pharmaceutical and medical device industries. Most recently heco-founded Aesthetic Sciences Corporation in 2004 and served as the Chief Executive Officer and Chairman until December 2010. Prior to that he served as President and Chief Operating Officer of Pherin Pharmaceuticals, Inc. from 2000 to 2001 and as President and Chief Operating Officer of Collagen Corporation, Inc. from 1995 to 1997 and as Chief Executive Officer from 1997 to 1999. From 1976 to 2000 he served in various management positions for pharmaceutical and medical device companies.

Other Directorships and Memberships: Mr. Petersmeyer servesserved as a director and member of the compensation and audit committees of Omnicell, Inc. (NASDAQ: OMCL). from January 2007 through February 2019. He also served as director and chairman of the board of Cardica, Inc. (NASDAQ: CRDC) through November 2015. He has previously served on the boards of Visx Incorporated and Roxro Pharmaceuticals prior to their acquisitions. He also servesserved as chairman of the board for Positive Coaching Alliance, anon-profit organization dedicated to improving youth sports.

Qualifications to Serve: Mr. Petersmeyer has served as the CEO or President of four companies in the medical device and pharmaceuticals industry and has over 35 years of industry experience in leadership positions. He has extensive knowledge and experience in global markets, including the United States, Asia, and Europe. His expertise includes financial, research and regulatory strategy, and business development with an emphasis on growth, new product lines, and leadership development. He has extensive experience as a director and has experience with service on a compensation committee.and audit committees. The Corporate Governance and Nominating Committee considers these factors important to their decision to recommend Mr. Petersmeyer forre-election to the Board.

 

 

 

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 ALLAN
ALLAN E. RUBENSTEIN,RUBENSTEIN, M.D.

AGE: 75

                    AGE: 74

JOINED THE BOARD: 1992

JOINED THE BOARD: 1992    

INDEPENDENT DIRECTOR; VICE CHAIRMAN AND LEAD DIRECTOR

INDEPENDENT DIRECTOR; VICE CHAIRMAN AND LEAD DIRECTOR

Business Experience: Dr. Rubenstein has served as our Vice Chairman and Lead Director since July 2002, and previously served as Chairman of the Board from July 1994 through July 2002. He served as Acting Chairman of the Board from April 1993 through June 1994. He is alsoa Clinical Professor of Neurology and Pediatrics at New York University Langone Medical Center. Formerly, he was Chief Executive Officer of NexGenix Pharmaceuticals in NYC from 2003 to 2011.

Other Directorships and Memberships: He currently serves as chairmanChairman of the scientific advisory board forScientific Advisory Boards of Plex Pharmaceuticals since September 2017.in San Diego and Coloursmith in Halifax, Nova Scotia, both privately-held technology companies. He is a member of the Board of Advisors of the Sackler School Graduate Program in Biomedical Sciences at Tufts University. He is also a trustee of the Connecticut River Museum in Essex,

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Connecticut. Previously, he served as a director of BioClinica (NASDAQ: BIOC), a specialty clinical trials company, from 2000 to 2003. He is alsoFounder and Medical Director Emeritus of the Children’s Tumor Foundation and a consultant to the National Institutes of Health, the U.S. Food and Drug Administration and the U.S. Department of Defense, where he served as Chair of the US Army Neurofibromatosis Research Program Integration Panel in 2001. Dr. Rubenstein was a Trustee of the Connecticut River Museum in Essex, CT from 2014-2019 and presently is a Director of the Lunenburg, Nova Scotia DocFest Film Festival.

Qualifications to Serve: As a leading academic scientist and clinician, Dr. Rubenstein provides valuable insight into human physiology and medical practices and techniques that aid the Board in making determinations regarding new technologies to develop or acquire. He also brings experience with clinical trials and a knowledge and understanding of the development of medical devices to his service. His experience as the head of a medical technology company provides perspective on operations of a medical device company. Additionally, through his long-term service on our Board, Dr. Rubenstein has gained a good working knowledge and understanding of our business and operations, which provides efficiency and continuity. The Corporate Governance and Nominating Committee considers these factors important to their decision to recommend Dr. Rubenstein forre-election to the Board.

 

 

 

ROBERT S. WEISS
 ROBERT S. WEISS

AGE: 73

JOINED THE BOARD: 1996

                    AGE: 72JOINED THE BOARD: 1996    

NON-INDEPENDENT DIRECTOR; FORMER CHIEF EXECUTIVE OFFICER

NON-INDEPENDENT DIRECTOR; FORMER CHIEF EXECUTIVE OFFICER

Business Experience: Mr. Weiss served as our President from March 2008 and as our Chief Executive Officer from November 2007.2007 until his retirement in May 2018. He also served as President of CooperVision, our contact lens subsidiary, from March 2007 to February 2008. He previously served as our Chief Operating Officer from January 2005 to October 2007 and as Executive Vice President from October 1995 to October 2007. He served as our Chief Financial Officer from September 1989 to January 2005. He served as our Treasurer from 1989 to March 2002. Since joining us in 1977, he has held a number of finance positions both with us and Cooper Laboratories, Inc. (our former parent).

Other Directorships and Memberships: Mr. Weiss is alsoserved as a director of Accuray Incorporated (Nasdaq: ARAY), a company that develops, manufactures, and sells precise, innovative tumor treatment solutions that set the standard of care with the aim of helping patients live longer, better lives.

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lives, until November 2019. He servesserved on its nominating and governance committee and on its audit committee. He is also a member of the Board of Trustees of the University of Scranton in Pennsylvania and serves on its finance, advancement, and audit committees.

Qualifications to Serve: As our former Chief Executive Officer and with over 40 years of experience with Cooper,the Company, Mr. Weiss provides the benefit of personal perspective on our business, awareness of our peers and our industry, and an understanding of the strategic goals for our Company that is important to the Board in making decisions regarding the direction of our business. He provides leadership, extensive knowledge of our Company, and business, operating, and policy experience to our Board. The Corporate Governance and Nominating Committee considers these factors important to their decision to recommend Mr. Weiss forre-election to the Board.

 

 

 

ALBERT G. WHITE III
 ALBERT G. WHITE III

AGE: 50

JOINED THE BOARD: 2018

                    AGE: 49JOINED THE BOARD: 2018    

PRESIDENT & CHIEF EXECUTIVE OFFICER; DIRECTOR

PRESIDENT & CHIEF EXECUTIVE OFFICER; DIRECTOR

Business Experience: Mr. White has served as President & Chief Executive Officer, and as a member of our Board of Directors, since May 2018. Previously, he served as Chief Financial Officer from November 2016 until his appointment as CEO and he also served as Executive Vice President and Chief Strategy Officer, positions he held from December 2015 and July 2011, respectively. From August 2015 to May 2018, Mr. White also directed CooperSurgical, our women’s

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healthcare business, and served as Chief Executive Officer of Cooper Medical, Inc., the parent company to CooperSurgical, Inc. Previously, he served as Vice President, Investor Relations from November 2007 through March 2013 and as Vice President and Treasurer from April 2006 through December 2012. Prior to joining the Company, Mr. White was a Director with KeyBanc Capital Markets for three years and held a number of leadership positions within KeyBank National Association over the prior eight years.

Other Directorships and Memberships: Mr. White does not hold any external directorships.

Qualifications to Serve: As our current Chief Executive Officer, Mr. White provides the Board with a direct connection to senior management and the benefit of management’s perspective on our business and immediate strategic goals. He provides leadership, extensive knowledge of our Company, and insight on the day to day operation of the business. The Corporate Governance and Nominating Committee considers these factors important to their decision to recommend Mr. White forre-election to the Board.

 

 

The Board of Directors unanimously recommends that you vote FOR each of the nominees for director presented above.

 

 

Nominees for director will be elected by a majority of the votes cast in person or by proxy at the Annual Meeting. The number of votes cast FOR a nominee must exceed the number of votes cast AGAINST. Abstentions and brokernon-votes will not be counted as votes cast either for or against the nominee and therefore will not affect the outcome of the director elections.

 

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PROPOSAL 2 — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

The Audit Committee has appointed the firm of KPMG LLP to act as our independent registered public accounting firm and to audit our consolidated financial statements for the fiscal year ending October 31, 2019.2020. This appointment will continue at the pleasure of the Audit Committee and is presented to the stockholders for ratification as a matter of good governance. In the event that this appointment is not ratified by our stockholders, the Audit Committee will consider that fact when it selects our independent auditor for the following fiscal year.

KPMG LLP has served as our independent registered public accounting firm since our incorporation in 1980, and one or more representatives of KPMG LLP will be present at the Annual Meeting. These representatives will be provided an opportunity to make a statement at the Annual Meeting, if they desire to do so, and will be available to respond to appropriate questions from stockholders.

 

 

The Board of Directors unanimously recommends that you vote FOR the ratification of KPMG LLP as our independent registered public accounting firm.

 

The proposal to ratify the selection of KPMG LLP as our independent registered public accounting firm for the 20192020 fiscal year requires an affirmative vote of the majority of the shares represented in person or by proxy at the Annual Meeting and entitled to vote on the proposal. Abstentions will have the same practical effect as votes against this proposal. Brokernon-votes will have no effect in determining the outcome of this proposal.

 

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PROPOSAL 3 – APPROVAL OF THE 2019 EMPLOYEE STOCK PURCHASE2020 LONG-TERM INCENTIVE PLAN FORNON-EMPLOYEE DIRECTORS

 

Overview

The Company is seeking to have stockholders approve The Cooper Companies, Inc. 2019 Employee Stock Purchase2020 Long-Term Incentive Plan forNon-Employee Directors (the “ESPP”“2020 Directors’ Plan”), described below. The ESPP2020 Directors’ Plan is designed to replace the 2006 Long-Term Incentive Plan forNon-Employee Directors, which expired by its terms in March 2019. The 2020 Directors’ Plan was adopted by our Board on December 11, 201810, 2019 and would become effective following stockholdersstockholder approval at the 2019 Annual Meeting.

The ESPPAs adopted, the 2020 Directors’ Plan would initially authorize the issuance of 1,000,000up to 50,000 shares of common stock, which represents approximately 2%0.1% of our outstanding shares of common stock as of January 22, 2019. The maximum aggregate number of shares of our common stock issuable under the ESPP per three month Offering Period will be 50,000.

Purpose23, 2020.

The purposesfull text of the ESPP are (i) to assist eligible employees in acquiring a stock ownership interest in the Company pursuant to a plan intended, for those eligible employees subject to U.S. federal income tax, to qualifyproposed 2020 Directors’ Plan is attached as an “employee stock purchase plan” within the meaningExhibit A. The following general description of Section 423(b) of the Internal Revenue Code, and (ii) to help eligible employees provide for their future security and to encourage them to remain in the employment of the Company and its designated subsidiaries. The ESPP gives our employees an opportunity to purchase shares of our common stock at a discounted price. We believe that our stockholders will benefit from an increased interest from our designated employees in our success.

We believe that the ESPP is a powerful incentive and retention tool that will benefit both our employees and all of our stockholders. Specifically, we believe the ESPP will enable us to: (i) provide eligible employees with a convenient means of acquiring an equity interest in us through payroll deductions, (ii) enhance such employees’ sense of participation in our affairs, and (iii) provide an incentive for continued employment. The ESPP will also align the interests of employees with those of our stockholders through increased stock ownership.

Summary of the ESPP

This section summarizes certain principal features of the ESPP. The summary2020 Directors’ Plan is qualified in its entirety by reference to the complete textplan document.

Purpose

The purpose of 2020 Directors’ Plan (as it may be amended or restated from time to time) is to promote the success and enhance the value of the ESPP. Stockholders are urgedCompany by linking the individual interests of Directors to readthose of Company stockholders and by providing such individuals with an incentive to increase shareholder value. The 2020 Directors’ Plan is further intended to provide flexibility to the actual textCompany in its ability to motivate, attract, and retain the services of qualified Directors upon whose judgment, interest, and special efforts the Company relies.

Summary of Terms

Administration. The 2020 Directors’ Plan is administered by the Board or, if the Board delegates its power and authority to administer the plan to a committee of the ESPPBoard, such committee. Any such committee shall consist solely of two or more directors appointed by and holding office at the pleasure of the Board, each of whom is anon-employee director, as defined in its entirety which is set forth in Exhibit A to this proxy statement.

Shares Available; Administration

A total of 1,000,000 shares of common stock are initially reserved for issuanceRule16b-3 under the ESPP. We intendExchange Act. As used in this proposal, the term “the Committee” will refer to register such shares on a Registration Statement on FormS-8.

The Organization and Compensation Committee (the “Committee”) (or its delegate) is designatedthe above described committee or to the Board, as the Administrator of the ESPP (the “Administrator”) and has the authority to interpret the terms of the ESPP and determine eligibility of participants. No purchase rights granted under the ESPP, and no shares of our common stock, will be issued under the ESPP until the ESPP has been approved by our stockholders.case may be.

Eligibility

Under the ESPP,. Only directors who are not also employees are eligible to participate in the ESPP if they are customarily employed by us2020 Directors’ Plan.

Grants.The 2020 Directors’ Plan provides for an automatic, annual grant on April 1 to eachNon-Employee Director (the “Annual Awards”). The Annual Awards will be in the form of RSUs and will have a grant date fair value, of (i) $270,000 for eachnon-employee director that is not the Lead Director or the Chairman of the Board, (ii) $283,500 for the Lead Director, and (iii) $297,000 for the Chairman of the Board. The grant date fair value is determined based on the closing price of our shares on the NYSE on the date of grant. The Board may also make the Annual Awards in the form of options or restricted stock, or a designated subsidiary at least twenty (20) hours per week and five months combination of RSUs, options and/or morerestricted stock, in any calendar year. As of December 31, 2018, we had approximately 10,500 employees who would have been eligible to participate inits discretion, but may not change the ESPP had the ESPP been in effect and the subsidiaries for whom such employees worked been designated as designated subsidiaries under the ESPP. We currently anticipate designating all subsidiariesgrant date fair value of the Company, globally, as designated subsidiaries under the ESPP subject to phased expansion.Annual Awards without stockholder approval.

 

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An employee may not be granted rights to purchase shares of our common stock under our ESPP if such employee, immediatelyIf aNon-Employee Director is appointed or elected after theApril 1, then they will receive a grant would own (directly or through attribution) stock possessing 5% or more of the total combined voting power or value of all classes of our common or other class of stock.

Offering Periods, Payroll Deductions and Purchase Dates

The Company will offer shares of common stock under the ESPP during one or more offering periods. The length of the offering periods under the ESPP will be determined by the Administrator and may be up to 27 months long. Initially, the Company intends to have offering periods of three (3) months in length.

Employee payroll deductions will be used to purchase shares on each purchase date during an offering period. The ESPP permits participants to purchase shares of our common stock through payroll deductions of between 1% and 15% of their eligible compensation (subject to any lower limit specified by the Administrator), which includes a participant’s gross base compensation for services to us, and/or sales commissions, but does not include incentive compensation, bonuses, expense reimbursements, fringe benefits or other special payments. The Administrator, in its sole discretion, may, on a uniform and nondiscriminatory basis for each offering period, establish a different definition of compensation. Also, the Administrator has the discretion to adopt a different definition of compensation with respect to participants onnon-U.S. payrolls.

The purchase dates will be the final trading day in each offering period. Offering periods under the ESPP will commence when determined by the Administrator. The Administrator may, in its discretion, modify the terms of future offering periods.

Limits

In connection with each offering period, the Administrator, in its sole discretion, may, on a uniform and nondiscriminatory basis, specify:

(i) a maximum number of shares of common stock that may be purchased by any individual participant on any purchase date during such offering period, which, in the absence of a contrary specification by the Administrator, will be 500 shares of common stock for offering periods of three (3) months; and

(ii) a maximum aggregate number of shares of common stock that may be purchased by all participants on any purchase date during an offering period, which, in the absence of a contrary specification by the Administrator, will be 50,000 shares of common stock for offering periods of three (3) months.

In no event will any employee be permitted to accrue the right to purchase stock under the ESPP at a rate in excess of $25,000 worth of shares during any calendar year during which such a purchase right is outstanding (based on the fair market value per sharedate of common stock as of the first day of the offering period).

By its terms, the ESPP provides the Administrator some flexibility with respectsuch appointment or election that is proportionally adjusted to certain aspects of the operation of the ESPP, such as (a) the limit onreflect the number of sharesmonths of common stock that may be purchased by a single participantactual service on the board during the offering period and (b) the limit on the aggregate numberfirst fiscal year of shares of common stock that may be purchased by all participants on single purchase datetheir election or a single offering period. This flexibilityappointment.

The 2020 Director’s Plan also allows the AdministratorBoard to be ablemake discretionary grants of RSUs, options, and restricted stock to adapt and adjust to our future compensation objectives.non-employee directors.

Purchase Price; Stock Purchases

On the first trading day of each offering period, each participant will automatically be granted an option to purchase shares of our common stock. The option will expire at the end of the applicable offering period and will be exercised at that timeShares subject to the extent of2020 Directors’ Plan. If approved, the payroll deductions accumulated during2020 Directors’ Plan would authorize the offering period. The purchase price of the shares will be designated by the Administrator priorCommittee to the start of an offering period and will not be less than 85% of the fair market value ofgrant to our common stock on the last trading day of the offering period.

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Participant Withdrawal or Termination

Participants may voluntarily end their participationnon-employee directors, in the ESPP at any time by providing the Company with written notice at least 30 calendar days priorform of stock options, restricted stock units, and restricted stock awards, up to the end of the applicable offering period, or such shorter period as determined by the Administrator, and will be paid their accrued payroll deductions that have not yet been used to purchase shares of common stock. A participant’s withdrawal from an offering period will not affect his or her ability to participate in subsequent offering periods or other Company plans. Participation ends automatically upon a participant’s termination of employment. A participant may not transfer rights granted under the ESPP other than by will, the laws of descent and distribution or as otherwise provided under the ESPP.

Changes in Capital Stock; Change in Control

In the event of certain changes in the capital stock of the Company or a change in control, the Administrator may, in order to prevent dilution or enlargement of the benefits intended to be made available under the ESPP, make equitable adjustments by providing for (a) either the replacement of outstanding rights with other rights or property or termination of outstanding rights in exchange for cash, (b) the assumption or substitution of outstanding rights by the successor or survivor corporation or parent or subsidiary thereof, if any, (c) the adjustment in the number and type of50,000 shares of common stock, subject to outstanding rights, (d)adjustment for future stock splits, stock dividends and similar events. To the useextent that any award under the 2020 Directors’ Plan is forfeited or expires, then the shares subject to such award will be available for future grants. However, no shares withheld to pay taxes or to pay the exercise price of participants’ accumulated payroll deductions to purchase common stockany option will be available for future grants.

Vesting.The Annual Awards will vest on the first anniversary of the grant date. However, if a new purchase date priordirector leaves the Board for any reason other than cause, they will keep apro-rata portion of the Annual Award based on the number of days elapsed since April 1, rounded to the next scheduledfull month. Discretionary Awards will all vest no earlier than one year from grant, although the Board may provide the in the event a director leaves the Board for any reason other than cause, that such discretionary award will vestpro-rata similar to Annual Awards. If a director is removed from or leaves the Board for reasons constituting cause prior to a vesting date, then both Annual Awards and discretionary awards will be forfeited. For this purpose, “cause” means the felony conviction of anon-employee director, the failure of thenon-employee director to contest prosecution for a felony or thenon-employee director’s willful misconduct or dishonesty. Generally, no award will vest once anon-employee director leaves the Board, however, the Board may provide for vesting post-termination in the event of certain events, including a change in control, death, retirement, disability or other specified termination. The Board may also accelerate vesting upon a change in control.

Types of Awards:

Restricted Stock Units.Restricted stock units are the right to receive shares of our common stock after the completion of the applicable vesting criteria. Restricted Stock Units granted under the 2020 Directors’ Plan will vest on the first anniversary of the date of grant.

Options. Stock options provide the right to purchase shares or common stock at a set price. Options granted under the 2020 Directors’ Plan will not have a term more than ten years and will not have an exercise price less than the fair market value on the date the option is granted. The options are not transferable, other than for estate or tax planning purposes. The option exercise price may be paid by (i) cash, check, money order, wire transfer or other immediately payable instrument (ii) delivery of shares of our common stock (including shares deliverable upon exercise of the option) which have been held for such time as the Board may establish, (iii) broker assisted cashless exercise, (iv) delivery of such other legal consideration as the Board may determine, or (v) any combination of the foregoing. If shares are delivered in payment of the option exercise price such shares will be valued at fair market value on the exercise date. We do not permit loans tonon-employee directors to fund exercise of stock options. Additionally, options may not be repriced without shareholder approval.

Restricted Stock. Restricted stock granted under the 2020 Directors’ Plan may not be sold or otherwise transferred until the applicable vesting criteria are satisfied and terminationall restrictions thereon are removed or expire. Restricted stock may be transferred for estate or tax planning purposes. If restricted stock is granted thenon-employee director will have all rights as a shareholder to vote

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the restricted stock and rights to dividends; however, the Board may require that any extraordinary dividend be subject to the same restrictions as the restricted stock and only paid once the restricted stock vests.

Adjustment for Stock Dividends, Mergers, etc. The Committee is authorized to make appropriate substitution or adjustments in connection with outstanding awards under the 2020 Directors’ Plan and the number of shares reserved for issuance under the 2020 Directors’ Plan in the event of any rights under ongoing offering periods,merger, reorganization, consolidation, recapitalization, stock dividend, stock split or (e)change in corporate structure affecting our common stock; provided, that the termination of all outstanding rights.shares subject to any grant shall always be a whole number.

Non-U.S. EmployeesAmendment andSub-Plans Termination

. The ESPP is generally intended to provide eligible employees ofBoard may amend the Company and its designated subsidiaries with the opportunity to participate in the ESPP in a manner that is intended to qualify under Section 423 of the Internal Revenue Code. However, the ESPP also authorizes the establishment of rules, procedures, agreements, appendices, orsub-plans to the ESPP to facilitate participation in the ESPP by eligible employees of certain subsidiaries in particular locations outside the United States in a manner that does not comply with Section 423.

The Administrator may adopt such rules, procedures, agreements, appendices, orsub-plans relating to the operation and administration of the ESPP to accommodate local laws, customs, and procedures for jurisdictions outside of the United States, the terms of which may take precedence over provisions of the ESPP, other than2020 Directors’ Plan at any time with respect to equity awards not yet granted. The Board may amend the provisions of any equity award previously granted only with the holder’s consent. Any amendment which would (i) increase the maximum number of securities subjectshares which may be issued under the Plan, (ii) increase the dollar amounts of the Annual Awards, (iii) reduce the price per share of any outstanding option granted under the Plan, or (iv) provide for the repricing of options requires the approval of stockholders.

FEDERAL INCOME TAX CONSEQUENCES

THE TAX CONSEQUENCES OF THE 2020 DIRECTORS’ PLAN UNDER CURRENT FEDERAL LAW ARE SUMMARIZED IN THE FOLLOWING DISCUSSION WHICH DEALS WITH THE GENERAL APPLICABLE TAX PRINCIPLES AND IS INTENDED FOR GENERAL INFORMATION ONLY. ALTERNATIVE MINIMUM TAX AND STATE, LOCAL, AND FOREIGN INCOME TAXES ARE NOT DISCUSSED, AND MAY VARY DEPENDING ON INDIVIDUAL CIRCUMSTANCES AND FROM LOCALITY TO LOCALITY.

Stock Options. Options granted to the ESPP.

Amendment of the ESPP

The Administrator may amend, suspend or terminate the ESPP at any time. However, stockholder approval of any amendment to the ESPP must be obtained for any amendment which increases the aggregate number, or changes the type, of shares that may be sold pursuant to rightsnon-employee directors do not qualify under the ESPP, changes in the corporations or classes of corporations whose employees are eligible to participate in the ESPP, or changes in the ESPP in any manner that would cause the ESPP to no longer be an employee stock purchase plan within the meaning of Section 423(b) of the Internal Revenue Code.

U.S. Federal Income Tax Consequences

The following is a general summary under current law of the material U.S. federal income tax consequences to an employee who participates in the ESPP. This summary deals with the general U.S. federal income tax principles that apply and is provided only for general information. Some kinds of taxes, such as state, local and foreign income taxes and federal employment taxes, are not discussed. Tax laws are complex and subject to change and may vary depending on individual circumstances and from locality to locality. This summary also assumes that the ESPP complies with Section 423 of the Internal Revenue Code andas incentive stock options by their terms. No income is based on the tax laws in effect as of the date of this proxy statement. Changes to these laws could alter the tax consequences described

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below. The summary does not discuss all aspects of federal income taxation that may be relevant in light of a participant’s personal circumstances. This summarized tax information is not tax advice and a participant should rely on the advice of his or her legal and tax advisors.

The right of U.S. participants to make purchases under the ESPP are intended to qualify under the provisions of Section 423 of the Internal Revenue Code. Under the applicable Internal Revenue Code provisions, no income will be taxable to a participant until the sale or other disposition of the shares purchased under the ESPP. Upon such sale or disposition, the participant will generally be subject to tax in an amount that depends upon the length of time such shares are heldrealized by the participant prior to disposing of them. If the shares are sold or disposed of more than two years from the first day of the offering period during which the shares were purchased and one year from the date of purchase, or if the participant dies while holding the shares, the participant (or his or her estate) will recognize ordinary income measured as the lesser of (1) the excess of the fair market value of the sharesnon-employee director at the time such sale or disposition over the purchase price or (2)option is granted. Generally, at exercise, ordinary income is realized by thenon-employee director in an amount equal to 15% of the fair market value of the shares as of the first day of the offering period. Any additional gain will be treated as long-term capital gain. If the shares are held for the holding periods described above but are sold for a price that is less than the purchase price, there is no ordinary income and the designated employee has a long-term capital loss for the difference between the saleoption exercise price and the purchase price. Ifpaid for the shares are sold or otherwise disposed of before the expiration of the holding periods described above, the participant will recognize ordinary income generally measured as the excess ofand the fair market value of the shares on the date the shares are purchased over the purchase price. Any additional gain or loss on such sale or dispositionof exercise, and we will be long-termentitled to a tax deduction in the same amount. Upon disposition of the stock acquired upon the exercise of the option, any appreciation or depreciation is treated as either short-term or long-term capital gain or loss depending on how long the shares were held followinghave been held.

Restricted Stock. On the date they were purchased byof grant, the participant priornon-employee directors will have taxable ordinary income equal to disposingthe difference between the fair market value of them.

The Company is notthe restricted stock on the date of grant and the price paid for such shares, if any, and we will be entitled to a deduction for amounts taxed as ordinary income or capital gain to a participant except to the extentamount of ordinary income recognized uponby thenon-employee director. Any gain or loss after such date will be eligible for short-term or long-term capital gain or loss depending on how long the shares are held. If theNon-Employee Director forfeits the restricted stock due to termination as a saledirector or disposition offailure to bere-nominated as a director for cause, thenon-employee director will be entitled to a capital loss.

Restricted Stock Units. On the date the shares prior toare delivered, the expiration of the holding periods described above.

Non-U.S.non-employee Income Tax Consequences

The Company may also grant options underSub-Plans of the ESPP to employees outside the U.S. The specific terms of suchSub-Plans are not yet known; accordingly, it is not possible to discuss with certainty the relevant tax consequences of these plans. These plansdirector will besub-plans of the ESPP that are generally not intended to qualify under the provisions of Sections 421 and 423 of the Code. Therefore, it is likely that at the time of the exercise of an option under such a plan, a non-U.S. employee subject to income tax would recognizehave taxable ordinary income equal to the excess of the fair market value of the stock on such date and we will be entitled to a deduction for the amount of ordinary income recognized. Any gain or loss after such date of exercise andwill be eligible for short-term or long-term capital gain or loss depending on how long the purchase price, to the extent that the employing entity is consolidated with the Company for U.S. tax purposes, then the Company would be able to claimshares have been held.

58 | P a tax deduction equal to this difference. To the extent that the employee is subject to U.S. tax withholding, then the Company would be required to withhold employment taxes and income tax at the time of the purchase.g e

Accounting TreatmentOther Information.

The Company will recognize compensation expense in connection with options outstanding under the ESPP in accordance with accounting authority with respect to stock-based compensation. So long as the Company continues issuing shares under the ESPP withclosing price of a purchase price at a discount to the fair market value of its stock, it will recognize compensation expense which will be dependent on the level of participation in the ESPP.

New Plan Benefits

Because the ESPP is a new plan no amounts have been allocated to any specific employee and it is not possible to predict what employees would have elected to purchase under the plan if it had been in effect in prior years. The number of shares that may be purchased under the ESPP will depend on each employee’s voluntary election to participate and on the fair market valueshare of our common stock at various future dates,on the actualRecord Date was $357.00.

New Plan Benefits

All 50,000 shares reserved for grant under the 2020 Directors’ Plan will be granted solely to non-employee directors and none of our named executive officers, other executive officers or other employees will receive any benefits under the plan:

 

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Name and PositionDollar ValueNumber of Units  

  All executive officers

--

  All non-employee directors

-50,000

  All other employees including current non-executive officers

--
 

number of shares that may be purchased by any individual cannot be determined in advance. However, the maximum dollar value of shares that may be purchased in any one calendar year by any individual is $25,000.Non-executive directors are not eligible to participate in the ESPP. No shares of common stock have been issued under the ESPP as it is not yet effective.

Equity Compensation Plan Information Table

 

  Plan category

 

  

No. of
Securities to
be Issued
upon
Exercise of
Outstanding  
Options,
Warrants
and Rights
(1)

 

  

Weighted-
average
Exercise
Price of
Outstanding  
Options,
Warrants
and Rights

 

  

No. of Securities  
Remaining
Available for
Future Issuance
under Equity
Compensation
Plans (excluding  
securities
reflected in
column (A))

 

    

(A)

 

  

(B)

 

  

(C)

 

 

  Equity compensation plans approved by stockholders (2)

  1,692,007  $160.31  1,572,390

 

  Equity compensation plans not approved by stockholders

  -  $-  -

 

  Total

 

  1,692,007

 

  $160.31

 

  1,572,390

 

 

Plan category

  No. of Securities to
be Issued upon
Exercise of
Outstanding
Options, Warrants
and Rights (1)		   Weighted-
average Exercise
Price of
Outstanding
Options,
Warrants and
Rights		   No. of Securities
  Remaining Available for  
Future Issuance under
Equity Compensation
Plans (excluding
securities reflected in
column (A))		 

  Equity compensation plans

  approved by stockholders(2)

   1,480,021    $186.24    2,280,407   

  Equity compensation plans

  not approved by

  stockholders

   -    $-0-    -   
  Total   1,480,021    $186.24    2,280,407   
 (1)

The amount of total securities to be issued under Company equity plans upon exercise of outstanding options, warrants, and rights shown in Column A includes 487,314429,571 Restricted Stock Units granted pursuant to the Company’s equity plans. These awards allow for the distribution of shares to the grant recipient upon the completion of time-based vesting periods. The total also includes 117,69525,698 shares representing the maximum number of shares that may be issued subject to Performance Share Awards outstanding as of the end of the fiscal year. Restricted Stock Units and Performance Share Awards do not have an associated exercise price. Accordingly, these awards are not reflected in the weighted-average exercise price disclosed in Column B.

 (2)

Includes information with respect to the Third Amended and Restated 2007 Long-Term Incentive Plan for Employees of the Cooper Companies, Inc. (“2007 Plan”), which was approved by stockholders on March 17, 2016, and provides for the issuance of up to 6,930,000 shares of Common Stock, the 2019 Employee Stock Purchase Plan (the “2019 ESPP”), which was approved by stockholders on March 18, 2019 and provides for the issuance of up to 1,000,000 shares of Common Stock, and the Second Amended and Restated 2006 Long Term Incentive Plan forNon-Employee Directors of the Cooper Companies, Inc. (the “Directors’ Plan”), which was approved by stockholders on March 16, 2011 and providesprovided for the issuance of up to 950,000 shares of Common Stock. As of October 31, 2017,2019, up to 1,441,8961,280,407 shares of Common Stock may be issued pursuant to the 2007 Plan and 130,494up to 1,000,000 shares of Common Stock may be issued pursuant to the 2019 ESPP. The 2006 Directors’ Plan.Plan expired by its terms in March 2019 and no additional shares will be issued under this plan.

 

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The Board of Directors unanimously recommends that you vote FOR the approval of the 2019 Employee Stock Purchase Plan.2020 Long-Term Incentive Plan forNon-Employee Directors.

 

 

The proposal to approve the 2019 Employee Stock Purchase2020 Long-Term Incentive Plan forNon-Employee Directors requires an affirmative vote of the majority of the shares represented in person or by proxy at the Annual Meeting and entitled to vote on the proposal. Abstentions will have the same practical effect as votes against this proposal. Brokernon-votes will have no effect in determining the outcome of this proposal.

 

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PROPOSAL 4 — ADVISORY VOTE ON EXECUTIVE COMPENSATION

 

WeAs required by Section 14A of the Exchange Act, we are requesting stockholder approval, on an advisory basis, of the compensation of our Named Executive Officers as presented in theCompensation Discussion and Analysis beginning on page 2017 and the compensation tables and associated narrative disclosure included in the discussion of executive compensation beginning on page 37.34.

Our executive compensation program has been designed to retain and incentivize a talented, motivated, and focused executive team by providing compensation that is competitive within our market. We believe that our executive compensation program provides an appropriate balance between salary and“at-risk” forms of incentive compensation, as well as a mix of incentives that encourage executive focus on both short-term and long-term goals as a company without encouraging inappropriate risks to achieve performance.

In addition to annual review of our overall programs by our Organization & Compensation Committee, we also present this advisory vote to our stockholders on an annual basis. We were pleased to receive a favorable vote for our compensation practices at both our 20172018 and 20182019 Annual Meetings, with over 90% of the votes cast by our stockholders on ourSay-on-Pay proposals voted in favor of the compensation of the Named Executive Officers each year. We consider these results to affirm stockholder support for our executive compensation practices and we continue to take steps to maintain alignment between executive pay and Company performance.

Highlights of our executive compensation program include:

A mixture of base salary and incentive compensation that makes a significant portion of executive compensation dependent on our performance as a company;

Checks and balances within our compensation packages to balance both short-term and long-term goals, encouraging our executives to focus on the health of the company both during the immediate fiscal year and for the future;

CompensationAgreements with our Named Executive Officers include a “double-trigger” for any compensation on termination of employment other than resulting from a change in control, is limited for most executives to the standard severance policies used for all employees;control; and

Clawback provisions in our short-term incentive compensation program.

As an advisory vote, this proposal is not binding upon us as a Company. However, our Compensation Committee,the OCC, which is responsible for the design and administration of our executive compensation program, values the opinions of our stockholders as expressed through your vote on this proposal. The Compensation CommitteeOCC will consider the outcome of this vote in making future compensation decisions for our Named Executive Officers.

Accordingly, we will present the following resolution for vote at the 20192020 Annual Meeting of Stockholders:

“RESOLVED, that the stockholders of The Cooper Companies, Inc. (the “Company”) approve, on an advisory basis, the compensation of the Company’s Named Executive Officers as described in the Compensation Discussion and Analysis and disclosed in the Summary Compensation Table and related compensation tables and narrative disclosure as set forth in our Proxy Statement.”

 

 

The Board of Directors unanimously recommends that you vote FOR the approval, on an advisory basis, of our executive compensation program as presented in this Proxy Statement.

 

 

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The proposal to approve our executive compensation program, on an advisory basis, requires an affirmative vote of the majority of the shares represented in person or by proxy at the Annual Meeting and entitled to vote on the proposal. Abstentions will have the same practical effect as votes against this proposal. Brokernon-votes will have no effect in determining the outcome of this proposal.

 

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OTHER MATTERS

 

The Board knows of no other matters to be presented at the Annual Meeting, but if any such matters properly come before the Annual Meeting, it is intended that the persons holding the accompanying proxy will vote in accordance with their best judgment.

RECOMMENDATIONS

 

The Board unanimously recommends that the stockholders vote:

 

FOR the election of each of the nominees for director named in this Proxy Statement;

FOR the ratification of KPMG LLP as our independent registered public accounting firm for the fiscal year ending October 31, 2019;2020;

FORthe approval of the 2019 Employee Stock Purchase Plan;2020 Long-Term Incentive Plan forNon-Employee Directors; and

FOR the approval, on an advisory basis, of the compensation of our Named Executive Officers as presented in this Proxy Statement.

When a properly executed proxy in the form enclosed with this Proxy Statement is returned, the shares will be voted as indicated or, if no directions are indicated, the shares will be voted in accordance with the recommendations of the Board.

VOTING INFORMATION

Your vote is important to us. Regardless of whether you plan to attend the meeting, we encourage you to read this Proxy Statement and the accompanying materials and to vote your shares as soon as possible to ensure that your vote is recorded. We look forward to your participation.

Who is entitled to vote at the Annual Meeting?

Our Record Date for the Annual Meeting is January 23, 2020. All stockholders who owned our stock at the close of business on the Record Date are entitled to receive proxy materials and to vote at the Annual Meeting and any continuations, adjournments or postponements thereof.

As of the Record Date, there were 49,166,615 shares of our common stock outstanding and entitled to vote at the Annual Meeting.

How many votes do I have?

Each outstanding share of our common stock is entitled to one vote at the Annual Meeting. You have one vote per share that you owned at the close of business on the Record Date.

How do I vote my shares?

You can vote your shares in person at the Annual Meeting or vote by proxy. The method of voting by proxy differs for shares held as a record holder and shares held in “street name.” If you hold your shares of common stock as a record holder you may vote your shares by following the instructions on the Notice, or by completing, dating, and signing the proxy card included with this Proxy Statement and promptly returning it in thepre-addressed, postage paid envelope provided to you. If phone or internet voting is available to you, instructions are included in the Notice or on your proxy card.

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If you hold your shares of common stock in “street name,” which means your shares are held of record by a broker, bank, or other nominee, you will receive the proxy materials from your broker, bank, or other nominee with instructions on how to vote your shares. Your broker, bank, or other nominee may allow you to deliver your voting instructions by phone or through the internet. If you wish to vote your shares in person you may do so by attending the Annual Meeting and requesting a ballot.

What happens if I vote my shares by proxy?

When you return a completed proxy card, or vote your shares by telephone or internet, you authorize our officers listed on the proxy card to vote your shares on your behalf as you direct.

If you sign and return a proxy card, but do not provide instructions on how to vote your shares, the designated officers will vote on your behalf as recommended by the Board:

Shares will be voted FOR each of the individuals nominated to serve as directors;

Shares will be voted FOR ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending October 31, 2020;

Shares will be voted FOR the 2020 Long-Term Incentive Plan forNon-Employee Directors;

Shares will be voted FOR the compensation of our Named Executive Officers as described in this Proxy Statement.

Can I change or revoke my vote after I return my proxy card or voting instructions?

If you choose to vote your shares by proxy, you may revoke or change your vote at any time prior to the casting of votes at the Annual Meeting. To revoke or change your vote, you may take any of the following actions:

1.

Execute and submit a new proxy card bearing a later date than your original proxy card;

2.

Submit new voting instructions through telephonic or internet voting, if available to you;

3.

Notify Randal L. Golden, Secretary of the Company, in writing that you wish to revoke your proxy; or

4.

Vote your shares in person at the Annual Meeting.

Attending the Annual Meeting in person will not automatically revoke your proxy.

How many votes must be present to hold the Annual Meeting?

In order to conduct business and have a valid vote at the Annual Meeting a quorum must be present in person or represented by proxies. A quorum is defined as a majority of the shares outstanding on the Record Date and entitled to vote. In accordance with Delaware law and our Bylaws, broker“non-votes” and proxies reflecting abstentions will be considered present and entitled to vote for purposes of determining whether a quorum is present.

What are broker“non-votes”?

Broker“non-votes” occur when a broker is not permitted to vote on behalf of shares it holds for a beneficial owner and the beneficial owner does not provide voting instructions. Shares held in a broker’s name may be voted by the broker, but only in accordance with the rules of the NYSE. Under those rules, the broker must follow the instructions of the beneficial owner. If instructions are not provided, NYSE rules determine whether the broker may vote the shares based on its own judgment or if it is required to withhold its vote. This determination depends on the proposal being voted on. For the proposals to be presented at the Annual Meeting, broker discretionary voting is only permitted for the ratification of our independent registered public accounting firm.

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Will I have appraisal or similar dissenters’ rights in connection with the proposals being voted on at the Annual Meeting?

No. You will not be entitled to appraisal or similar dissenters’ rights in connection with the proposals to be voted on at the Annual Meeting.

Other Q&A

Why did I receive aone-page notice in the mail regarding the internet availability of proxy materials instead of a full set of proxy materials?

The SEC permits us to provide our proxy materials electronically if you have not previously requested to receive only printed materials on an ongoing basis. Accordingly, on or about February 6, 2020, we mailed a Notice of Internet Availability of Proxy Materials (“the Notice”). The Notice includes instructions on how to access the proxy materials over the internet or to request a printed copy.

The Notice was sent to our stockholders of record at January 23, 2020. All stockholders receiving the Notice have the ability to access the proxy materials electronically through the website referred to in the Notice, and they also have the option to request a printed set of the proxy materials. We encourage stockholders to take advantage of the availability of proxy materials on the internet.

Can I vote my shares by filling out and returning the Notice of Internet Availability of Proxy Materials?

No. The Notice only identifies the items to be voted on at the Annual Meeting. You cannot vote by marking the Notice and returning it. The Notice provides instructions on how to cast your vote.

Who pays for the proxy solicitation and how will the Company solicit votes?

We pay all costs associated with the solicitation of proxies, including any costs incurred by brokers and other fiduciaries to forward proxy solicitation materials to beneficial owners.

We may solicit proxies in person or by mail, telephone, facsimile, ore-mail. Proxies may be solicited on our behalf by any of our directors, officers, or employees. Additionally, we have retained the firm of D.F. King & Co., Inc. to assist with the solicitation of proxies and will pay a fee of $16,500 for this service, plus reasonable costs and expenses.

How can I communicate with the Board of Directors?

Any interested party can contact our Board to provide comments, to report concerns, or to ask a question, at the following address:

Randal L. Golden

Vice President, Secretary & General Counsel

The Cooper Companies, Inc.

6101 Bollinger Canyon Road, Suite 500

San Ramon, CA 94583

Communications are distributed to the Board, or to any individual directors as appropriate, depending on the facts and circumstances outlined in the communication. You may also communicate online with our Board of Directors as a group through our website. Please refer to our website athttp://investor.coopercos.com/ for any changes in this process.

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STOCKHOLDER PROPOSALS AND NOMINATIONS FOR DIRECTOR

SEC rules and our Bylaws permit stockholders to nominate directors for election and to propose other business to be considered by stockholders at the Annual Meeting under various mechanisms.

To be considered at the 2021 Annual Meeting, director nominations or other proposals must be submitted in writing to:

Randal L. Golden, Secretary

The Cooper Companies, Inc.

6101 Bollinger Canyon Road, Suite 500

San Ramon, CA 94583

Proposals to be Presented Under Rule14a-8:

No later than October 9, 2020.

Director Nominations under Bylaw Article II, Section 16 (“Proxy Access”):

No earlier than September 9, 2020 and no later than October 9, 2020.

Proposals and Director Nominations Submitted Under Other Bylaw Provisions:

No earlier than November 18, 2020 and no later than December 18, 2020.

In the event that we set the date for the 2021 Annual Meeting more than 30 days before or more than 70 days after March 18, 2021, submissions may be made no earlier than the close of business on the 120th day prior to the announced meeting date and no later than the close of business on the later of the 90th day prior to the announced meeting date or the 10th day following our first public disclosure of the date of the meeting.

The Corporate Governance and Nominating Committee will consider director nominees suggested by stockholders on the same terms as nominees selected by the Committee. See page 3 for information about the Committee’s criteria for director nominations.

The person recommending the nominee must be a stockholder entitled to vote at the 2021 Annual Meeting. To be considered, recommendations must include:

(1)

the nominee’s written consent to being named in the Proxy Statement and to serve as a director if elected;

(2)

the name and address of the stockholder submitting the recommendation or the beneficial owner on whose behalf the proposed candidate is being suggested for nomination;

(3)

a statement of the proposed nominee’s qualifications to serve as director; and

(4)

the class and number of our shares owned by the stockholder or beneficial owner submitting the recommendation.

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If we increase the number of directors to be elected at the 2021 Annual Meeting with less than 100 days’ notice prior to March 18, 2021, stating the size of the increase and naming all the nominees for director, then stockholder nominations for directors will be considered if the proposal is delivered to our Secretary at our principal offices no later than 10 days after we make a public announcement of the increased board size. This only applies to nominations for positions created by the increase and does not apply to nominations for current positions.

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RECONCILIATION OFNON-GAAP FINANCIAL MEASURES

THE COOPER COMPANIES, INC. AND SUBSIDIARIES

Reconciliation of Selected GAAP Results toNon-GAAP Results

(In millions, except per share amounts)

(Unaudited)

  Twelve Months Ended October 31, 
  2019
GAAP		  Adjustment     2019
Non-GAAP		  2018
GAAP		  Adjustment     2018
Non-GAAP		 

  Cost of sales

  $896.6   $(28.2)   A   $868.4   $900.5   $(75.5)   A   $825.0 

  Operating expense excluding amortization, impairment and a gain on sale of an intangible

  $1,083.3   $(30.2)   B   $1,053.1   $1,058.1   $(50.9)   B   $1,007.2 

  Amortization of intangibles

  $145.8   $(145.8)   C   $-   $146.7   $(146.7)   C   $- 

  Impairment of intangibles

  $-   $-    $-   $24.4   $(24.4)   D   $- 

  Gain on sale of an intangible

  $(19.0)   $19.0   E   $-   $-   $-    $- 

  Interest Expense

  $68.0   $(0.8)   F   $67.2   $82.7   $(4.2)   F   $78.5 

  Other expense (income), net

  $1.3   $-    $1.3   $(11.5)   $14.2   G   $2.7 

  Provision for income taxes

  $10.7   $35.1   H   $45.8   $192.0   $(144.5)   H   $47.5 

  Diluted earnings per share

  $9.33   $3.02    $12.35   $2.81   $8.69    $11.50 

  Weighted average diluted shares used

  50.0   

 

 

 

 

 

  

 

 

 

 

 

  50.0   49.7   

 

 

 

 

 

  

 

 

 

 

 

  49.7 

A

Fiscal 2019 GAAP cost of sales includes $28.2 million of costs primarily related to product transition write off costs, integration and other manufacturing related costs, resulting in fiscal 2019 GAAP gross margin of 66%, as compared to fiscal 2019non-GAAP gross margin of 67%. Fiscal 2018 GAAP cost of sales includes $10.1 million of costs in CooperVision primarily related to product transition write off costs, incremental costs associated with the impact of Hurricane Maria and other related manufacturing integration costs; $65.4 million in CooperSurgical, primarily related to PARAGARD inventorystep-up release and other integration costs, resulting in fiscal 2018 GAAP gross margin of 64%, as compared to fiscal 2018non-GAAP gross margin of 67%.

B

Fiscal 2019 GAAP operating expense comprised of $30.2 million in charges primarily related to acquisition and integration activities and European MDR costs in CooperSurgical and CooperVision. Fiscal 2018 GAAP operating expense comprised of $50.9 million in charges primarily related to acquisition and integration activities in CooperSurgical and CooperVision and compensation costs related to executives’ retirements.

C

Amortization expense was $145.8 million and $146.7 million for the fiscal 2019 and 2018 periods, respectively.

D

Fiscal 2018 GAAP results includes an impairment charge of intangible assets associated with carrier screening acquired from Recombine in CooperSurgical.

E

Fiscal 2019 gain on sale of an intangible asset relates to a gain recognized in CooperSurgical on the sale of an exclusive distribution right of the Filshie Clip System. Items A, B, C, D and E resulted in fiscal 2019 GAAP operating margin of 21% as compared to fiscal 2019non-GAAP operating margin of 28%, and fiscal 2018 GAAP operating margin of 16% as compared to fiscal 2018non-GAAP operating margin of 28%.

F

Fiscal 2019 and 2018 interest expense includes $0.8 million and $2.5 million, respectively, pertaining to the write off of debt issuance costs related to term loan prepayments. Fiscal 2018 also includes $1.7 million of bridge loan termination fees related to CooperSurgical’s PARAGARD acquisition.

G

Fiscal 2018 other income includes $14.2 million from monetization of Puerto Rico R&D credit.

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H

Fiscal 2019 represents the net change in provision for income taxes that arise from the impact of the above adjustments. Fiscal 2018 GAAP provision for income taxes includes a $(214.6) million of U.S. tax reform impact and $70.1 million of net changes in the provision for income taxes that arise from the impact of the above adjustments.

To supplement our financial results and guidance presented on a GAAP basis, we usenon-GAAP measures that we believe are helpful in understanding our results. Thenon-GAAP measures exclude costs which we generally would not have otherwise incurred in the periods presented as a part of our continuing operations. Ournon-GAAP financial results and guidance are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Management uses supplementalnon-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. Thesenon-GAAP measures are among the factors management uses in planning and forecasting for future periods. We believe it is useful for investors to understand the effects of these items on our consolidated operating results. Ournon-GAAP financial measures may include the following adjustments, and as appropriate, the related income tax effects and changes in income attributable to noncontrolling interests:

We exclude the effect of amortization and impairment of intangible assets from ournon-GAAP financial results. Amortization of intangible assets will recur in future periods; however, the amounts are affected by the timing and size of our acquisitions. Impairment of intangible assets is anon-recurring cost.

We exclude the effect of acquisition and integration expenses and the effect of restructuring expenses from ournon-GAAP financial results. Such expenses generally diminish over time with respect to past acquisitions; however, we generally will incur similar expenses in connection with any future acquisitions. We incurred significant expenses in connection with our acquisitions and also incurred certain other operating expenses or income, which we generally would not have otherwise incurred in the periods presented as a part of our continuing operations. Acquisition and integration expenses include direct effects of acquisition accounting, such as inventory fair valuestep-up and items such as personnel costs for transitional employees, other acquired employee related costs and integration related professional services. Restructuring expenses include items such as employee severance, product rationalization, facility and other exit costs.

We exclude other exceptional or unusual charges or expenses and gains or income. These can be variable and difficult to predict, such as certain litigation expenses and product transition costs, and are not what we consider as typical of our continuing operations. Investors should considernon-GAAP financial measures in addition to, and not as replacements for, or superior to, measures of financial performance prepared in accordance with GAAP.

We report revenue growth using thenon-GAAP financial measure of pro forma which includes constant currency revenue and revenue from acquisitions and excludes CooperSurgical product line exits in both periods. Management also presents and refers to constant currency information so that revenue results may be evaluated excluding the effect of foreign currency rate fluctuations. To present this information, current period revenue for entities reporting in currencies other than the United States dollar are converted into United States dollars at the average foreign exchange rates for the corresponding period in the prior year.

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We define thenon-GAAP measure of free cash flow as cash provided by operating activities less capital expenditures. We believe free cash flow is useful for investors as an additional measure of liquidity because it represents cash flows that are available for repayment of debt, repurchases of our common stock or to fund our strategic initiatives. Management uses free cash flow internally to understand, manage, make operating decisions and evaluate our business. In addition, we use free cash flow to help plan and forecast future periods.

 

By Order of the Board of Directors

LOGO

A. Thomas Bender

Chairman of the Board of Directors

 

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EXHIBIT A – 2019 EMPLOYEE STOCK PURCHASE PLAN2020 LONG-TERM INCENTIVE PLAN FORNON-EMPLOYEE DIRECTORS

 

THE COOPER COMPANIES, INC.

2020 LONG-TERM INCENTIVE PLAN FORNON-EMPLOYEE DIRECTORS

ARTICLE 1. Purposes of the PlanPURPOSE

The purposespurpose of this The Cooper Companies, Inc. 2019 Employee Stock Purchase2020 Long-Term Incentive Plan forNon-Employee Directors (as it may be amended or restated from time to time, the “Plan”) areis to assist Eligible Employeespromote the success and enhance the value of The Cooper Companies, Inc., a Delaware corporation (the “Company”), by linking the individual interests of Directors to those of Company stockholders and its Designated Subsidiaries in acquiring a stock ownership interest inby providing such individuals with an incentive to increase shareholder value. The Plan is further intended to provide flexibility to the Company pursuantin its ability to a plan that is intended, for Eligible Employees subject to U.S. federal income tax, to qualify as an “employee stock purchase plan” withinmotivate, attract, and retain the meaningservices of Section 423(b) of the Code (a “Qualified ESPP”),qualified Directors upon whose judgment, interest, and to help Eligible Employees provide for their future security and to encourage them to remain in the employment ofspecial efforts the Company and its Designated Subsidiaries. The provisions of the Plan shall, accordingly, be construed so as to extend and limit participation in a manner consistent with the requirements of that section of the Code.relies.

ARTICLE 2. Definitions and ConstructionDEFINITIONS AND CONSTRUCTION

Wherever the following terms are used in the Plan they willshall have the meanings specified below, unless the context clearly indicates otherwise. The singular pronoun shall include the plural where the context so indicates.

 

(a)2.1

“Administrator” meansAnnual Equity Grant” shall mean the Organization and Compensation Committeegrant made toNon-Employee Directors each year as provided in Section 4.2.

2.2

“Annual Equity Value” shall have the meaning set forth in Section 4.2.

2.3

“Applicable Accounting Standards” shall mean Generally Accepted Accounting Principles in the United States, International Financial Reporting Standards or such other accounting principles or standards as may apply to the Company’s financial statements under United States federal securities laws from time to time.

2.4

“Applicable Law” shall mean any applicable law, including, without limitation: (a) provisions of the Code, the Securities Act, the Exchange Act and any rules or regulations thereunder; (b) corporate, securities, tax or other laws, statutes, rules, requirements or regulations, whether federal, state, local or foreign; and (c) rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded.

2.5

“Automatic Exercise Date” shall mean, with respect to an Option the last business day of the applicable Option Term that was initially established by the Board for such Option (e.g., the last business day prior to the tenth anniversary of the date of grant of such Option if the Option initially had aten-year Option Term).

2.6

“Award” shall mean an Option, a Restricted Stock award, or any of its delegates, including committees, administering the Plan, in accordance with Section 11 ofa Restricted Stock Unit award, which may be awarded or granted under the Plan.

 

(b)2.7

“Affiliate” meansAward Agreement” shall mean any corporation, partnership, joint venturewritten notice, agreement, terms and conditions, contract or other entity ininstrument or document evidencing an Award, including through electronic medium, which shall contain such terms and conditions with respect to an Award as the Company holds an equity, profit or voting interest of more than fifty percent (50%).Board shall determine consistent with the Plan.

 

(c)

“Applicable Law” means the requirements relating to the administration of equity incentive plans under U.S. federal and state securities, tax and other applicable laws, rules and regulations, the applicable rules of any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws and rules of any foreign country or other jurisdiction where rights under this Plan are granted.

(d)2.8

“Board” meansshall mean the Board of Directors of the Company.

 

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(e)2.9

“Cause” shall mean the felony conviction of aNon-Employee Director or the failure of aNon-Employee Director to contest prosecution for a felony, or aNon-Employee Director’s willful misconduct or dishonesty.

2.10

“Change in Control” means the occurrence of any of the following events:

 

 (i)(a)

The acquisition by any individual, entity or group (within the meaning of section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule13d-3 promulgated under the Exchange Act) of fifty percent (50%) or more of the combined voting power of the then outstanding securities entitled to vote generally in the election of Board members (“Voting Stock”) of the Company;

 

 (ii)(b)

Consummation of a reorganization, merger or consolidation, a sale or other disposition of all or substantially all of the assets of the Company, or other transaction (each, a “Business Combination”), unless, in each case, immediately following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners of Voting Stock of the Company immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of the combined voting power of the then outstanding shares of Voting Stock of the entity resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions relative to each other as their ownership, immediately prior to such Business Combination, of the Voting Stock of the Company and (B) no Person beneficially owns, directly or indirectly, fifty percent (50%) or more of the combined voting power of the then outstanding shares of Voting Stock of the entity resulting from such Business Combination; or

 

 (iii)(c)

The Company’s stockholders approve a plan of complete liquidation or dissolution of the Company.

 

(f)2.11

“Code” meansshall mean the Internal Revenue Code of 1986, as amended andfrom time to time, together with the regulations and official guidance promulgated thereunder, whether issued prior or subsequent to the grant of any Award.

2.12

“Committee” shall mean the Compensation Committee of the Board, or another committee or subcommittee of the Board which may be comprised of one or more Directors and/or executive officers of the Company as appointed by the Board, to the extent permitted in accordance with Applicable Law.

2.13

“Common Stock” shall mean the common stock $0.10 par value per share of the Company.

2.14

“Company” shall have the meaning set forth in Article 1.

2.15

“Director” shall mean a member of the Board, as constituted from time to time.

2.16

“Discretionary Grant” shall have the meaning set forth in Section 4.5.

2.17

“DRO” shall mean a “domestic relations order” as defined by the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended from time to time, or the rules thereunder.

 

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(g)2.18

“Common Stock” means the common stock ofEquity Restructuring” shall mean a nonreciprocal transaction between the Company and its stockholders, such other securities of the Company that may be substituted therefore pursuant to Section 8.as a stock dividend, stock split,spin-off, rights offering or

 

(h)

“Company” means The Cooper Companies, Inc., a Delaware corporation, or any successor.

 

(i)

“Compensation” of an Eligible Employee means the gross base compensation and/or sales commissions received by such Eligible Employee as compensation for services to the Company or any Designated Subsidiary, but excluding overtime payments, incentive compensation, bonuses, expense reimbursements, fringe benefits and other special payments. The Administrator, in its sole discretion, may, on a uniform and nondiscriminatory basis for each Offering, establish a different definition of Compensation. Further, the Administrator shall have the discretion to determine the application of this definition to Participants on payrolls outside of the United States.

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(j)

“Designated Subsidiary” means any Subsidiary designated by the Administrator as participating in the Plan in accordance with Section 11(c)(ii).

(k)

“Effective Date” means the date the Plan is adopted by the Board; provided, however, that no Employee will have any rights under the Plan before the first Offering Period, which will be determined by the Administrator in its sole discretion.

(l)

“Eligible Employee” means an Employee (i) who does not, immediately after any rights under this Plan are granted, own (directly or through attribution) stock possessing five percent (5%) or more of the total combined voting power or value of all classes of Common Stock and other stock of the Company, a Parent or a Subsidiary (as determined under Section 423(b)(3) of the Code) and (ii) whose customary employment is for at least twenty (20) hours per week and five (5) months or more in any calendar year. For purposes of the foregoing sentence, the rules of Section 424(d) of the Code with regard to the attribution of stock ownership will apply in determining the stock ownership of an individual, and stock that an Employee may purchase under outstanding options will be treated as stock owned by the Employee; provided, however, that the Administrator may determine in its discretion that an Employee will not be eligible to participate in an Offering if: (x) such Employee is a highly compensated employee within the meaning of Section 423(b)(4)(D) of the Code; and/or (y) such Employee has not met a service requirement designated by the Administrator pursuant to Section 423(b)(4)(A) of the Code (which service requirement may not exceed two (2) years); and/or (z) such Employee is a citizen or resident of a foreign jurisdiction and the grant of a right to purchase Common Stock under the Plan to such Employee would be prohibited under the laws of such foreign jurisdiction or the grant of a right to purchase Common Stock under the Plan to such Employee in compliance with the laws of such foreign jurisdiction would cause the Plan to violate the requirements of Section 423 of the Code, as determined by the Administrator in its sole discretion; provided, further, that any exclusion in clauses (x), (y), or (z) will be applied in an identical manner to all Participants of each Offering in accordance with Treasury RegulationSection 1.423-2(e). In the case of individuals who perform services for the Company or a Designated Subsidiary in jurisdictions in which local law prohibits the Company from discriminating in its granting of benefits on the basis of number of hours worked, the determination of who is an Eligible Employee will be made without regard to the number of hours worked.

(m)

“Employee” means any officer or other employee (as defined in accordance with Section 3401(c) of the Code) of the Company or any Designated Subsidiary. “Employee” does not include any director of the Company or a Designated Subsidiary who does not render services to the Company or a Designated Subsidiary as an employee within the meaning of Section 3401(c) of the Code. For purposes of the Plan, the employment relationship will be treated as continuing intact while the individual is on sick leave or other leave of absence approved by the Company or Designated Subsidiary and meeting the requirements of Treasury RegulationSection 1.421-1(h)(2). Where the period of leave exceeds three (3) months and the individual’s right to reemployment is not guaranteed either by statute or by contract, the employment relationship will be deemed to have terminated on the first day immediately following such three (3) month period, unless provided otherwise under Applicable Law. For purposes of clarity, the term “Employee” will not include the following, regardless of any subsequent reclassification as an employee by

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recapitalization through a large, nonrecurring cash dividend, that affects the Companynumber or a Designated Subsidiary, any governmental agency, or any court: (i) any independent contractor; (ii) any consultant; (iii) any individual performing services for the Company or a Designated Subsidiary under a purchase order, a supplier agreement or anykind of Shares (or other agreement that the Company or a Designated Subsidiary enters into for services; (iv) any individual classified by the Company or a Designated Subsidiary as contract labor (such as contractors, contract employees, job shoppers), regardless of length of service; and (vi) any leased employee. The Administrator will have exclusive discretion to determine whether an individual is an Employee for purposessecurities of the Plan.

(n)

“Enrollment Date” meansCompany) or the first Trading Dayshare price of each Offering Period.Common Stock (or other securities) and causes a change in theper-share value of the Common Stock underlying outstanding Awards.

 

(o)2.19

“Exchange Act” meansshall mean the Securities Exchange Act of 1934, as amended from time to time.

 

(p)2.20

“Fair Market Value” meansshall mean, as of any given date, the value of a Share on a particular date determined by such methods or procedures as may be established by the Administrator. Unless otherwise determined by the Administrator, the Fair Market Value of Common Stock as of any date is the closing price forfollows:

(a)

If the Common Stock is (i) listed on any established securities exchange (such as reported on the New York Stock Exchange, (orthe Nasdaq Capital Market, the Nasdaq Global Market and the Nasdaq Global Select Market), (ii) listed on any other national securitiesmarket system or (iii) quoted or traded on any automated quotation system, its Fair Market Value shall be the closing sales price for a Share as quoted on such exchange on which the Common Stock is then listed)or system for thatsuch date or, if there is no closing sales price is reported for thata Share on the date in question, the closing sales price for a Share on the immediatelylast preceding date for which a closing price was reported.such quotation exists, as reported in The Wall Street Journal or such other source as the Board deems reliable;

 

(q)(b)

“Offering” hasIf the meaning given toCommon Stock is not listed on an established securities exchange, national market system or automated quotation system, but the Common Stock is regularly quoted by a recognized securities dealer, its Fair Market Value shall be the mean of the high bid and low asked prices for such termdate or, if there are no high bid and low asked prices for a Share on such date, the high bid and low asked prices for a Share on the last preceding date for which such information exists, as reported in Section 4(a).The Wall Street Journal or such other source as the Board deems reliable; or

 

(r)(c)

“Offering Document” hasIf the meaning given to such termCommon Stock is neither listed on an established securities exchange, national market system or automated quotation system nor regularly quoted by a recognized securities dealer, its Fair Market Value shall be established by the Board in Section 4(a).its discretion.

 

(s)2.21

“Offering Period”Holder” shall mean a person who has the meaning given to such term in Section 4(a).been granted an Award.

 

(t)2.22

“Parent” means any corporation, other thanNon-Employee Director” shall mean a Director of the Company inwho is not an unbroken chain of corporations ending with the Company if, at the time of the determination, each of the corporations other than the Company owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.Employee.

 

(u)2.23

“Participant” means any Eligible Employee who has executedOption” shall mean a subscription agreement and been granted rightsright to purchase Common Stock pursuant toShares at a specified exercise price, granted under Article 5. No Options granted under this Plan shall be treated as “incentive stock option” as defined in Section 422 of the Plan.Code.

 

(v)2.24

“Plan” means this The Cooper Companies, Inc. 2019 Employee Stock Purchase Plan, as it may be amended from time to time.Option Term” shall have the meaning set forth in Section 5.4.

 

(w)2.25

“Purchase Date” meansOrganizational Documents” shall mean, collectively, (a) the last Trading DayCompany’s articles of each Offering Period.incorporation, certificate of incorporation, bylaws or other similar organizational documents relating to the creation and governance of the Company, and (b) the Committee’s charter or other similar organizational documentation relating to the creation and governance of the Committee.

 

(x)2.26

“Purchase Price” meansPermitted Transferee” shall mean, with respect to a Holder, any “family member” of the purchase price designated by the AdministratorHolder, as defined in the applicable Offering Document (which purchase price will not be less than eighty-five percent (85%) ofGeneral Instructions to FormS-8 Registration Statement under the Fair Market Value of a Share on the Purchase Date); provided, however, that, in the event no purchase price is designated by the Administrator in the applicable Offering Document, the purchase price for the Offering Periods covered by such Offering Document will be eighty-five percent (85%) of the Fair Market Value of a Share on the Purchase Date; provided, further, that the Purchase Price may be adjusted by the Administrator without shareholder approval toSecurities Act (or any purchase price that complies with Section 423 of the Code, including pursuant to Section 8(a), and will not be less than the par value of a Share.successor form thereto) after taking into account Applicable Law.

 

(y)2.27

“Qualified ESPP” hasPlan” shall have the meaning givenset forth in Article 1.

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2.28

“Restricted Stock” shall mean Common Stock awarded under Article 7 that is subject to such term in Section 1.certain restrictions and may be subject to risk of forfeiture or repurchase.

 

(z)2.29

“Restricted Stock Units” shall mean the right to receive Shares awarded under Article 8.

2.30

“Section 409A” shall mean Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance issued thereunder.

2.31

“Securities Act” meansshall mean the Securities Act of 1933, as amended.

(aa) “Share” means a share

2.32

“Shares” shall mean shares of Common Stock.

(bb)

“Subsidiary” means any corporation, other than the Company, in an unbroken chain of corporations beginning with the Company if, at the time of the determination, each of the corporations other than the last corporation in an unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain; provided, however, that a limited liability company or partnership may be treated as a Subsidiary to the extent either (i) such entity is treated as a disregarded entity under Treasury RegulationSection 301.7701-3(a) by reason

 

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 2.33

“Termination of Service” shall mean the date theNon-Employee Director ceases to provides services to the Company or any other Subsidiary that is a corporation being the sole owner of such entity, or (ii) such entity elects to be classifiedeither as a corporation under Treasury RegulationSection 301.7701-3(a)Director or consultant. The Board, in its sole discretion, shall determine the effect of all matters and such entity would otherwise qualify as a Subsidiary.

(cc)

“Trading Day” means a day on which national stock exchanges in the United States are open for trading.questions relating to any Termination of Service.

ARTICLE 3. Shares Subject to the PlanSHARES SUBJECT TO THE PLAN

 

(a)3.1

Number of Shares. Subject to Section 8, the aggregate number of Shares that may be issued pursuant to rights granted under the Plan is One Million (1,000,000) Shares. If any right granted under the Plan terminates for any reason without having been exercised, the Common Stock not purchased under such right will again become available for issuance under the Plan.

 

(b)(a)

Stock Distributed.Subject to Sections 3.1(b) and 11.2, Awards may be made under the Plan covering an aggregate number of Shares equal to 50,000. Any Common StockShares distributed pursuant to the Planan Award may consist, in whole or in part, of authorized and unissued Common Stock, treasury stock,Common Stock or Common Stock purchased on the open market.

(b)

If any Shares subject to an Award are forfeited or expire, are converted to shares of another person in connection with a recapitalization, reorganization, merger, consolidation,split-up,spin-off, combination, exchange of shares or other similar event, or such Award is settled for cash (in whole or in part) (including Shares repurchased by the Company under Section 7.4 at the same price paid by the Holder), the Shares subject to such Award shall, to the extent of such forfeiture, expiration or cash settlement, again be available for future grants of Awards under the Plan. Notwithstanding anything to the contrary contained herein, the following Shares shall not be added to the Shares authorized for grant under Section 3.1(a) and shall not be available for future grants of Awards: (i) Shares tendered by a Holder or withheld by the Company in payment of the exercise price of an Option; (ii) Shares tendered by the Holder or withheld by the Company to satisfy any tax withholding obligation with respect to an Award; and (iii) Shares purchased on the open market by the Company with the cash proceeds received from the exercise of Options. Any Shares repurchased by the Company under Section 7.4 at the same price paid by the Holder so that such Shares are returned to the Company shall again be available for Awards.

ARTICLE 4. Offering Periods; Offering DocumentsGRANTING OF AWARDS

 

4.1

Participation. EachNon-Employee Director shall automatically be eligible to participate in the Plan and receive Annual Equity Awards as described in Section 4.2.Non-Employee Directors may also be eligible to receive Discretionary Awards under Section 4.3. However, no other individuals shall be eligible to participate in the Plan or have any right to be

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granted an Award pursuant to the Plan. Unless the Board determines otherwise, each Award shall be evidenced by an Award Agreement that sets forth the terms, conditions and limitations for such Award as determined by the Board in its sole discretion (consistent with the requirements of the Plan).

4.2

Automatic Awards toNon-Employee Directors.

(a)

Offering Periods. The Administrator may from timeDuring the term of the Plan, on April 1 eachNon-Employee Director will be automatically granted an Annual Equity Grant with a grant date fair value, based on the Fair Market Value on the date of grant, equal to time grant(i) $270,000 for eachNon-Employee Director that is not the Lead Director or providethe Chairman of the Board, (ii) $283,500 for the Lead Director, and (iii) $297,000 for the Chairman of the Board (such amounts being the “Annual Equity Value”).

(b)

Should aNon-Employee Director be newly elected or appointed after the date the Annual Equity Grant has been made for a year, then upon such appointment or election to the Board such newNon-Employee Director shall receive an Annual Equity Grant with a grant date fair value, based on the Fair Market Value on such date equal to the product of rights(i) the Annual Equity Value, and (ii) a fraction the numerator of which is the number of months theNon-Employee Director will serve on the Board (including fractional months) through the next April 1 and the denominator of which shall be 12.

(c)

The Annual Equity Grant shall take the form of Restricted Stock Units rounded to purchase Commonthe nearest whole Share; provided, however, that the Board may without shareholder approval change the Annual Equity Grant to be in the form of Options or Restricted Stock, underor a combination of Options, Restricted Stock and/or Restricted Stock Units, as it may determine in its sole discretion. The Annual Equity Grant shall vest in full on the Planfirst anniversary of the date of grant. In the event of aNon-Employee Director’s Termination of Service for any reason, other than Cause, prior to Eligible Employees (an “Offering”) during one (1) or more periods (each, an “Offering Period”) selected by the Administrator. The terms and conditions applicablevesting date, then the Director will vest pro rata in the Annual Equity Grant based on the number of days elapse from April 1 through the date of theNon-Employee Director’s Termination of Service, rounded to each Offering Periodthe next full month. In the event of aNon-Employee Director’s Termination of Service for Cause prior to the vesting date, the Annual Equity Grant will be set forthforfeited.

4.3

Discretionary Grants. The Board may at any time provide anyNon-Employee Director with an Award or other fee in an “Offering Document” adopted byaddition to those provided for in Section 4.2 (a “Discretionary Grant”), including for service, on a specific purpose committee or for any other special service, in each case determined in the Administrator, which Offering Documentdiscretion of the Board. Discretionary Grants shall vest no earlier than the first anniversary of the date of grant; provided, however, that the Board may provide that in the event of aNon-Employee Director’s Termination of Service for any reason, other than Cause, prior to the vesting date, the Director may vest pro rata in a Discretionary Grant based on the number of days elapsed from the date of grant through the date of theNon-Employee Director’s Termination of Service, rounded to the next full month. In all events, however, in the event of aNon-Employee Director’s Termination of Service for Cause prior to the vesting date, any Discretionary Grant will be forfeited.

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ARTICLE 5. OPTIONS

5.1

Granting of Options. The Board may make the Annual Equity Grant and Discretionary Awards in suchthe form of Options as, it shall determine in its sole discretion, and will containon such terms and conditions as it may determine, which shall not be inconsistent with the Administrator will deem appropriate and will be incorporated by reference into and made partterms of the Plan and will be attached hereto as part of the Plan. The provisions of separate Offering Periods under the Plan need not be identical.

 

(b)5.2

Offering Documents. Each Offering DocumentOption Exercise Price. The exercise price per Share subject to each Option shall be set by the Board, but shall not be less than 100% of the Fair Market Value of a Share on the date the Option is granted.

5.3

Option Term. The term of each Option (the “Option Term”) shall be set by the Board in its sole discretion; provided, however, that the Option Term shall not be more than (a) ten (10) years from the date the Option is granted. Except as limited by the requirements of Section 409A or the first sentence of this Section 5.2 and without limiting the Company’s rights under Section 9.7, the Board may extend the Option Term, and may extend the time period during which vested Options may be exercised, in connection with any Termination of Service of the Holder or otherwise, and may amend, subject to Section 9.7 and 11.1, any other term or condition of such Option relating to such Termination of Service of the Holder or otherwise.

5.4

Option and SAR Exercises. No Option may be exercised prior to the date it is vested. Unless determined otherwise by the Board, in the event that on the last business day of the term of an Option (a) the exercise of the Option is prohibited by Applicable Law, as determined by the Company, or (b) Shares may not be purchased or sold by the applicable Holder due to any Company insider trading policy (including blackout periods) or a“lock-up” agreement undertaken in connection with an issuance of securities by the Company, the term of the Option shall be extended until the date that is thirty (30) days after the end of the legal prohibition,black-out period orlock-up agreement, as determined by the Company; provided, however, in no event shall the extension last beyond the ten year term of the applicable Option. Unless otherwise determined by the Board in the Award Agreement (i) no portion of an Option which is unexercisable at a Holder’s Termination of Service shall thereafter become exercisable and (ii) the portion of an Option that is unexercisable at a Holder’s Termination of Service shall automatically expire on the date of such Termination of Service.

ARTICLE 6. EXERCISE OF OPTIONS

6.1

Exercise and Payment. An exercisable Option may be exercised in whole or in part. However, unless the Board otherwise determines, an Option shall not be exercisable with respect to an Offering Period will specify (through incorporationfractional Shares and the Board may require that, by the terms of the Option, a partial exercise must be with respect to a minimum number of Shares.

6.2

Manner of Exercise. Except as set forth in Section 6.3, all or a portion of an exercisable Option shall be deemed exercised upon delivery of all of the following to the Secretary of the Company, the stock plan Board of the Company or such other person or entity designated by the Board, or his, her or its office, as applicable:

(a)

A written notice of exercise in a form the Board approves (which may be electronic) complying with the applicable rules established by the Board. The notice shall be

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signed or otherwise acknowledge electronically by the Holder or other person then entitled to exercise the Option or such portion thereof;

(b)

Such representations and documents as the Board, in its sole discretion, deems necessary or advisable to effect compliance with Applicable Law.

(c)

In the event that the Option shall be exercised pursuant to Section 9.3 by any person or persons other than the Holder, appropriate proof of the right of such person or persons to exercise the Option, as determined in the sole discretion of the Board; and

(d)

Full payment of the exercise price and applicable withholding taxes for the Shares with respect to which the Option, or portion thereof, is exercised, in a manner permitted by the Board in accordance with Sections 9.1 and 9.2.

6.3

Expiration of Option Term: Automatic Exercise ofIn-The-Money Options. Unless otherwise provided by the Board in an Award Agreement or otherwise or as otherwise directed by an Option Holder in writing to the Company, each vested and exercisable Option outstanding on the Automatic Exercise Date with an exercise price per Share that is less than the Fair Market Value per Share as of such date shall automatically and without further action by the Holder or the Company be exercised on the Automatic Exercise Date. In the sole discretion of the Board, payment of the exercise price of any such Option shall be made pursuant to Section 9.1(b) or 9.1(c) and the Company shall be entitled to deduct or withhold an amount sufficient to satisfy all taxes associated with such exercise in accordance with Section 9.2. Unless otherwise determined by the Board, this Section 6.3 shall not apply to an Option if the Holder of such Option incurs a Termination of Service on or before the Automatic Exercise Date. For the avoidance of doubt, no Option with an exercise price per Share that is equal to or greater than the Fair Market Value per Share on the Automatic Exercise Date shall be exercised pursuant to this Section 6.3.

ARTICLE 7. RESTRICTED STOCK

7.1

Award of Restricted Stock. The Board is authorized to grant the Annual Equity Award and make Discretionary Awards in the form of Restricted Stock, or the right to purchase Restricted Stock, in such amounts and subject to such terms and conditions not inconsistent with the Plan, as determined by the Board. The Board shall determine all the terms and conditions, including the restrictions applicable to each award of Restricted Stock, which terms and conditions shall not be inconsistent with the Plan and may impose such other conditions on the issuance of such Restricted Stock as it deems appropriate. The Board shall establish the purchase price, if any, and form of payment for Restricted Stock; provided, however, that if a purchase price is charged, such purchase price shall be no less than the par value, if any, of the Shares to be purchased, unless otherwise permitted by Applicable Law. In all cases, legal consideration shall be required for each issuance of Restricted Stock to the extent required by Applicable Law.

7.2

Rights as Stockholders. Subject to Section 7.4, upon issuance of Restricted Stock, the Holder shall have, unless otherwise provided by the Board, all of the rights of a stockholder with respect to said Shares, subject to the restrictions in the Plan and/or the applicable Award Agreement, including the right to receive all dividends and other distributions paid or made with respect to the Shares to the extent such dividends and other distributions have a record date that is on or after the date on which the Holder to whom such Restricted Stock

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are granted becomes the record holder of such Restricted Stock; provided, however, that, in the sole discretion of the Board, any extraordinary dividends or distributions with respect to the Shares may be subject to the restrictions set forth in Section 7.3. In addition, notwithstanding anything to the contrary herein, with respect to a share of Restricted Stock, dividends which are paid prior to vesting shall only be paid out to the Holder to the extent that the share of Restricted Stock vests.

7.3

Restrictions. All shares of Restricted Stock (including any shares received by Holders thereof with respect to shares of Restricted Stock as a result of stock dividends, stock splits or any other form of recapitalization) and any property (other than cash) transferred to Holders in connection with an extraordinary dividend or distribution, shall be subject to such restrictions and vesting requirements as the Board shall provide in the applicable Award Agreement.

7.4

Repurchase or Forfeiture of Restricted Stock. Except as otherwise determined by the Board, if no price was paid by the Holder for the Restricted Stock, upon a Termination of Service during the applicable restriction period, the Holder’s rights in unvested Restricted Stock then subject to restrictions shall lapse, and such Restricted Stock shall be surrendered to the Company and cancelled without consideration on the date of such Termination of Service. If a price was paid by the Holder for the Restricted Stock, upon a Termination of Service during the applicable restriction period, the Company shall have the right to repurchase from the Holder the unvested Restricted Stock then subject to restrictions at a cash price per share equal to the price paid by the Holder for such Restricted Stock or such other amount as may be specified in the applicable Award Agreement.

7.5

Section 83(b) Election. If a Holder makes an election under Section 83(b) of the Code to be taxed with respect to the Restricted Stock as of the date of transfer of the Restricted Stock rather than as of the date or dates upon which the Holder would otherwise be taxable under Section 83(a) of the Code, the Holder shall be required to deliver a copy of such election to the Company promptly after filing such election with the Internal Revenue Service along with proof of the timely filing thereof with the Internal Revenue Service.

ARTICLE 8. AWARD OF RESTRICTED STOCK UNITS

8.1

Grant of Restricted Stock Units. The Board is authorized to grant the Annual Equity Award and Discretionary Awards in the form of Restricted Stock Units, in such amounts and subject to such terms and conditions not inconsistent with the Plan, as determined by the Board. A Holder will have no rights of a stockholder with respect to Shares subject to any Restricted Stock Unit unless and until the Shares are delivered in settlement of the Restricted Stock Unit.

8.2

Vesting of Restricted Stock Units. At the time of grant, the Board shall specify the date or dates on which a Discretionary Award of Restricted Stock Units shall become fully vested and nonforfeitable, and may specify such conditions to vesting as it deems appropriate, including, without limitation, vesting based upon the Holder’s duration of service to the Company, in each case on a specified date or dates or over any period or periods, as determined by the Board. An Award of Restricted Stock Units shall only be eligible to vest while the Holder is a Director, employee or consultant to the Company; provided, however, that the Board, in its sole discretion, may provide (in an Award Agreement or otherwise)

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that a Restricted Stock Unit award may become vested subsequent to a Termination of Service in the event of the occurrence of certain events, including a Change in Control, the Holder’s death, retirement or disability or any other specified Termination of Service.

8.3

Maturity and Payment. At the time of grant, the Board shall specify the maturity date applicable to each grant of Restricted Stock Units, which shall be no earlier than the vesting date or dates of the Award and may be determined at the election of the Holder (if permitted by the applicable Award Agreement). On the maturity date, the Company shall, in accordance with the applicable Award Agreement and subject to Section 9.4(f), transfer to the Holder one unrestricted, fully transferable Share for each Restricted Stock Unit scheduled to be paid out on such date and not previously forfeited, or in the sole discretion of the Board, an amount in cash equal to the Fair Market Value of such Shares on the maturity date or a combination of cash and Common Stock as determined by the Board.

ARTICLE 9. ADDITIONAL TERMS OF AWARDS

9.1

Payment. The Board shall determine the method or methods by which payments by any Holder with respect to any Awards granted under the Plan shall be made, including, without limitation: (a) cash, wire transfer of immediately available funds or check, (b) Shares (including, in the case of payment of the exercise price of an Award, Shares issuable pursuant to the exercise of the Award) or Shares held for such minimum period of time as may be established by the Board, in each case, having a Fair Market Value on the date of delivery equal to the aggregate payments required, (c) delivery of a written or electronic notice that the Holder has placed a market sell order with a broker acceptable to the Company with respect to Shares then issuable upon exercise or vesting of an Award, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the aggregate payments required; provided that payment of such proceeds is then made to the Company upon settlement of such sale, (d) other form of legal consideration acceptable to the Board in its sole discretion, or (e) any combination of the above permitted forms of payment. Notwithstanding any other provision of the Plan to the contrary, no Holder shall be permitted to make payment with respect to any Awards granted under the Plan, or continue any extension of credit with respect to such payment, with a loan from the Company or a loan arranged by the Company in violation of Section 13(k) of the Exchange Act.

9.2

Tax Withholding. The Company shall have the authority and the right to deduct or withhold, or require a Holder to remit to the Company, an amount sufficient to satisfy federal, state, local and foreign taxes required by law to be withheld with respect to any taxable event concerning a Holder arising as a result of the Plan or any Award. The Board may, in its sole discretion and in satisfaction of the foregoing requirement, or in satisfaction of such additional withholding obligations as a Holder may have elected, allow a Holder to satisfy such obligations by any payment means described in Section 9.1 hereof, including without limitation, by allowing such Holder to elect to have the Company withhold Shares otherwise issuable under an Award (or allow the surrender of Shares). The number of Shares that may be so withheld or surrendered shall be limited to the number of Shares that have a fair market value on the date of withholding or repurchase no greater than the aggregate amount of such liabilities based on the maximum statutory withholding rates in such Holder’s applicable jurisdictions for federal, state, local and foreign income tax and

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payroll tax purposes that are applicable to such taxable income. The Board shall determine the fair market value of the Shares, consistent with applicable provisions of this Plan by referencethe Code, for tax withholding obligations due in connection with a broker-assisted cashless Option exercise involving the sale of Shares to pay the Option exercise price or otherwise)any tax withholding obligation.

9.3

Transferability of Awards.

(a)

Except as otherwise provided in Sections 9.3(b) and 9.3(c):

 

 (i)

The lengthNo Award under the Plan may be sold, pledged, assigned or transferred in any manner other than (A) by will or the laws of descent and distribution or (B) subject to the consent of the Offering Period, which period will not exceed twenty-seven (27) months;Board, pursuant to a DRO, unless and until such Award has been exercised or the Shares underlying such Award have been issued, and all restrictions applicable to such Shares have lapsed;

 

 (ii)

The maximum numberNo Award or interest or right therein shall be liable for or otherwise subject to the debts, contracts or engagements of the Holder or the Holder’s successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy) unless and until such Award has been exercised, or the Shares underlying such Award have been issued, and all restrictions applicable to such Shares have lapsed, and any attempted disposition of an Award prior to satisfaction of these conditions shall be null and void and of no effect, except to the extent that may be purchasedsuch disposition is permitted by any Eligible Employee during such Offering Period, to be determined by the Administrator as set forth in Section 5(e)9.3(a)(i); and

 

 (iii)

Such other provisions asDuring the Administrator determines are appropriate,lifetime of the Holder, only the Holder may exercise any exercisable portion of an Award granted to such Holder under the Plan, unless it has been disposed of pursuant to a DRO. After the death of the Holder, any exercisable portion of an Award may, prior to the time when such portion becomes unexercisable under the Plan or the applicable Award Agreement, be exercised by the Holder’s personal representative or by any person empowered to do so under the deceased Holder’s will or under the then-applicable laws of descent and distribution.

(b)

Notwithstanding Section 9.3(a), the Board, in its sole discretion, may determine to permit a Holder or a Permitted Transferee of such Holder to transfer an Award to any one or more Permitted Transferees of such Holder, subject to the Plan.following terms and conditions: (i) an Award transferred to a Permitted Transferee shall not be assignable or transferable by the Permitted Transferee other than (A) to another Permitted Transferee of the applicable Holder or (B) by will or the laws of descent and distribution or, subject to the consent of the Board, pursuant to a DRO; (ii) an Award transferred to a Permitted Transferee shall continue to be subject to all the terms and conditions of the Award as applicable to the original Holder (other than the ability to further transfer the Award to any person other than another Permitted Transferee of the applicable Holder); (iii) the Holder (or transferring Permitted Transferee) and the receiving Permitted Transferee shall execute any and all documents requested by the Board, including, without limitation documents to (A) confirm the status of the transferee as a Permitted Transferee, (B) satisfy any

5.    Eligibility and Participation

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requirements for an exemption for the transfer under Applicable Law and (C) evidence the transfer; and (iv) the transfer of an Award to a Permitted Transferee shall be without consideration.

 

(c)

Notwithstanding Section 9.3(a), a Holder may, in the manner determined by the Board, designate a beneficiary to exercise the rights of the Holder and to receive any distribution with respect to any Award upon the Holder’s death. A beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject to all terms and conditions of the Plan or Award Agreement applicable to the Holder and any additional restrictions deemed necessary or appropriate by the Board. If the Holder is married or a domestic partner in a domestic partnership qualified under Applicable Law and resides in a community property state, a designation of a person other than the Holder’s spouse or domestic partner, as applicable, as the Holder’s beneficiary with respect to more than 50% of the Holder’s interest in the Award shall not be effective without the prior written or electronic consent of the Holder’s spouse or domestic partner. If no beneficiary has been designated or survives the Holder, payment shall be made to the person entitled thereto pursuant to the Holder’s will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Holder at any time; provided that the change or revocation is delivered in writing to the Board prior to the Holder’s death.

9.4

Conditions to Issuance of Shares.

(a)

Eligibility. Any Eligible Employee whoThe Board shall determine the methods by which Shares shall be delivered or deemed to be delivered to Holders. Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates or make any book entries evidencing Shares pursuant to the exercise of any Award, unless and until the Board has determined that the issuance of such Shares is employedin compliance with Applicable Law and the Shares are covered by an effective registration statement or applicable exemption from registration. In addition to the terms and conditions provided herein, the Board may require that a Holder make such reasonable covenants, agreements and representations as the Board, in its sole discretion, deems advisable in order to comply with Applicable Law.

(b)

All share certificates delivered pursuant to the Plan and all Shares issued pursuant to book entry procedures are subject to any stop-transfer orders and other restrictions as the Board deems necessary or advisable to comply with Applicable Law. The Board may place legends on any share certificate or book entry to reference restrictions applicable to the Shares (including, without limitation, restrictions applicable to Restricted Stock).

(c)

The Board shall have the right to require any Holder to comply with any timing or other restrictions with respect to the settlement, distribution or exercise of any Award, including a window-period limitation, as may be imposed in the sole discretion of the Board.

(d)

Unless the Board otherwise determines, no fractional Shares shall be issued and the Board, in its sole discretion, shall determine whether cash shall be given in lieu of fractional Shares or whether such fractional Shares shall be eliminated by rounding down.

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(e)

The Company, in its sole discretion, may (i) retain physical possession of any stock certificate evidencing Shares until any restrictions thereon shall have lapsed and/or (ii) require that the stock certificates evidencing such Shares be held in custody by a designated escrow agent (which may but need not be the Company) until the restrictions thereon shall have lapsed, and that the Holder deliver a stock power, endorsed in blank, relating to such Shares.

(f)

Notwithstanding any other provision of the Plan, unless otherwise determined by the Board or required by Applicable Law, the Company shall not deliver to any Holder certificates evidencing Shares issued in connection with any Award and instead such Shares shall be recorded in the books of the Company (or, as applicable, its transfer agent or stock plan Board).

9.5

Forfeiture and Claw-Back Provisions. All Awards (including any proceeds, gains or other economic benefit actually or constructively received by a Holder upon any receipt or exercise of any Award or upon the receipt or resale of any Shares underlying the Award) shall be subject to the provisions of any claw-back policy implemented by the Company, including, without limitation, any claw-back policy adopted to comply with the requirements of Applicable Law, including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder, whether or not such claw-back policy was in place at the time of grant of an Award, to the extent set forth in such claw-back policy and/or in the applicable Award Agreement.

9.6

Repricing. Subject to Section 11.2, the Board shall not, without the approval of the stockholders of the Company, (a) authorize the amendment of any outstanding Option to reduce its price per Share, or (b) cancel any Option in exchange for cash or another Award when the Option price per Share exceeds the Fair Market Value of the underlying Shares.

9.7

Amendment of Awards. Subject to Applicable Law, the Board may amend, modify or terminate any outstanding Award, including but not limited to, substituting therefor another Award of the same or a Designated Subsidiary ondifferent type, and changing the date of exercise or settlement. The Holder’s consent to such action shall be required unless (a) the Board determines that the action, taking into account any related action, would not materially and adversely affect the Holder, or (b) the change is otherwise permitted under the Plan (including, without limitation, under Section 11.2 or 11.10).

9.8

Data Privacy. As a given Enrollment Datecondition of receipt of any Award, each Holder explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of personal data as described in this Section 9.8 by and among, as applicable, the Company and its Subsidiaries for the exclusive purpose of implementing, administering and managing the Holder’s participation in the Plan. The Company and its Subsidiaries may hold certain personal information about a Holder, including but not limited to, the Holder’s name, home address and telephone number, date of birth, social security or insurance number or other identification number, salary, nationality, job title(s), any shares of stock held in the Company or any of its Subsidiaries, details of all Awards, in each case, for the purpose of implementing, managing and administering the Plan and Awards (the “Data”). The Company and its Subsidiaries may transfer the Data amongst themselves as necessary for the purpose of implementation, administration and management of a Holder’s participation in the Plan, and the Company and its Subsidiaries may each further transfer the Data to any third parties assisting the Company and its Subsidiaries in the

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implementation, administration and management of the Plan. These recipients may be located in the Holder’s country, or elsewhere, and the Holder’s country may have different data privacy laws and protections than the recipients’ country. Through acceptance of an Offering PeriodAward, each Holder authorizes such recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Holder’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom the Company or any of its Subsidiaries or the Holder may elect to deposit any Shares. The Data related to a Holder will be held only as long as is eligiblenecessary to implement, administer, and manage the Holder’s participation in the Plan. A Holder may, at any time, view the Data held by the Company with respect to such Holder, request additional information about the storage and processing of the Data with respect to such Holder, recommend any necessary corrections to the Data with respect to the Holder or refuse or withdraw the consents herein in writing, in any case without cost, by contacting his or her local human resources representative. The Company may cancel the Holder’s ability to participate in the Plan during such Offering Period, subjectand, in the Board’s discretion, the Holder may forfeit any outstanding Awards if the Holder refuses or withdraws his or her consents as described herein. For more information on the consequences of refusal to consent or withdrawal of consent, Holders may contact their local human resources representative.

ARTICLE 10. ADMINISTRATION

10.1

Administration. The Board shall administer the requirements of this Section 5 and the limitations imposed by Section 423(b) of the Code.Plan (except as otherwise permitted herein).

 

10.2

Duties and Powers of Board. It shall be the duty of the Board to conduct the general administration of the Plan in accordance with its provisions. The Board shall have the power to interpret the Plan and Award Agreements, and to adopt such rules for the administration, interpretation and application of the Plan as are not inconsistent with the Plan, to interpret, amend or revoke any such rules and to amend the Plan or Award Agreement; provided that the rights or obligations of the Holder of the Award that is the subject of any Award Agreement are not materially and adversely affected by such amendment, unless the consent of the Holder is obtained or such amendment is otherwise permitted under Section 9.7 or Section 11.10.

10.3

Action by the Board. Unless otherwise established by the Board, set forth in any Organizational Documents or as required by Applicable Law, a majority of the Board shall constitute a quorum and the acts of a majority of the members present at any meeting at which a quorum is present, and acts approved in writing by all members of the Board in lieu of a meeting, shall be deemed the acts of the Board. Each member of the Board is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company, the Company’s independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan. Neither the Board nor any member or delegate thereof shall have any liability to any person (including any Holder) for any action taken or omitted to be taken or any determination made in good faith with respect to the Plan or any Award.

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10.4

Authority of Board. Subject to the Organizational Documents, any specific designation in the Plan and Applicable Law, the Board has the exclusive power, authority and sole discretion to:

(a)

Determine the type or types of Awards to be granted as Annual Equity Awards or Discretionary Awards (including, without limitation, any Awards granted in tandem with another Award granted pursuant to the Plan);

(b)

EnrollmentDetermine the recipients, if any, and the amount and types of any Discretionary Awards;

(c)

Determine the terms and conditions of any Award granted pursuant to the Plan, including, but not limited to, the exercise price, grant price, purchase price, any restrictions or limitations on the Award, any schedule for vesting, lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers thereof, and any provisions related tonon-competition and claw-back and recapture of gain on an Award, based in Plan:each case on such considerations as the Board in its sole discretion determines;

(d)

Determine whether, to what extent, and under what circumstances an Award may be settled in, or the exercise price of an Award may be paid in cash, Shares, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered;

(e)

Prescribe the form of each Award Agreement, which need not be identical for each Holder;

(f)

Decide all other matters that must be determined in connection with an Award;

(g)

Establish, adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan;

(h)

Interpret the terms of, and any matter arising pursuant to, the Plan or any Award Agreement; and

 

 (i)

Make all other decisions and determinations that may be required pursuant to the Plan or as the Board deems necessary or advisable to administer the Plan.

10.5

Decisions Binding. The Board’s interpretation of the Plan, any Awards granted pursuant to the Plan or any Award Agreement and all decisions and determinations by the Board with respect to the Plan are final, binding and conclusive on all persons.

10.6

Delegation of Authority. The Board may from time to time delegate to a committee of one or more Directors the authority to grant or amend Awards or to take other administrative actions pursuant to this Article 10; provided, however, that any delegation of administrative authority shall only be permitted to the extent it is permissible under any Organizational Documents and Applicable Law. Any delegation hereunder shall be subject to the restrictions and limits that the Board specifies at the time of such delegation or that are otherwise included in the applicable Organizational Documents, and the Board may at any time rescind the authority so delegated or appoint a new delegatee. At all times, the delegatee appointed under this Section 10.6 shall serve in such capacity at the pleasure of the Board and the Board may abolish any committee at any time andre-vest in itself any previously delegated authority.

10.7

Acceleration. Subject to the Organizational Documents, any specific designation in the Plan and Applicable Law, in the event of a Holder’s death or disability, the Board has the

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exclusive power, authority and sole discretion to accelerate, wholly or partially, the vesting or lapse of restrictions (and, if applicable, the Company shall cease to have a right of repurchase) of any Award or portion thereof at any time after the grant of an Award, subject to whatever terms and conditions it selects and Section 11.2.

ARTICLE 11. MISCELLANEOUS PROVISIONS

11.1

Amendment, Suspension or Termination of the Plan.

(a)

Except as otherwise set forthprovided in an Offering DocumentSection 11.1(b), the Plan may be wholly or determinedpartially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator, an Eligible Employee may become a ParticipantBoard; provided that, except as provided in Section 9.7 and Section 11.10, no amendment, suspension or termination of the Plan for an Offering Period by delivering a subscription agreement toshall, without the Company by such time prior toconsent of the Enrollment Date for such Offering Period (or such other date specified inHolder, materially and adversely affect any rights or obligations under any Award theretofore granted or awarded, unless the Offering Document) designated by the Administrator and in such form as the CompanyAward itself otherwise expressly so provides.

 

 (ii)(b)

Each subscription agreement will designate a whole percentage of such Eligible Employee’s Compensation to be withheld byNotwithstanding Section 11.1(a), the Company or the Designated Subsidiary employing such Eligible Employee on each payday during the Offering Period as payroll deductions under the Plan. The percentage of Compensation designated by an Eligible Employee as payroll deductionsBoard may not, be less than one percent (1%) and may not be more than fifteen percent (15%),except as provided in Section 11.2, take any of the following actions without approval of the Company’s stockholders given within twelve (12) months before or after such loweraction: (i) increase the limit asimposed in Section 3.1 on the maximum number of Shares which may be set by the Administrator for the Offering Period. The payroll deductions made for each Participant will be credited to an account for such Participantissued under the Plan, and will be deposited with(ii) increase the general fundsdollar amounts of the Company, unless required otherwise under Applicable Law.

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Annual Award Amount in Section 4.2, (iii)

A Participant may increase (but not decrease) reduce the percentage of Compensation designated in his or her subscription agreement, subject to the limits of this Section 5(b), prior to the Enrollment Date for such Offering Period (or such other date specified in the Offering Document) designated by the Administrator and in such form as the Company provides, or may suspend his or her payroll deductions. A Participant may not decrease the percentage of Compensation designated in his or her subscription agreement; such Participant may only suspend deductions or withdraw from such Offering Period in accordance with Section 7(a). Any increase or suspension of payroll deductions will become effective as soon as reasonably practicable after the Company’s receipt of the Participant’s new subscription agreement and, to the extent possible, within the Offering Period with respect to which it is requested by the Participant. In the event a Participant suspends his or her payroll deductions, the balance of the amount credited to the account of such Participant will be applied to the purchase of Shares on the next following Purchase Date. The balance of the amount credited to the accountprice per share of any Participant that has not been applied tooutstanding Option granted under the purchase of Shares by reasonPlan or take any action prohibited under Section 10.6, or (iv) cancel any Option in exchange for cash or another Award in violation of Section 423(b)(8) of the Code, Section 5(e) or the other limitations set forth in this Plan will be paid to such Participant in one lump sum in cash as soon as reasonably practicable.9.6.

 

 (iv)11.2

Except as otherwise set forthChanges in an Offering DocumentCommon Stock or determined byAssets of the Administrator, a Participant may participate inCompany, Acquisition or Liquidation of the Plan only by means of payroll deductionCompany and may not make contributions by lump sum payment for any Offering Period, unless required otherwise under Applicable Law.

(c)

Payroll Deductions. Except as otherwise provided in the applicable Offering Document, payroll deductions for a Participant will commence on the first payroll following the Enrollment Date and will end on the last payroll in the Offering Period to which the Participant’s authorization is applicable, unless sooner terminated by the Participant as provided in Section 7 or suspended by the Participant or the Administrator as provided in Section 5(b) and Section 5(e), respectively.

(d)

Effect of Enrollment. A Participant’s completion of a subscription agreement will enroll such Participant in the Plan for each subsequent Offering Period on the terms contained therein until the Participant either submits a new subscription agreement, withdraws from participation under the Plan as provided in Section 7 or otherwise becomes ineligible to participate in the Plan.

(e)

Limitation on Purchase of Common Stock. In connection with each Offering Period, the Administrator, in its sole discretion, may, on a uniform and nondiscriminatory basis, specify:Other Corporate Events.

 

 (i)(a)

A maximum number of Shares that may be purchased by any Participant on any Purchase Date during such Offering Period, which, inIn the absence of a lower specification by the Administrator, will be five hundred (500) Shares (subject to adjustment under Section 8) for Offering Periods of three (3) months; and

(ii)

A maximum aggregate number of Shares that may be purchased by all Participants on any Purchase Date during an Offering Period, which, in the absence of a lower specification by the Administrator, will be Fifty Thousand (50,000) Shares (subject to adjustment under Section 8) for Offering Periods of three (3) months.

If the aggregate number of Shares issuable upon exercise of purchase rights during the Offering Period would exceed any such maximum aggregate number, then, in the absence of any Administrator action otherwise, the maximum aggregate number of Shares will be allocated on a pro rata basis according to each Participant’s accumulated payroll deduction (rounded down to the nearest whole Share). An Eligible Employee may be granted rights under the Plan only if such rights, together with any other rights granted to such Eligible Employee under “employee stock purchase plans” of the Company, any Parent or any Subsidiary, as specified by Section 423(b)(8) of the Code, do not permit such employee’s rights to purchase stock of the Company or any Parent or Subsidiary to accrue at a rate that exceeds twenty five thousand dollars (US$25,000) of the Fair Market Value of such stock (determined as of the first day of the Offering Period during which such rights are granted) for each calendar year in which such rights are outstanding at any time. This limitation will be applied in accordance with Section 423(b)(8) of the Code.

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(f)

Suspension of Payroll Deductions. Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 5(e) or the other limitations set forth in this Plan, a Participant’s payroll deductions may be suspended by the Administrator at any time during an Offering Period. The balance of the amount credited to the account of each Participant that has not been applied to the purchase of Shares by reason of Section 423(b)(8) of the Code, Section 5(e) or the other limitations set forth in this Plan will be paid to such Participant in one lump sum in cash as soon as reasonably practicable after the Purchase Date.

(g)

Foreign Employees. Subject to Section 12, the terms of which shall control, in order to facilitate participation in the Plan, the Administrator may provide for such special terms applicable to Participants who are citizens or residents of a foreign jurisdiction, or who are employed by a Designated Subsidiary outside of the United States, as the Administrator may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. For an Offering, such special terms may not be more favorable than the terms of rights granted under the Plan to Eligible Employees who are residents of the United States. Moreover, the Administrator may approve such supplements to, or amendments, restatements or alternative versions of, this Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of this Plan as in effect for any other purpose. No such special terms, supplements, amendments or restatements will include any provisions that are inconsistent with the terms of this Plan as then in effect unless this Plan could have been amended to eliminate such inconsistency without further approval by the stockholders of the Company.

(h)

Leave of Absence. If a Participant ceases active service by reason of a leave of absence, then the Participant shall have the election, exercisable up until no later than thirty (30) calendar days prior to the end of the Offering Period (or by such later date prior to the end of the Offering Period as the Administrator determines in its sole discretion) in which such leave of absence commences (or, if earlier, the date immediately preceding the date on which the Participant ceases to be an Eligible Employee), to (i) withdraw all the funds in the Participant’s account at the commencement of such leave or (ii) have such funds held for the purchase of Shares at the end of such Offering Period. If no such election is made, then such funds shall automatically be held for the purchase of Shares at the end of such Offering Period. In no event however, shall any further payroll deductions be added to the Participant’s account following the commencement of such leave of absence, unless otherwise required by Applicable Law. Should the Participant return to active service (x) within three (3) months following the commencement of his or her leave of absence or (y) prior to the expiration of any longer period for which such Participant’s right to reemployment with the Company is guaranteed by statutestock dividend, stock split, combination or contract, then his or her payroll deductions under the Plan shall automatically resume upon his or her return at the rate in effect at the time the leave began, and if a new Offering Period begins during the periodexchange of the leave, then the Participant will automatically be enrolled in that purchase period at the rate of payroll deduction in effect for him or her at the time the leave commenced, but payroll deductions for that Offering Period shall not actually begin until the Participant returns to active service, unless otherwise required by Applicable Law. However, an individual who returns to active employment following a leave of absence that exceeds in duration the applicable (x) or (y) time period will be treated as a new Employee for purposes of subsequent participation in the Plan and must accordinglyre-enroll in the Plan (by making a timely filing of the prescribed enrollment forms) on or before the start date of any subsequent Offering Period in which he or she wishes to participate.

6.        Grant and Exercise of Rights

(a)

Grant of Rights. On the Enrollment Date of each Offering Period, each Eligible Employee participating in such Offering Period will be granted a right to purchase the maximum number of Shares specified under Section 4(b), subject to the limits in Section 5(e), and will have the right to buy, on each Purchase Date during such Offering Period (at the applicable Purchase Price), such number of whole and fractional Shares as is determined by dividing (A) such Participant’s payroll deductions accumulated prior to such Purchase Date and retained in the Participant’s account as of the Purchase Date, by (B) the applicable Purchase

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Price. The right will expire on the earlier of: (x) the last Purchase Date of the Offering Period, (y) the last day of the Offering Period and (z) the date on which the Participant withdraws in accordance with Section 7(a) or Section 7(c).

(b)

On each Purchase Date, each Participant’s accumulated payroll deductions and any other additional payments specifically provided for in the applicable Offering Document will be applied to the purchase of whole and fractional Shares, up to the maximum number of Shares permitted pursuant to the terms of the Plan and the applicable Offering Document, at the Purchase Price. Shares issued pursuant to the Plan may be evidenced in such manner as the Administrator may determine and may be issued in certificated form or issued pursuant to book-entry procedures.

(c)

Pro Rata Allocation of Shares. If the Administrator determines that, on a given Purchase Date, the number of Shares with respect to which rights are to be exercised may exceed (i) the number of Shares that were available for issuance under the Plan on the Enrollment Date of the applicable Offering Period, or (ii) the number of Shares available for issuance under the Plan on such Purchase Date, the Administrator may in its sole discretion provide that the Company will make a pro rata allocation of the Shares available for purchase on such Enrollment Date or Purchase Date, as applicable, among all Participants for whom rights to purchase Common Stock are to be exercised pursuant to this Section 6 on such Purchase Date, and will either (i) continue all Offering Periods then in effect, or (ii) terminate any or all Offering Periods then in effect pursuant to Section 9. The Administrator may make pro rata allocation of the Shares available on the Enrollment Date of any applicable Offering Period pursuant to the preceding sentence, notwithstanding any authorization of additional Shares for issuance under the Plan by the Company’s stockholders subsequent to such Enrollment Date. The balance of the amount credited to the account of each Participant that has not been applied to the purchase of Shares will be paid to such Participant in one lump sum in cash as soon as reasonably practicable after the Purchase Date.

(d)

Withholding. The Participant must make adequate provision for any federal, state,shares, merger, consolidation or other tax withholding obligations that arise in connection with the Participant’s participation in the Plan. Thedistribution (other than normal cash dividends) of Company and the Designated Subsidiaries are authorizedassets to withhold any applicable taxes from the Participant’s compensation, from the Shares purchased under the Plan, from the proceeds of the sale of Shares purchased under the Plan or by such other means as permissible under Applicable Law.

(e)

Conditions to Issuance of Common Stock. The Company is not required to issue or deliver any certificate or certificates for, or make any book entries evidencing, Shares purchased upon the exercise of rights under the Plan prior to fulfillment of all of the following conditions:

(i)

The admission of such Shares to listing on all stock exchanges, if any, on which the Common Stock is then listed;

(ii)

The completion of any registration or other qualification of such Shares under any state or federal law or under the rulings or regulations of the Securities and Exchange Commissionstockholders, or any other governmental regulatory body, that the Administrator will, in its absolute discretion, deem necessary or advisable;

(iii)

The obtaining of any approval or other clearance from any state or federal governmental agency that the Administrator, in its absolute discretion, determines to be necessary or advisable;

(iv)

The payment to the Company or a Designated Subsidiary of all amounts that the Company or the Designated Subsidiary is required to withhold under federal, state or local law as a result of the Participant’s participation in the Plan; and

(v)

The lapse of such reasonable period of time following the exercise of the rights as the Administrator may from time to time establish for reasons of administrative convenience.

(f)

ESPP Broker. If the Administrator designates or approves a stock brokerage or other financial services firm (the “ESPP Broker”) to hold shares purchased under the Plan for the accounts of Participants, the following procedures will apply. Promptly following each Purchase Date, the number of shares of Common Stock

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purchased by each Participant will be deposited into an account established in the Participant’s name with the ESPP Broker. Each Participant will be the beneficial owner of the Common Stock purchased under the Plan and will have all rights of beneficial ownership in such Common Stock. A Participant will be free to undertake a disposition ofchange affecting the shares of Common Stock in histhe Company’s stock or her account at any time, but, in the absence of such a disposition, the shares of Common Stock purchased under the Plan must remain in the Participant’s account at the ESPP Broker. Dividends paid in the form of shares of Common Stock with respect to Common Stock in a Participant’s account shall be credited to such account.

7.        Withdrawal; Cessation of Eligibility

(a)

Withdrawal. A Participant may withdraw all but not less than allshare price of the payroll deductions credited to his or her account and not yet used to exercise his or her rights underCompany’s stock other than an Equity Restructuring, the Plan at any time by giving written notice to the Company in a form acceptable to the Company no later than thirty (30) calendar days prior to the end of the Offering Period, or by such later date prior to the end of the Offering Period as the Administrator determines in its sole discretion. All of the Participant’s payroll deductions credited to his or her account during an Offering Period will be paid to such Participant as soon as reasonably practicable after receipt of notice of withdrawal and such Participant’s rights for the Offering Period will be automatically terminated, and no further payroll deductions for the purchase of Shares will be made for such Offering Period. If a Participant withdraws from an Offering Period, payroll deductions will not resume at the beginning of the next Offering Period unless the Participant timely delivers to the Company a new subscription agreement.

(b)

Future Participation. A Participant’s withdrawal from an Offering Period will not have any effect upon his or her eligibility to participate in any similar plan thatBoard may hereafter be adopted by the Company or a Designated Subsidiary or in subsequent Offering Periods that commence after the termination of the Offering Period from which the Participant withdraws.

(c)

Cessation of Eligibility. Upon a Participant’s ceasing to be an Eligible Employee for any reason, he or she will be deemed to have elected to withdraw from the Plan pursuant to this Section 7 and the payroll deductions credited to such Participant’s account during the Offering Period will be paid to such Participant or, in the case of his or her death, to the person or persons entitled thereto under Section 13(d), as soon as reasonably practicable, and such Participant’s rights for the Offering Period will automatically terminate.

8.        Adjustments Upon Changes in Stock

(a)

Changes in Capitalization. Subject to Section 8(c), in the event that the Administrator determines that any dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), Change in Control, reorganization, merger, amalgamation, consolidation, combination, repurchase, recapitalization, liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company, or sale or exchange of Common Stock or other securities of the Company, issuance of warrants or other rights to purchase Common Stock or other securities of the Company, or other similar corporate transaction or event, as determined by the Administrator, affects the Common Stock such that an adjustment is determined by the Administrator to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended by the Company to be made available under the Plan or with respect to any outstanding purchase rights under the Plan, the Administrator will make equitable adjustments if any, to reflect such change with respect toto: (i) the aggregate number and typekind of Shares (or other securities or property) that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Sections 3(a) and 4(e), and the limitations established in each Offering Document pursuant to Section 4(b)3.1 on the maximum number and kind of Shares thatwhich may be purchased)issued under the Plan); (b)(ii) the class(es)number and numberkind of Shares and price per Share(or other securities or property) subject to outstanding rights;Awards; (iii) the terms and (c) the Purchase Price with respect toconditions of any outstanding rights.Awards; and (iv) the grant or exercise price per share for any outstanding Awards under the Plan.

 

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(b)

Subject to Section 8(c), inIn the event of any transaction or event described in Section 8(a)11.2(a) or any unusual or nonrecurring transactions or events affecting the Company, any Affiliate, or the financial statements of the Company, or any Affiliate (including without limitation any Change in Control), or of changes in Applicable Law or accounting principles,Applicable Accounting Standards, the Administrator,Board, in its sole discretion, and on such terms and conditions as it deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event, is hereby authorized to take any one or more of the following actions whenever the AdministratorBoard determines that such action is appropriate in order to prevent the dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to

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any rightAward under the Plan, to facilitate such transactions or events or to give effect to such changes in laws, regulationsApplicable Law or principles:Applicable Accounting Standards:

 

 (i)

To provide for either (A)the termination of any outstanding rightsuch Award in exchange for an amount of cash if any,and/or other property with a value equal to the amount that would have been obtainedattained upon the exercise of such right had such rightAward or realization of the Holder’s rights (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction or event described in this Section 11.2 the Board determines in good faith that no amount would have been currently exercisable or (B)attained upon the replacementexercise of such outstanding right with otherAward or realization of the Holder’s rights, or property selectedthen such Award may be terminated by the Administrator in its sole discretion;Company without payment);

 

 (ii)

To provide that the outstanding rights under the Plan willsuch Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or willshall be substituted for by similar options, rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices;applicable exercise or purchase price, in all cases, as determined by the Board;

 

 (iii)

To make adjustments in the number and type of Shares of the Company’s stock (or other securities or property) subject to outstanding rights under the PlanAwards, and/or in the terms and conditions of (including the grant or exercise price), and the criteria included in, outstanding rightsAwards and rights thatAwards which may be granted in the future;

 

 (iv)

To provide that Participants’ accumulated payroll deductions maysuch Award shall be usedexercisable or payable or fully vested with respect to purchase Common Stock priorall Shares covered thereby, notwithstanding anything to the next occurring Purchase Date on such date ascontrary in the Administrator determines in its sole discretion and the Participants’ rights under the ongoing Offering Period(s) will be terminated; andPlan or Award Agreement;

 

 (v)

To provide that all outstandingreplace such Award with other rights will terminate without being exercised.or property selected by the Board; and/or

 

(vi)

To provide that the Award cannot vest, be exercised or become payable after such event.

(c)

No Adjustment Under Certain Circumstances. NoIn connection with the occurrence of any Equity Restructuring, and notwithstanding anything to the contrary in Sections 11.2(a) and 11.2(b):

(i)

The number and type of securities subject to each outstanding Award and the exercise price or grant price thereof, if applicable, shall be equitably adjusted (and the adjustments provided under this Section 11.2(c)(i) shall be nondiscretionary and shall be final and binding on the affected Holder and the Company); and/or

(ii)

The Board shall make such equitable adjustments, if any, as the Board, in its sole discretion, may deem appropriate to reflect such Equity Restructuring with respect to the aggregate number and kind of Shares that may be issued under the Plan (including, but not limited to, adjustments of the limitation in Section 3.1 on the maximum number and kind of Shares which may be issued under the Plan).

(d)

Notwithstanding any other provision of the Plan, if a Change in Control occurs and a Holder’s outstanding Awards are not continued, converted, assumed, or replaced by the surviving or successor entity in such Change in Control, then immediately prior to

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the Change in Control such outstanding Awards, to the extent not continued, converted, assumed, or replaced, shall become fully vested and, as applicable, exercisable, and all forfeiture, repurchase and other restrictions on such Awards shall lapse immediately prior to such transaction. Upon, or in anticipation of, a Change in Control, the Board may cause any and all Awards outstanding hereunder to terminate at a specific time in the future, including but not limited to the date of such Change in Control, and shall give each Holder the right to exercise such Awards during a period of time as the Board, in its sole and absolute discretion, shall determine. For the avoidance of doubt, if the value of an Award that is terminated in connection with this Section 11.2(d) is zero or negative at the time of such Change in Control, such Award shall be terminated upon the Change in Control without payment of consideration therefor. In the event an Award continues in effect or is assumed or an equivalent Award substituted, and a Holder incurs a Termination of Service upon or within twelve (12) months following the Change in Control, then such Holder shall be fully vested in such continued, assumed or substituted Award.

(e)

In the event that the successor corporation in a Change in Control refuses to assume or substitute for an Award, the Board may cause (i) any or all of such Award to terminate in exchange for cash, rights or other property pursuant to Section 11.2(b)(i) or (ii) any or all of such Award to become fully exercisable immediately prior to the consummation of such transaction and all forfeiture restrictions on any or all of such Award to lapse. If any such Award is exercisable in lieu of assumption or substitution in the event of a Change in Control, the Board shall notify the Holder that such Award shall be fully exercisable for a period of fifteen (15) days from the date of such notice, contingent upon the occurrence of the Change in Control, and such Award shall terminate upon the expiration of such period.

(f)

For the purposes of this Section 11.2, an Award shall be considered assumed if, following the Change in Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or other securities or property) received in the Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the Change in Control was not solely common stock of the successor corporation or its parent, the Board may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Award, for each Share subject to an Award, to be solely common stock of the successor corporation or its parent equal in fair market value to theper-share consideration received by holders of Common Stock in the Change in Control.

(g)

The Board, in its sole discretion, may include such further provisions and limitations in any Award, agreement or certificate, as it may deem equitable and in the best interests of the Company that are not inconsistent with the provisions of the Plan.

(h)

Unless otherwise determined by the Board, no adjustment or action described in this Section 811.2 or in any other provision of the Plan isshall be authorized to the extent that such adjustment or actionit would cause the Plan to fail to satisfy the requirements of(i) result in short-swing profits liability under Section 42316 of the Code with respect to any offerings under the Plan.Exchange Act or

 

(d)

No Other Rights. Except as expressly provided in the Plan, no Participant will have any rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend, any increase or decrease in the number of shares of stock of any class or any dissolution, liquidation, merger, or consolidation of the Company or any other corporation. Except as expressly provided in the Plan or pursuant to action of the Administrator under the Plan, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, will affect, and no adjustment by reason thereof will be made with respect to, the number of Shares subject to outstanding rights under the Plan or the Purchase Price with respect to any outstanding rights.

9.        Amendment, Modification and Termination

 

(a)

Amendment, Modification and Termination. The Administrator may amend, suspend or terminate the Plan at any time and from time to time; provided, however, that approval of the Company’s stockholders will be required to amend the Plan to: (i) increase the aggregate number, or change the type, of shares that may be sold pursuant to rights under the Plan under Section 3(a) (other than an adjustment as provided by Section 8); (ii) change the corporations or classes of corporations whose employees may be granted rights under the Plan; or (iii) change the Plan in any manner that would cause the Plan to no longer be an “employee stock purchase plan” within the meaning of Section 423(b) of the Code.

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(b)

Certain Changes to Plan. Without stockholder consent and without regard to whether any Participant rights may be considered to have been adversely affected, to the extent permitted by Section 423 of the Code, the Administrator is entitled to change the Offering Periods, limit the frequency and/or number of changes in the amount withheld from Compensation during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in

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 excess

violate the exemptive conditions of Rule16b-3 of the amount designated by a Participant in orderExchange Act, or (ii) cause an Award to adjust for delays or mistakes in the Company’s processing of payroll withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each Participant properly correspond with amounts withheld from the Participant’s Compensation, and establish such other limitations or procedures as the Administrator determines in its sole discretionfail to be advisable that are consistentexempt from or comply with the Plan.

(c)

Actions In the Event of Unfavorable Financial Accounting Consequences. In the event the Administrator determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Administrator may, in its discretion and, to the extent necessary or desirable and permitted under Applicable Law, modify or amend the Plan to reduce or eliminate such accounting consequence including, but not limited to:Section 409A.

 

 (i)

Altering the Purchase Price for any Offering Period including an Offering Period underway at the timeThe existence of the Plan, any Award Agreement and/or the Awards granted hereunder shall not affect or restrict in any way the right or power of the Company or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in Purchase Price;the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Common Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

 

 (ii)(j)

ShorteningIn the event of any Offering Period so thatpending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the Offering Period ends on a new Purchase Date, including an Offering Period underway atShares or the timeshare price of the Administrator action; andCommon Stock including any Equity Restructuring, for reasons of administrative convenience, the Board, in its sole discretion, may refuse to permit the exercise of any Award during a period of up to thirty (30) days prior to the consummation of any such transaction.

 

 (iii)11.3

Allocating Shares among Participants, provided that such allocation is consistent with Section 13(f).

Such modifications or amendments will not require stockholderApproval of Plan by Stockholders. The Plan shall be submitted for the approval or the consent of any Participant.

(d)

Payments Upon Termination of Plan. Upon termination of the Plan,Company’s stockholders and shall be effective on the balance in each Participant’s Plan account will be refunded as soon as practicable after such termination, without any interest thereon, unless required otherwise by Applicable Law.

10. Term of Plan

The Plandate it is effective as of the Effective Date. The effectiveness of the Plan is subject to approval of the Plan by the stockholders of the Company within twelve months following the date the Plan is first approved by the Board. No right may be granted under the Plan prior to such stockholder approval. No rights may be granted under the Plan during any period of suspension of the Plan or after termination of the Plan.

11.    Administration

(a)

Administrator. Unless otherwise determined by the Board, the Administrator of the Plan will be the Organization and Compensation Committee of the Board (or another committee or subcommittee of the Board to which the Organization and Compensation Committee of the Board delegates administration of the Plan) (such committee, the “Committee”). Additionally, the Administrator may delegate theday-to-day administration of the Plan to a committee or group of management and other Employees, provided that such committee or group shall act in accordance with the terms of the Plan and within the scope of the Administrator’s delegation. Notwithstanding the forgoing, the Board may at any time vest in the Board any authority or duties for administration of the Plan.

(b)

Action by the Administrator. Unless otherwise established by the Board or in any charter of the Administrator, a majority of the members comprising the Administrator will constitute a quorum. The acts of a majority of the members present at any meeting at which a quorum is present and, subject to Applicable Law and the Bylaws of the Company, acts approved in writing by a majority of the Administrator in lieu of a meeting, will be deemed the acts of the Administrator. Each member of the Administrator is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other Employee, the Company’s independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan.

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(c)

Authority of Administrator. The Administrator will have the power, subject to, and within the limitations of, the express provisions of the Plan:stockholders.

 

 (i)11.4

To determine when and howNo Stockholders Rights. Except as otherwise provided herein or in an applicable Award Agreement, a Holder shall have none of the rights of a stockholder with respect to purchase Common Stock will be granted andShares covered by any Award until the provisions of each offeringHolder becomes the record owner of such rights (which need not be identical).Shares.

 

 (ii)11.5

To designate, from time to time (A) which Subsidiaries will be Designated Subsidiaries participating inPaperless Administration. In the Plan, (B) which Subsidiaries will not be Designated Subsidiaries participating in the Plan, (C) which branches, representative offices or other disregarded entities of the Company or of any Designated Subsidiary may be excluded from participation in the Plan, in each case to the extent consistent with Section 423 of the Code, and (D) which Designated Subsidiaries will participate in each separate Offering (to the extentevent that the Company makes separate Offerings). Such designationestablishes, for itself or using the services of a third party, an automated system for the documentation, granting or exercise of Awards, such as a system using an internet website or interactive voice response, then the paperless documentation, granting or exercise of Awards by a Holder may be made withoutpermitted through the approvaluse of the stockholders of the Company. To construe and interpret the Plan and rights granted under it, and to establish, amend and revoke rules and regulations for its administration. The Administrator, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan, in a manner and to the extent it will deem necessary or expedient to make the Plan fully effective.

To amend, suspend or terminate the Plan as provided in Section 9.such an automated system.

 

 (iii)11.6

Generally, to exercise such powers and to perform such acts as the Administrator deems necessary or expedient to promote the best interestsEffect of Plan upon Other Compensation Plans. The adoption of the Company and its Subsidiaries and to carry outPlan shall not affect any other compensation or incentive plans in effect for the intent thatCompany. Nothing in the Plan shall be treated as a Qualified ESPP.construed to limit the right of the Company: (a) to establish any other forms of incentives or compensation for Directors, or (b) to grant or assume options or other rights or awards otherwise than under the Plan in connection with any proper corporate purpose including without limitation, the grant or assumption of options in connection with the acquisition by purchase, lease, merger, consolidation or otherwise, of the business, stock or assets of any corporation, partnership, limited liability company, firm or association.

 

(d)11.7

Decisions Binding.Compliance with Laws. The Administrator’s interpretationPlan, the granting and vesting of the Plan, any rights granted pursuant to the Plan, any subscription agreement and all decisions and determinations by the Administrator with respect to the Plan are final, binding, and conclusive on all parties.

12.Non-U.S. Offerings

Notwithstanding any provision to the contrary in this Plan, the Administrator may adopt such rules, procedures, agreements, appendices, orsub-plans (collectively,“Sub-Plans”) relating to the operation and administration of the Plan to accommodate local laws, customs and procedures for jurisdictions outside of the United States, the terms of whichSub-Plans may take precedence over other provisions of this Plan, with the exception of Section 3 and Section 9 hereof, but unless otherwise superseded by the terms of suchSub-Plan, the provisions of this Plan will govern the operation of suchSub-Plan. To the extent inconsistent with the requirements of Section 423 of the Code, any suchSub-Plan will be considered part of an Offering that is not intended to, and purchase rights granted thereunder will not be required by the terms of the Plan to, comply with Section 423 of the Code. Without limiting the generality of the foregoing, the Administrator is authorized to adoptSub-Plans for particularnon-U.S. jurisdictions that modify the terms of the Plan to meet applicable local requirements, customs or procedures regarding, without limitation, (i) eligibility to participate, (ii) the definition of Compensation, (iii) the dates and duration of offering periods and purchase periods, (iv) any minimum or maximum amount of payroll deductions a Participant may make in an offering period or other specified period under the applicableSub-Plan, (v) the method of contribution to the Plan, including by means of check, wire transfer, electronic fund transfer or such other contribution method other than payroll deductions, (vi) the establishment of bank, building society or trust accounts to hold payroll deductions or other contributions to the Plan, (vii) the payment of interest, (viii) conversion of local currency, (ix) obligations to pay payroll tax, (x) withholding procedures and (xi) handling of share issuances.

13.    Miscellaneous

(a)

Restriction upon Assignment. A right grantedAwards under the Plan will not be transferable other than by will orand the applicable lawsissuance and delivery of descentShares and distribution, and is exercisable during the Participant’s lifetime only by the Participant. Except as provided in Section 13(d) hereof, a right under the Plan may not be exercised to any extent except by the Participant. The Company will not recognize and will be under no duty to recognize any assignment or alienationpayment of the Participant’s interest in the Plan, the Participant’s rightsmoney under the Plan or under Awards granted or awarded hereunder are subject to compliance with all Applicable Law (including but not limited to state, federal and foreign securities law and margin requirements), and to such approvals by any rights thereunder.listing, regulatory or governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith.

 

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(b)

Rights as a stockholder. With respect to Shares subject to a right grantedAny securities delivered under the Plan a Participant willshall be subject to such restrictions, and the person acquiring such securities shall, if requested by the Company, provide such assurances and representations to the Company as the Company may deem necessary or desirable to assure compliance with all Applicable Law. The Board, in its sole discretion, may take whatever actions it deems necessary or appropriate to effect compliance with Applicable Law, including, without limitation, placing legends on share certificates and issuing stop-transfer notices to agents and registrars. Notwithstanding anything to the contrary herein, the Board may not take any actions hereunder, and no Awards shall be granted, that would violate Applicable Law. To the extent permitted by Applicable Law, the Plan and Awards granted or awarded hereunder shall be deemed to be a stockholder of the Company, and the Participant will not have any of the rights or privileges of a stockholder, until such Shares have been issuedamended to the Participant or his or her nominee following exercise of the Participant’s rights under the Plan. No adjustments will be made for dividends (ordinary or extraordinary, whether in cash securities, or other property) or distribution or other rights for which the record date occurs priorextent necessary to the date of such issuance, except as otherwise expressly provided herein or as determined by the Administrator.

(c)

Interest. No interest will accrue on the payroll deductions or contributions of a Participant under the Plan, unless otherwise required byconform to Applicable Law.

 

(d)11.8

DesignationTitles and Headings, References to Sections of Beneficiary.the Code or Exchange Act. The titles and headings of the Sections in the Plan are for convenience of reference only and, in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control. References to sections of the Code or the Exchange Act shall include any amendment or successor thereto.

 

 (i)

A Participant may, if permitted by the Administrator, file a written designation of a beneficiary who is to receive any Shares and/or cash, if any, from the Participant’s account under the Plan in the event of such Participant’s death subsequent to a Purchase Date on which the Participant’s rights are exercised but prior to delivery to such Participant of such Shares and cash. In addition, if permitted by the Administrator, a Participant may file a written designation of a beneficiary who is to receive any cash from the Participant’s account under the Plan in the event of such Participant’s death prior to exercise of the Participant’s rights under the Plan. If the Participant is married and resides in a community property state, a designation of a person other than the Participant’s spouse as his or her beneficiary will not be effective without the prior written consent of the Participant’s spouse.

(ii)

Such designation of beneficiary may be changed by the Participant at any time by written notice to the Company. In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such Participant’s death, the Company will deliver such Shares and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator is appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such Shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.

(e)

Notices. All notices or other communications by a Participant to the Company under or in connection with the Plan will be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.

(f)

Equal Rights and Privileges. Subject to Section 5(g), all Eligible Employees in each Offering will have equal rights and privileges under this Plan so that the Offering qualifies as an offering under a Qualified ESPP. Subject to Section 5(g), any provision of this Plan that is inconsistent with Section 423 of the Code will, without further act or amendment by the Company, the Board or the Administrator, be reformed to comply with the equal rights and privileges requirement of Section 423 of the Code.

(g)

Use of Funds. All payroll deductions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company will not be obligated to segregate such payroll deductions, unless required otherwise by Applicable Law.

(h)

Reports. Statements of account will be given to Participants at least annually, which statements will set forth the amounts of payroll deductions, the Purchase Price, the number of Shares purchased and the remaining cash balance, if any.

(i)

No Employment Rights. Nothing in the Plan will be construed to give any person (including any Eligible Employee or Participant) the right to remain in the employ of the Company or any Parent or Subsidiary or affect the right of the Company or any Parent or Subsidiary to terminate the employment of any person (including any Eligible Employee or Participant) at any time, with or without cause.

(j)

Notice of Disposition of Shares. Each Participant participating in the Plan will give prompt notice to the Company of any disposition or other transfer of any Shares purchased upon exercise of a right under the

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Plan. Such notice will specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by the Participant in such disposition or other transfer.

(k)11.9

Governing Law. TheExcept as required by Delaware corporate law, the Plan and any agreementsAward Agreements hereunder willshall be administered, interpreted and enforced under the internal laws of the State of DelawareCalifornia without regard to conflicts of laws thereof or of any other jurisdictionjurisdiction.

 

(l)11.10

Electronic Forms.Section 409A. To the extent permittedthat the Board determines that any Award granted under the Plan is subject to Section 409A, the Plan and the Award Agreement evidencing such Award shall incorporate the terms and conditions required by Applicable LawSection 409A. In that regard, to the extent any Award under the Plan or any other compensatory plan or arrangement of the Company or any of its Subsidiaries is subject to Section 409A, and such Award or other amount is payable on account of a Holder’s Termination of Service (or any similarly defined term), then (a) such Award or amount shall only be paid to the extent such Termination of Service qualifies as a “separation from service” as defined in Section 409A, and (b) if such Award or amount is payable to a “specified employee” as defined in Section 409A then to the extent required in order to avoid a prohibited distribution under Section 409A, such Award or other compensatory payment shall not be payable prior to the earlier of (i) the expiration of thesix-month period measured from the date of the Holder’s Termination of Service, or (ii) the date of the Holder’s death. To the extent applicable, the Plan and any Award Agreements shall be interpreted in accordance with Section 409A. Notwithstanding any provision of the Plan to the contrary, in the discretionevent that the Board determines that any Award may be subject to Section 409A, the Board may (but is not obligated to), without a Holder’s consent, adopt such amendments to the Plan and the applicable Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Board determines are necessary or appropriate to (A) exempt the Award from Section 409A and/or preserve the intended tax treatment of the Administrator, an Eligible Employee may submit any form or notice as set forth herein by means of an electronic form approved by the Administrator. Before the commencement of an Offering Period, the Administrator will prescribe the time limits within which any such electronic form will be submitted to the Administratorbenefits provided with respect to such Offering Period in orderthe Award, or (B) comply with the requirements of Section 409A and thereby avoid the application of any penalty taxes under Section 409A. The Company makes no representations or warranties as to be a valid election.the tax treatment of any Award under Section 409A or otherwise. The Company shall have no obligation under this Section 11.10 or otherwise to take any action (whether or not described herein) to avoid the imposition of taxes, penalties or interest under Section 409A with respect to any Award and shall have no liability to any Holder or any other person if

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any Award, compensation or other benefits under the Plan are determined to constitutenon-compliant, “nonqualified deferred compensation” subject to the imposition of taxes, penalties and/or interest under Section 409A.

 

A-13 | Page   11.11

Unfunded Status of Awards. The Plan is intended to be an “unfunded” plan for incentive compensation. With respect to any payments not yet made to a Holder pursuant to an Award, nothing contained in the Plan or Award Agreement shall give the Holder any rights that are greater than those of a general creditor of the Company.

11.12

Relationship to Other Benefits. No payment pursuant to the Plan shall be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company except to the extent otherwise expressly provided in writing in such other plan or an agreement thereunder.

11.13

Expenses. The expenses of administering the Plan shall be borne by the Company.

11.14

Foreign Holders. Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws in countries other than the United States in which aNon-Employee Director may reside or in order to comply with the requirements of any foreign securities exchange or other Applicable Law, the Board, in its sole discretion, shall have the power and authority to: (a) restrict eligibility to participate in the Plan; (b) modify the terms and conditions of any Award to comply with Applicable Law (including, without limitation, applicable foreign laws or listing requirements of any foreign securities exchange); (d) establish subplans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable; provided, however, that no such subplans and/or modifications shall increase the share limitation contained in Section 3.1 or the Annual Award Amount; and (e) take any action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local governmental regulatory exemptions or approvals or listing requirements of any foreign securities exchange.

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LOGOLOGO

 

NOTICE OF

ANNUAL MEETING

OF STOCKHOLDERS

AND

PROXY STATEMENT

 

Meeting Date

 

March 18, 20192020

 

 

 

LOGO

ANNUAL MEETING OF STOCKHOLDERS OF

THE COOPER COMPANIES, INC.

March 18, 20192020

GO GREEN

 

e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.astfinancial.com to enjoy online access.

 

 
 

NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL:MATERIAL:

The Notice of Meeting, Proxy Statement, Annual Report on Form 10-K

and Proxy Card are available at investor.coopercos.com/financials.cfmfinancial-information

 

Please sign, date and mail

your proxy card in the

envelope provided as soon

as possible.

 

 

$ Please detach along perforated line and mail in the envelope provided. $

 

⬛

 00033333333330330000    600033333333303300000    9     031819031820                

 

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” ITEMS 1 THRU 4.

PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR

BLACK INK AS SHOWN HERE  ☒

In their discretion, the proxies are authorized to vote for the election of such substitute nominee(s) for directors as such proxies may select in the event that any nominee(s) named herein become unable to serve, and on such other matters as may properly come before the meeting or any adjournments or postponements thereof.

 

THIS PROXY WILL REVOKE ALL PRIOR PROXIES SIGNED BY YOU.

    1. ELECTION OF NINEEIGHT DIRECTORS. FOR AGAINST ABSTAIN
    

    A. Thomas Bender

 

 ☐ ☐ ☐
    

    Colleen E. Jay

 

 ☐ ☐ ☐
    

    Michael H. Kalkstein

☐☐☐

William A. Kozy

 

 ☐ ☐ ☐
         

    Jody S. Lindell

 

 ☐ ☐ ☐
      

    Gary S. Petersmeyer

 

 ☐ ☐ ☐
      

    Allan E. Rubenstein, M.D.

 

 ☐ ☐ ☐
      

    Robert S. Weiss

 

 ☐ ☐ ☐
         

    Albert G. White III

 

 ☐ ☐ ☐
   2. 

Ratification of the appointment of KPMG LLP as the independent registered public accounting firm for The Cooper Companies, Inc. for the fiscal year ending October 31, 2019;2020;

 

 ☐ ☐ ☐
   3. 

Approve the 2019 Employee Stock Purchase Plan;2020 Long-Term Incentive Plan for Non-Employee Directors;

 

 ☐ ☐ ☐
   

4.

 

An advisory vote on the compensation of our named executive officers as presented in the Proxy Statement; and

 

 ☐ ☐ ☐
        5. 

Transact any other business that my properly come up before the meeting or any continuations, adjournmentadjournments or postponements thereof.

 

To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.

 ☐     

 

 

Signature of Stockholder

    Date:      Signature of Stockholder    Date:    

⬛

 Note: 

Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign.   When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.

 ⬛

 

 

 

LOGO                     ⬛

PROXY

THE COOPER COMPANIES, INC.

PROXY FOR ANNUAL MEETING OF STOCKHOLDERS, MARCH 18, 20192020

SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned stockholder of The Cooper Companies, Inc., a Delaware corporation, hereby appoints BRIAN G. ANDREWS, RANDAL L. GOLDEN, DANIEL G. MCBRIDE AND ALBERT G. WHITE III, and each of them, proxies, with full power of substitution, to vote all of the shares of common stock of The Cooper Companies, Inc. which the undersigned is entitled to vote at the Annual Meeting of Stockholders of The Cooper Companies, Inc. to be held at the offices of The Cooper Companies, Inc., 6140 Stoneridge Mall6101 Bollinger Canyon Road, Suite 590, Pleasanton,500, San Ramon, CA 9458894583 at 8:00 a.m., (P.D.T.), and at any continuations, adjournments or postponements thereof, as set forth on the reverse, and in their discretion upon any other business that may properly come before the meeting.

THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED “FOR” ITEMS 1 THRU 4, AND WILL GRANT DISCRETIONARY AUTHORITY PURSUANT TO ITEM 5.

(Continued and to be signed on the reverse side.)

 

⬛  1.1  14475  ⬛