UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

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☑		Definitive Proxy Statement
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☐		Soliciting Material Pursuant to §240.14a-12
NU SKIN ENTERPRISES, 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):
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NU SKIN ENTERPRISES, INC.

June 23, 2015

 

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NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual Meeting") of Nu Skin Enterprises, Inc., a Delaware corporation, will be held at 8:00 a.m., Mountain Daylight Time, on June 23, 2015, at our corporate offices, 75 West Center Street, Provo, Utah 84601, for the following purposes, which are more fully described in the Proxy Statement:

1.	To elect the eight directors named in the Proxy Statement;

3.	To ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2015; and

4.	To transact such other business as may properly come before the Annual Meeting.

The Board of Directors has fixed the close of business on April 27, 2015, as the record date for determining the stockholders entitled to receive notice of and to vote at the Annual Meeting or any adjournment or postponement thereof.

You are cordially invited to attend the Annual Meeting in person. However, to ensure your representation at the Annual Meeting, please mark, sign, date and return the accompanying proxy as promptly as possible in the enclosed postage‑prepaid envelope. If you attend the Annual Meeting, you may, if you wish, withdraw your proxy and vote in person.

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on June 23, 2015: The proxy statement and annual report to stockholders are available at materials.proxyvote.com/67018T.

 

By Order of the Board of Directors,

STEVEN J. LUND
Chairman of the Board

Provo, Utah, May 13, 2015

 

 

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PROXY STATEMENT		1
SOLICITATION OF PROXIES		1
OUTSTANDING SHARES AND VOTING RIGHTS		2
PROPOSAL 1:  ELECTION OF DIRECTORS		3
CORPORATE GOVERNANCE		7
Corporate Governance Highlights		7
Director Independence		8
Board Leadership Structure		8
Risk Oversight		8
Board of Directors Meetings		9
Board Committees		9
Compensation Committee Interlocks and Insider Participation		11
Our Director Nominations Process		11
Communications with Directors		12
Additional Corporate Governance Information		12
DIRECTOR COMPENSATION		14
EXECUTIVE COMPENSATION		16
Compensation Discussion and Analysis		16
Executive Compensation Committee Report		33
Executive Compensation Tables and Accompanying Narrative		34
PROPOSAL 2: ADVISORY VOTE TO APPROVE OUR EXECUTIVE COMPENSATION		50
AUDIT COMMITTEE REPORT		53
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS		54
Review and Approval of Related Person Transactions		54
Related Person Transactions		54
PROPOSAL 3: RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		55
Audit and Non-Audit Services Pre-Approval Policy		55
STOCK OWNERSHIP INFORMATION		57
Security Ownership of Certain Beneficial Owners and Management		57
Section 16(a) Beneficial Ownership Reporting Compliance		58
STOCKHOLDER PROPOSALS FOR 2016 ANNUAL MEETING		58
HOUSEHOLDING		59
OTHER MATTERS		59

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PROXY STATEMENT

NU SKIN ENTERPRISES, INC.

ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 23, 2015

 

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SOLICITATION OF PROXIES

The accompanying proxy is solicited on behalf of the Board of Directors of Nu Skin Enterprises, Inc. ("Nu Skin," "we," "us," or "the company") for use at the Annual Meeting of Stockholders (the "Annual Meeting") at our corporate offices, 75 West Center Street, Provo, Utah 84601, on June 23, 2015, at 8:00 a.m., Mountain Daylight Time, and at any adjournment or postponement thereof, for the following purposes, which are more fully described in this Proxy Statement:

1.	To elect the eight directors named in the Proxy Statement;

3.	To ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2015; and

4.	To transact such other business as may properly come before the Annual Meeting.

All shares represented by each properly executed, unrevoked proxy received in time for the Annual Meeting will be voted as directed by the stockholder. In the absence of specific instructions, proxies will be voted in accordance with the Board of Directors' recommendations "FOR" the election of each director nominee, "FOR" Proposal 2 and "FOR" Proposal 3. Although it is anticipated that each nominee will be able to serve as a director, should any nominee become unavailable to serve, proxies will be voted for such other person or persons as may be designated by the Board of Directors. If any other matters properly come before the Annual Meeting, including, among other things, consideration of a motion to adjourn the Annual Meeting to another time or place, the persons named in the accompanying proxy will vote on such matters in accordance with their best judgment.

This proxy statement and form of proxy are first being sent or given to our stockholders on or about May 13, 2015. We will bear the cost of solicitation of proxies. Expenses include reimbursements paid to brokerage firms and others for their expenses incurred in forwarding solicitation material regarding the Annual Meeting to beneficial owners of our voting stock. Our regular employees may further solicit proxies by telephone, by mail, in person or by electronic communication and will not receive additional compensation for such solicitation.

Any proxy duly given pursuant to this solicitation may be revoked by the person or entity giving it at any time before it is voted by delivering a written notice of revocation to our Corporate Secretary, by executing a later‑dated proxy and delivering it to our Corporate Secretary, or by attending the Annual Meeting and voting in person (although attendance at the Annual Meeting will not in and of itself constitute a revocation of the proxy). If you hold shares through a broker, bank or other nominee, you must follow the instructions of your broker, bank or other nominee to change or revoke your voting instructions, and if you wish to vote in person at the Annual Meeting you will be required to present a legal proxy from your broker, bank or other nominee. Directions to our Annual Meeting may be obtained by calling (801) 345-1000.

 

 

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OUTSTANDING SHARES AND VOTING RIGHTS

Only stockholders of record at the close of business on April 27, 2015 are entitled to vote at the Annual Meeting. As of this record date, approximately 58,630,491 shares of our Class A Common Stock were issued and outstanding. Each outstanding share of Class A Common Stock will be entitled to one vote on each matter submitted to a vote of the stockholders at the Annual Meeting.

In order to constitute a quorum for the conduct of business at the Annual Meeting, a majority of the issued and outstanding shares of the Class A Common Stock entitled to vote at the Annual Meeting must be represented, either in person or by proxy, at the Annual Meeting. Under Delaware law, shares represented by proxies that reflect abstentions or "broker non‑votes" (which are shares held by a broker or nominee that are represented at the Annual Meeting, but with respect to which such broker or nominee is not empowered to vote on a particular proposal) will be counted as shares that are present and entitled to vote for purposes of determining the presence of a quorum. However, broker non‑votes will not be voted on proposals on which your broker or other nominee does not have discretionary authority to vote under the rules of the New York Stock Exchange (the "NYSE"), including Proposals 1 and 2.

In February 2015, our Board of Directors amended our Bylaws and Corporate Governance Guidelines to require director nominees to be elected by a majority of the votes cast in an uncontested election, such as at the 2015 Annual Meeting. Prior to the February 2015 amendment, a plurality voting standard applied to all director elections. Under the majority-of-the-votes-cast standard, a nominee must receive more "for" votes than "against" votes to be elected as a director. Shares not represented in person or by proxy at the Annual Meeting, abstentions and broker non-votes are not considered as votes cast and will have no effect on the election of directors. If an incumbent director does not receive the required majority, the director shall resign pursuant to an irrevocable resignation that was required to be tendered prior to his or her nomination and effective upon (i) such person failing to receive the required majority vote and (ii) the Board's acceptance of such resignation. Within 90 days after the date of the certification of the election results, the Board will determine whether to accept or reject the resignation or whether other action should be taken, and the Board will publicly disclose its decision.

Approval of Proposals 2 and 3 will require the affirmative vote of a majority of the votes cast affirmatively or negatively. Shares not represented in person or by proxy at the Annual Meeting, abstentions and broker non-votes will have no effect on the approval of Proposals 2 and 3. Proposal 2 is a stockholder advisory vote and will not be binding on the Board.

 

 

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PROPOSAL 1:
ELECTION OF DIRECTORS

Directors are elected at each annual meeting of stockholders and hold office until their successors are duly elected and qualified at the next annual meeting of stockholders or until their earlier death, resignation or removal. Our Bylaws provide that the Board of Directors will consist of a minimum of three and a maximum of fifteen directors, with the number being designated by the Board. The current number of authorized directors is eight.

Each of our current directors was previously elected to his or her present term of office by our stockholders. Each of the nominees is currently a director of our company except for Edwina D. Woodbury. Ms. Woodbury was recommended by Thomas R. Pisano, one of our independent directors.

Patricia A. Negrón has elected to retire from the Board and will not stand for reelection. Our Board extends gratitude to Ms. Negrón for her ten years of service to Nu Skin. As a result of Ms. Negrón's retirement, and assuming the election of all director nominees, the size of the Board will remain at eight.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR EACH OF THE EIGHT NOMINEES TO OUR BOARD OF DIRECTORS.

Set forth below are the name, age as of April 1, 2015, business experience and other qualifications of each of our director nominees, listed in alphabetical order.

Nevin N. Andersen, 74, has served as a director of our company since 2008. Mr. Andersen is currently retired. Mr. Andersen previously served in various positions, including Senior Vice President and Chief Financial Officer, Vice President and Corporate Controller, and Director of Internal Audit, at Shaklee Corporation, a direct selling company, from 1979 to 2003, when he retired. He was asked to return to Shaklee Corporation for a period of time to serve as the Interim Chief Financial Officer and to help in the transition with a new Chief Financial Officer, which role he fulfilled from 2005 to 2008. Prior to initially working at Shaklee Corporation in 1979, he worked for Price Waterhouse & Co. and served as an officer in the U.S. Army Finance Corps. He received M.Acc. and B.S. degrees from Brigham Young University.

Mr. Andersen is an experienced financial professional. His ten years as a CPA with Price Waterhouse provided him with valuable experience in the areas of audit, internal control and financial reporting, and his more than 25 years with Shaklee Corporation added to that knowledge and expertise by allowing him to focus on those issues directly related to the operations of a public company in the direct selling industry. Mr. Andersen's areas of expertise include corporate strategy, risk management, succession planning, executive compensation, stockholder communication and regulatory compliance.

Daniel W. Campbell, 60, has served as a director of our company since 1997 and currently serves as our Lead Independent Director. Mr. Campbell has been a Managing General Partner of EsNet, Ltd., a privately held investment company, since 1994. He has served on the Utah State Board of Regents for Higher Education since 2010. From 1992 to 1994, Mr. Campbell was the Senior Vice President and Chief Financial Officer of WordPerfect Corporation, a software company, and prior to that was a partner of Price Waterhouse LLP. He received a B.S. degree from Brigham Young University.

Mr. Campbell is a recognized business leader with expertise in the areas of finance, accounting, transactions, corporate governance and management. In addition, through his experience as a partner of an international accounting firm, and later as Chief Financial Officer of a large technology company, Mr. Campbell has developed deep insight into the management, operations, finances and governance of public companies.

 

 

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M. Truman Hunt, 56, has served as our President and Chief Executive Officer and as a director of our company since 2003. Mr. Hunt joined our company in 1994 and has served in various positions, including Vice President and General Counsel from 1996 to 2003 and Executive Vice President from 2001 until 2003. Mr. Hunt is also a trustee of the Nu Skin Force for Good Foundation, a charitable organization that our company established in 1996 to help encourage and drive the philanthropic efforts of our company, its employees, its sales force and its customers to enrich the lives of others. He received a B.S. degree from Brigham Young University and a J.D. degree from the University of Utah.

As our President and Chief Executive Officer for the past 11 years, Mr. Hunt has developed a deep understanding of our business globally. Mr. Hunt's leadership has been integral to the success of several of our key initiatives in recent years. Mr. Hunt is also recognized as a leader in the direct selling industry and has served in a variety of industry trade association leadership roles, including his current service as Chairman of the United States Direct Selling Association and his previous service as Chairman of the World Federation of Direct Selling Associations from 2005 to 2008.

Andrew D. Lipman, 63, has served as a director of our company since 1999. Mr. Lipman is a partner and head of the Telecommunications, Media and Technology Group at Morgan, Lewis & Bockius LLP, an international law firm that he joined in 2014. He previously held similar positions with Bingham McCutchen LLP from 2006 to 2014 and Swidler Berlin, LLP from 1988 to 2006. From 2007 to 2013, Mr. Lipman served as a member of the board of directors of Sutron Corporation, a provider of hydrological and meteorological monitoring products. From 2000 to 2014, Mr. Lipman served as a member of the board of directors of The Management Network Group, Inc., a telecommunications related consulting firm. He received a B.A. degree from the University of Rochester and a J.D. degree from Stanford Law School.

Mr. Lipman is a highly experienced senior lawyer and business advisor with over 35 years of experience dealing with international regulatory, technology and marketing issues in multiple countries. In addition, he has extensive experience in corporate governance and related legal and transactional issues. Mr. Lipman has worked closely with dozens of public companies, including service on the boards of a variety of companies in several industries. His experience also includes managing and implementing strategic initiatives and launching new products and markets globally in competitive industries.

Steven J. Lund, 61, has served as the Chairman of the Board since 2012. Mr. Lund previously served as Vice Chairman of the Board from 2006 to 2012. Mr. Lund served as President, Chief Executive Officer and a director of our company from 1996, when our company went public, until 2003, when he took a three-year leave of absence. Mr. Lund was a founding stockholder of our company. Mr. Lund is a trustee of the Force for Good Foundation, a charitable organization that our company established in 1996 to help encourage and drive the philanthropic efforts of our company, its employees, its sales force and its customers to enrich the lives of others. Mr. Lund worked as an attorney in private practice prior to joining our company as Vice President and General Counsel. He received a B.A. degree from Brigham Young University and a J.D. degree from Brigham Young University's J. Reuben Clark Law School.

Mr. Lund brings to the Board over 25 years of company and industry knowledge and experience as a senior executive, including service as our General Counsel, Executive Vice President, and President and Chief Executive Officer. He has played an integral role in managing our growth from start-up through his term as President and Chief Executive Officer from 1996 to 2003. Mr. Lund also served on the executive board of the United States Direct Selling Association. A respected business and community leader, he currently serves as chairman of the board of trustees of Utah Valley University.

 

 

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Neil H. Offen, 70, has served as a director of our company since 2011. Mr. Offen previously served as President and Chief Executive Officer of the United States Direct Selling Association from 1978 through 2011, when he retired. In addition, he served as secretary of the World Federation of Direct Selling Associations from 1978 to 2012 and as vice chairman of the Direct Selling Education Foundation from 1990 to 2011. Before joining the Direct Selling Association as a staff attorney in 1971, Mr. Offen was legislative and administrative assistant to a United States Congressman and, prior to that, served with the U.S. Department of State's Agency for International Development. Mr. Offen has published both legal and non-legal articles, has lectured on a variety of topics at numerous universities and is recognized as a Governance Fellow by the National Association of Corporate Directors. Mr. Offen received a B.A. from Queens College and a J.D. degree from George Washington University. He is a member of the Bar of the District of Columbia.

With over 40 years of service and leadership in the direct selling industry, Mr. Offen has an extensive understanding of the opportunities and challenges of our industry. In addition, Mr. Offen has developed relationships with many other leaders both inside and outside our industry. Mr. Offen serves on the board of directors and the Finance, Audit and Governance Committee of Christel House International and previously served on the Advisory Board of Queens College. Mr. Offen has also served as vice chair of the board of directors of the Inter-American Foundation, on the board of trustees of the Hudson Institute and the boards of directors of the U.S. Chamber of Commerce Foundation, the Council of Better Business Bureaus, the National Retail Federation, the Small Business Legislative Council, the Ethics Resource Center, the American Society of Association Executives and co-chaired the Democratic Business Council.

Thomas R. Pisano, 70, has served as a director of our company since 2008. He served as Chief Executive Officer and a director of Overseas Military Sales Corp., a marketer of motor vehicles, from 2005 until his retirement in 2010. From 1998 to 2004, he served as the Chief Operating Officer and a director of Overseas Military Sales Corp. From 1995 to 1997, he served as Vice President, Head of the International Division, for The Topps Company, Inc., a sports publications and confectionery products company. Prior to that, he served in various positions, including Vice President, Global New Business Development, for Avon Products, Inc., a direct seller of personal care products, from 1969 to 1994. He received a B.S. from the Georgia Institute of Technology and an M.B.A. from Dartmouth College.

Mr. Pisano is an experienced senior executive who is an expert in the direct selling, personal care, beauty products and other consumer goods industries. During his 25-year career at Avon Products, Inc., he was responsible for global new business development, which included new geographic market openings and launching new product lines globally. He was also responsible for the operation of international businesses in Latin America, Europe and Asia. During his international business career at Avon, Topps and OMSC he traveled to and conducted business in 50 countries.

Edwina D. Woodbury, 63, has been President and Chief Executive Officer of The Chapel Hill Press, Inc., a publishing services company, since 1999. Ms. Woodbury has over 20 years of experience in the direct selling and personal care products industries, having served at Avon Products, Inc. as Chief Financial Officer and in other finance and operations positions from 1977 to 1998. Since 1997, Ms. Woodbury has served as a member of the board of directors of RadioShack Corporation, a retail consumer electronics company. From to 2005 to 2010, Ms. Woodbury also served as a member of the board of directors of R.H. Donnelley Corporation, a publishing and marketing company, and from 2000 to 2005, she served as a director of Click Commerce, Inc., a research solutions company. In addition, since 2009, Ms. Woodbury has served on the board of directors at the nonprofit Medical Foundation of North Carolina. She received a B.S.B.A from the University of North Carolina.

 

 

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We are not aware of any family relationships among any of our directors, director nominees or executive officers. Our Certificate of Incorporation contains provisions eliminating or limiting the personal liability of directors for violations of a director's fiduciary duty to the extent permitted by the Delaware General Corporation Law.

 

 

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CORPORATE GOVERNANCE

Corporate Governance Highlights

The following are some highlights of our corporate governance practices and policies:

Board of Directors Independence and Committee Structure

·	Separate Chairman of the Board and Chief Executive Officer. The positions of Chairman of the Board and Chief Executive Officer are filled by Mr. Lund and Mr. Hunt, respectively.

·	Lead Independent Director. Our independent directors have designated Mr. Campbell as Lead Independent Director.

·	Limitation on management directors. All of our directors are independent of the company and management except for Mr. Lund, who is one of our company's founders, and Mr. Hunt.

·	Meetings of independent directors. All independent directors meet regularly in executive session. Mr. Campbell, the Lead Independent Director, chairs these sessions.

·	Independent committees. Only independent directors serve on our Audit, Executive Compensation, and Nominating and Corporate Governance Committees.

·	Annual Board and committee performance evaluations. The performance of the Board and each Board committee is evaluated at least annually.

Election of Directors

·	Annual election of directors. All of our directors are elected annually; we do not have a staggered board.

·	Majority voting in uncontested director elections. Our Bylaws provide that director nominees must be elected by a majority of the votes cast in uncontested elections.

Stock-Related Matters

·

Stock ownership requirements. We have stock ownership requirements that apply to our directors and executive officers, designed to align directors' and executive officers' interests with those of stockholders. For a description of these requirements, see "Additional Corporate Governance Information" and "Compensation Discussion and Analysis—Stock Ownership Guidelines."

·

Hedging policy. Our directors and employees, including officers, are prohibited from engaging in any hedging transactions with respect to our securities, including through the use of financial instruments such as prepaid variable forward contracts, equity swaps, collars and exchange funds. This prohibition applies regardless of whether the director's or employee's securities were granted as compensation and regardless of whether the director or employee holds the securities directly or indirectly.

·	Pledging policy. Our directors and employees, including officers, are prohibited from pledging their securities in our company.

 

 

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Director Independence

The Board of Directors has determined that each of the current directors, listed below, is an "independent director" under the listing standards of the NYSE. The Board also has determined that Edwina D. Woodbury, who is a nominee not currently on the Board, will be an "independent director" under the listing standards of the NYSE, if elected.

Nevin N. Andersen	Andrew D. Lipman	Thomas R. Pisano
Daniel W. Campbell	Patricia A. Negrón	Neil H. Offen

In assessing the independence of the directors, the Board determines whether or not any director has a material relationship with us (either directly or as a partner, stockholder or officer of an organization that has a relationship with us). The Board considers all relevant facts and circumstances in making independence determinations, including the existence and scope of any commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships.

Board Leadership Structure

We currently separate the roles of Chairman of the Board and Chief Executive Officer. However, the Board has not adopted a policy with regard to whether the same person should serve as both the Chairman of the Board and Chief Executive Officer or, if the roles are separate, whether the Chairman of the Board should be selected from the non-employee directors or should be an employee. The Board believes it is most appropriate to retain the discretion and flexibility to make such determinations at any given point in time in the way that it believes best to provide appropriate leadership for the company at that time. We have determined that our current separation of the roles of Chairman of the Board and Chief Executive Officer is appropriate given the differences in the roles and duties of the two positions and the individuals currently serving in these positions.

The Board has created the Lead Independent Director position to provide independent leadership of the Board's affairs on behalf of our stockholders and to promote open communication among the independent directors. Our Corporate Governance Guidelines provide that the Lead Independent Director (i) is designated by the non-management directors; (ii) consults with the Chairman of the Board and the Chief Executive Officer regarding agenda items for Board meetings; (iii) chairs executive sessions of the Board's independent directors; and (iv) performs such other duties as the Board deems appropriate.

Risk Oversight

Our Board of Directors has primary responsibility for risk oversight. Except with regard to certain strategically significant risks, the Board administers its risk oversight function through the Audit Committee, Nominating and Corporate Governance Committee and Executive Compensation Committee. The committees are responsible for overseeing and discussing with management our risk assessment and risk management programs and plans related to the following risk areas:

Audit Committee:

·	major financial risk exposures;

·	operational risks related to information systems and facilities; and

·	public disclosure and investor related risks.

 

 

 

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Nominating and Corporate Governance Committee:

·	corporate governance risks;

·	operational risks not assigned to the Audit Committee;

·	compliance and regulatory risks; and

·	reputational risks.

Executive Compensation Committee:

·	compensation practices related risks; and

·	human resources risks.

The chairs of the Nominating and Corporate Governance Committee and Executive Compensation Committee report to the Audit Committee regarding their respective risk oversight responsibilities.

Board of Directors Meetings

The Board of Directors held 15 meetings during the fiscal year ended December 31, 2014. Each incumbent director attended more than 75% of the total number of meetings of the Board and the total number of meetings of all committees of the Board on which that director served during the period. Although we encourage Board members to attend our annual meetings of stockholders, we do not have a formal policy regarding director attendance at annual stockholder meetings. All eight of the current directors attended our 2014 annual meeting of stockholders.

Board Committees

We have standing Audit, Executive Compensation and Nominating and Corporate Governance Committees. Each member of the committees is independent within the meaning of the listing standards of the NYSE. In addition, the Audit Committee and the Executive Compensation Committee are composed solely of directors who meet additional, heightened independence standards applicable to members of audit committees and compensation committees under the NYSE Listed Company Rules and the Securities and Exchange Commission's rules.

The following table identifies the current membership of the committees and states the number of committee meetings held during 2014.

Director	Audit	Executive Compensation	Nominating and Corporate Governance
Nevin N. Andersen	Chair		●
Daniel W. Campbell	●	Chair
Andrew D. Lipman		●	Chair
Patricia A. Negrón	●	●
Neil H. Offen		●	●
Thomas R. Pisano	●		●
Number of Meetings in 2014	25	14	6

 

 

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The Board has adopted a written charter for each of the committees, which are available at our website at nuskinenterprises.com.

The Board has determined that Messrs. Andersen and Campbell are Audit Committee financial experts as such term is defined in Item 407(d)(5) of Regulation S-K promulgated by the Securities and Exchange Commission.

The Audit Committee's responsibilities include, among other things:

·	selecting our independent auditor;

·	reviewing the activities and the reports of our independent auditor;

·	approving in advance the audit and non-audit services provided by our independent auditor;

·	reviewing our quarterly and annual financial statements and our significant accounting policies, practices and procedures;

·	reviewing the adequacy of our internal controls and internal auditing methods and procedures;

·	overseeing our compliance with legal and regulatory requirements;

·	overseeing our risk assessment and risk management programs and plans related to our major financial risk exposures, operational risks related to information systems and facilities, and public disclosure and investor related risks; and

·	conferring with the chairs of the Nominating and Corporate Governance Committee and Executive Compensation Committee regarding their respective oversight of our risk assessment and risk management programs and our related guidelines and policies.

 

The Executive Compensation Committee's responsibilities include, among other things:

·	overseeing and approving compensation policies and programs;

·	reviewing and approving corporate goals and objectives relevant to the compensation to be paid to our Chief Executive Officer and other executive officers;

·	establishing the salaries, bonuses, and other compensation to be paid to our Chief Executive Officer as well as approving the compensation for the other executive officers;

·	administering our incentive plans;

·	overseeing regulatory compliance with respect to executive compensation matters; and

·	overseeing our risk assessment and risk management programs and plans related to our compensation practices and human resources.

 

 

 

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The Nominating and Corporate Governance Committee's responsibilities include, among other things:

·	making recommendations to the Board of Directors about the size and membership criteria of the Board or any committee thereof;

·	identifying and recommending candidates for the Board and committee membership, including evaluating director nominations received from stockholders;

·	leading the process of identifying and screening candidates for a new Chief Executive Officer when necessary, and evaluating the performance of the Chief Executive Officer;

·	determining compensation for the Board and overseeing the evaluation of the Board and management;

·	developing and recommending to the Board a set of corporate governance guidelines; and

·	overseeing our risk assessment and risk management programs and plans related to our corporate governance risks, operational risks not assigned to the Audit Committee, compliance and regulatory risks, and reputational risks.

 

Compensation Committee Interlocks and Insider Participation

None of the directors who served on the Executive Compensation Committee during 2014 was:

·	a current or former officer or employee of our company;

·	a participant during 2014 in a "related person" transaction that is required to be disclosed; or

·

an executive officer of another entity at which one of our executive officers served during 2014 on either the board of directors or the compensation committee, nor were any of our other directors an executive officer of another entity at which one of our executive officers served on the compensation committee.

 

Our Director Nominations Process

As indicated above, the Nominating and Corporate Governance Committee of the Board of Directors oversees the director nomination process. This committee is responsible for identifying and evaluating candidates for membership on the Board and recommending to the Board nominees to stand for election.

Minimum Criteria for Members of the Board. Each candidate to serve on the Board must possess the highest personal and professional ethics, integrity and values, and be committed to serving the long‑term interests of our stockholders. In addition, our Corporate Governance Guidelines require that, to be nominated for re-election to our Board, an incumbent director must tender an irrevocable resignation that will be effective upon (i) the failure to receive the required vote for director election at the next annual meeting at which they face re-election and (ii) Board acceptance of such resignation. Other than the foregoing, there are no stated minimum criteria for director nominees, although the Nominating and Corporate Governance Committee may consider such other factors as it may deem appropriate, which may include, without limitation, professional experience, diversity of backgrounds, skills and experience at policy‑making levels in business, government, financial, and in other areas relevant to our global operations, experience and history with our company, and stock ownership.

 

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We do not have a formal policy with regard to the consideration of diversity in identifying Board nominees, but the Nominating and Corporate Governance Committee strives to nominate individuals with a variety of complementary skills so that, as a group, the Board will possess the appropriate talent, skills and expertise to oversee our business.

Process for Identifying, Evaluating and Recommending Candidates. The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders if properly submitted to the committee. Stockholders wishing to recommend candidates should do so in writing to the Nominating and Corporate Governance Committee, c/o Corporate Secretary, Nu Skin Enterprises, Inc., 75 West Center Street, Provo, Utah 84601. The committee may also consider candidates proposed by current directors, management, employees and others. All such candidates who, after evaluation, are then recommended by the Nominating and Corporate Governance Committee and approved by the Board will be included in our recommended slate of director nominees in our proxy statement.

Procedures for Stockholders to Nominate Director Candidates at our Annual Meetings. Stockholders of record may also nominate director candidates for our annual meetings of stockholders by following the procedures set forth in our Bylaws. Please refer to the section below titled "Stockholder Proposals for 2016 Annual Meeting" for further information.

Communications with Directors

Stockholders or other interested parties wishing to communicate with the Board of Directors, the non‑management directors as a group, or any individual director may do so in writing by addressing the correspondence to that individual or group, c/o Corporate Secretary, Nu Skin Enterprises, Inc., 75 West Center Street, Provo, Utah 84601. All such communications will be initially received and processed by our Corporate Secretary. Accounting, audit, internal accounting controls and other financial matters will be referred to our Audit Committee chair. Other matters will be referred to the Board, the non‑management directors, or individual directors as appropriate.

Additional Corporate Governance Information

We have also adopted the following:

·

Code of Conduct. Our code of conduct applies to all of our employees, officers and directors, including our subsidiaries. As noted below, this code is available on our website. Any amendments or waivers (including implicit waivers) regarding this code for which disclosure is required by applicable NYSE Listed Company Rules or the Securities and Exchange Commission's rules will be disclosed on our website.

·

Corporate Governance Guidelines. Our corporate governance guidelines govern our company and our Board of Directors on matters of corporate governance, including responsibilities, committees of the Board and their charters, director independence, director qualifications, director compensation and evaluations, director orientation and education, director access to management, director access to outside financial, business and legal advisors and management development and succession planning.

 

 

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·

Stock Ownership Guidelines. Our stock ownership guidelines apply to our directors and executive officers. These guidelines provide that executive officers and directors must retain 50% to 75% of the net shares (after payment of the exercise price and related taxes) with respect to any equity award unless the individual holds a number of shares equal to the ownership levels set forth in the guidelines. The ownership levels are phased in over five years from the date of appointment or election. Unvested equity awards and vested options are not counted in determining whether a director or executive officer holds shares equal to or greater than the designated level. At the end of the five-year phase-in period, the designated ownership levels are set at 100,000 shares for our Chief Executive Officer, 25,000 shares for our other executive officers, and 5,000 shares for directors.

Each of the above is available on our website at nuskinenterprises.com. In addition, stockholders may obtain a print copy of any of the above, free of charge, by making a written request to Investor Relations, Nu Skin Enterprises, Inc., 75 West Center Street, Provo, Utah 84601.

 

 

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DIRECTOR COMPENSATION

Our Board of Directors periodically reviews director compensation. The Nominating and Corporate Governance Committee is responsible for evaluating director compensation from time to time and making any adjustments it determines are appropriate. The Nominating and Corporate Governance Committee has retained the services of Frederic W. Cook & Co. as its independent compensation consultant to assist in the review of our director compensation program, to provide compensation data and alternatives, and to provide advice as requested. For additional information regarding our independent compensation consultant, see "Compensation Discussion and Analysis—Use of Compensation Consultant and Competitive Data."

In 2014, each director who did not receive compensation as an executive officer or employee of our company or our affiliates in 2014 received an annual retainer fee of $50,000, a fee of $1,500 for each meeting of the Board or any committee meeting thereof attended, and an additional fee of $1,000 for each committee meeting attended if such director was the chair of that committee. The Lead Independent Director, the Audit Committee chair and all other committee chairs received additional annual retainer fees of $20,000, $15,000 and $10,000, respectively, for their service in those positions. In addition, we may compensate a director $1,500 per day for corporate events or travel that we require, and we may reimburse directors for certain expenses incurred in attending Board and committee meetings and other corporate events. We also may provide company products to our directors for their use. In 2014, each non-management director also received 5,000 stock options and 1,000 restricted stock units, all of which will vest April 30, 2015.

Director Compensation Table – 2014

The table below summarizes the compensation earned by or paid to each of our directors in 2014 except Mr. Hunt, whose compensation is reported in the executive compensation tables. Mr. Hunt serves as a director, but as a company employee he receives no compensation for his services as a director.

Name	Fees Earned or Paid in Cash ($)	Stock Awards ($)(1)	Option Awards ($)(1)	All Other Compensation ($)(2)	Total ($)
Nevin N. Andersen	171,000	72,500	121,350	—	364,850
Daniel W. Campbell	175,500	72,500	121,350	—	369,350
Andrew D. Lipman	132,000	72,500	121,350	19,968(3)	345,818
Patricia A. Negrón	137,000	72,500	121,350	—	330,850
Neil H. Offen	119,000	72,500	121,350	—	312,850
Thomas R. Pisano	126,500	72,500	121,350	—	320,350
Steven J. Lund	—	—	—	612,736(4)	612,736

 

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(1)

On June 24, 2014, Messrs. Andersen, Campbell, Lipman, Pisano and Offen and Ms. Negrón each received 1,000 restricted stock units and 5,000 stock options. The amounts reported in these columns reflect the aggregate grant date fair value of equity awards computed in accordance with FASB ASC Topic 718 and do not represent amounts actually received by the director. For this purpose, the estimate of forfeitures is disregarded and the value of the stock awards is discounted to reflect that no dividends are paid prior to vesting. For information on the valuation assumptions used in calculating these amounts, refer to Note 12 to our financial statements in the Form 10-K filed for the fiscal year ended December 31, 2014.

 

 

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The outstanding stock and option awards held at December 31, 2014 by each of the listed individuals are as follows:

Name	Stock Awards	Option Awards
Nevin N. Andersen	1,000	40,100
Daniel W. Campbell	1,000	40,000
Andrew D. Lipman	1,000	70,100
Patricia A. Negrón	1,000	10,000
Neil H. Offen	1,000	20,000
Thomas R. Pisano	1,000	20,000
Steven J. Lund	—	50,000

 

 

 

(2)	This column does not include perquisites and personal benefits provided to directors where the director's aggregate amount of perquisites and personal benefits is less than $10,000.

(3)	Consists of company products, spouse travel to a sales force event where his spouse was expected to attend and help entertain and participate in events with our sales force and their spouses, and the amount reimbursed by us for the payment of taxes with respect to such spouse travel.

(4)

Consists of Mr. Lund's compensation as an employee of the company for 2014, including a salary of $550,000; a discretionary holiday bonus of $23,652; and other compensation of $39,084, including $10,620 in life insurance premiums, $10,400 in 401(k) contributions, company products, security monitoring, spouse travel to a sales force event where his spouse was expected to attend and help entertain and participate in events with our sales force and their spouses, and the amount reimbursed by us for the payment of taxes with respect to such spouse travel.

 

 

 

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Executive Summary

The primary objectives of our executive compensation program are to successfully recruit, motivate and retain experienced and talented executives, provide competitive compensation arrangements that are tied to corporate and individual performance, and align the financial interests of our executives with those of our stockholders. The program is designed to align actual compensation payments to actual performance and to adjust upward during periods of strong performance and adjust downward when performance is short of expectations.

We believe that our executive compensation program is one of several key factors that drove our strong revenue and earnings per share growth in recent years through 2013. However, our executive compensation program is also designed to avoid rewarding performance that falls below expectations. In 2014, we reported annual revenue of approximately $2.6 billion, a 19% year-over-year decline. Diluted earnings per share decreased to $3.11 in 2014, 48% lower than the prior year. As previously disclosed, we believe the decline in our revenue was largely driven by two primary factors: (1) a significant disruption of our business in Mainland China following our voluntary suspension of business meetings and acceptance of applications for new sales representatives in response to media and regulatory scrutiny of our business in January 2014; and (2) difficult comparisons with 2013, which included significant revenue related to the global limited-time offer of ageLOC TR90. The decline in earnings per share reflects the revenue decline and two significant charges taken in 2014: a $46.3 million foreign currency charge related to the devaluation of the Venezuelan currency and the increased tax rate related to this foreign currency charge, and a $50.0 million charge for the write-down of inventory primarily in Mainland China.

Executive compensation declined considerably in 2014 as a result of our 2014 performance, and 2015 decisions to date have continued to reduce executive compensation, particularly the equity grants, in response to 2014 performance.

When compared to 2012 results, our 2014 revenues increased 20.5%, and our diluted earnings per share decreased 11.6%. We also had several positive achievements during 2014, including:

·	Continuing to develop our anti-aging product platform, with plans for the development and launch of new products over the next several years;

·	Generating $194 million in regional limited-time offer sales of ageLOC TR90 and ageLOC Tru Face Essence Ultra;

·	Providing value to our stockholders through our stock repurchase program and a 134% increase in our dividends per share from 2011 through 2014; and

·	Achieving a three-year compounded annual revenue growth rate of 14% as of December 31, 2014 despite the disruption of our Mainland China business that occurred in 2014.

 

Despite these successes, our 2014 revenue and earnings per share results did not meet expectations. In addition, our closing stock price on December 31, 2014 was $43.70, a 68% decline from December 31, 2013. When viewed over a longer term, our December 31, 2014 stock price was above its December 31, 2012 closing price of $37.05, and our stock price has increased during 2015, closing at $58.70 on April 28, 2015.

 

 

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The 2014 compensation of our executive officers listed in the Summary Compensation Table (collectively, the "named executive officers") reflects our pay-for-performance philosophy. As discussed more fully in "Pay for Performance," below, our named executive officers as a group experienced a year-over-year decline of 55% in their total compensation as reflected in the Summary Compensation Table, and our Chief Executive Officer's total compensation was down 51% from 2013 and below the 25^th percentile of our peer group companies. Furthermore, based on our 2014 performance, none of our named executive officers earned any equity or non-equity performance awards that were contingent on our 2014 performance. This means that the equity compensation amounts in the Summary Compensation Table overstate the amounts earned because some awards were forfeited due to falling below our 2014 performance goals. When 2014 total compensation is adjusted to reflect the forfeiture of the 2014 equity awards that were forfeited based on 2014 performance, the year-over-year decline in all named executive officers' total compensation and in our Chief Executive Officer's total compensation is 63% and 64%, respectively.

Also, during 2014, our Chief Scientific Officer, Mr. Chang, agreed to waive his right to the retention bonus provided in his employment agreement as a means of recognizing the company's below-target performance, and in 2015, we entered into a new employment agreement with Mr. Chang that does not include any retention bonuses or other guaranteed bonuses.

Our 2015 compensation decisions to date have considered 2014 performance, with no salary increases, new challenging 2015 performance goals that reflect constant-currency growth over our annual 2014 performance, and equity awards that have 25% lower target grant value than the equity awards provided in the first quarter of 2014.  Similar to equity awards granted in 2014, many of the equity awards granted in the first quarter of 2015 are performance contingent (100% for the Chief Executive Officer), and these may not be earned if, as with the 2013 and 2014 awards that were contingent on our 2014 performance, the goals set in early 2015 are not reached over the next three years (2015–2017).

Our executive compensation program includes base salary, cash incentive bonuses, equity awards and retirement benefits. A majority of each named executive officer's target compensation is based on corporate performance, which helps align their total compensation with our actual performance. We award performance-based cash incentive bonuses designed to motivate our executive officers to achieve pre-established quarterly and annual revenue and adjusted operating income performance levels, with performance goals that tend to require above-median revenue and adjusted operating income growth rates relative to our peers.

Our executive compensation program also emphasizes long-term equity incentives, which, coupled with our stock ownership guidelines, reward sustainable performance and align the financial interests of our executives with those of our stockholders. In 2014, each of the named executive officers was granted 50% or more of their equity awards and 67% or more of their equity grant value in the form of performance stock options and performance restricted stock units. In 2014, 100% of the equity awards granted to our Chief Executive Officer were contingent on three years of operating performance, and in 2015 to date, 100% of the Chief Executive Officer's equity award has been performance contingent. Our equity awards contain clawback or recoupment provisions that allow the company to recover the gains from the exercise or vesting of any equity awards if an executive materially breaches certain contractual obligations or covenants.

Overview

Our executive compensation program consists of a variety of components, including base salary, cash incentive bonuses, equity awards, and retirement benefits. This compensation discussion and analysis is intended to provide greater visibility regarding:

 

 

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·	our compensation objectives;

·	various components of our compensation program and how they relate to our compensation objectives;

·	factors taken into consideration in establishing executive compensation; and

·	decisions related to the 2014 compensation of our named executive officers and the factors and analysis pertaining to such decisions.

 

Objectives

The primary objectives of our compensation program are to:

·	successfully recruit, motivate and retain experienced and talented executives;

·	provide competitive compensation arrangements that are tied to corporate and individual performance; and

·	align the financial interests of our executives with those of our stockholders.

 

The following table identifies the key components of our compensation program and the objectives of each component:

Component of Compensation Program		Objective
Base Salary		Pay for role Retention Recruitment
Cash Incentive Plan		Short-term incentive Pay for performance Quarterly and annual operating achievement
Equity Incentive Plan		Long-term incentive Pay for performance Stock price performance Stockholder alignment

We also provide retirement benefits in the form of a 401(k) plan and a deferred compensation plan, as well as limited perquisites and other personal benefits to executives that represent a very small portion of their overall compensation.

Pay for Performance

The following factors demonstrate that our executive compensation for 2014 aligned with a pay-for-performance philosophy and, due to our lower stock price and operating performance that was short of our challenging goals, adjusted compensation down significantly from both previous years and the peer market data that we considered for reference.

·	Our 2014 cash incentive plan goals were challenging and reflected 75th percentile-range revenue and adjusted operating income growth relative to our peers. We did not achieve the goals and did not pay 2014 cash incentive bonuses to named executive officers.

·

All equity and non-equity performance awards for which earnout was contingent upon our 2014 performance were forfeited by our named executive officers as a result of failing to achieve the performance levels required for earnout. The equity awards that were forfeited are reported at "target" in the Summary Compensation Tables, which overstates the value delivered.

 

 

 

 

 

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It is important to note that the Summary Compensation Table in this proxy statement does not reflect the forfeiture of the above performance-based equity awards tied to 2014 performance or the fact that the time-based stock options granted in March 2014 are underwater. Rather, as required by SEC rules, the stock awards and option awards in the Summary Compensation Table reflect the grant date fair value of each equity award that was granted during each respective year, which is driven in part by the stock price at the time of grant, even though that grant value, or any value at all, is not necessarily being earned.

Notwithstanding the inclusion of the grant date fair value of all equity awards, the Summary Compensation Table still reveals a sharp year-over-year decrease in total compensation for all of our named executive officers in 2014. As illustrated in the following table, the year-over-year decreases in total compensation for our named executive officers as a group and for our Chief Executive Officer were 55% and 51%, respectively. When 2014 total compensation is adjusted to reflect the forfeiture of 2014 equity awards that were contingent on 2014 performance, the decreases are 63% and 64%, respectively.

	Total Compensation in Summary Compensation Table			Adjusted 2014 Total Compensation			Grant Date Fair Value of 2013 Awards Forfeited  Due to 2014 Performance ($)(1)
Named Executive Officer	2014 ($)	2013 ($)	Decrease	Less: Grant Date Fair Value of Forfeited 2014 Awards  ($)(1)	Adjusted 2014 Total Compensation ($)	Decrease from 2013
M. Truman Hunt	4,759,080	9,694,835	-51%	(1,222,050)	3,537,030	-64%	(1,434,375)
Ritch N. Wood	1,590,783	4,148,614	-62%	(214,620)	1,376,163	-67%	(291,219)
Joseph Y. Chang	1,624,462	3,008,906	-46%	(214,620)	1,409,842	-53%	(138,469)
Daniel R. Chard	1,589,256	4,143,735	-62%	(214,620)	1,374,636	-67%	(291,219)
D. Matthew Dorny	1,206,083	2,699,063	-55%	(152,523)	1,053,560	-61%	(138,469)
Total	10,769,664	23,695,153	-55%	(2,018,433)	8,751,231	-63%	(2,293,751)

 

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(1)

These columns reflect amounts that, while required to be included in total compensation for the respective year, were not ultimately earned and were therefore forfeited based on 2014 performance. See the "Equity Awards—Forfeiture of Performance Awards Contingent on 2014 Performance" section, below, for detail regarding these awards. The 2014 awards were divided into three equal tranches, with one tranche contingent on each of 2014, 2015 and 2016 performance. Although the above table does not deduct the grant date fair values of the 2015 and 2016 tranches because those periods have not ended, we currently do not expect that those tranches will be earned either. If the 2015 and 2016 tranches of the 2014 awards were deducted, the Adjusted 2014 Total Compensation of our named executive officers would be as follows: Mr. Hunt – $1,145,280; Mr. Wood – $936,346; Mr. Chang – $970,026; Mr. Chard – $934,819; and Mr. Dorny – $739,933, for a total of $4,726,404.

Our Chief Executive Officer's total compensation was below the 25^th percentile, his cash compensation was the lowest of any chief executive officer in our peer group (i.e., the "zero percentile"), and he had a year-over-year decrease of approximately 51% in both total compensation as disclosed in the Summary Compensation Table and total direct compensation (consisting of salary, actual bonuses and cash incentive bonuses paid, and grant date fair value of equity awards).

2015 Executive Compensation Decisions

At our 2014 annual meeting of stockholders, approximately 94% of the votes cast were in favor of our executive compensation program. When designing our 2015 executive compensation program, the Committee considered, among other things, the 2014 voting results and other feedback we received from our stockholders, which we viewed as supporting our pay philosophy and incentive framework.

 

 

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The Committee continues to apply a pay-for-performance philosophy to our executive compensation during 2015.

·	We did not increase the salaries of any of our named executive officers in 2015.

·	Our named executive officers' 2015 equity compensation is once again highly performance-contingent.

·

The grant date fair values for the March 2015 equity grants to our named executive officers are 25% lower than were provided in March 2014.

 

 

Named Executive Officer		Q1 Equity Grant Date Fair Value
		2015 ($)		2014 ($)		Decrease
M. Truman Hunt		2,717,885		3,613,800		-25%
Ritch N. Wood		570,297		863,741		-34%
Joseph Y. Chang		862,682(1)		863,741		—
Daniel R. Chard		570,297		863,741		-34%
D. Matthew Dorny		409,744		620,051		-34%
Total		5,130,905		6,825,074		-25%

 

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(1)

Includes 5,458 restricted stock units that vest after approximately one year with a grant date fair value of $292,385, computed in accordance with FASB ASC Topic 718.

·	Equity awards in 2015 to date are 100% performance-based for the Chief Executive Officer and over 75% performance-based for the other named executive officers (as a percent of grant value).

·	The 2015 cash incentive bonus plan goals are challenging, with target performance that requires above-median revenue growth and upper-quartile operating income growth relative to the actual performance of our peer companies.

·	Maximum potential cash incentive bonus earnout was reduced from 250% of target in 2014 to 200% of target in 2015 (although no bonus was paid for 2014, so the maximum was not relevant to actual compensation amounts earned).

 

Process for Determining Compensation

Role of Executive Compensation Committee and Chief Executive Officer

The Executive Compensation Committee of the Board of Directors (the "Committee") is responsible for establishing and administering our executive compensation program. The Committee, together with the Nominating and Corporate Governance Committee, evaluates the performance of the Chairman and of the Chief Executive Officer. The Committee is then responsible for setting their compensation. The Committee has delegated to the Chief Executive Officer the responsibility for evaluating the performance of the other executive officers and sharing those evaluations with the Committee. The Chairman and the Chief Executive Officer can also make recommendations to the Committee with regard to the compensation packages for other executive officers. The Committee reviews any such recommendations and has the authority to approve, revise or reject such recommendations.

Use of Compensation Consultant and Competitive Data

The Committee has retained the services of Frederic W. Cook & Co. as its independent compensation consultant to assist the Committee in the review of our executive compensation program, to provide compensation data and alternatives to the Committee, and to provide advice to the Committee as requested. The compensation consultant engaged by the Committee does not perform any work for us outside of the services it performs for the Committee and for the Nominating and Corporate Governance Committee with respect to director compensation. The Committee utilizes the compensation data and alternatives provided by the compensation consultant to analyze compensation decisions in light of current market rates and practices, and to help ensure that our compensation decisions are competitive and economically defensible.

 

 

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Peer group information is used by the Committee in making compensation decisions. The Committee compares compensation proposals to the compensation practices of a peer group of publicly-traded companies that compete with us broadly in the consumer products industry and are similar in size to us.

The Committee reviews and updates the peer group from time to time to ensure we are utilizing an appropriate group in terms of size and relevance. The peer group was reviewed and revised in 2013, taking into account the input and recommendations of Frederic W. Cook & Co. At the time of the revision, to avoid potential distortion from differences in peer size, the revenue and market capitalization of the companies included in the peer group fell within a range of about 25% and 400% of our revenue and market capitalization, and we were near the median of the peer group with respect to revenue and slightly below the median with respect to market capitalization.

The following companies were included in our revised peer group, reflecting the addition of Primerica, Inc. and the removal of Alberto-Culver Company and Nutrisystem, Inc.

Church & Dwight Co., Inc.	Primerica, Inc.
Elizabeth Arden, Inc.	Revlon, Inc.
Energizer Holdings, Inc.	Sally Beauty Holdings, Inc.
The Hain Celestial Group, Inc.	Sensient Technologies Corporation
Helen of Troy Limited	Tupperware Brands Corporation
Herbalife Ltd.	Ulta Salon, Cosmetics & Fragrance, Inc.
International Flavors & Fragrances Inc.	Vitamin Shoppe, Inc.
Newell Rubbermaid Inc.	Weight Watchers International, Inc.
Perrigo Company

Risks Arising From Compensation Policies and Practices

In establishing and reviewing the components of compensation, the Committee considers potential risks associated with such components. In addition, our management conducted a review of our compensation policies and practices for employees and concluded that risks arising from our compensation policies and practices for employees are not reasonably likely to have a material adverse effect on us.

In reaching this conclusion, our management considered the following factors:

·

Our compensation programs are market driven and balance short-term incentives with significant long-term equity incentives. Performance equity awards provide additional long-term incentives to our key employees and executive officers. In addition, our stock ownership guidelines help to ensure that a portion of our executives' equity incentives remains tied to our long-term performance.

·

Our global cash incentive compensation is based on revenue and adjusted operating income, which are core measures of performance. In addition, substantially all of our revenue is received through cash or credit card payments, as opposed to other credit arrangements, which minimizes risk associated with our revenue-based incentives. We limited bonuses under our 2014 cash incentive plans to 250% of the target bonus and have reduced the limit to 200% of target in 2015. Additionally, the Board of Directors and management regularly review the business plans and strategic initiatives, including related risks, proposed to achieve such performance metrics.

·

We do not allow engagement in speculative trading or hedging. Our policies prohibit all of our directors and employees, including executive officers, from holding our stock in margin accounts and from engaging in speculative transactions in our stock, including short sales, options or hedging transactions.

 

 

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Mix of Compensation

When the Committee reviews an executive officer's compensation, it does not use a specific formula or allocation target to establish the level or mix of compensation. Rather, it exercises judgment in determining a compensation package that is appropriate to accomplish our compensation objectives under the circumstances applicable to the executive officer. The Committee also reviews the relative mix of compensation provided by other companies in our peer group for context and tries to ensure each component is competitive. Historically, we have tied a majority of compensation to corporate performance under our cash incentive plan and equity incentive plan.

The Committee also reviews each executive officer's total compensation as a market check against the total compensation of executive officers in our peer group. This total compensation review focuses on base salary, cash bonuses, and valuation of equity grants using grant date valuations. The Committee periodically reviews perquisites and retirement benefits to confirm that they remain relatively consistent with the value of perquisites and retirement benefits provided by our peer companies. Our 2014 equity grants are more performance-based than those of most of our peers, with 100% being performance-contingent for our Chief Executive Officer and 67%-68% for our other named executive officers.

Components of Compensation

Base Salary

Base salaries are provided to reflect the individual's responsibilities, function, performance and competencies. In establishing and approving base salaries, the Committee considers various factors including:

·	current market practices and salary levels;

·	each executive officer's responsibilities, experience in their position and capabilities;

·	individual performance and company performance;

·	the relative role and contribution of each executive officer in the company;

·	competitive offers made to executive officers and the level of salary that may be required to recruit or retain executive officers;

·	the recommendations of the Chairman of the Board, and of the Chief Executive Officer regarding the other executive officers; and

·	prior-year financial performance and current-year performance projections.

 

Base salaries for executive officers are typically reviewed annually during our evaluation period in the first quarter. The Committee does not assign specific weights to the factors identified above, but emphasizes establishing base salaries that are competitive in order to attract and retain qualified and effective executive officers.

 

 

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In the first quarter of 2014, the Committee adjusted the base salaries of Messrs. Wood, Chang, Chard and Dorny as shown in the table below to maintain competitiveness based on our peer group and in consideration of their individual performance and contributions. The Committee did not increase our Chief Executive Officer's salary in 2014.

Named Executive Officer		Prior Salary ($)		Adjusted Salary ($)		Increase ($)		Increase (%)
M. Truman Hunt		1,000,000		1,000,000		—		—
Ritch N. Wood		510,000		535,000		25,000		5%
Joseph Y. Chang		550,000		575,000		25,000		5%
Daniel R. Chard		510,000		535,000		25,000		5%
D. Matthew Dorny		420,000		440,000		20,000		5%

The named executive officers listed above were not provided a salary increase in 2015, marking the second consecutive year without a salary increase for our Chief Executive Officer.

Cash Incentive Bonus

Consistent with our objective to tie a significant portion of the executive officers' compensation to our financial performance, we award performance-based cash incentive bonuses under our Amended and Restated 2010 Omnibus Incentive Plan. We believe these bonuses motivate executive officers and reward them for achieving short-term operating performance levels.

These bonuses are also structured to avoid rewarding our executive officers when performance does not meet expectations. Because the performance goals for our 2014 quarterly and annual periods were not achieved, we did not pay any of these bonuses to our named executive officers for 2014. In addition, although the employment agreement of Mr. Chang, entered into in 2009, entitled Mr. Chang to a retention bonus of $300,000 less the amount of his 2014 cash incentive bonus for his continued employment through December 31, 2014, Mr. Chang agreed to waive his right to this retention bonus for 2014 in recognition of the company's 2014 performance. In 2015, we entered into a new employment agreement with Mr. Chang that does not include any retention bonuses or other guaranteed bonuses.

Cash incentive bonuses are determined based on equally weighted revenue and adjusted operating income performance levels. The Committee believes revenue measures management's effectiveness in growing the business and that adjusted operating income measures their effectiveness in growing the business profitably. For purposes of the cash incentive bonus, revenue and adjusted operating income are calculated on a constant currency basis, and adjusted operating income excludes certain predetermined items so that extraneous items not within the control of management are excluded. Revenue and adjusted operating income are equally weighted because management is responsible for both growing the business and increasing profitability, including by controlling costs. Our incentive plan allocates 50% of the cash incentive bonus to annual performance levels and 50% to quarterly performance levels, with 12.5% allocated to each quarter. A portion of the cash incentive bonus is tied to quarterly performance levels to motivate focused performance in each quarter, while the annual portion recognizes that strong annual results are a critical benchmark for stockholders.

Following strong 2013 operating results, we altered the cash incentive bonus program for 2014 by giving named executive officers the opportunity to earn up to 250% of their target bonus rather than our historical maximum of 200%, although the performance required to earn 250% was viewed as extraordinary when the goals were set. For our 2015 cash incentive bonus program, we have returned to our historical maximum bonus of 200% of target bonus. Cash incentive bonuses are computed based on the degree to which pre-determined goal performance levels are met or exceeded. If goal performance levels are met for a particular incentive period, a participant will earn a cash incentive bonus equal to a pre-established percentage of salary, the "target bonus." If goal performance levels are not met, the bonus decreases linearly until reaching 50% of the target bonus at the minimum performance levels. If minimum adjusted operating income performance levels are not met, as was the case in 2014, no bonus is paid, except that the Committee has the discretion to pay a bonus based on achievement of individual performance objectives in an amount up to 10% of the executive's target bonus. If minimum adjusted operating income performance levels are met but minimum revenue performance levels are not, 25% of the target bonus is earned. To the extent actual revenue or adjusted operating income exceed goal performance levels, the bonus increases linearly above the target bonus until reaching 200% of the target bonus at the high performance levels. To the extent actual revenue or adjusted operating income exceed high performance levels, the bonus increases linearly above 200% of the target bonus until reaching 250% of the target bonus at the stretch performance levels. There is no incremental bonus for performance that exceeds the stretch performance levels.

 

 

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We set the target bonus as a percentage of base salary based on an executive officer's position and responsibility and on market practices. The target bonus is intended to tie a significant portion of an executive officer's total cash compensation to our performance. In early 2014, in recognition of superior performance in 2013, we set the 2014 target bonus percentage at 125% of salary for our Chief Executive Officer and 65% of salary for our other named executive officers, which was an increase from 100% and 60% of salary in 2013, respectively. Up to 20% of the 2014 cash incentive bonus of each named executive officer was based on individual performance goals designed to support strategic business imperatives in order to motivate and reward individual performance. The Committee determined not to pay this portion for the named executive officers in light of 2014 financial performance.

The 2013 peer group compensation review suggested that the 2014 target annual cash compensation for our named executive officers, including salary and target bonus, was at the median for the Chief Executive Officer and near the 60^th percentile for the other named executive officers, on average. Based on our performance in 2014, which fell below our pre-established minimum performance goals, actual annual cash compensation was lower than target due to the lack of earned bonuses. Actual cash compensation for 2014 ended lower than actual cash amounts paid to any of the peer company officers in 2013 for most of our named executive officer positions, including for the Chief Executive Officer. The Committee views the difference between the target cash level relative to peers and the actual cash compensation level relative to peers as a performance-driven outcome and consistent with the company's pay-for-performance philosophy.

In establishing minimum revenue and operating performance levels (the level at which 50% of the target bonus is paid), goal revenue and operating performance levels (the level at which 100% of the target bonus is paid), high revenue and adjusted operating income performance levels (the level at which 200% of the target bonus is paid) and stretch revenue and adjusted operating income performance levels (the level at which 250% of the target bonus is paid), the Committee considered various factors, including our recent performance and current business plans, desired core growth rates, general business and economic conditions and business risks. For 2014, our goal performance levels were set at levels that benchmarked as being near 75^th-percentile revenue and operating income growth rates for our peer group at the time the goals were established.

To provide incentives that are earned for operating performance that is within the control of the executive officers, the performance levels are based on constant currency rates and exclude certain items as determined by the Committee at the time the performance levels were established, such as charges arising from Japan customs litigation related to disputed duties for periods prior to 2014.

 

 

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Stretch performance levels are set at a level that the Committee considers to be extraordinary performance. The following tables set forth the correlation between minimum, goal, high and stretch performance levels for 2014, measured as a percentage of goal performance levels, together with the percentage of target bonus that could be earned at such levels.

		Minimum		Goal		High		Stretch
Revenue
Percentage of goal performance level		90.4%		100.0%		123.3%		137.0%
Percentage of target bonus paid		50.0%		100.0%		200.0%		250.0%

The percentage of target bonus earned increases 5.2% for every 1% increase in achievement of the goal revenue performance level from the minimum revenue performance level to the goal revenue performance level, 4.3% for every 1% increase in excess of the goal revenue performance level from the goal revenue performance level to the high revenue performance level, and 3.7% for every 1% increase in excess of the goal revenue performance level from the high revenue performance level to the stretch revenue performance level.

		Minimum		Goal		High		Stretch
Adjusted Operating Income
Percentage of goal performance level		88.5%		100.0%		127.2%		142.9%
Percentage of target bonus paid		50.0%		100.0%		200.0%		250.0%

The percentage of target bonus earned increases 4.3% for every 1% increase in achievement of the goal adjusted operating income performance level from the minimum adjusted operating income performance level to the goal adjusted operating income performance level, 3.7% for every 1% increase in excess of the goal adjusted operating income performance level from the goal adjusted operating income performance level to the high adjusted operating income performance level, and 3.2% for every 1% increase in excess of the goal adjusted operating income performance level from the high adjusted operating income performance level to the stretch adjusted operating income performance level.

It is also important to note that the Committee considers the revenue and adjusted operating income performance levels within the context of desired core growth rates, determined on a constant currency basis and excluding certain predetermined items, to be achieved from the prior year in establishing the appropriate performance levels. For example, the goal revenue performance level for the annual period in 2014 represented a 12.7% constant currency growth rate over 2013 and the goal adjusted operating income performance level represented a 13.3% constant currency growth rate over 2013. The growth rates associated with the high performance levels for revenue and adjusted operating income were approximately 1.2 times the growth rates associated with the goal performance levels. The growth rates associated with the stretch performance levels for revenue and adjusted operating income were approximately 1.4 times the growth rates associated with the goal performance levels. Actual performance represented rates of decline that were approximately 19% and 36% of the growth rates associated with the revenue and adjusted operating income goal performance levels, respectively.

As established by the Committee, the percentage of target bonus paid for actual quarterly and annual revenue and adjusted operating income performance was calculated as follows:

 

 

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·	For actual performance between the minimum performance levels and the goal performance levels, the percentage of target bonus paid is equal to 100% – [(100% – 50%) x (actual performance – goal performance level) / (minimum performance level – goal performance level)].

·	For actual performance between the goal performance levels and the high performance levels, the percentage of target bonus paid is equal to 100% + [(200% – 100%) x (actual performance – goal performance level) / (high performance level – goal performance level)].

·	For actual performance between the high performance levels and the stretch performance levels, the percentage of target bonus paid is equal to 200% + [(250% – 200%) x (actual performance – high performance level) / (stretch performance level – high performance level)].

·	For actual performance exceeding the stretch performance levels, the percentage of target bonus paid is equal to 250%.

 

The table below sets forth the adjusted operating income and revenue performance levels for the incentive periods in 2014, the actual performance, the percentage of the goal performance levels achieved, and the percentage of the target bonus that was paid. We have included the growth rates over the prior-year period to help provide a clearer understanding of the performance levels under the incentive plan. The total dollar amount of the bonuses earned is set forth in the Summary Compensation Table.

(dollar amounts expressed in thousands)

	Q1 2014	Q2 2014	Q3 2014	Q4 2014	Annual
Revenue (50% weight)
Goal performance level(1)	$860,000	$950,000	$950,000	$890,000	$3,650,000
(Constant currency growth rate over prior year)	56.3%	39.1%	2.4%	17.4%	12.7%
Actual performance	$691,565	$660,577	$661,603	$656,870	$2,670,615
(Constant currency growth rate over prior year)	25.7%	-3.3%	-28.7%	-39.0%	-17.5%
Percentage of goal performance level achieved	80.4%	69.5%	69.6%	73.8%	73.2%
Percentage of target bonus paid	0.0%	0.0%	0.0%	0.0%	0.0%
Adjusted Operating Income (50% weight)
Goal performance level(2)	$139,320	$165,000	$165,000	$149,000	$618,320
(Constant currency growth rate over prior year)	68.5%	44.0%	-1.9%	-17.2%	13.3%
Actual performance	$104,664	$55,786	$98,121	$98,858	$357,429
(Constant currency growth rate over prior year)	26.6%	-51.3%	-41.7%	-45.1%	-34.5%
Percentage of goal performance level achieved	75.1%	33.8%	59.5%	66.3%	57.8%
Percentage of target bonus paid	0.0%	0.0%	0.0%	0.0%	0.0%

 

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(1)

Minimum revenue performance levels for the four quarterly and annual periods were $750,000; $870,000; $850,000; $830,000 and $3,300,000, respectively. High revenue performance levels were $930,000; $1,260,000; $1,230,000; $1,080,000 and $4,500,000, respectively. Stretch revenue performance levels were $1,020,000; $1,375,000; $1,375,000; $1,230,000 and $5,000,000, respectively.

 

 

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(2)

Minimum adjusted operating income performance levels for the four quarterly and annual periods were $120,000; $146,000; $145,000; $136,000 and $547,000, respectively. High adjusted operating income performance levels were $152,520; $230,580; $225,090; $178,200 and $786,390, respectively. Stretch adjusted operating income performance levels were $169,320; $254,375; $254,375; $205,410 and $883,480, respectively.

For 2014, the total aggregate annual bonus earned was 0% of the aggregate annual target bonus, based on actual performance that fell below our pre-established minimum performance levels for revenue and adjusted operating income. Differences between actual results reported in the table above and results reported in our audited financial statements are a result of the difference between the exchange rates used in our financial statements and constant currency rates used to measure performance under the incentive plan, as well as the exclusion of certain items determined to be appropriate by the Committee at the time the performance levels were established. To facilitate comparisons between the incentive period and the prior-year period (i.e., to help measure core growth rates in the targets), the currency rates used to establish the goals and measure performance were the exchange rates that were used in the prior-year period.

Because 2014 cash incentive bonuses did not fund, total actual cash compensation fell by 57% for the named executive officers as a group and ranked at or near the bottom of our peer group.

		2014 Total Actual Cash Compensation (1)
Named Executive Officer		($)		Decrease from 2013		Approx. Percentile vs. Peers
M. Truman Hunt		1,042,402		-66%		0P
Ritch N. Wood		553,860		-51%		0P
Joseph Y. Chang		595,526		-52%		10P
Daniel R. Chard		553,860		-51%		0P
D. Matthew Dorny		455,735		-51%		10P
Total		3,201,3843		-57%		5P(2)

 

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(1)

Includes salary, holiday bonus (year-end gift provided to all employees) and non-equity incentives paid under annual cash incentive bonus plan.

(2)

Average for named executive officers (rounded).

Equity Awards

The equity component of our 2014 compensation program was designed to emphasize performance-based equity awards. Equity awards in 2014 were limited to our regular annual equity grants.

Annual Equity Grants

Aligning the interests of our executive officers with those of our stockholders is an important objective of our compensation program. In order to accomplish this objective, we tie a significant portion of the total compensation of executive officers to our long-term stock performance through the grant of equity awards and our stock ownership guidelines that require our executive officers to hold stock. We also believe that equity compensation helps motivate executive officers to drive earnings growth because they will be rewarded with increased equity value, and assists in the retention of executive officers who may have significant value tied up in unvested equity awards.

We periodically review and adjust the level of our equity awards. We do not use a fixed formula or criteria in determining whether to adjust the level of equity awards, but subjectively evaluate a variety of factors consisting of:

 

 

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·	practices of peer companies;

·	degree of responsibility for overall corporate performance;

·	overall compensation levels;

·	changes in position and/or responsibilities;

·	individual performance;

·	company performance;

·	total stockholder return;

·	degree of performance risk in the equity grant program;

·	potential dilution of our overall equity grants;

·	accumulated realized and unrealized value of past equity awards;

·	associated expenses of equity awards;

·	the recommendations of the Chairman of the Board, and of the Chief Executive Officer regarding the other executive officers; and

·	data and context provided by our compensation consultant.

 

Historically, we have referenced peer company compensation data for context on pay levels and performance requirements compared to our peers. We do not target specific percentiles, but use them as reference and consideration of reasonableness in light of past and future performance expectations and relative internal compensation levels.  We generally have not given significant consideration to the value of existing equity award holdings because we want to ensure that our equity compensation is competitive for the position on an annualized basis and we want to provide an incentive from the date of grant. However, we periodically review and consider the in-the-money value of existing award holdings (inclusive of stock sales proceeds over the previous three years) of our executive officers in connection with our review of equity compensation practices to determine if wealth creation is aligning with performance and the amount of unvested equity in place for retention.  In evaluating 2014 equity award levels, we also considered the annualized number of special performance stock options granted to the named executive officers in 2013, annualized over their anticipated vesting period.

Emphasis on Performance-Based Awards

Although we consider time-based stock options to be performance-based because the stock price must increase after the grant for value to be realized, we believe that the performance nature of our equity grants is further enhanced by making a majority of equity grants in the form of performance options or performance restricted stock units that are earned for achieving multi-year performance goals. Accordingly, as reflected in the following table, each of the named executive officers was granted 50% or more of their equity awards and 67% or more of their grant value in the form of performance stock options and performance restricted stock units.

 

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								Percentage Performance-Based
Named Executive Officer		Performance Stock Options		Performance Restricted Stock Units		Time-Based Stock Options		Number of Awards		Grant Date Fair Value
M. Truman Hunt		—		45,000		—		100%		100%
Ritch N. Wood		8,600		5,100		13,600		50%		68%
Joseph Y. Chang		8,600		5,100		13,600		50%		68%
Daniel R. Chard		8,600		5,100		13,600		50%		68%
D. Matthew Dorny		6,500		3,500		9,900		50%		67%

Our performance-based equity awards generally become eligible for vesting based on the achievement of adjusted earnings per share performance levels, measured in terms of diluted earnings per share excluding certain predetermined items. Due to our strong 2013 operating results, the terms of the performance-based equity awards that were granted in March 2014 give named executive officers the opportunity to earn up to 200% of their target award rather than our historical maximum of 100% if performance meets certain pre-defined, "stretch" levels. Consistent with our historical practice, named executive officers earn 100% of their target award if performance is at goal level, and they earn 50% of their target award if performance is at the minimum level. In addition, the 2014 performance-based equity awards are divided into three equal tranches, which are contingent on performance over 2014, 2015 and 2016, respectively. Prior to 2014, our performance-based equity awards were divided into tranches that were contingent on performance over two years. The change in 2014 was to focus performance-based equity award earnout on long-term operating performance over three years.

Our equity awards contain clawback provisions that allow the Committee to recover the gains from the exercise or vesting of any equity awards if an executive materially breaches certain contractual obligations or covenants, including non-compete and non-solicitation covenants, or willfully engages in or is convicted of certain illegal activity, fraud or other misconduct. In such event, we may terminate the outstanding awards of such executive and recover any gains from the exercise or vesting of equity awards during the twelve months preceding the act or anytime thereafter.

Forfeiture of Performance Awards Contingent on 2014 Performance

For the tranche of our annual performance-based equity awards granted in March 2014 that was contingent on 2014 performance, the minimum, goal and stretch adjusted earnings per share levels were $5.93, $6.70 and $8.53, respectively. These levels were based on expectations as of the beginning of 2014; the Committee decided not to relax or change the goals despite the disruption of our Mainland China business that began during the first quarter. Our 2014 adjusted earnings per share goal performance level of $6.70 reflected above-median growth relative to our peer group at the time the goals were established.  Our 2014 actual adjusted earnings per share as calculated for purposes of the performance awards were $3.11. This amount is less than our pre-established minimum performance levels of $5.93 for the March 2014 awards and of $4.15 for the February 2013 awards.  As a result, our executive officers forfeited all performance-based equity awards that were based on 2014 performance.

The following table summarizes the performance-based equity awards that were forfeited as a result of 2014 performance falling short of all previously set expectations and performance goals. It also includes the grant date fair values for such awards, which values were included in the Summary Compensation Table for the year in which the grants were made.

 

 

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Name	Grant Date	Award Type	Number of Underlying Shares That Were Forfeited (#)(1)	Grant Date Fair Value ($)
M. Truman Hunt	2/15/2013	Performance-Based Restricted Stock Units	37,500	1,434,375
	3/31/2014	Performance-Based Restricted Stock Units	15,000	1,222,050
			52,500	2,656,425
Ritch N. Wood	2/15/2013	Performance-Based Stock Options	8,750	99,969
	2/15/2013	Performance-Based Restricted Stock Units	5,000	191,250
	3/31/2014	Performance-Based Stock Options	2,866	76,121
	3/31/2014	Performance-Based Restricted Stock Units	1,700	138,499
			18,317	505,839
Joseph Y. Chang	2/15/2013	Performance-Based Stock Options	3,750	42,844
	2/15/2013	Performance-Based Restricted Stock Units	2,500	95,625
	3/31/2014	Performance-Based Stock Options	2,866	76,121
	3/31/2014	Performance-Based Restricted Stock Units	1,700	138,499
			10,817	353,089
Daniel R. Chard	2/15/2013	Performance-Based Stock Options	8,750	99,969
	2/15/2013	Performance-Based Restricted Stock Units	5,000	191,250
	3/31/2014	Performance-Based Stock Options	2,866	76,121
	3/31/2014	Performance-Based Restricted Stock Units	1,700	138,499
			18,317	505,839
D. Matthew Dorny	2/15/2013	Performance-Based Stock Options	3,750	42,844
	2/15/2013	Performance-Based Restricted Stock Units	2,500	95,625
	3/31/2014	Performance-Based Stock Options	2,166	57,529
	3/31/2014	Performance-Based Restricted Stock Units	1,166	94,994
			9,584	290,992

 

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(1)	Reflects the number of shares of stock that would have become eligible for vesting or exercisable if performance had been achieved at the goal performance level, the same number used for calculating grant date fair value for purposes of the Summary Compensation Table in the respective year.

Timing of Equity Grants

Our normal schedule is to grant equity awards two times per year to average stock price volatility and allow more comprehensive consideration of performance.  In March 2014, we granted annual performance-based restricted stock units to each of the named executive officers.  We also granted annual performance-based stock options and approximately half of the annual time-based stock options to each of the named executive officers except for Mr. Hunt, to whom the Committee determined not to grant any stock options of any kind in 2014 due to our performance.  In December 2014, we granted the remaining half of annual time-based stock options to each of the named executive officers except for Mr. Hunt, whose award was withheld due to 2014 performance.

For the named executive officers except for Mr. Hunt, we split the annual time-based options into two semi-annual grants rather than one annual grant to allow for option exercise price averaging, overlapping vesting, more regular consideration of individual performance and consideration of the most recent say-on-pay stockholder vote results. The Committee meets on or before each grant date to review the award list and approve the grant. We set the exercise price for stock options at the closing price of our stock on the date of grant.

 

 

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Stock Ownership Guidelines

Our stock ownership guidelines are designed to motivate our executive officers to consider the long-term consequences of business strategies and to provide a level of long-term performance risk with respect to our compensation programs. These guidelines provide that executive officers must retain 50% to 75% of the net shares (after payment of the exercise price and related taxes) with respect to any equity award unless the individual holds a number of shares equal to the ownership levels set forth in the guidelines. The ownership levels are phased in over five years from appointment as an executive officer. Unvested equity awards and vested options are not counted in determining whether an executive officer holds shares equal to or greater than the designated level. At the end of the five-year phase-in period, the designated ownership levels are set at 100,000 shares for our Chief Executive Officer and 25,000 shares for our other executive officers. As of March 15, 2015, based on the most recent closing price of $55.74 for our Class A Common Stock on the NYSE, these levels of ownership were valued at $5,574,000 and $1,393,500, respectively. Based on these values, the ownership level required for our Chief Executive Officer represents approximately 5.6 times Mr. Hunt's 2014 base salary and the ownership level required for executive officers represents approximately 2.7 times the average of the 2014 base salaries of Messrs. Wood, Chang, Chard and Dorny. As of March 15, 2015, all of our named executive officers owned more than the designated number of shares under our stock ownership guidelines.

Retirement and Other Post-Termination Benefits

Our executive officers do not participate in any pension or defined benefit plan. We believe it is important for retention purposes to provide executive officers with a meaningful opportunity to accumulate savings for their retirement. To accomplish this objective, we maintain both a tax-qualified 401(k) plan and a nonqualified deferred compensation plan. We do not make any matching contributions for named executive officers under the deferred compensation plan. We do make a discretionary contribution of up to 10% of each executive officer's salary, which is allocated between the executive officer's 401(k) and deferred compensation plan accounts. Discretionary contributions to an executive officer's 401(k) plan account vest 20% per year for the first five years of service. Discretionary contributions to an executive officer's deferred compensation plan account vest 50% at 10 years of service and 5% each year thereafter. Vested company contributions in the deferred compensation plan will not be paid out, however, if the participant competes with us during the one-year period following termination of employment. This non-compete limitation terminates after the participant has reached 20 years of service or age 60.

As more fully described and quantified below under the section titled "Employment Agreements" and in the table titled "Potential Payments Upon Termination or Change in Control," we have executive employment agreements with each of the named executive officers that provide for certain change in control and termination benefits. We do not provide excise tax gross-up protection to any of our named executive officers. Any cash severance payment or accelerated vesting of equity in connection with a change in control requires a qualifying termination of employment. We believe these double-trigger post-termination benefits provide reasonable protections to employees who may be terminated following a change in control. It also assists us in retaining their services in the event of a potential change in control. We believe such arrangements are in the best interests of us and our stockholders if they are reasonable in amount and scope, because they can help to retain key employees during a change in control process.

Perquisites and Other Personal Benefits

We provide our executive officers and other key employees with other limited benefits and perquisites. These consist of, among other things, payments for term life insurance, use of company-provided vehicles, properties, sporting event tickets, company products, sales force event-related spouse travel and prizes at company parties. We do not reimburse executive officers for the income taxes associated with these perquisites except for limited business-related perquisites such as spouse travel to sales force events where the spouse is expected to attend and help entertain and participate in events with our sales force and their spouses. We have elected to pay the income taxes for these business-related perquisites because we believe they are business expenses. These benefits represent a very small portion of an executive officer's overall compensation and provide a benefit to us and our stockholders. The amount of these benefits is included in footnote 5 to the Summary Compensation Table.

 

 

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Tax Limitations on Deductibility

We have taken into consideration the limitation on deductibility for United States income tax purposes of compensation in excess of $1 million paid to our Chief Executive Officer and the three other most highly compensated executive officers employed at the end of the year (other than our Chief Financial Officer) by structuring a significant portion of our compensation as performance-based. Our current cash incentive plan and equity incentive plan have been approved by our stockholders, and the awards under these plans can qualify as "performance-based" for purposes of the deductibility limitations. While we try to structure compensation so that it will be deductible for income tax purposes, we also exercise judgment and may authorize compensation payments that do not comply with the exemptions in Section 162(m) when we believe that such payments are appropriate and in the best interests of us and our stockholders.

Executive Compensation Committee Report

We have reviewed and discussed with management the Compensation Discussion and Analysis to be included in this proxy statement. Based on the review and discussions referred to above, we recommend to the Board of Directors that the Compensation Discussion and Analysis referred to above be included in this proxy statement.

EXECUTIVE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS

Daniel W. Campbell, Chairman

Andrew D. Lipman

Patricia A. Negrón

Neil H. Offen

 

 

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Executive Compensation Tables and Accompanying Narrative

Summary Compensation Table

The following table summarizes the total compensation paid to or earned by each of the named executive officers for the fiscal years ended December 31, 2012, December 31, 2013 and December 31, 2014.

Name and Principal Position	Year		Salary ($)(1)				Bonus ($)(2)				Stock Awards ($)(3)				Option Awards ($)(3)				Non-Equity Incentive Plan Compensation ($)(4)				All Other Compensation ($)(5)				Total ($)
M. Truman Hunt President and Chief Executive Officer	2014			1,000,000				42,402				3,613,800				—				—				102,878				4,759,080
	2013			1,000,000				42,966				2,914,313				3,596,000				2,000,000				141,557				9,694,835
	2012			988,333				42,167				3,934,500				685,000				2,000,000				129,965				7,779,965
Ritch N. Wood Chief Financial Officer	2014			530,833				23,027				409,564				552,573				—				74,786				1,590,783
	2013			505,000				22,550				388,575				2,528,063				612,000				92,426				4,148,614
	2012			473,333				20,500				524,600				604,600				576,000				74,383				2,273,417
Joseph Y. Chang Chief Scientific Officer and Executive Vice President,	2014			570,833				24,693				409,564				552,573				—				66,799				1,624,462
	2013			550,000				24,216				194,288				1,490,663				660,000				89,740				3,008,906
	2012			545,833				24,806				262,300				268,475				660,000				93,408				1,854,822
Product Development
Daniel R. Chard President, Global Sales and Operations	2014			530,833				23,027				409,564				552,573				—				73,259				1,589,256
	2013			505,000				22,550				388,575				2,528,063				612,000				87,547				4,143,735
	2012			480,000				21,940				524,600				604,600				576,000				84,725				2,291,865
D. Matthew Dorny General Counsel	2014			436,667				19,068				281,072				409,882				—				59,394				1,206,083
	2013			414,167				18,800				194,288				1,490,663				504,000				77,146				2,699,063
	2012			385,000				16,542				262,300				268,475				462,000				57,033				1,451,350

 

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(1)

Messrs. Chang and Dorny deferred a portion of their salaries under our nonqualified deferred compensation plan, which is included in the Nonqualified Deferred Compensation – 2014 table. Each of the named executive officers also contributed a portion of his salary to our 401(k) retirement savings plan.

(2)

The amounts reported in this column include gift payments that we have historically made to all corporate employees as year‑end holiday gifts in the form of a gift certificate or similar merchant credit arrangement, or cash in an amount equal to a percentage of each employee's base salary (approximately two weeks of salary).

(3)

The amounts reported in these columns reflect the aggregate grant date fair value of equity awards computed in accordance with FASB ASC Topic 718 and, for performance-based awards, are based on the probable outcome of the performance conditions as of the grant date. The amounts do not represent amounts actually received by the named executive officers. For this purpose, the estimate of forfeitures is disregarded and the value of the stock awards is discounted to reflect that no dividends are paid prior to vesting. For information on the valuation assumptions used in calculating these amounts, refer to Note 12 to our financial statements in the Form 10-K filed for the fiscal year ended December 31, 2014.

The aggregate grant date fair value of the 2014 performance-based stock and option awards, assuming achievement of the maximum performance level, would be respectively: Mr. Hunt – $7,227,600 and $0; Mr. Wood – $819,128 and $489,746; Mr. Chang – $819,128 and $489,746; Mr. Chard – $819,128 and $489,746; and Mr. Dorny – $562,144 and $370,158. The foregoing amounts do not include the value of time-based options that were granted during 2014, which are reflected in the Option Awards column.

 

 

 

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(4)

The amounts reported in this column are cash awards to the named executive officers made pursuant to our Amended and Restated 2010 Omnibus Incentive Plan. None of the named executive officers received a payout under these awards for 2014 because minimum performance goals were not met. See "Compensation Discussion and Analysis—Cash Incentive Bonus" for information regarding these awards.

(5)	The following table describes the components of the All Other Compensation column for 2014 in the Summary Compensation Table.

Name	Company Contributions to Deferred Compensation Plan ($)	Tax Payments ($)(a)	Life Insurance Premiums Paid by Company ($)(b)	Company Contributions to 401(k) Retirement Savings Plan ($)	Perquisites and Other Personal Benefits ($)(c)	Total ($)
M. Truman Hunt	76,700	—	1,571	10,400	14,207	102,878
Ritch N. Wood	30,200	3,064	838	10,400	30,284	74,786
Joseph Y. Chang	34,200	3,064	3,270	10,400	15,865	66,799
Daniel R. Chard	31,200	3,064	1,058	10,400	27,537	73,259
D. Matthew Dorny	21,700	2,563	1,016	10,400	23,715	59,394

 

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(a)

This column reports amounts reimbursed by us for the payment of taxes with respect to travel of the named executive officers' spouses to sales force events where the spouse is expected to attend and help entertain and participate in events with our sales force and their spouses. We have elected not to pay the income taxes associated with non-business related perquisites. For further discussion regarding tax payments, see "Compensation Discussion and Analysis—Perquisites and Other Personal Benefits."

(b)

This column reports premiums paid to obtain term life insurance policies with coverage, as of December 31, 2014, of $500,000 for Mr. Chang and $750,000 for Messrs. Hunt, Wood, Chard and Dorny.

(c)

This column reports our incremental cost for perquisites and personal benefits provided to the named executive officers. In 2014, these included the personal use of company‑provided vehicles and properties; AAA membership; tickets, travel and hospitality for sporting events; company products; security monitoring; and spouse travel to sales force events where the spouse is expected to attend and help entertain and participate in events with our sales force and their spouses.

 

 

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Grants of Plan‑Based Awards – 2014

The following table provides information about equity and non‑equity awards granted to the named executive officers in 2014.

Name	Grant Date	Estimated Future Payouts under non-Equity Incentive Plan Awards			Estimated Future Payouts under Equity Incentive Plan Awards			All Other Stock Awards: Number of Shares of Stock or Units (#)	All Other Option Awards: Number of Securities Underlying Options (#)(3)	Exercise or Base Price of Option Awards ($)(4)	Grant Date Fair Value of Stock and Option Awards ($)(5)
		Threshold ($)(1)	Target ($)(1)	Max ($)(1)	Threshold (#)(2)	Target (#)(2)	Max (#)(2)
M. Truman Hunt	3/31/2014	—	—	—	22,500	45,000	90,000	—	—	—	3,613,800
	N/A	312,500	1,250,000	3,125,000	—	—	—	—	—	—	—
Ritch N. Wood	3/31/2014	—	—	—	4,300	8,600	17,200		—	82.85	244,873
	3/31/2014	—	—	—	2,550	5,100	10,200	—	—	—	409,564
	3/31/2014	—	—	—	—	—	—	—	6,800	82.85	209,304
	12/17/2014	—	—	—	—	—	—	—	6,800	39.51	98,396
	N/A	86,938	347,750	869,375	—	—	—	—	—	—	—
Joseph Y. Chang	3/31/2014	—	—	—	4,300	8,600	17,200	—	—	82.85	244,873
	3/31/2014	—	—	—	2,550	5,100	10,200	—	—	—	409,564
	3/31/2014	—	—	—	—	—	—	—	6,800	82.85	209,304
	12/17/2014	—	—	—	—	—	—	—	6,800	39.51	98,396
	N/A	93,438	373,750	934,375	—	—	—	—	—	—	—
Daniel R. Chard	3/31/2014	—	—	—	4,300	8,600	17,200	—	—	82.85	244,873
	3/31/2014	—	—	—	2,550	5,100	10,200	—	—	—	409,564
	3/31/2014	—	—	—	—	—	—	—	6,800	82.85	209,304
	12/17/2014	—	—	—	—	—	—	—	6,800	39.51	98,396
	N/A	86,938	347,750	869,375	—	—	—	—	—	—	—
D. Matthew Dorny	3/31/2014	—	—	—	3,250	6,500	13,000	—	—	82.85	185,079
	3/31/2014	—	—	—	1,750	3,500	7,000	—	—	—	281,072
	3/31/2014	—	—	—	—	—	—	—	5,000	82.85	153,900
	12/17/2014	—	—	—	—	—	—	—	4,900	39.51	70,903
	N/A	71,500	286,000	715,000	—	—	—	—	—	—	—

 

 

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(1)

The amounts reported in these columns reflect potential payouts for 2014 under our cash incentive plan if the respective levels of performance were achieved for all quarters and for the year. The amounts reported in the Threshold column reflect the potential payout if any company performance metric was at the minimum level required to receive a bonus. The amounts reported in the Target column reflect the potential payout if all company performance metrics were at goal performance levels. The amounts reported in the Max column reflect the potential payout if all company performance metrics were at or above stretch performance levels. As reflected in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table, none of the named executive officers received a payout under the cash incentive plan for 2014 because minimum performance goals were not met.

(2)

The awards reported in these columns are performance restricted stock units and performance stock options granted under our Amended and Restated 2010 Omnibus Incentive Plan. The amounts reported in these columns reflect the potential number of shares of stock that become eligible for vesting or exercisable pursuant to these performance equity awards if certain financial metrics are achieved. The amount reported in the Threshold column for each award reflects the potential number of shares of stock that become eligible for vesting or exercisable if performance is at the minimum level required for any shares of stock to become eligible for vesting or exercisable. The amount reported in the Target column for each award reflects the potential number of shares of stock that become eligible for vesting or exercisable if performance is at the goal performance level. The amount reported in the Max column for each award reflects the potential number of shares of stock that become eligible for vesting or exercisable if performance is at the level required for 200% of the target-level shares of stock to become eligible for vesting or exercisable.

 

 

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(3)

The awards reported in this column are stock options granted to the named executive officers under our Amended and Restated 2010 Omnibus Incentive Plan. These stock option awards vest and become exercisable in four equal annual installments beginning approximately one year from the date of the respective grant.

(4)	This column shows the exercise price for the stock option awards granted, which in each case is the closing price of our stock on the date of the respective grant.

(5)

The amounts reported in this column reflect the aggregate grant date fair value of equity awards computed in accordance with FASB ASC Topic 718 and, for performance-based awards, are based on the probable outcome of the performance conditions as of the grant date. For this purpose, the estimate of forfeitures is disregarded and the value of the stock awards is discounted to reflect that no dividends are paid prior to vesting. For information on the valuation assumptions used in calculating these amounts, refer to Note 12 to our financial statements in the Form 10-K filed for the fiscal year ended December 31, 2014. Because the amounts reported in this column reflect the aggregate grant date fair value of the equity awards, these amounts do not reflect that certain of the equity incentive plan awards granted on March 31, 2014 did not and will not vest, nor that the exercise price of the time-based stock options granted on March 31, 2014 is currently greater than our stock price.

Narrative to Summary Compensation Table and Grants of Plan‑Based Awards Table

Employment Agreements

We have executive employment agreements with Messrs. Hunt, Wood, Chard and Dorny. Among other things, these agreements provide that:

·	Time-based equity awards granted to the executive officers will fully vest upon certain terminations of employment within six months prior to and in connection with, or within two years following, a change in control;

·	No excise tax protections will be provided for termination payments;

·	The executive officers will be bound by certain covenants, including non-solicitation, non-competition and non-endorsement, that are in addition to, or supersede, previous key employee covenants;

·	The executive officers will be entitled to the following termination payments in addition to salary and benefits earned prior to termination:

 

Termination Upon Death or Disability:

(a)	A lump sum equal to the pro-rata portion of the executive officer's target bonus for any outstanding bonus cycle; and

(b)	Salary continuation for up to 90 days in certain circumstances related to a disability.

 

 

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Resignation for Good Reason or Other Termination Without Cause:

(a)	A lump sum equal to the cost of twelve months of health care continuation coverage;

(b)	A lump sum equal to the pro-rata portion of the executive officer's earned bonus, if any, for each outstanding bonus cycle;

(c)	For Mr. Hunt, continuation of annual salary for a period of 24 months; and

(d)	For Messrs. Wood, Chard and Dorny, continuation of annual salary for a period of 15 months.

Termination or Resignation for Good Reason in Connection with a Change in Control:

(a)	A lump sum equal to the cost of twelve months of health care continuation coverage;

(b)	A lump sum equal to the pro-rata portion of the executive officer's target bonus for any outstanding bonus cycle;

(c)	For Mr. Hunt, a lump sum amount equal to two times annual salary and target bonus; and

(d)	For Messrs. Wood, Chard and Dorny, a lump sum amount equal to 1.25 times annual salary and target bonus.

Other Resignation:

(a)	For Mr. Hunt, continuation of annual salary for a restricted period of up to two years, during which non-solicitation, non-competition and non-endorsement covenants remain in effect; and

(b)	For Messrs. Wood, Chard and Dorny, continuation of 75% of annual salary for a restricted period of up to one year, during which non-solicitation, non-competition and non-endorsement covenants remain in effect.

We also had an employment agreement with Mr. Chang throughout 2014 that provided, among other things, the following for 2014:

·	Mr. Chang is entitled to annual retention bonuses for continued employment at the end of each year in the amount of $300,000 for 2014, offset by any cash incentive bonus for the respective year, although Mr. Chang agreed to waive his right to this bonus for 2014;

·	All of Mr. Chang's equity awards vest upon a termination in connection with a change in control;

·	If Mr. Chang is terminated without cause prior to the end of 2014, he will be entitled to the following termination payments in addition to salary and benefits earned prior to termination:

(a)	Continuation of annual salary and health care coverage and any retention and cash incentive bonuses that would have otherwise been payable, for a period of 12 months; and

(b)	Vesting of any stock incentive awards that would have otherwise vested during such 12‑month period;

·	Following his employment, Mr. Chang will be entitled to a four‑year consulting contract with us for $250,000 per year; and

·	Our obligations under this agreement are contingent upon various restrictive covenants, including, among others, non‑competition, non‑solicitation, non‑endorsement and confidentiality.

 

 

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In 2015, we entered into a new employment agreement with Mr. Chang that does not entitle him to any retention bonuses or other guaranteed bonuses and includes other terms that are set forth in our Form 8-K filed with the Securities and Exchange Commission on April 20, 2015.

Performance Awards

For information on the terms of the equity and non-equity performance awards that were granted to named executive officers during 2014, see the "Compensation Discussion and Analysis" section of this Proxy Statement and the footnotes to the Outstanding Equity Awards at Fiscal Year-End – 2014 table.

 

 

 

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Outstanding Equity Awards at Fiscal Year-End – 2014

The following table provides information on the holdings of equity awards by the named executive officers as of December 31, 2014.

 

		Option Awards					Stock Awards
Name and Award Type (1)	Grant Date	Number of Securities Underlying Unexercised Options Exercisable (#)	Number of Securities Underlying Unexercised Options Unexercisable (#)(2)(3)	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)(3)(4)	Option Exercise Price ($)	Option Expiration  Date	Number of Shares or Units of Stock That Have Not Vested (#)(5)	Market Value of Shares or Units of Stock That Have Not Vested ($)(6)	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(4)(5)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(6)
M. Truman Hunt
SO	2/28/2005	25,000	—	—	22.33	2/28/2015	—	—	—	—
SO	8/31/2005	25,000	—	—	21.34	8/31/2015	—	—	—	—
SO	2/28/2008	25,000	—	—	16.89	2/28/2015	—	—	—	—
SO	8/11/2008	50,000	—	—	17.03	8/11/2015	—	—	—	—
SO	2/27/2009	250,000	—	—	9.40	2/27/2016	—	—	—	—
SO	6/28/2010	25,000	—	—	25.89	6/28/2017	—	—	—	—
SO	8/31/2010	25,000	—	—	25.57	8/31/2017	—	—	—	—
PSO	11/15/2010	50,000	—	—	30.43	11/15/2017	—	—	—	—
SO	2/28/2011	18,750	6,250	—	31.92	2/28/2018	—	—	—	—
SO	8/15/2011	18,750	6,250	—	39.35	8/15/2018	—	—	—	—
SO	2/9/2012	12,500	12,500	—	54.08	2/9/2019	—	—	—	—
PRSU	2/9/2012	—	—	—	—	—	18,750	819,375	—	—
SO	12/17/2012	12,500	12,500	—	44.83	12/17/2019	—	—	—	—
PRSU	2/15/2013	—	—	—	—	—	18,750	819,375	18,750	819,375
PSO	7/15/2013	—	—	18,750	77.65	7/15/2020	—	—	—	—
SO	12/9/2013	12,500	37,500	—	131.52	12/9/2020	—	—	—	—
PRSU	3/31/2014	—	—	—	—	—	—	—	22,500	983,250
Ritch N. Wood
PSO	3/2/2010	17,500	—	—	28.09	3/2/2017	—	—	—	—
SO	6/28/2010	13,750	—		25.89	6/28/2017	—	—	—	—
SO	8/31/2010	13,750	—	—	25.57	8/31/2017	—	—	—	—
PSO	11/15/2010	50,000	—	—	30.43	11/15/2017	—	—	—	—
SO	2/28/2011	10,312	3,438	—	31.92	2/28/2018	—	—	—	—
PSO	2/28/2011	17,500	—	—	31.92	2/28/2018	—	—	—	—
SO	8/15/2011	10,312	3,438	—	39.35	8/15/2018	—	—	—	—
PSO	2/9/2012	13,125	4,375	—	54.08	2/9/2019	—	—	—	—
SO	2/9/2012	6,875	6,875	—	54.08	2/9/2019	—	—	—	—
PRSU	2/9/2012	—	—	—	—	—	2,500	109,250	—	—
SO	8/31/2012	6,875	6,875	—	41.49	8/31/2019	—	—	—	—
PSO	2/15/2013	4,375	4,375	4,375	41.27	2/15/2020	—	—	—	—
SO	2/15/2013	3,438	10,312		41.27	2/15/2020	—	—	—	—
PRSU	2/15/2013	—	—	—	—	—	2,500	109,250	2,500	109,250
PSO	7/15/2013	—	—	18,750	77.65	7/15/2020	—	—	—	—
SO	12/9/2013	3,438	10,312	—	131.52	12/9/2020	—	—	—	—
PSO	3/31/2014	—	—	4,300	82.85	3/31/2021	—	—	—	—
SO	3/31/2014	—	6,800	—	82.85	3/31/2021	—	—	—	—
PRSU	3/31/2014	—	—	—	—	—	—	—	2,550	111,435
SO	12/17/2014	—	6,800	—	41.52	12/17/2021	—	—	—	—

 

 

 

 

 

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		Option Awards					Stock Awards
Name and Award Type (1)	Grant Date	Number of Securities Underlying Unexercised Options Exercisable (#)	Number of Securities Underlying Unexercised Options Unexercisable (#)(2)(3)	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)(3)(4)	Option Exercise Price ($)	Option  Expiration Date	Number of Shares or Units of Stock That Have Not Vested (#)(5)	Market Value of Shares or Units of Stock That Have Not Vested ($)(6)	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(4)(5)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(6)

Joseph Y. Chang
SO	2/27/2009	37,500	—	—	9.40	2/27/2016	—	—	—	—
PSO	3/2/2010	5,625	—	—	28.09	3/2/2017	—	—	—	—
SO	6/28/2010	3,125	—	—	25.89	6/28/2017	—	—	—	—
SO	8/31/2010	4,688	—	—	25.57	8/31/2017	—	—	—	—
PSO	11/15/2010	50,000	—	—	30.43	11/15/2017	—	—	—	—
SO	2/28/2011	4,687	1,563	—	31.92	2/28/2018	—	—	—	—
PSO	2/28/2011	7,500	—	—	31.92	2/28/2018	—	—	—	—
SO	8/15/2011	4,687	1,563	—	39.35	8/15/2018	—	—	—	—
PSO	2/9/2012	5,625	1,875	—	54.08	2/9/2019	—	—	—	—
SO	2/9/2012	3,125	3,125	—	54.08	2/9/2019	—	—	—	—
PRSU	2/9/2012	—	—	—	—	—	1,250	54,625	—	—
SO	8/31/2012	3,125	3,125	—	41.49	8/31/2019	—	—	—	—
PSO	2/15/2013	1,875	1,875	1,875	41.27	2/15/2020	—	—	—	—
PRSU	2/15/2013	—	—	—	—	—	1,250	54,625	1,250	54,625
SO	2/15/2013	1,563	4,687	—	41.27	2/15/2020	—	—	—	—
PSO	7/15/2013	—	—	12,500	77.65	7/15/2020	—	—	—	—
SO	12/9/2013	1,563	4,687	—	131.52	12/9/2020	—	—	—	—
PRSU	3/31/2014	—	—	—	—	—	—	—	2,550	111,435
PSO	3/31/2014	—	—	4,300	82.85	3/31/2021	—	—	—	—
SO	3/31/2014	—	6,800	—	82.85	3/31/2021	—	—	—	—
SO	12/17/2014	—	6,800	—	41.52	12/17/2021	—	—	—	—
Daniel R. Chard
SO	2/28/2005	10,000	—	—	22.33	2/28/2015	—	—	—	—
SO	2/28/2008	17,500	—	—	16.89	2/28/2015	—	—	—	—
SO	8/11/2008	17,500	—	—	17.03	8/11/2015	—	—	—	—
SO	2/27/2009	42,500	—	—	9.40	2/27/2016	—	—	—	—
PSO	3/2/2010	17,500	—	—	28.09	3/2/2017	—	—	—	—
SO	6/28/2010	13,750	—	—	25.89	6/28/2017	—	—	—	—
SO	8/31/2010	13,750	—	—	25.57	8/31/2017	—	—	—	—
PSO	11/15/2010	50,000	—	—	30.43	11/15/2017	—	—	—	—
SO	2/28/2011	10,312	3,438	—	31.92	2/28/2018	—	—	—	—
PSO	2/28/2011	17,500	—	—	31.92	2/28/2018	—	—	—	—
SO	8/15/2011	10,312	3,438	—	39.35	8/15/2018	—	—	—	—
PSO	2/9/2012	13,125	4,375	—	54.08	2/9/2019	—	—	—	—
SO	2/9/2012	6,875	6,875	—	54.08	2/9/2019	—	—	—	—
PRSU	2/9/2012	—	—	—	—	—	2500	109,250	—	—
SO	8/31/2012	6,875	6,875	—	41.49	8/31/2019	—	—	—	—
PSO	2/15/2013	4,375	4,375	4,375	41.27	2/15/2020	—	—	—	—
SO	2/15/2013	3,438	10,312	—	41.27	2/15/2020	—	—	—	—
PRSU	2/15/2013	—	—	—	—	—	2,500	109,250	2,500	109,250
PSO	7/15/2013	—	—	18,750	77.65	7/15/2020	—	—	—	—
SO	12/9/2013	3,438	10,312	—	131.52	12/9/2020	—	—	—	—
PRSU	3/31/2014	—	—	—	—	—	—	—	2,550	111,435
PSO	3/31/2014	—	—	4,300	82.85	3/31/2021	—	—	—	—
SO	3/31/2014	—	6,800	—	82.85	3/31/2021	—	—	—	—
SO	12/17/2014	—	6,800	—	41.52	12/17/2021	—	—	—	—

 

 

 

 

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