Issue link: http://catalog.e-digitaleditions.com/i/275026
23 intends to maximize deductibility of compensation under Section 162(m) of the Internal Revenue Code to the extent consistent with our overall compensation program objectives, while also maintaining maximum flexibility in the design and administration of our compensation programs and in making appropriate payments to executives. Accordingly, the Compensation Committee may choose to authorize compensation that does not meet the requirements of Section 162(m) if it determines such payments are appropriate, and it has done so in the past in the case of the chief executive officer position. Share-Based Compensation: We account for compensation expense from our stock awards in accordance with the Compensation — Stock Compensation Topic of the Financial Accounting Standards Board Accounting Standards Codification ("FASB Codification") that requires companies to measure the cost of employee stock awards based on the grant-date fair value and recognize that cost over the period during which a recipient is required to provide services in exchange for the stock awards, typically the vesting period. We consider the impact on the Company's compensation expense when determining and making stock awards. 2014 Compensation Decisions The table below summarizes the 2014 compensation decisions for the 2013 NEOs other than Mr. Bergy, who is no longer an executive officer of the Company. These decisions will be more fully discussed in the proxy statement for our 2015 annual meeting. Name Annualized Base Salary ($) Target Bonus ($)(1) Number of Stock Options (#)(2) Number of Performance Stock Units at Target (#)(3) Kevin A. Lobo ............................................................................... 1,060,000 1,378,000 160,215 40,054 William R. Jellison ........................................................................ 539,000 377,300 30,810 7,702 Ramesh Subrahmanian .................................................................. 529,000 396,750 39,440 9,860 Timothy J. Scannell ....................................................................... 571,000 428,250 51,760 12,940 David K. Floyd .............................................................................. 520,000 390,000 39,440 9,860 ____________ (1) Each NEO bonus plan for 2014 includes an opportunity to earn an overachievement bonus of up to an additional 100% of target bonus, based on sales and earnings metrics. (2) Stock options to purchase shares of the Company's Common Stock were granted at an exercise price of $81.14 per share (the closing price as reported by the NYSE Composite Transactions on February 11, 2014, the last trading day before the grant date). (3) Key design features for the 2014 performance stock units include the following: • Awards will be earned based on the achievement of pre-established three-year average adjusted diluted net earnings per share growth goals as well as sales growth relative to a comparison group of companies; • Payout range of 0% to 200% of the target award; and • Settled in Common Stock in early 2017 following the completion of the three-year performance period. COMPENSATION COMMITTEE REPORT The Compensation Committee of the Board of Directors has reviewed and discussed with management the foregoing Compensation Discussion and Analysis and, on the basis of such review and discussions, has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement. Submitted by: Howard L. Lance, Chair Howard E. Cox, Jr. Roch Doliveux, DVM Members of the Compensation Committee