exv10w1



 






Exhibit 10.1




SUMMARY OF COMPENSATION ARRANGEMENTS FOR

NAMED EXECUTIVE OFFICERS




     Following is a description of compensation arrangements that have been approved by the
Management Development and Compensation Committee (“Committee”) of the Company’s Board of Directors
for the Chief Executive Officer and the other four most highly compensated executive officers in
2004 (the “Named Executive Officers”).



Base Salary – The current annual base salaries of the Company’s Named Executive
Officers are as follows:




	 	 	 	 	 
	H. J. Riley, Jr. – Chairman and Chief Executive Officer
	 	$	1,100,000	 
	 	 	 	 	 
	K.S. Hachigian – President and Chief Operating Officer
	 	$	800,000	1
	 	 	 	 	 
	T.A. Klebe – Senior Vice President and Chief Financial Officer
	 	$	466,000	 
	 	 	 	 	 
	D.K. Schumacher – Senior Vice President, General Counsel
and Chief Compliance Officer
	 	$	430,000	 
	 	 	 	 	 
	D.R. Sheil – Senior Vice President, Human Resources and Chief
Administrative Officer
	 	$	388,500	 












	1	 	Reflects the increase to Mr. Hachigian’s base salary as a result
of his promotion to Chief Executive Officer effective May 1, 2005.





Annual Incentive Compensation




     On February 8, 2005, the Committee established performance goals and maximum bonus
opportunities for the Named Executive Officers and other executives for the fiscal year ending
December 31, 2005. The 2005 annual incentive compensation awards are made pursuant to the
Company’s Management Annual Incentive Plan, as amended, which was filed as Exhibit 10.18 to
Cooper’s Form 10-K for the fiscal year ended December 31, 2003. The performance goals for 2005 are
based upon actual results as compared to budgeted performance on two financial measures: (1)
earning per share; and (2) free cash flow, with the award being determined by reference to a matrix
of different performance levels. Participants can receive a bonus based on a percentage of their
annual salary if the Company meets threshold, good, target or maximum attainments. In determining
the actual annual incentive award to be part to an executive, the Committee may also consider the
executive’s individual performance objectives and personal contributions.



 









 





     The following table sets forth the minimum and maximum annual incentive award payouts for each
of the Company’s Named Executive Officers based on the achievement of the Company’s performance
criteria for the year ending December 31, 2005.



	 	 	 	 	 	 	 	 	 
	 	 	Minimum	 	 	Maximum	 
	 	 	Payout	 	 	Payout	 
	H.J. Riley, Jr.
	 	 	0	%	 	 	200	%
	 	 	 	 	 	 	 	 	 
	K.S. Hachigian
	 	 	0	%	 	 	180	%
	 	 	 	 	 	 	 	 	 
	T.A. Klebe
	 	 	0	%	 	 	120	%
	 	 	 	 	 	 	 	 	 
	D.K. Schumacher
	 	 	0	%	 	 	100	%
	 	 	 	 	 	 	 	 	 
	D.R. Sheil
	 	 	0	%	 	 	100	%






Stock Options




     The Company’s Amended and Restated Stock Incentive Plan provides for the granting of stock
options, restricted stock units and performance-based share awards to the Named Executive Officers
and other key executives. On February 8, 2005, the Committee approved the following nonqualified
stock option grants to the Named Executive Officers at an exercise price of $70.94, which was the
fair market value of the Company’s stock on the grant date.



	 	 	 	 	 
	H.J. Riley, Jr.
	 	0 shares
	 	 	 	 	 
	K.S. Hachigian
	 	47,500 shares
	 	 	 	 	 
	T.A. Klebe
	 	30,400 shares
	 	 	 	 	 
	D.K. Schumacher
	 	23,800 shares
	 	 	 	 	 
	D.R. Sheil
	 	21,400 shares






     In addition, in connection with Mr. Hachigian’s promotion to Chief Executive Officer and Mr.
Riley’s continued service as Chairman of the Company, on April 25, 2005, the Committee approved the
following non-qualified stock option grants at an exercise price of $65.47, which was the fair
market value of the Company’s stock on the grant date.



	 	 	 	 	 
	H.J. Riley, Jr.
	 	150,000 shares
	 	 	 	 	 
	K.S. Hachigian
	 	52,500 shares






 









 






     All the stock option grants disclosed above vest in three equal annual installments and expire
seven years after the grant date, except the options granted to Mr. Riley will expire on December
1, 2010.



Performance Shares




     On February 8, 2005 the Committee also set performance goals for performance – based share
awards for the Named Executive Officers and other key executives for a three-year performance
period beginning on January 1, 2005 and ending on December 31, 2007. The Committee set performance
goals tied to the cumulative compound growth in earnings per share during the performance period.
The Committee determined that compound earnings per share growth over the period of the at least 4%
was required before any award would be earned and at least 16% was required for a payout at the
maximum level. The awards, to the extent earned, will be distributed in Class A common shares of
Cooper, or at the executive’s election and upon approval by the Committee, up to 50% of the earned
award may be paid in cash. The following table presents information about the long term incentive
award granted in 2005 to the Named Executive Officers.



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Performance or	 	 	Estimated Future
	 	 	Other Period until	 	 	Payouts Under
	 	 	Maturation or	 	 	Non-Stock Price-
	 	 	Payout	 	 	Based Plans
	 	 	 	 	 	 	Threshold	 	 	Target	 	 	Maximum	 
	 	 	 	 	 	 	(shares)	 	 	(shares)	 	 	(shares)	 
	H.J. Riley, Jr.
	 	 	—	 	 	 	0	 	 	 	0	 	 	 	0	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	K.S. Hachigian2
	 	February 2008	 	 	20,000	 	 	 	60,000	 	 	 	80,000	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	T.A. Klebe
	 	February 2008	 	 	4,350	 	 	 	13,040	 	 	 	17,380	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	D.K. Schumacher
	 	February 2008	 	 	3,400	 	 	 	10,200	 	 	 	13,600	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	D.R. Sheil
	 	February 2008	 	 	3,060	 	 	 	9,170	 	 	 	12,220	 












	2	 	Includes the following performance-based share awards granted to Mr.
Hachigian in recognition of his promotion to Chief Executive Officer effective My 1, 2005:
threshold 13,210 shares; target 39,640 shares; and maximum 52,860 shares.