Document:

Amendment dated February 19, 2007 to Employment Agreement, dated August 22, 2001

 Exhibit 10.36 
 

 
 February 19, 2007 
 Mr. Michael F. Killea 
 2537 Holly Point Road East 
 Orange Park, FL 32073 
 Dear Michael: 
 This letter amends your Employment Agreement dated August 22, 2001 (the “Agreement”), with Pacer International, Inc. (“Pacer”), to extend the Severance Period thereunder from twelve (12) months to
twenty-four (24) months and to correspondingly amend the definition of the capitalized term “Severance Period” for all purposes of the Agreement. Except as otherwise provided herein, the Agreement remains in full force and effect in
accordance with its terms. 
 If the foregoing accurately sets forth our agreement, please acknowledge that by signing two counterparts of
this letter where provided below and forwarding one to Bill Smith for your personnel file. The other counterpart is for your records. 
  

			
	Very truly yours,	 	
		
	 /s/ Michael E. Uremovich
	 	
	Michael E. Uremovich	 	
	Chairman and Chief Executive Officer	 	

 ACKNOWLEDGED AND AGREED 
  

	
	 /s/ Michael F. Killea

	Michael F. Killea2007 Incentive Payment Plan

 EXHIBIT 10.1 
 

 
 2007 INCENTIVE PAYMENT PLAN 
 FINAL 
 February 20, 2007 

 THE COOPER COMPANIES, INC. 
 2007 INCENTIVE PAYMENT PLAN 
 SECTION I - NAME 
 The name of this plan is the “2007 Incentive Payment Plan” (the “Plan” or “IPP”). 
 SECTION
II - SCOPE 
 This Plan sets out the IPP guidelines for the following Business Units of The Cooper Companies, Inc. and its subsidiaries (the
“Company” or “TCC”): 
 CooperVision (“CVI”) Consolidated 
 CooperSurgical (“CSI”) Consolidated 
 Corporate HQ 
 Where the terms of this Plan
differ from the terms of any Participant’s employment or severance contract, the terms of such contract will dictate. No new such arrangements shall be entered into without the advance written approval of all of the following: The
Company’s Chief Financial Officer (“CFO”), its Chief Operating Officer (“COO”), its President and Chief Executive Officer (“CEO”) and the Organization and Compensation Committee of the Board of Directors (the
“Committee”). 
 SECTION III - PURPOSE 
 The
purpose of the Plan is to provide incentives to officers and key employees of the Company who are in a position to contribute significantly to increasing (1) Revenue, (2) Income and (3) Adjusted Cash Flow, as defined in the Plan. The Plan also
includes a discretionary pool designed to allow for a subjective evaluation of each Business Unit’s and/or Participant’s performance and for awards for achievement not otherwise adequately reflected in the awards tied to Revenue, Income or
Adjusted Cash Flow. 
 SECTION IV - COMPENSATION PHILOSOPHY 
 It is the Company’s philosophy that: 
  

	 	¡	 	 The Company’s executive compensation programs are designed to attract, motivate, and retain executive talent with the skills, experience, motivation and
commitment needed to optimize stockholder value in a competitive environment. 

  

	 	¡	 	 The Company believes that employee performance and achievement will result in economic benefits and support the goal of increasing stockholder value in the Company
by achieving specific financial and strategic objectives. 

  

	 	¡	 	 All employees be paid a base salary that is competitive with salaries paid by comparable organizations, based on each employee’s experience, performance and
geographical location. 

  

	 	¡	 	 Employees whose efforts achieve the goals outlined in Section III - Purpose, be provided with the opportunity to significantly increase their total compensation,
via this Plan and certain other benefit plans. 

 SECTION V - DEFINITIONS 
 “Budget” or “Budgeted,” when used in conjunction with any measuring device under this Plan (e.g., Revenue Budget or Budgeted Revenue) shall mean the
approved 2007 Budget for each Participant’s Business Unit, adjusted 

  

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where appropriate to reflect acquisitions and/or divestitures in accordance with “deal sheets” approved by, and in the sole discretion of, the
Board of Directors. 
 “Business Unit” shall mean any operating or headquarters unit so established by the Company. For the 2007 Plan, the
designated Business Units are set out in Section II - Scope, above. 
 “Cash Flow” shall mean the following: 
 For Corporate Headquarters, Cash Flow is defined as the result of subtracting consolidated “Net cash and debt” at the beginning of the Year from
“Net cash and debt” at the end of the Year. For purposes of this definition, “Net cash and debt” shall be the result of subtracting the sum of short and long-term debt (including capitalized leases) from cash and cash
equivalents, all as recorded on the Company’s consolidated balance sheet, and in accordance with Accounting Principles Generally Accepted in the United States of America (“GAAP”). 
 For all other Business Units, Cash Flow shall mean Operating Income plus noncash charges (primarily depreciation), plus (minus) decreases (increases) in
noncash and cash equivalent asset accounts, plus (minus) increases (decreases) in noninterest-bearing liability accounts other than income tax payable at the operating business level. The Intercompany account will be excluded from all determinations
of Cash Flow. 
 For ALL measurements of Cash Flow, the balance sheet increases and decreases detailed above shall be the result of comparing
the fiscal 2007 year-end balance sheet to the final ACTUAL balance sheet as at the end of fiscal 2006. 
 “Adjusted Cash Flow” shall mean the
following: 
 For Corporate Headquarters, Corporate Headquarter’s Cash Flow less cash received for stock option exercises, and excluding
the impact of consolidated capital expenditures. 
 For each other Business Unit, such Business Unit’s Cash Flow, excluding the amounts
for capital expenditures. 
 “Eligible Individual” shall mean any person employed by the Company who is paid a salary or a fixed monthly amount, as
distinguished from an hourly wage. 
 “Executive Management” shall mean the CEO, the COO and the CFO for purposes of administering this Plan.

 “Income” is defined as follows: 
  

			
	 Business Unit
	  	 Definition

	 Corporate HQ
	  	Consolidated net income exclusive of the effects of any required changes in accounting in accordance with GAAP and excluding any adjustment to income (net of tax) for nonrecurring acquisition
and restructuring costs, and stock option expenses, all accounted for in accordance with the Policies and Procedures of the Company and GAAP and increased or decreased by foreign exchange gains or losses.
		
	 All CVI Business Units
	  	Net Operating Income for each individual Business Unit.
		
	 CSI
	  	Operating Income

  

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 “Net Operating Income” shall mean the result of reducing Operating Income by an amount equal to the taxes
computed by multiplying the Company’s consolidated Effective Tax Rate by Operating Income, both as defined below: 
  

	 	o	Operating Income - Revenue less the sum of cost of products sold (including third party royalties), selling, general and administrative expenses (including freight costs), research
and development expenses, amortization of intangibles but excluding any adjustment to operating income for nonrecurring acquisition and restructuring costs, and stock option expenses, all accounted for in accordance with the Policies and Procedures
of the Company and GAAP and increased or decreased by foreign exchange gains or losses. 

  

	 	o	Effective Tax Rate - The rate derived by dividing consolidated provision for taxes by income from continuing operations before income taxes, both as per the Company’s
consolidated statement of income and in accordance with GAAP, but excluding nonrecurring acquisition and restructuring costs. 

 “Participant” shall mean any Eligible Individual selected to have the opportunity to earn an award under the Plan in accordance with its terms. 
 “Revenue” shall mean net revenue accounted for in accordance with the Policies and Procedures of the Company and GAAP, including freight costs reimbursed by customers. In general terms, net revenue is the result of deducting from
total gross revenue any returns, discounts, rebates and any sales tax charged to customers. 
 “Salary” shall mean the actual base salary paid to
an Eligible Individual during the Year while a Participant in the Plan. No items of supplemental compensation (prior year bonus, relocation or automobile allowances, special stipends, etc.) will be considered part of Salary. 
 “Year” shall mean the fiscal year of the Company, which is November 1 through October 31. 
 SECTION VI - ELIGIBILITY FOR PARTICIPATION 
 Participation in the
Plan will be offered to those Eligible Individuals who, in the opinion of the Company, are in a position to significantly influence the Company’s Revenue, Income and/or Cash Flow and Adjusted Cash Flow. Eligibility for participation shall be at
the sole discretion of the Committee, which may delegate this authority to Executive Management for non 16b reporting levels. 
 SECTION VII - AWARD
OPPORTUNITY 
 At the beginning of each Year, or as otherwise appropriate, the Committee, which may delegate this authority to Executive Management for
non 16b reporting levels, will classify each Participant into a category indicating his or her incentive opportunity for achievement of 100% of established goals. The incentive opportunity will range from 10% to 75% of Salary and may be adjusted
upward or downward from the previous Year’s level. 
 SECTION VIII - DETERMINATION OF INCENTIVE PAYMENT 
 Each Participant’s incentive award opportunity will be based in part on the performance of the Business Unit of which Participant is a member and in part based on a
discretionary evaluation of his or her performance. In the event that any Participant, other than members of Management covered by Rule 16(b) under the Securities and Exchange Act of 1934 (“16b Officers”), works for more than one Business
Unit over the course of the Year, Executive Management shall, in its sole and absolute discretion, prorate IPP achievement; however, in no event shall any Participant receive a total IPP amount greater than the maximum amount that would have been
payable had Participant been employed solely by the Business Unit which receives the greatest IPP achievement. The total award opportunity for Business Units will be the sum of assigned percentage weightings for Revenue, Income and Adjusted Cash
Flow (together, “Quantitative Criteria”) and discretionary, as set out in Attachment I. At the discretion of Executive Management, the calculations for certain individual Participants’ quantitative incentive awards may be
prorated between a Business Unit and Corporate Headquarters. 
  

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 Goals for earning an award payment will be based on the percentage of Budget achievement generated for each of the
Quantitative Criteria. Executive Management will provide the Committee a report on variances to the consolidated Budgets for Income and Cash Flow and Adjusted Cash Flow, highlighting key variances including nonrecurring, noncontrollable and/or
discretionary items. The Committee may elect to include or exclude certain of these items for purposes of determining the overall Corporate HQ quantitative Budget achievement. Executive Management may exercise this same discretion in assessing the
Budget achievement of each of the Company’s other Business Units. The amount of discretionary payments reflects the qualitative assessment of each individual Participant’s performance, by his or her supervisor, Senior Management and/or
Executive Management. Executive Management will consult with the Committee before determining the overall level of achievement of each Business Unit’s discretionary criteria, the percentage achievements of which may vary from Participant to
Participant. The level of achievement of both the quantitative and discretionary components for each of the 16b Officers shall be recommended by Executive Management to the Committee. The determination of the amounts of said components for each 16b
Officer will be made by the Committee. 
 Each Quantitative Criteria will be measured separately for achievement of Budget. The matrix below indicates the
level of IPP achievement that coincides with a given Budget achievement. Importantly, every one of the Quantitative Criteria must achieve at least 95% of Budget before the total IPP payment associated with Quantitative Criteria can exceed 100%. The
IPP achievement of the discretionary portion may also range from 0% to a percentage deemed appropriate by Executive Management and, in the case of the 16b Officers, determined by the Committee after receipt of recommendations from Executive
Management. 
  

			
	If	  	IPP (3)
	Achievement is(2)	  	Achievement is
	 Less than 85%
	  	    0%
	   85%
	  	  25%
	   90%
	  	  50%
	   95%
	  	  75%
	 100%
	  	100% (1)
	 110%
	  	150%
	 120% or more
	  	200% (Maximum) (2)

	(1)	This is the level indicated as the “Incentive Opportunity” in Section VII. 

	(2)	Executive Management reserves the right to adjust indicated levels for quantitative criteria where target figures are so small as to invite anomalous results.

	(3)	For Revenue the IPP Achievement is -0-% if achievement is less than 90%. 

	(4)	The Committee in its discretion may reduce the bonus that otherwise would be payable based on satisfaction of the foregoing quantitative goals to take into account such qualitative
factors as it may determine; provided however, the Committee may not reduce such bonus by more than 25%. 

 If achievement falls between the
specific levels listed above, the IPP achievement will be interpolated to the nearest whole percent. For example, if the Budget achievement for Revenue was 97%, the IPP achievement (before applying weighting factors) for that particular portion
would be 85%: 
  

				
	 IPP achievement for 95% of Budget achievement
	  	75	%
	 Plus 40% ( 2/5ths) of next 25% (100% - 75%)
	  	10	%
		  	 	 
	 IPP achievement for 97% of Budget achievement
	  	85	%
		  	 	 

 SECTION IX - FORM OF PAYMENT 
 Payments under this Plan may be made in the form of a combination of cash and common stock of the Company. The percentage mix of the payment will be at the sole discretion of the Board of Directors of the Company,
subject to the limitation that the stock portion of the payment will not exceed 50% of the total. Such determination will be made at the time the Board approves payments to be made under the Plan. Any common stock portion of the payment will be made
in shares of restricted stock bearing a restriction of up to 30 days, at no cost to the Participant other than required payments for taxes. 
  

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 SECTION X - TIMING OF AWARD PAYMENTS 
 Incentive award payments for each Participant will be made net of all required withholdings, and will be calculated and accrued in the appropriate Business Unit’s books from time to time during the Year based on
projected results for Quantitative Criteria and a reasonable estimate of the discretionary percentage. The indicated payment for Quantitative Criteria plus a reasonable estimate of discretionary must be accrued for as at the end of each Year. No IPP
payments for Quantitative Criteria in excess of the accrual balance will be made. Such accruals will be calculated based upon each Business Unit’s performance against Budget for the Year then ended as discussed above and illustrated in the
attached examples. No payments will be made to any Participant until Executive Management has had an opportunity to review the results of the first two months of the subsequent Year. To the extent that such first two months results reflect negative
anomalies that are determined by Executive Management to relate back to the previous Year, award payments for such Year may be delayed by Executive Management and, subject to approval by the Committee, may be decreased or canceled. The target date
to release payments, therefore, will be January 31, 2008, subject to acceleration by Executive Management, in its sole and absolute discretion. 
 SECTION XI - TERMINATION OF EMPLOYMENT 
 Except where required pursuant to a previously existing employment agreement (or extenuating
circumstances, which will be handled on an ad hoc basis by Executive Management), any Participant whose employment is terminated by the Company prior to the end of the Year, or by the Participant prior to the payment for such Year for any reason
other than death or retirement or disability consistent with the Company’s then current provisions for retirement and/or disability, will forfeit any opportunity to receive an award under the Plan for that Year. 
 In the case of a Participant’s retirement, disability or death, such Participant (or designated heir in the event of the Participant’s death) may, at the
discretion of Executive Management, be eligible to receive a pro rata payment under the Plan for the period prior to cessation of active full-time employment. Pro rata payments will be made concurrently with other payments under the Plan.

 SECTION XII - NEW HIRES AND PROMOTIONS 
 Individuals
hired or promoted during the Year may become Participants in the Plan subject to the approval of Executive Management. Partial Year Participants may be eligible to earn a pro rata award. Separate pro rata calculations will be made for any
Participant who is promoted to a higher Incentive Opportunity during the Year. 
 SECTION XIII - GENERAL PROVISIONS 
  

	(1)	Each Participant shall treat as personal and strictly confidential any and all information related to Participant’s inclusion in the Plan. 

  

	(2)	The expenses of administering the Plan shall be borne by the Company. 

  

	(3)	No employee has any right or claim to be a Participant in the Plan or to receive a payment under the Plan. 

  

	(4)	Participation in the Plan does not provide any employee the right to be retained in the employment of the Company. 

  

	(5)	A Participant may not assign or transfer any rights under the Plan. Any attempt to do so will invalidate those rights. 

  

	(6)	The Plan shall be subject to all applicable federal and state laws and regulations. Payments made under the Plan shall only be made to the extent permitted by such laws and
regulations, subject to all applicable taxes. 

 SECTION XIV - AMENDMENT OR TERMINATION 
 The Plan may be amended or terminated at any time by action of the Board of Directors of the Company. 
 SECTION XV - ADMINISTRATION AND INTERPRETATION 
 Executive Management shall be responsible, in its sole discretion,
for administration of the Plan, and the Committee shall be responsible for interpretation of this Plan. Such interpretations shall be final. 
  

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	 Attachments:
	  	I Weighting Factors
		  	II List of Participants and Levels of Participation
		
	 Budgets:
	  	2007 Budgets – Previously provided in the 2007 Budget Presentation approved by the BOD, except that Cash Flow and Adjusted Cash Flow will be revised to launch off certified 10/31/06
balance sheet and except for changes for acquisitions or any other changes approved by the Committee.

  

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 2007 IPP Plan 
 ATTACHMENT I 
 WEIGHTING FACTORS 
 — Weighting Percentages of IPP Entitlement Factors — 
  

											
	  	  	 Revenue
	  	 Income
	  	 Adjusted
 Cash Flow
	  	 Discretionary
	  	 Total

	 All CVI Units
	  	35	  	20	  	20	  	25	  	100
	 All CSI Units
	  	35	  	20	  	20	  	25	  	100
	 Corporate HQ
	  	35	  	20	  	20	  	25	  	100

 Each of the Quantitative Criteria must achieve at least 95% of Budget before the total IPP payment associated with
the Quantitative Criteria can exceed 100%. 
  

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 2007 IPP PLAN 
 ATTACHMENT II 
 LIST OF NAMED EXECUTIVE OFFICERS AND LEVELS OF PARTICIPATION 
 TOP 5 
  

					
	 NAME
	  	 TITLE
	  	 FY 2007 IPP
 ELIGIBILITY %

	 A. Thomas Bender
	  	Chairman of the Board, President and Chief Executive Officer	  	75%
			
	 Gregory A. Fryling
	  	President and Chief Operating Officer, CooperVision Inc.	  	65%
			
	 Carol R. Kaufman
	  	Senior Vice President of Legal Affairs, Secretary and Chief Administrative Officer	  	50%
			
	 Steven M. Neil
	  	Vice President and Chief Financial Officer	  	55%
			
	 Robert S. Weiss
	  	Executive Vice President and Chief Operating Officer	  	65%

  

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