Back to Contents  | Mark. S. Wrighton Age 68
Director Since October 2005 NomineeInformation Dr. Wrighton became a director following the Company’s acquisition of Helix Technology Corporation in October 2005. Dr. Wrighton has been chancellor of Washington University in St. Louis since July 1995. Dr. Wrighton also serves as a director of Cabot Corporation, a chemical manufacturer, and of Corning Incorporated, a manufacturer of specialty glass and ceramics. He previously served as a director of A.G. Edwards, Inc., a financial services company, until 2007, and he previously served as a director of Akermin, Inc, a private company that ceased operations in 2017. Since 1995 Dr. Wrighton has served as Chancellor and Professor of Chemistry at Washington University in St. Louis, following a 23-year tenure at MIT, first as a faculty member in chemistry and for the last five years as Provost and Professor of Chemistry. Qualifications The Board of Directors has concluded that Dr. Wrighton should continue to serve as a director of the Company because of his leadership and financial experience gained as the lead executive of an esteemed, large university, as well as his extensive experience as a member of the board for large, technology focused public companies in the manufacturing and financial sectors and his technology experience as a scientist. |
 | Ellen M. Zane Age 66
Director Since May 2012 NomineeInformation Ms. Zane is serving as CEO Emeritus and vice chair of the board of trustees at Tufts Medical Center & Floating Hospital for Children, and from 2004 to 2011, she served as its president and chief executive officer. From May 1994 to January 2004, Ms. Zane served as Network President for Partners Healthcare System, a physician/hospital network sponsored by the Harvard affiliated Massachusetts General Hospital and Brigham and Women’s Hospital. Prior to 2004, Ms. Zane served as chief executive officer of Quincy Hospital in Quincy, Massachusetts. Ms. Zane is also currently a member of the board of directors at Boston Scientific Corporation, a publicly traded worldwide medical devices provider, Fiduciary Trust Company, a privately owned wealth management company and AgNovos Healthcare, LLC a privately-held medical device company, focused on bone health. Ms. Zane previously served as a director of Lincare Holdings Inc. until August 2012, Haemonetics Corporation until April 2016, Press Ganey until October 2016, Century Capital Management until June of 2017 and Parexel International Corporation until September 2017. Ms. Zane holds a Professional Director Certification from the American College of Corporate Directors. Qualifications The Board of Directors has concluded that Ms. Zane should continue to serve as a director of the Company because of her executive experience in the health care industry, including as the chief executive officer of a large medical center, in addition to her substantial experience as a director at other public companies. |
Ellen M. ZaneBROOKS AUTOMATION - 2018 Proxy Statement20
Back to Contents Age 64
Director Since May 2012
Nominee Information
Ms. Zane is serving as CEO Emeritus and vice chair of the board of trustees at Tufts Medical Center & Floating Hospital for Children, and from 2004 to 2011, she served as its president and chief executive officer. From May 1994 to January 2004, Ms. Zane served as Network President for Partners Healthcare System, a physician/hospital network sponsored by the Harvard affiliated Massachusetts General Hospital and Brigham and Women’s Hospital. Prior to 2004, Ms. Zane served as chief executive officer of Quincy Hospital in Quincy, Massachusetts. Ms. Zane is also currently a member of the board of directors at Parexel International Corporation, a publicly traded global bio-pharmaceutical services company, Haemonetics Corporation, a publicly traded global blood management solutions company, Press Ganey, a publicly traded preeminent provider of patient experience measurement and data in acute hospital settings and ambulatory settings, Century Capital Management, LLC, a private mutual fund company, Fiduciary Trust Company, a privately owned wealth management company and AgNovos Healthcare, LLC a privately held medical device company, focused on bone health. Ms. Zane previously served as a director of Lincare Holdings Inc. until it was acquired in August 2012. Ms. Zane holds a Professional Director Certification from the American College of Corporate Directors.
Qualifications
The Board of Directors has concluded that Ms. Zane should continue to serve as a director of the Company because of her executive experience in the health care industry, including as the chief executive officer of a large medical center, in addition to her substantial experience as a director at other public companies.
Pending Legal Matters In January 2009, the chairman of Satyam disclosed a series of fraudulent transactions that resulted in an overstatement of Satyam’s assets and revenue. As a result of subsequent investigations by the Special Fraud Investigation Office (“SFIO”), an investigative agency of the Indian government, various proceedings were brought in India in 2009 against Satyam involving allegations of fraud, substantial overstatements of revenues, profits and assets, as well as violations of sections of India’s criminal and corporate statutes. SFIO produced a report relating to these matters alleging a series of violations of the Companies Act, 1956, of India (the “Companies Act”) by the former directors of Satyam. In December 2009, SFIO filed complaints with respect to two of these allegations naming Professor Palepu and other Satyam directors. These complaints relate to Satyam’s alleged failure to properly identify highly paid employees in reports required by the Companies Act and failure to obtain prior approval from the government of India for consulting fees paid to Professor Palepu. In December 2014, the court in India hearing the complaints filed by SFIO issued its decision finding that Satyam violated the applicable provisions of the Companies Act and ordered each Satyam director, including Professor Palepu, to pay a fine of 20,000 Rupees (approximately $325) for the failure of Satyam to file reports identifying highly paid employees. In addition, the court found that Satyam violated the Companies Act by failing to obtain governmental approval of the consulting fees paid to Professor Palepu and ordered Professor Palepu to pay a fine of 500,000 Rupees (approximately $8,000) and return the consulting fees previously paid to him in the amount of 26,600,000 Rupees (approximately $428,000). Professor Palepu has informed our Board of Directors that he intends to appealappealed the decision with respect to both allegations, and he has informed the Board of Directors that he believes the allegations lack merit and that he intends to continue to assert his defenses vigorously. Professor Palepu has also been named as a respondent to a petition brought in January 2009 before the Company Law Board of the Indian government and another petition filed in a civil court in January 2009 court by Mahindra Satyam, successor to Satyam, both arising out of the same facts andfacts. The civil court petition is seeking 2.67 billion Rupees (approximately $42.72 million) in damages. This action isBoth of these actions are still pending. Professor Palepu was also a named defendant in a putative class action lawsuit filed in the United States District of New York in which the plaintiffs alleged violations of United States securities laws including Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. That class action lawsuit was dismissed as to all claims against Professor Palepu in January 2013.
BROOKS AUTOMATION -2016 2018 Proxy Statement 2021
Back to Contents COMPENSATION OF DIRECTORS The following table sets forth the total compensation paid or accrued during the fiscal year ended September 30, 20152017 to each of our non-employee directors. Director Compensation Table Fiscal Year 20152017 Name | Fees Earned or Paid in case | | Stock Awards | (1) | | Total | Joseph R. Martin | $ | 140,000 | $ | 130,014 | | $ | 270,014 | John K. McGillicuddy | $ | 117,500 | $ | 90,018 | (2) | $ | 207,518 | Ellen M. Zane | $ | 112,500 | $ | 90,018 | | $ | 202,518 | Krishna G. Palepu | $ | 105,000 | $ | 90,018 | | $ | 195,018 | A. Clinton Allen | $ | 100,000 | $ | 90,018 | | $ | 190,018 | Robyn C. Davis | $ | 92,500 | $ | 90,018 | (3) | $ | 182,518 | Kirk P. Pond | $ | 92,500 | $ | 90,018 | (4) | $ | 182,518 | Alfred Woollacott, III | $ | 92,500 | $ | 90,018 | | $ | 182,518 | Mark S. Wrighton | $ | 92,500 | $ | 90,018 | | $ | 182,518 | Dr. Schwartz is not included here, having only received compensation as an employee during fiscal 2017. His compensation is discussed below under Executive Officers - Summary Compensation Table. (1) The value of a stock award is based on the fair value as of the grant date calculated in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718 (previously FAS 123R). All shares vest in one year on the date one day before the Company’s 2018 Annual Meeting of Shareholders. (2) Mr. McGillicuddy has chosen to defer his 2017 stock award. (3) Ms. Davis has chosen to defer her 2017 stock award. (4) Mr. Pond has chosen to defer his 2017 stock award. |
| | | Fees Earned or | | | Stock | | | | | Name | | Paid in case | | | Awards(1) | | | Total | | Joseph R. Martin | | $ | 130,000 | | | $ | 120,010 | | | $ | 250,010 | | A. Clinton Allen | | $ | 100,000 | | | $ | 80,010 | | | $ | 180,010 | | Krishna G. Palepu | | $ | 105,000 | | | $ | 80,010 | | | $ | 185,010 | | Alfred Woollacott, III | | $ | 90,000 | | | $ | 80,010 | | | $ | 170,010 | | Mark S. Wrighton | | $ | 90,000 | | | $ | 80,010 | | | $ | 170,010 | | Ellen M. Zane | | $ | 95,000 | | | $ | 80,010 | | | $ | 175,010 | | John K. McGillicuddy | | $ | 115,000 | | | $ | 80,010 | (2) | | $ | 195,010 | | Kirk P. Pond | | $ | 95,000 | | | $ | 80,010 | (3) | | $ | 175,010 | | Robyn C. Davis | | $ | 90,000 | | | $ | 80,010 | | | $ | 170,010 |
Dr. Schwartz is not included here, having only received compensation as an employee during fiscal 2015. His compensation is discussed below under Executive Officers -Summary Compensation Table.
(1) | The value of a stock award is based on the fair value as of the grant date calculated in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718 (previously FAS 123R). | | | (2) | Mr. McGillicuddy has chosen to defer his 2015 stock award. | | | (3) | Mr. Pond has chosen to defer his 2015 stock award. |
Compensation Policy The following annual cash compensation is paid to our non-employee directors on a quarterly basis (pro-rated for the portion of any fiscal year in which the non-employee director provides service): • $90,000 Board retainer to each non-employee director; • | $80,000 annual Board retainer to each non-employee director; | | | • | $5,000 annual Committee retainer to each non-employee director for each Committee that such director serves on; | | | • | an additional $40,000 annual retainer to the non-executive chairman of the board; | | | • | an additional $10,000 annual retainer to each of the chairman of the Human Resources and Compensation Committee, the Chairman of the Nominating and Governance Committee, and the Chairman of the Finance Committee; | | | • | an additional $20,000 annual retainer to the chairman of the Audit Committee; and | | | • | an annual award of unrestricted shares of Brooks Common Stock having a market value of $80,000 ($120,000 for the non-executive chairman of the board) based on the closing price on the date of grant. |
• $5,000 Committee retainer for each of Executive, Finance or Nominating and Governance Committee that such director serves on; • $10,000 Committee retainer for each of Audit or Human Resources and Compensation Committee that such director serves on; • an additional $40,000 retainer to the non-executive chairman of the Board; • an additional $10,000 retainer to each of the chairman of the Nominating and Governance Committee, the Finance Committee, and the Executive Committee; • an additional $20,000 retainer to the chairman of the Human Resources and Compensation Committee and (in the aggregate) to the co-chairmen of the Audit Committee; and • an annual award of unrestricted shares of our Common Stock having a market value of $90,000 ($130,000 for the non-executive chairman of the board) based on the closing price on the date of grant, which occurs each year following our annual meeting of stockholders. In addition, on the date of appointment each newly elected non-employee director will receive an award of unrestricted shares of Brooksour Common Stock having a market value of $80,000$90,000 based on the closing price on the date of grant, prorated for the number of days out of 365 that have elapsed sinceremaining until the most recent next annual equity award to non-employee directors. The Board of Directors has previously approved equity ownership guidelines for non-employee directors, which require each non-employee director to own over time shares of our Common Stock having a market value of at least $300,000. The target ownership amounts are subject to adjustments based on changes in the market price for our Common Stock. The Nominating and Governance Committee intends to monitor the policy over the coming years. As of September 30, 2015,2017, each of the non-employee directors has exceeded the target BROOKS AUTOMATION - 2018 Proxy Statement22
Back to Contents ownership amount, except for Ms. Davis, who joined the Board in June 2013.amount. The Board may at any time revoke or modify the policy. The amount of any further such grants will be subject to the review and approval of the Nominating and Governance Committee based on the Committee’s analysis, with the assistance of independent consultants, if desired, of the appropriateness of the nature and amount of any such grants, based upon such factors as a comparison of director compensation at peer companies and a review of prevailing market practices and conditions. BROOKS AUTOMATION - 2016 Proxy Statement21
The Nominating and Governance Committee and the full Board will continue to monitor and assess Boardreviews director compensation in generalperiodically in light of business and market conditions and such other factors as they deem appropriate. In 2017, based on an analysis of our director compensation program conducted by Pearl Meyer & Partners (“Pearl Meyer”), an independent compensation consultant, the Nominating and Governance Committee made recommendations of the following changes to our director compensation program which were reviewed and adopted by the Board: • Annual equity retainer was increased from $80,000 to $90,000; • Form of annual equity retainer was changed from unrestricted stock to restricted stock subject to one-year cliff vesting; • Chair retainer for the Human Resources and Compensation Committee was increased from $10,000 to $20,000; and • Committee member retainer for the Audit Committee and the Human Resources and Compensation Committee was increased from $5,000 to $10,000; Deferred Compensation Plan Non-employee directors may elect to defer receipt of their stock in exchange for a credit, in restricted stock units, to a deferred RSU account. Non-employee directors may also elect to defer all or a portion of their cash compensation pursuant to the Company’s Deferred Compensation Plan. No directors deferred cash compensation in 2015.2017. In general, directors must make these deferral elections by the end of the calendar year preceding the date of the grant of the shares. Directors who make a deferral election will have no rights as stockholders of the Company with respect to amounts credited to their deferred RSU account. An amount equal to the cash dividends that would be paid on the number of shares equal to the number of RSUs credited to the director’s deferred RSU account will be converted into additional RSUs based on the closing price of the Company’s stock on each dividend record date. Payment of RSUs credited to the deferred RSU account will be made in a lump sum in an equal number of shares of unrestricted common stock at the time specified in the director’s deferral election, but no later than as soon as administratively feasible following the director’s termination of Board service. The table below sets forth the total number of deferred stock awards held by each non-employee director as of September 30, 2015.2017. Name | | Number of Deferred | Name | | Restricted Stock Units | A. Clinton Allen | | | 7,4197,822 | Robyn C. Davis | | | 8,64822,387 | John K. McGillicuddy | | | 57,66674,100 | Kirk P. Pond | | | 24,79739,423 |
Indemnification Agreements We have entered into indemnification agreements with each of our directors and anticipate that we will enter into similar agreements with any future directors. Generally, the indemnification agreements are designed to provide the maximum protection permitted by Delaware law with respect to indemnification of a director. The indemnification agreements provide that we will pay certain amounts incurred by a director in connection with any civil or criminal action or proceeding, specifically including actions by or in our name (derivative suits) where the individual’s involvement is by reason of the fact that the director is or was a director or officer. Such amounts include, to the maximum extent permitted by law, attorney’s fees, judgments, civil or criminal fines, settlement amounts, and other expenses customarily incurred in connection with legal proceedings. Under the indemnification agreements, a director will receive indemnification unless the director is adjudged not to have acted in good faith and in a manner the director reasonably believed to be in the best interests of Brooks. BROOKS AUTOMATION -2016 2018 Proxy Statement 2223
Back to Contents EXECUTIVE OFFICERS Biographical Information The names of our executive officers and certain biographical information furnished by them as of December 11, 201513, 2017 are set forth below. Each executive officer serves until his resignation or termination. Name | Age | Age | | Position with the Company | Stephen S. Schwartz | 58 | 56 | | Chief Executive Officer and President | Mark D. Morelli | | 51 | | President and Chief Operating Officer | Lindon G. Robertson | 56 | 54 | | Executive Vice President and Chief Financial Officer | Maurice H. Tenney III | 54 | 52 | | President, Brooks Life Science Systems | David E. Jarzynka | 49 | Senior Vice President, General Manager, Brooks Semiconductor Solutions Group | David C. Gray | 52 | 50 | | Senior Vice President, Chief Strategy and New Business Officer | William T. Montone | 65 | 63 | | Senior Vice President, Human Resources | Jason W. Joseph | 47 | 45 | | Senior Vice President, General Counsel and Secretary | David F. Pietrantoni | 44 | 43 | | Vice President, Finance and Corporate Controller and Principal Accounting Officer |
Dr.StephenS.Schwartz joined Brooks in April 2010 as President and continued to serve as such until August 2013. He was reappointed President in May 2016. As of October 1, 2010, Dr. Schwartz also became Brooks’ Chief Executive Officer, and continues to serve as such. Dr. Schwartz was elected to the Brooks Board of Directors in August 2010. Dr. Schwartz had previously served, from August 2002 until April 20, 2009, as Chief Executive Officer of Asyst Technologies, Inc., a manufacturer of integrated hardware and software automation systems primarily directed at the semiconductor manufacturing industry. He joined Asyst in January 2001 as Senior Vice President, Product Groups and Operations and was elected Chairman of Asyst in January 2003. Asyst filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Act on April 24, 2009, and Asyst’s assets have since been liquidated. Prior to joining Asyst, Dr. Schwartz had served since 1987 in various capacities with Applied Materials, Inc., including acting as General Manager for Applied Material’s service business and President of Consilium, Inc., an Applied Materials software subsidiary. Mr. Mark D. Morelli was appointed President and Chief Operating Officer in August 2013, before which he served as Executive Vice President and Chief Operating Officer since joining Brooks in January 2012. From September 2007 to May 2011, Mr. Morelli was President and Chief Executive Officer of Energy Conversion Devices, a leader in thin-film flexible photovoltaic laminates and, prior to that, Mr. Morelli was a senior executive at United Technologies Corporation, most recently as the President of UTC’s Carrier Commercial Refrigeration Division. In February 2012, Energy Conversion Devices filed for bankruptcy in the U.S. Bankruptcy Court, Eastern District of Michigan. Mr. LindonG.Robertson joined Brooks in October 2013 as Executive Vice President and Chief Financial Officer. Prior to joining Brooks, from July 2011 to September 2013, Mr. Robertson served as the Vice President and Chief Financial Officer of Graftech International Ltd., a publicly traded manufacturer of carbon and graphite products for industrial applications. Prior to that, he spent 27 years at IBM Corporation in various senior financial management positions, including Chief Financial Officer of IBM’s global hardware business and Chief Financial Officer of IBM’s Japan and China operations.
Mr.MauriceH.TenneyIII was appointed President, Brooks Life Science Systems in November 2014. Prior to joining Brooks, Mr. Tenney spent 13 years with PerkinElmer, Inc. in various leadership roles, most recently as Senior Vice President of customer operations. Mr. Tenney’s career includes progressive leadership assignments with GE, Lockheed Martin, AlliedSignal and Honeywell. Mr.DavidE.Jarzynka was appointed as the General Manager of Brooks Semiconductor Solutions Group in April 2016. Prior to his appointment, he had responsibility for the Company’s semiconductor automation business since June 2013. Prior to that he was general manager of the Company’s Systems business. Mr. Jarzynka joined Helix Technology Corporation in 2004 and continued on with Brooks after its acquisition of Helix in 2005, during which time Mr. Jarzynka held commercial leadership roles in product management, product marketing and sales. Prior to Helix, Mr. Jarzynka held commercial leadership roles at Intel Corporation and IBM. He began his career as an applications engineer for Brooks. Dr.DavidC.Gray was appointed Senior Vice President, Chief Strategy and New Business Officer in June 2014.2014 and, addiitonally, as General Manager Cryogenic Automation Solutions in October 2016. From October 2013 to June 2014, Dr. Gray provided consulting services to the Company. Prior to that, from January 2009 to January 2013, Dr. Gray was employed by GT Advanced Technology in various senior leadership roles, most recently as Chief Strategy and New Business Officer. Mr.WilliamT.Montone was appointed Senior Vice President, Human Resources in October 2005 when Brooks acquired Helix Technology Corporation, where he served as Vice President of Human Resources since 1998. Prior to joining Brooks, Mr. Montone held senior human resources roles at A.T. Cross, an international manufacturer of fine writing instruments, and Rogers Corporation, a materials technology company, for 13 and eight years, respectively. Mr.JasonW.Joseph joined Brooks in March 2011 as Vice President, General Counsel and Secretary.Secretary and was appointed as Senior Vice President in November 2017. Prior to joining Brooks, Mr. Joseph served as Vice President, General Counsel and Secretary of Unica Corporation, a publicly traded marketing automation software company, from June 2007 through November 2010, and as General Counsel and Secretary of MapInfo Corporation, a publicly traded location intelligence software company, from December 2003 through April 2007. Mr. Joseph also previously practiced law at Wilmer, Cutler, Pickering, Hale and Dorr LLP (formerly Hale and Dorr LLP) from 2000 through 2003. Mr.DavidF.Pietrantoni was appointed Principal Accounting Officer and Corporate Controller in June 2013. Since joining Brooks in 2006, he has held various financial leadership positions, including Vice President, Finance and Division Chief Financial Officer. Prior to joining Brooks, Mr. Pietrantoni spent six years in various financial leadership roles at SPX Corporation and Standex International Corporation. BROOKS AUTOMATION -2016 2018 Proxy Statement 2324
Back to Contents COMPENSATION DISCUSSION AND ANALYSIS Executive Summary Our executive compensation program is built on a foundation of pay for performance and we continually evolve our compensation program to further enhancemaintain the alignment of pay and performance. In Fiscal 2015For the second consecutive year, we were pleased to receive support from over 99% of our shareholders who voted at our 2017 Annual Meeting to approve our “say on pay” proposal. We believe this investor endorsement of our executive pay program is a direct result of our strategy execution and business performance in Fiscal 2016 we modifiedas well as the modification of certain elements of our compensationpay program in response to concerns identified byFiscal 2015 based on direct feedback from our shareholders. In this CD&A, we have described the material elements of our Fiscal 2017 compensation for the following Named Executive Officers: Name | Role | Stephen S. Schwartz | Chief Executive Officer and President | Mark D. Morelli | President and Chief Operating Officer | Lindon G. Robertson | Executive Vice President and Chief Financial Officer | Maurice H. Tenney III | President, Brooks Life Science Systems | David E. Jarzynka | Senior Vice President, Brooks Semiconductor Solutions Group | David C. Gray | Senior Vice President, Chief Strategy and New Business Officer |
Advisory Vote on Executive CompensationShareholder Outreach and Shareholder Engagement
AtIn Fiscal 2017, we continued our 2015 Annual Meetingpractice of Stockholders our named executive officer’s compensation was approved, on an advisory basis, by 65.3% of the votes cast. Our Human Resources and Compensation Committee and management were dissatisfied by this level of shareholder approval. The views of our shareholders asreaching out to our compensation program are of paramount importance to the Board of Directors. As a result, we undertook a multi-pronged approach to address identified concernslarger shareholders and improve the effectiveness of our executive compensation program. This included a comprehensive review ofscheduling discussions on our pay practices, increased utilization of our compensation consultantsprograms and engagement with a leading provider of proxy disclosure advisory services.
In Fiscal 2015, we engaged directly with many of our largest shareholders to better understand their views of our pay programs |
Most importantly, as part of a continuous effort to better understand our shareholders’ perspectives, we initiated a shareholder outreach effortpractices. These sessions were led by our Chairman of the Board and our Chairman of the Human Resources and Compensation Committee. We spoke directly with manyCommittee (“HRC”) and in addition to receiving investor feedback, we engaged their perspectives on topical executive pay issues to assist in guiding the ongoing management of our largest shareholders regardingprogram. This year, the investors we spoke with were asked to provide their input on:
• enhancing our executive compensation program, who in aggregate owned approximately 40%pay disclosure • degree of alignment of our outstanding shares. Whilemetrics and goals with our business strategy
• whether any portion of the annual incentive award should be based on non-formulaic measures The shareholders commented positively on many aspectswe engaged with in Fiscal 2017 were uniformly supportive and complimentary of our executive pay program, the strong linkage of our incentive metrics and believed, on balance, thatgoals to our business model and strategy, our executive compensation program is aligned with our strategypay governance and performance, they also identified areas for improvement. Some of the identified issues had been addressed preemptively in our executive compensation program for Fiscal 2015 while the other elements will be addressed in Fiscal 2016. Below we highlight key feedback itemsproxy disclosure, and the actions we tookopportunity to speak with members of our Board. The feedback from our outreach efforts is provided to the Committee and are taking in response to our shareholder outreach: Area of Focus | | Shareholder Feedback | | Our Actions Taken in Response | Better Clarity in
Disclosure | | Concern that our executive compensation disclosure did not clearly articulate the Company’s pay program and underlying rationale | | We have enhanced the CD&A section of our proxy statement to better describe our pay program and we have expanded the discussion of the rationale for actions taken in Fiscal 2015 and 2016 | Setting Performance
Goals | | Concern that target performance goals for Fiscal 2014 were lower than Fiscal 2013 goals | | Our Fiscal 2015 Performance-based Variable Compensation Plan (PBVC) and Long Term Incentive Plan (LTIP) performance targets reflect significant increases over both Fiscal 2014 performance targets and actual outcomes | Performance
Measurement Period | | Desire to see long-term incentives with multi-year goals and measurement | | Our Fiscal 2015 LTIP has a mix of one- and three-year financial performance metrics. Our Fiscal 2016 LTIP is entirely based on three-year financial performance objectives | CEO Stock Ownership
Guideline | | Perception that the stock ownership guideline for our CEO should be higher | | We increased our CEO stock ownership requirement to 5 times base salary (from 3 times base salary) commencing in Fiscal 2016 |
the full Board. We intend to maintain an ongoing dialogue with our shareholders to ensure that our pay program continues to reflecttake their views.views into consideration. We encourage our shareholders to provide us with feedback on our executive compensation program and governance and togovernance. To facilitate that process we have established a link to provide feedback on the investor section atof our website. Please visithttp://www.brooks.com/company/investors/shareholder-feedback.shareholder-feedback. Fiscal 2017 Company Performance and Financial Highlights Our business strategy, which has provided steady and profitable growth for the prior four years, accelerated our growth significantly in Fiscal 2017. Our organizational structure, fiscal management, and strength of our customer-focused product offerings in both business segments, permitted us to continue to capture market share and outpace our industry’s growth levels. The increase in shareholder value for Brooks is a reflection of our strong financial results and our disciplined operational management. We were ready with the right semiconductor products delivered timely to a ramping business segment and our life sciences business continued its profitable organic growth while adding products and services companies that expanded our sample management portfolio offerings and customer base. We believe that our business strategy is proving its value and we remain committed to continuing our internal and acquisition related investments to accelerate our performance results. Following are some financial highlights from Fiscal 2017. • Grew Revenue by 24% to $693MM with balance from both Life Sciences (+38%) and Semiconductor (+20%) • Grew Adjusted Net Income by 167% to $87MM • Expanded Adjusted Gross Margin 300 basis points from Fiscal 2016, to 39.2% • Increased Adjusted Earnings Per Share (“EPS”) to $1.23 per share from $0.47 per share in Fiscal 2016 BROOKS AUTOMATION -2016 2018 Proxy Statement 2425
Back to Contents • Our Life Sciences segment increased revenues to $149MM while adding $11MM to operating profit over prior year levels. In addition, we seamlessly absorbed three acquisitions while successfully commercializing two new products. We believe our comprehensive sample management offerings and commitment to continued investment in the growth of our recurring revenue business has us poised for rapid growth. • Our Semiconductor segment delivered on its existing customer commitments while building on its new Magnatran(R) LEAP product portfolio that is achieving strong customer reception. Our financial results reflect our strong product offerings and the operating transformation that has been ongoing for the past two years. Fiscal 20152017 Company Performance and Financial Highlights Fiscal 2015 was a strong year of financial performance as we continued to deliver results from the investments we have made in critical growth segments.
• | Fiscal 2015 revenue increased 15% over Fiscal 2014 revenue with very strong performance and market share gains for Brooks Product Solutions (BPS) in the semiconductor market and 8% growth in our Life Sciences systems revenue; this follows a 46% increase in Life Sciences revenue from the prior year. | | | | | | •Non-GAAP Financial Measures - see http://www.brooks.com/company/investors/investor-presentations for reconciliation tables. | Cumulative Total Shareholder Return for the 3-year fiscal period ended September 30, 2015 was 17.2%. |
We continued to execute onOur long-term financial model forms the basis for our long-term strategic and operational plan and achieved several important strategic objectives during Fiscal 2015 including:
• | Semiconductor marketannual performance targets, which we share for BPS increased across a broad base that drove profitability and delivered revenue growth at a rate of 25% above the market growth rate. This included gains in advanced packaging; record levels of vacuum robot shipments driven by share gains in deposition and etch at major OEMs; vacuum system share gains in Korea and China; cryogenics vacuum products growth on the strength of semi front-end; and new applications outside of semi for our large refrigerator products. | | | • | Significant and profitable growth in our Contamination Control Solutions business coupled with an acquisition to expand the product portfolio. | | | • | Continued growth in Life Sciences systems revenue (8%) and the successful launch of our Cryo sample storage products and the acquisition of FluidX, which was accretive to earnings in the fiscal year. | | | • | Improved operating expense and selling, general and administrative (SG&A) expense performance as part of our focused initiative to improve business processes. |
While we were pleased with our stronginvestors. The chart below shows the alignment between financial performance and many of our strategic accomplishments in Fiscal 2015, we are committed to sustaining our growth and momentum by accelerating our gross margin improvement and increasing our Life Sciences revenue, which both fell short ofCEO pay over the aggressive growth targets we established as part of our Long-Term Incentive Plan (see page 26). Even though we did not achieve our targets in these two important areas, we plan to set aggressive targets for these critical measures again in Fiscal 2016.last four years.
BROOKS AUTOMATION -2016 2018 Proxy Statement 2526 Fiscal 2015 Compensation Highlights
Pay for Performance Alignment Compensation opportunities underWe have focused on the alignment of the pay of our executive leadership team with the Company’s performance against certain core business metrics. These metrics, which are incorporated into our incentive compensation programplans, are tied directlychosen to clearly definedcoordinate with our financial and challenging yet achievable financialstrategic objectives and to appropriately balance our short- and long-term goals. Our performance goals for bothare designed to incent building a business with resilience and growth capability with an eye to long-term sustainable growth. We believe the goals are aggressive but achievable.
The chart below shows the strong alignment between our annualbusiness strategy and our cash (PBVC) and long term equity (LTIP) incentive (LTIP) plans. Annual PBVC Cash Incentive Plan – Fiscal 2015 Results
Our Fiscal 2015 annual PBVC cash incentive plan was based on Revenue and Operating Income performance, each weighted at 40% of target payout. An additional 20% of the target payout was based on the achievement of strategic Individual Objectives. As shown below, in Fiscal 2015, we achieved 105% of our Revenue target and 60% of our Operating Income target.
Long Term Incentive Plan (LTIP) Fiscal Year 2015 Results
Our Fiscal 2015 LTIP included both one-year and three-year performance goals. Fiscal 2015 Life Sciences Revenue and Corporate Gross Margin targets are each weighted 30%, while Fiscal 2015-2017 Cumulative Free Cash Flow and Average ROIC targets are weighted 30% and 10%, respectively. As shown below, we did not achieve the very aggressive one year goals for our Life Science Systems Revenue (target goal reflected a 37% increase over Fiscal 2014) and Corporate Gross Margin goal (target goal represented a 200 basis point increase over the target goal setplans for Fiscal 2014)Years 2016, 2017 and as a result will not earn any portion of the 2015 LTIP award related to Fiscal 2015 measures. The Free Cash Flow and Average ROIC goals will be measured at the end of fiscal year 2017 to determine whether any portion of this Restricted Stock Unit award will be earned and vested.2018.
BROOKS AUTOMATION -2016 2018 Proxy Statement 2627
Back to Contents Executive Compensation Program Framework Philosophy and Objectives Our executive compensation program is intended to reward our senior leadership team for achieving performance that is directly tied to our annual operating and longer term strategic plans which areand is designed to create value for our shareholders. We believe that our plan structure including some of the more recent changes, clearly alignaligns our reward outcomes with the interests of our shareholders. RecentOur dialogue with our shareholders over the last several years reinforces this position. We have identified strategic business imperatives and designed our compensation programs in a manner that we believe provides appropriate incentives for management to work toward our mutually beneficial goals. Strategic Imperatives | Driveperformance | | Extend our leadership position in our semiconductor focused businesscore markets | | ApplyExpand our core technologies to automatedcomprehensive sample management business in the life sciences market with organic and acquisition investments | Deliver profitable growth• Exercise balanced and disciplined capital deployment | Deliverprofitablegrowth | | Drive margin expansion in each of our two core businesses | | Achieve rapid growth of life sciences revenue |
Our executive compensation program provides competitive compensation that is in line with the practices of leading semiconductor capital equipment, life sciences, and high technology companies with whom we compete for business and talent. Our total rewards strategy is intended to provide: • a balance between fixed and variable pay that rewards performance and results; • | a balance between fixed and variable pay that emphasizes performance and results; | | | • | performance-based awards that are tied to aggressive but achievable company, business unit and individual results; and | | | • | recognition that in our highly cyclical and volatile industries, the ability to perform throughout the cycles is critical to our long-term success. |
• performance-based awards that are tied to aggressive but achievable company, business unit and individual results; and • recognition that in our highly cyclical and volatile industries, the ability to perform throughout the business cycles is critical to our long-term success. We do not define specific percentages of fixed, variable, and long-term compensation for our executives. Given the cyclical nature of the semiconductor industry and the variable order pattern of our life sciences equipment units, we designed our executive pay program to provide base compensation that is competitive with our peer group along with the opportunity to earn variable pay when justified by financial performance. Our pay for performance design emphasizes at risk,“at-risk”, that is, variable compensation thatwhich is paid for the achievement of strategic accomplishments that are directly tied to increasing shareholder value. Strong Governance and Pay Practices We believe that our executive compensation program supports our business strategies and talent management objectives and is consistent with governance best practices that serve our shareholdersshareholders’ long-term interests. The following are some of the highlights of our program design and pay practices: What We Do | | What We Don’t Do |  | ✔ Maintain robust stock ownership guidelines | |  | ✗ No above-median pay benchmarking | | ✔ Maintain robust clawback provisions | | | | | ✔ Provide for double-trigger change-in-control benefits | | | ✗ No pension plans or other postemploymentpost-employment benefit plans | | ✔ Consult with an independent compensation consultant | | | ✗ No executive perquisites | | ✔ Conduct an annual risk assessment | | | ✗ No severance multipliers in excess of 3 times total pay | | ✔ Conduct an annual review of pay levels | | | ✗ No dividend paymentdividends on RSUs until they vest | | ✔ Conduct an annual evaluationevaluations of performance goal rigor | | | ✗ No hedging or pledging of Company stock | | Maintain a policy prohibiting executive hedging of stock | | | | | ✔ Solicit shareholder input and incorporate their feedback | | ✔ Require minimum vesting periods on equity awards | | |
BROOKS AUTOMATION -2016 2018 Proxy Statement 2728 Key Components of Compensation Our executive compensation program consists of the following three components: base pay,pay; annual cash incentive under our performance-based variable compensation (PBVC) planplan; and annual equity awards under our long-term incentive plan (LTIP). Element | | Objectives | BaseSalary | | | Provides regular source of income at market-competitive levels | PBVCPlan | | | Motivates executive team to achieve key annual financial goals and objectives | | | | Provides upside earnings potential for achievement of stretch goals as well as at-risk compensation that is not earned if minimum threshold goals are not achieved as well as upside earnings potential for achievement of stretch goals | LTIP Plan | | | Motivates executive team to execute against longer-term financial and strategic objectives | | | | Performance-based RSUs provide a direct link between performance outcomes and actual pay realized and performance outcomes;realized; payout is contingent upon achieving minimum performance thresholds, and provides upside potential for stretch performance | | | | Time-based RSUs also provide retention incentive |
In allocating total direct compensation among thethese three components, we seek to provide competitive levels of fixed compensation (base pay and time-based RSUs) and, through annual and long-term variable incentives, provide opportunity for variableadditional compensation where aggressive but achievable performance objectives can result in additional pay.are met. For Fiscal 2015,2017, our CEO’s and named executive officers’ target pay mix emphasized variable at-risk pay opportunities as illustrated below: 
BROOKS AUTOMATION -2016 2018 Proxy Statement 2829 Determining Executive Compensation The Human Resources and Compensation (“HRC”) Committee is responsible for developing and administering the compensation program for executives as illustrated in the chart below. All HRC Committee pay recommendations are submitted to the non-employee directors of the Board for final vote and approval. The HRC Committee is composed of at least three members, all of whom are independent directors. Following five years as chairMs. Ellen M. Zane is Chair of the HRC Committee having been appointed in February 2015, and she is joined on the HRC Committee by Mr. Kirk P. Pond transitioned to a member of the committee with Ms. Ellen Zane being appointed chair at the February 2015 board meeting. Joining Ms. Zane and Mr. Pond for Fiscal 2015, are continuing members Mr. Alfred Woollacott III, and Ms. Robyn C. Davis. Each year our chief executive officer,CEO, with the assistance of our Human Resources department, makes annual recommendations to the HRC Committee regarding the salaries, incentive payments and equity grants for key employees, including all executive officers with the exception of his own, which is determined solely by the HRC Committee.other than himself. The HRC Committee also holds executive sessions that are not attended by members of management. The HRC Committee makes recommendations to the non-employee directors on each element of the chief executive officer’sour CEO’s compensation, as well as other significant aspects of the Company’s executive pay programs, for final approval by our full board. The recommendations typically include the following: | Executive compensation program development | | PBVC and LTIP design, performance metrics, and goals | | Executive base salary adjustments | | Incentive plan achievement awards and payouts | | Pay programs and policies that impact the executive team such as securityseverance and change in control arrangements, stock ownership requirements and other pay governance items |
Use of Consultants The HRC Committee has the authority to directly retain the services of independent consultants and other experts to assist in fulfilling its responsibilities. Theresponsibilities as described below. Each year our outside compensation consultant assists the HRC Committee in evaluating the competitiveness and appropriateness of executive compensation levels and practices. In Fiscal 2017, the HRC Committee continued its engagement with its independent compensation consultant, Pearl Meyer, & Partners (“PM&P”), a national executive compensation consulting firm, to review and provide recommendations concerning all of the elements of the Company’s executive compensation program. PM&PPearl Meyer performs services solely on behalf of the HRC Committee and BROOKS AUTOMATION - 2018 Proxy Statement30
Back to Contents has no relationship with the Company or management except as it may relate to performing such services. As described below, PM&P assists the HRC Committee in evaluating the competitiveness and appropriateness of executive compensation levels and practices BROOKS AUTOMATION - 2016 Proxy Statement29
each year. The HRC Committee has assessed the independence of PM&PPearl Meyer pursuant to SEC rules and the corporate governance rules of the Nasdaq Stock Market and concluded that no conflict of interest exists that prevents PM&PPearl Meyer from independently representing the HRC Committee. Services provided by PM&PPearl Meyer in Fiscal 20152017 included:
• a review of the appropriateness of our peer group for executive compensation comparison purposes • | a review of the appropriateness of our peer group for executive compensation comparison purposes | | | • | a competitive assessment of Brooks as compared to the market based on the compensation components of base salary, target annual incentives, long-term incentives, and total direct compensation | | | • | an evaluation of the rigor in achieving and the relevance to increasing shareholder value of the incentive metrics and goals adopted in the short- and long-term incentive pay plans | | | • | an analysis of Brooks’ short- and long-term pay for performance alignment related to our peer group | | | • | assistance with shareholder outreach efforts | | | • | periodic attendance at scheduled HRC Committee meetings to assist with ongoing support |
• a competitive assessment of Brooks as compared to the market based on the compensation components of base salary, target annual incentives, long-term incentives, and total direct compensation • an evaluation of the rigor of our short-term and long-term incentive metrics and goals as they relate to achievement and relevance to increasing shareholder value • an analysis of our equity practices to assure prudent equity management as measured by our share burn rate, dilution and overhang • an analysis of Brooks’ short- and long-term pay for performance alignment related to our peer group • assistance with shareholder outreach efforts • periodic attendance at scheduled HRC Committee meetings to assist with ongoing support The information provided by PM&PPearl Meyer is supplemented by compensation survey data purchased by the Company from Radford Executive Survey, which is used to gauge the market competitiveness of our senior executive pay. Before each meeting, the HRC Committee is provided appropriate materials and information necessary to make informed decisions onabout the Company’s executive compensation practices. This material may be supplemented by reports prepared by PM&P.Pearl Meyer. The HRC Committee uses its judgment supported by facts and documentation in making compensation recommendations that support our philosophy and objectives. Peer Group In consultation with PM&P,Pearl Meyer, the HRC Committee annually reviews Brooks’ peer group to ensure it is appropriate to utilize for external compensation comparisons. Criteria used to select these companies include industry comparability, revenue size and market capitalization, and product/service comparability. Brooks attempts to excludegenerally excludes companies that primarily make integrated circuit (IC) chips because of the significantly different business model of those chip makers versus semiconductor capital equipment manufacturers like Brooks. Publicly traded Life Sciences equipment publicly traded companies within our financial ranges are also included. Brooks developedmodified its 2015Fiscal 2016 peer group to construct its peer group for 20152017 compensation determinations priordetermination. For Fiscal 2017 the Committee removed Affymetrix, Inc., FEI Company and Newport Corporation as these three companies were acquired during 2016 and ceased to operate as independent public corporations. Additions to the start of the fiscal year by reviewing the 2014 peer group. For fiscal year 2015, the HRC Committee felt thatgroup were: Coherent, Inc. a laser technology company with Life Sciences applications; MTS Systems, a sensor and testing manufacturer; and Bruker Corporation, and Teradyne, Inc., with market valuationsa life sciences tool manufacturer. While Bruker’s size is at the upper end of approximately $4.0 billion and revenue approximately three to four times as large as Brooks, were too far outside our scope criteria and removed them from the 2015 peer group. Additionally, ATMI was acquired by existing peer group company, Entegris, Inc. Two newrange, its similarity to our life sciences segment and proximity to our corporate headquarters made this a logical choice. Adding three and removing three companies keeps our peer group at 14 companies. The Fiscal 2017 peer group has balance between revenue and market cap for size, and maintains a sizable presence of companies offering life science equipment companies were added, Affymetrix, Inc. and Analogic Corp., reflecting the greater profile of Life Sciences in our business mix, as well as semiconductor equipment manufacturer, Axcelis Technologies, Inc. This maintained the number of peer companies at 14. products. Peer Group Selection Criteria
Industry Comparabilityplus
 | Revenue: | $125mm - $2.0B | | Market Cap: | $180mm - $2.98B |
Both Revenue and Market Cap (.25x and 4x Brooks)
 The following lists the companies in our peer group.
Fiscal 2014 Peer Group: | Fiscal 2015 Peer Group: | Advanced Energy Industries, Inc. | Advanced Energy Industries, Inc. | ATMI Inc. | Affymetrix, Inc. | Bruker Corporation | Analogic Corp. | Entegris, Inc. | Axcelis Technologies, Inc. | FEI Company | Entegris, Inc. | FormFactor, Inc. | FEI Company | GT Advanced Technologies | FormFactor, Inc. | LTX-Credence Corporation | GT Advanced Technologies, Inc. | MKS Instruments, Inc. | MKS Instruments, Inc. | Newport Corporation | Newport Corporation | Photronics, Inc. | Photronics, Inc. | Teradyne, Inc. | Ultra Clean Holdings, Inc. | Ultra Clean Holdings, Inc. | Veeco Instruments, Inc. | Veeco Instruments, Inc. | Xcerra Corp. (formerly LTX-Credence Corporation) |
BROOKS AUTOMATION -2016 2018 Proxy Statement 3031
Back to Contents The following chart contains a list of the companies in our Fiscal 2016 and 2017 peer groups. Fiscal 2016 Peer Group: | Fiscal 2017 Peer Group: |
Back to ContentsAdvanced Energy Industries, Inc. | Advanced Energy Industries, Inc. | Affymetrix, Inc. | Analogic Corp. | Analogic Corp. | Axcelis Technologies, Inc. | Axcelis Technologies, Inc. | Bruker Corporation | Cabot Microelectronics Corporation | Cabot Microelectronics Corporation | Entegris, Inc. | Coherent, Inc. | FEI Company | Entegris, Inc. | FormFactor, Inc. | FormFactor, Inc. | MKS Instruments, Inc. | MKS Instruments, Inc. | Newport Corporation | MTS Systems Corporation | Photronics, Inc. | Photronics, Inc. | Ultra Clean Holdings, Inc. | Ultra Clean Holdings, Inc. | Veeco Instruments, Inc. | Veeco Instruments, Inc. | Xcerra Corp. | Xcerra Corp. |
Fiscal Year 20152017 Executive Compensation Program After reviewingBased on Pearl Meyer’s competitive assessment and the findingsHRC Committee’s review of PM&P,each executive’s scope of responsibility and individual performance, the HRC Committee set target pay levels for the CEO and other executive officers that were in accordance with our pay philosophy.
The outcomes of our Fiscal Year 20152017 compensation program can be summarized as follows: Fiscal Year 20152017 Element | Fiscal Year 20152017 Outcome | BaseSalary | | No changes to base salaries for Messrs. Schwartz and Gray. Messrs. Robertson, Tenney and Jarzynka received market competitive increases. | AnnualPBVCCashIncentivePlan | | Achieved 105%Corporate Revenue exceeded the target goal and achieved 100% of Revenue Targetthe stretch goal. | | | Achieved 60%Adjusted Gross Margin exceeded the target goal and achieved 70% of Operating Income Targetthe stretch goal. | Long-term Incentive – One year measures | • Adjusted Earnings Per Share exceeded the target goal and achieved 100% of the stretch goal | Long-termIncentivePlan(2015-2017) Status: Complete. Final Achievement 40.5% | • 1-Year metric Measures: Fell below the threshold of 2015 Adjusted Gross Margin below goal threshold – Forfeited RSUsand Life Sciences 2015 Revenue (weighted together at 60%) following end of Fiscal 2015 measurement period; participants forfeited RSUs. | | | Life Sciences Revenue below goal threshold – Forfeited RSUs | Long-term Incentive – Three year measures | • | Calculation of3-Year metric Measures: cumulative Free Cash Flow for 2015 - 2017 and 3-year ROIC average for Fiscal 2015 - 2017 (weighted together at 40%) achieved 104.63% of target and participants vested in corresponding RSUs. | Long-termIncentivePlan(2016-2018) Status: Ongoing. | • 3-Year metric Measures: cumulative Life Sciences Revenue; cumulative Company Adjusted Operating Profit; and three-year average ROIC to be measured at fiscalfollowing the end of Fiscal 2018. | Long-termIncentivePlan(2017-2019) Status: Ongoing | • 3-Year metric Measures: cumulative Adjusted Operating Profit; cumulative Free Cash Flow; and three year average ROIC to be measured following the end 2017of Fiscal 2019 |
Base Salary We reviewThe HRC Committee reviews salaries annually and normally implementimplements any adjustments effective January 1, with occasional mid-year adjustments for off cycle events such as promotions. The HRC Committee considered the market competitive positioning of the CEO and other named executive officers and recommended that base salaries remain unchangedbe increased for Fiscal 2015. Mr.Messrs. Robertson, Tenney assumed his responsibilities in November 2014.and Jarzynka. The following table below lists base salaries for the CEO and our other Named Executive Officers.
FISCAL YEAR END BASE PAYBROOKS AUTOMATION - 2018 Proxy Statement - 32
Back to Contents FISCALYEARENDBASEPAY | Name | September 30, 2014 | | September 30, 2015 | | Percent Increase | September 30, 2016 | September 30, 2017 | Percent Increase | | | Stephen S. Schwartz | $ | 625,000 | | | $ | 625,000 | | | No Change | $ | 625,000 | $ | 625,000 | No Change | | | Mark D. Morelli | $ | 500,000 | | $ | 500,000 | | No Change | | | Lindon G. Robertson | $ | 425,000 | | $ | 425,000 | | No Change | $ | 425,000 | $ | 440,000 | 3.5 | % | | Maurice H. Tenney III | Hired | 11/3/2014 | | $ | 425,000 | | — | $ | 425,000 | $ | 435,000 | 2.4 | % | | David C. Gray | $ | 350,000 | | $ | 350,000 | | No Change | $ | 350,000 | $ | 350,000 | No Change | | David E. Jarzynka | | $ | 335,000 | $ | 350,000 | 4.5 | % |
Executive Pay Increases LindonRobertson-ChiefFinancialOffficer • Mr. Robertson assumed added responsibilities since the departure of the COO in April 2016 in helping run the commercial and operational elements of the business. He has worked more closely with our business unit leadership in helping meet financial commitments and balancing resources to current and anticipated needs. In addition to his CFO responsibilities, Mr. Robertson also manages worldwide facilities, logistics and IT. This was his first salary adjustment since his hire in October 2013. MauriceTenney-President,BrooksLifeScienceSystems • Mr. Tenney’s position expanded, as planned, as he grew the life sciences business both organically and through acquisition. He led the integration of BioStorage Technologies and rationalized infrastructure and his leadership team while exiting the fourth quarter of Fiscal 2016 profitably. DavidJarzynka-GeneralManager,BrooksSemiconductorSolutionsGroup • Mr. Jarzynka received a market competitive base salary increase to recognize his accomplishments in consolidating the semiconductor business. Annual Cash Incentive Fiscal Year 20152017 – Performance-Based Variable Compensation (PBVC) Each year we reviewthe HRC Committee, with management, reviews the annual operating plan to determine what are the critical financial metrics and goals that, when achieved, will help drive shareholder value. We consideredFor Fiscal 2017, the following when settingHRC Committee voted to retain the Revenue and Adjusted Gross Margin metrics used in the Fiscal 20152016 Plan but felt that an Adjusted Earnings per Share metric was better aligned to the Company’s emphasis on accelerating profitable growth. (A Free Cash Flow metric used in the Fiscal 2016 PBVC Plan is now part of the Fiscal 2017 Long-Term Incentive Plan). In reviewing the metrics and goals:goals, the Committee was guided by the following: • Alignment between the shorter term financial objectives of our annual PBVC incentive and the longer term equity plan strategic objectives • | Alignment between the shorter term financial objectives of the annual PBVC incentive and the longer term equity plan strategic objectives | | | • | Establishing financial and individual goals that are aggressive but achievable and show growth over prior years targets and results | | | • | Maintaining a consistency between incentive plan metrics and our strategic plan |
• Establishing financial and individual goals that are aggressive but achievable, and show significant growth over prior years targets and results • | Input from executive management on what metrics will best focus our leadership on driving achievement consistent with our annual operating plan and strategy | | | • | Equitable ranges of financial long-term performance to appropriately reward performance below and above our aggressive targets |
• Maintaining a strong linkage between incentive plan metrics and our strategic plan and business model. • WeAppropriate ranges of financial long-term performance to equitably reward performance below and above our aggressive targets
The HRC Committee met over several sessions and engaged our compensation consultant to review and discuss performance metrics and goals. We referenced an analysis performed by our compensation consultants that reviewed BrooksBrooks’ and its peer group’s historical achievement levels on the proposed metrics to assure appropriate rigor in the goal setting. Seeking to accelerateEmerging from a fourth quarter Fiscal 2016 that suggested positive momentum for Fiscal 2017, the solidPBVC goals were established considering the following: 2017 PBVC Financial Performance Goals AnnualRevenue: • Key growth realized withmeasure that anticipated an upturn in the fiscal year 2014 results, we established the fiscal year 2015 financial performance goals as follows:semiconductor industry in Fiscal 2017 and continued organic growth of Life Sciences • Target reflected an increase of 11% over Fiscal 2016 actual and 7% over Fiscal 2016 target • Weighted at 20% of Target BROOKS AUTOMATION - 20162018 Proxy Statement3133
Back to Contents AdjustedGrossMargin: • Key metric for measuring the ability to drive profitability at all points in the industry cycle while outperforming the industry and increasing market share • 2015Selected aggressive gross margin goal (38.0%) from 2017 target model showing continuous improvement in delivering profitable growth. Target is a 130 basis point improvement over Fiscal 2016 actual and 50 basis point increase over Fiscal 2016 target
• Progress continues and initiatives are in place to capture additional market share while rationalizing the infrastructure as important elements of our Fiscal 2017 Plan • Removed the link to the Revenue goals (for FY2016 PBVC, Adjusted Gross Margin goals were adjusted based on Revenue results) given the aggressive goals (threshold through maximum) for both metrics and the expected growth from fiscal yer 2016 results • Weighted at 20% of Target AdjustedEarningsPerShare: • Added adjusted EPS as a PBVC annual metric and moved Free Cash Flow to LTIP as a 3-year cumulative target • Adjusted EPS will enable us to measure our performance in delivering profitable growth using a measure that is understood by our shareholders • Selected target from Fiscal 2017 financial model which will be greater than 65% improvement over actual Fiscal 2016 adjusted EPS • Weighted at 40% of Target Fiscal 2017 Corporate Financial Performance GoalsObjectives, PBVC Plan Results Our performance in Fiscal 2017 is a culmination of the activities and planning of prior years as we remained commited to transforming the Company. We continued to strengthen our customer connections while developing products and services to meet the significant growth opportunities provided by our markets. Within our semiconductor segement, revenue increased $92M (20%) over prior year and our adjusted gross margin and adjusted operating profit was up 370 basis points and $53M (100%), respectively, over Fiscal 2016. We believe our product portfolio is well positioned across the high growth semiconductor segments of Deposition and Etch; Advanced Packaging; and Contamination Control where our growth and market share capture is outpacing our competitors. The Life Sciences segment continued its double-digit growth through a carefully planned strategy of organic and acquisition investments. Revenues and bookings rose to $149M (a 38% increase over Fiscal 2016) and $179M (a 32% increase over fiscal 2016), respectively. We were profitable each quarter and our adjusted gross margin increased by 50 basis points. We acquired three companies that complement our existing product and services portfolio. As a result of our performance, we exceeded our three PBVC cash bonus plan targets reaching the stretch goal on Revenue and Adjusted EPS and reaching 70% of the Adjusted Gross Margin stretch goal. | | TARGETS | | ACHIEVEMENT | | | Corporate | Metric Weighting | 25 | % | 100 | % | Max | | | Full Year Result | | Target Award Percent | | | | CEO | | NEOs | | | Annual Revenue ($000) | 20% | <$560 | | $620 | | $680 | | | $693 | | 200 | % | 150 | % | | Adjusted Gross Margin | 20% | <36.5 | % | 38.0 | % | 40 | % | | 39.4 | % | 170 | % | 135 | % | | Adjusted Earnings Per Share | 40% | <$0.60 | | $0.80 | | $1.00 | | | $1.23 | | 200 | % | 150 | % | | Individual Objectives | 20% | | | | | | | | Varies | | | | | | |
Revenue:
• | Key growth measure. Weighted at 40% | | | • | Target was initially set consistent with our annual operating plan and reflecting 12% growth over the 2014 fiscal year target ($550MM from $490MM) | | | • | Threshold at $500MM was set at a figure 11% greater than the Fiscal 2014 threshold | | | • | Our stretch goal of $600MM reflected 9% growth over our Fiscal 2014 stretch goal of $550MM |
Operating Income:
• | Essential to improve our ability to generate profitable growth consistent with growth in revenue. Weighted at 40% | | | • | Target was initially set with our annual operating plan and reflecting growth of 150% over our Fiscal 2014 target ($45MM from $18MM) | | | • | Threshold at $25MM was set at a figure 400% greater than Fiscal 2014 threshold | | | • | Our stretch goal ($70MM) reflected 56% improvement over our Fiscal 2014 operating income stretch goal |
Fiscal 2017 - PBVC FINANCIAL METRIC RESULTS | | | | Fiscal 2015 Plan and Results | | | | | | | | | | | | | | | Forecast | | Forecast | | | Fiscal 2014 | | Metric | | Threshold | | Target | | Max(2) | | | | Target Award | | Weighted % of | | | Actual(1) | | Weighting | | 0% | | 100% | | 200% | | Actual | | Percent | | Target Award | | Revenue ($M) | $ | 506.9 | | | 40% | | $ | <500 | | $ | 550 | | $ | 600 | | $ | 552.7 | | | 105% | | | 42.1% | | Operating Income | | | | | | | | | | | | | | | | | (Non-GAAP) ($M) | $ | 23.8 | | | 40% | | $ | <25 | | $ | 45 | | $ | 70 | | $ | 36.9 | | | 60% | | | 23.9% | | TOTAL FINANCIAL ACHIEVEMENT (WEIGHTED) | | | | | | | | | | | 66.0% |
(1) | Pro forma results taking into account expected results from divested Granville-Phillips business unit excluding results from Fiscal 2014 acquired businesses. | | | (2) | 200% for CEO; named executive officer(s) max is 150% of target. |
Strategic Individual Objectives The individual strategic objectives are a measurable set of goals relating to strategic development and execution, organic growth, organizational capability and acquisition opportunity within the fiscal year. The strategic goals for the CEO are developed jointly by the HRC Committee and CEO and approved by the Board. The CEO in turn develops strategic goals for his direct reports which focus on the measurable accomplishments in their individual areas of responsibility that will also benefit our shareholders over the long term. The Individual Objectives are weighted at 20% of the PBVC target opporunity and cannot exceed 20% even if the level of achievement for each objective exceeds the measure. Listed below is a summary of each named executive officer(s)officer’s performance against his Fiscal Year 20152017 strategic objectives. BROOKS AUTOMATION - 2018 Proxy Statement - 34
Back to Contents | Name | | Individual Objectives
Summary | | PBVCWeighted | | Results | | Achievement | | Stephen S. Schwartz | | •Successful life sciences new product launch; •Acquisition and divestiture activity focus; •Achieve SG&A expense control per board commitment | | 20% | | •Launched BioStore III Cryo Automated Cryogenic Sample Management System (RAD). Shipped five units for customer review. •Acquired FluidX at beginning of fiscal year and met aggressive growth plan for Fiscal 2015. •BioCision investment and equity position and joint launch of Cryo Pod. •Licensing agreement with PharmaSeq’s p-Chip technology for sample tubes management. •Acquired Contact (Japan) to add to CCS product portfolio •Executed on SG&A cost savings initiatives to realize a $106.9MM spend in Fiscal Year 2015. This spend is $6.8MM below the commitment in the annual operating plan. | | 95% | | Mark D. Morelli | | •Organizational development and key hiring; •Achieve Infrastructure consolidation targets; •Achieve SG&A expense control per board commitment | | 20% | | •Key positions in Operations, Supply Chain and Life Sciences all filled •Footprint reductions in Poway, Switzerland, Spokane resulted in infrastructure savings 25% above the plan target. •SG&A initiatives resulted in reduced spending 6% below the target. | | 100% |
PBVC Individual Objectives FY 2017 | Name | Key Strategy | Individual
Objectives | Weight
% | Results | Achievement Level | Dr. Stephen S. Schwartz CEO and President | Rapid Growth of Life Sciences | Develop and reconcile Board approval on the Next Phase Action Plan for Life Sciences Growth | 50% | Product roadmaps and acquisition strategies were delivered and reviewed; supplemented with financial projections of a larger business | 80% | | Action Plan for Sources of Expansion Capital
| Secure commitment to timely access of capital for Life Sciences growth (tied to Objective #1) | 30% | Term Loan B secured on favorable terms. Public credit ratings received positive outlooks. | 100% | | Succession Planning/Leadership Development
| Build upon Leadership Development progress by implementing a dynamic succession planning process to assure the continuity of CEO and Executive Team positions | 20% | Leadership Development and Succession Planning process developed and executed. Cadence established with Board. | 100% | Lindon G. Robertson Chief Financial Officer | Operations Execution Improvement and Control | Operations coordination with focus on cadence, process, and tools to improve efficiency | 25% | Objectives achieved across all operational functions | 100% | | Increase Shareholder
Value | Investor relations
expansion | 25% | Life Sciences coverage expanded | 100% | | Growth through strategic acquisition and partnership | Cash and debt management to support Company finance needs | 50% | Term Loan B secured on favorable terms. Public credit ratings received positive outlooks. | 100% | Maurice H. Tenney III President, Brooks Life Sciences | Advance the rapid growth of Life Sciences | Launch of new innovation across the business that culminates in incremental revenues of $XXM v. PY across the Consumables & Instruments, Cryo/Stockyard, and Informatics businesses | 50% | Incremental revenues well over targets | 100% | | Market Leadership | Sequential revenue and Operating Profit expansion quarter over quarter | 50% | Each quarter successively higher on each financial measure | 100% | David E. Jarzynka General Manager Brooks Semiconductor Solutions Group | Growth and Market Leadership | New Service Strategy and Model to achieve Revenue and Gross Margin increases | 25% | New service strategy substantially increased Revenue and Gross Margin increases | 100% | | Growth and Market Leadership: New Products | Qualification of progress MagnaTran LEAP | 50% | Achieved | | | Operational Excellence | Establish and Implement an Excess/Obsolete Process, Reduce charges from Excess/Obsolete by 10% in 2017 | 25% | Implemented and reduced charges well over target | 100% | David C. Gray Chief Strategy and New Business Officer | Advance the rapid growth of Life Sciences | Provide GM level leadership to drive progress in Life Sciences cryogenic automation solutions | 60% | Revenue and bookings grew significantly | 100% | | Extend Leadership in core Semiconductor and adjacent markets | Support corporate level development initiatives | 25% | Achieved | 100% | | Engage employees to deliver results | Support fuller engagement and utilization of company technical staff through annual tech conference event and related events | 15% | Highly energed technical community from both business segments exchanged ideas and reviewed innovation opportunities | 100% |
BROOKS AUTOMATION -- 2016 2018 Proxy Statement3235 | Name | | Individual Objectives
Summary | | PBVC
Weighted | | Results | | Achievement | | Lindon G. Robertson | | •Acquisition and divestiture activity; •Organizational development of finance team; •Enhanced financial reporting •Achieve SG&A expense control per board commitment | | 20% | | •Collaborated on acquisition strategy, built business scenarios on opportunities and ensured complete financial diligence and Board clarity. •Enhanced the Finance team with key hire competence. •Delivered enhanced financial reporting on GAAP reporting, longer term financial strategy, Fx analysis and impact, and ROIC modeling. •SG&A initiatives resulted in reduced spending 6% below the target. | | 100% | | Maurice H. Tenney III | | •Business development initiatives; •New products launch of BioStore III Cryo system; •Achieve gross margin targets; infrastructure rationalization | | 20% | | •Delivered PharmaSeq equity investment and Labcyte acoustic agreement; partnership agreement with Chart Industries; grew revenue of newly acquired FluidX and bested plan by $2MM. •BioStore III Cryo system successfully launched. Product received industry award at International Society for Biological and Environmental Repositories (ISBER) show •Completed closure of Poway site and restructuring of Spokane and Switzerland sites. Infrastructure savings of $1.2M | | 100% | | David C. Gray | | •Complete development of BioStore III Cryo system, Cryopod, and Cryopod Filling Station •Structure product development contracts with our Cold Chain business partners | | 20% | | •Product launch at ISBER annual meeting in May, 2015 ahead of schedule. Product was named best new product of the year; BioStore III Cryo system was runner up. •Completed joint development agreements; helped develop Cryopod; enhanced product capability with a strategic partner. | | 100% |
Fiscal 20152017 PBVC Plan Awards and Results (continued) Listed below are our CEOCEO’s and named executive officersofficers’ earned cash payouts based on the achievement of the corporate financial metrics weighted at 80% of target and the individual objectives weighted at 20% of target. Messrs. Tenney and Jarzynka are also measured on specific business unit financial performance. Name | Target Opportunity as
% of Fiscal Base Pay | Cash Payout | Payment as a
% of Target | Individual Objectives Achievement | Stephen S. Schwartz | 110% | $1,195,031 | 174% | 90% | Lindon G. Robertson | 100% | $597,575 | 137% | 100% | Maurice H. Tenney | 75% | $236,485 | 73% | 100% | David E. Jarzynka | 75% | $359,641 | 138% | 100% | David C. Gray | 60% | $287,658 | 137% | 100% |
Special Bonus Award: Mr. Tenney Following fiscal year end discussion by the full Board of the significant growth and strategic advances realized by the Life Sciences segment in fiscal 2017, a special one-time discretionary bonus outside of the PBVC Plan was awarded to Mr. Tenney as President of Life Sciences in the amount of $100,000 as recognition for the significant growth and strategic advances realized by the Life Sciences segment in fiscal 2017. The Board noted the achievements listed below and the impact that the growth of our Life Sciences business has had on our enterprise valuation: | Name | Target Opportunity as
% of Fiscal Base Pay | | Financial
Achievement | | Individual Objectives
Achievement | | Payment as a
% of Target | | Cash
Payout | | | Stephen S. Schwartz | | 100 | % | | | 66 | % | | | 19 | % | | | 85 | % | | $ | 531,750 | | | Mark D. Morelli | | 100 | % | | | 65 | % | | | 20 | % | | | 85 | % | | $ | 425,000 | | | Lindon G. Robertson | | 100 | % | | | 65 | % | | | 20 | % | | | 85 | % | | $ | 361,250 | | | Maurice H. Tenney | | 75 | % | | | 16 | % | | | 20 | % | | | 36 | % | | $ | 102,215 | | | David C. Gray | | 60 | % | | | 65 | % | | | 20 | % | | | 85 | % | | $ | 178,500 | |
• Thirty-eight percent overall revenue growth and 27% organic growth year-over-year • Adjusted operating profit improvement of 880 basis points reversing a $5M operating loss in Fiscal 2016 to a $7M operating profit in Fiscal 2017 • Bookings growth to $189M with each product line contributing to and backlog climbing in excess of $250M • Four acquisitions implemented with accretive impacts • Commercial success in two strategic, high-growth product lines - Informatics and CryoAutomation • Restructuring of the Life Sciences Senior Leadership team and expansion and upgrade of global sales team • Significant customer penetration in China and one year ahead of schedule Long-Term Incentives We regularly review the design of our equity incentive plan to assure it remains calibrated to our longer termlong-term strategic goals while providing the appropriate balance of challenge and motivation. Each of our Named Executive Officersnamed executive officers received award grants of both time-time-based and performance-based RSUs in Fiscal 2015. 2017. We use performance-based RSUs for the majority (75%) of our equity grant and supplement this with time-based (25%) RSUs. grants. Following two years (Fiscal 2013, Fiscal 2014) of using one-year performance measures with extended vesting of any earned awards, we adopted a hybrid plan for Fiscal 2015 that featured two metrics with one-year performance measures and two metrics with three-year measurement periods. We have usedwere using one-year measurement periods previously to assist in addressing the volatility inherent in the semiconductor industry and the difficulty in setting meaningful targets over extended periods. We believed setting one-yearFor Fiscal 2016 and 2017, we moved entirely to 3-year measurements. The financial metrics for the Fiscal 2017 LTIP are comprised of cumulative adjusted operating profit (40% weight), cumulative free cash flow (40% weight) and average return on invested capital (20% weight). All three financial metrics will be measured against 3-year performance goals for the fiscal 2017-2019 performance period. Adjusted operating profit is a key performance indicator that motivates and rewards sustained growth in profit. Free cash flow, which will provide for funding of growth initiatives focused on new product development and acquisitions, is also an important metric. Return on invested capital is a key financial metric, as it focuses executives on a forward looking, disciplined approach to capital investment in optimizing shareholder return. This metric will measure effective capital deployment in internal organic investments and acquisitions with additional vesting requirements permitted us to establish an appropriate balance of aggressive yet achievable performance goals that would retain their incentive value. We were also influenced by the significant number of companies (43%) in our peer group who also utilize one-year performance measurement timeframes in their incentive plans. We returned to a partial use of three-year equity plan performance measures for Fiscal Year 2015 to align our executives with the 2017 strategic growth plan that we have communicated to our shareholders. We continued to utilize one-year performance measures to incent the creation of shorter-term value critical to sustained future growth.accretive returns. BROOKS AUTOMATION - 2016 Proxy Statement 33
Grant Process The numbervalue of RSUseach year’s LTIP equity grant for the HRC Committee recommends for each keyCEO and executive and the vesting schedule for each grantofficers is determined based on a variety of factors including market and peer group data such as that provided by PM&P,Pearl Meyer, the ability of the key executive’s positionexecutive to impact long-term shareholder value, the executive’s performance,prior contributions and the current outstanding equity grants held by the executive. For executive officers, this translates into an annuala projected equity value to base salarytarget cash compensation ratio generally ranging from 0.51.0 to 3.0.1.5. A combination of performance and time-based RSUs has been utilized.are used. Performance-based RSUs are intended to focus and align management leadership to increasing share value and BROOKS AUTOMATION - 2018 Proxy Statement36
Back to Contents profitable Company growth, while time-based RSUs help promote retention of key leadership talent. The most recent PM&PPearl Meyer executive pay analysis, completed in September 2015,2017, noted that Brooks’ dilution (total number of shares outstanding under the equity compensation programs as a percentage of the most recent fiscal year’s shares outstanding) wasremained at the 30thpercentile of its 2015our 2017 compensation peer group. Our Share Burn Rate, sum of options and full-value shares granted divided by weighted average basic shares outstanding (where all options and full value shares (100%) are counted equally) average of 1.5% in Fiscal 2017 was slightly above the 50th percentile of our peer group. This judicious use of equity awards affords the HRC Committee flexibility in incenting strategic initiatives and the ability to use equity to drive executive behaviors.  Brooks Share Burn Rate and Dilution Compared to Peer Group
Fiscal YearYears 2015-2017 LTIP Grant Guided by the Company’s fiscal year end 2017 business model and strategy, and utilizing the financial targets from the model, we selected four performance metrics and goals for our long-term incentive plan (LTIP) for Fiscal 2015.2015 in November 2014. The metrics were selected based on the following: | | | | | | | Measurement | | | | Threshold | | Target | | Maximum | | Metric | | Strategic Objective | | Weighting | | Period | | Vesting | | (000) | | (000) | | (000) | | Life Sciences Revenue | | •To continue growth and deliver value from our life sciences business | | 30% | | Fiscal Year 2015 | | 50%
FYE 2016
50%
FYE 2017 | | $75M | | $88M | | $100M | | Gross Margin | | •Continue gross margin improvement to drive profits performance at all points in the industry cycle | | 30% | | Fiscal Year 2015 | | 50%
FYE 2016
50%
FYE 2017 | | 36% | | 38% | | 40% | | Cumulative Free Cash Flow | | •To assure funding for growth initiatives with new product development and acquisition activity | | 30% | | Fiscal Year 2015 –
Fiscal 2017 | | 100%
FYE 2017 | | * | | * | | * | | | | •To subsidize industry down cycles | | | | | | | | | | | | | | | | •Alternative uses | | | | | | | | | | | | | | ROIC 3 Year Average | | •Assure investments are returning value to our shareholders | | 10% | | Fiscal Year 2015 –
Fiscal 2017 | | 100%
FYE 2017 | | * | | * | | * |
* | We do not publicly disclose our goals during the performance periods due to the proprietary and competitive sensitivity of the information. We believe these goals to be consistent with our philosophy of establishing aggressive but achievable targets and after one year’s results, participants are on track to achieve the targets. |
Metric | Strategic Objective | Weighting | Measurement Period | Vesting | Threshold (000) | Target (000) | Maximum (000) | Results | Life Sciences
Revenue | • To continue growth and deliver value from our life sciences business | 30% | Fiscal Year 2015 | 50% FYE 2016
50% FYE 2017 | $75M | $88M | $100M | <$75MM all shares forfeited | Adjusted Gross Margin | • Continue gross margin improvement to drive profits performance at all points in the industry cycle | 30% | Fiscal Year 2015 | 50% FYE 2016
50% FYE 2017 | 36% | 38% | 40% | <36% all shares forfeited | Cumulative Free
Cash Flow | • To assure funding for growth initiatives with new product development and acquisition activity | 30% | Fiscal Year 2015 – Fiscal 2017 | 100% FYE 2017 | $100M | $135M | $200M | $137.8M | | • To subsidize industry down cycles | | | | | | | | | | | | | | | | | ROIC 3 Year Average | • Assure investments are returning value to our shareholders | 10% | Fiscal Year 2015 – Fiscal 2017 | 100% FYE 2017 | 4.0% | 6.4% | 9.0% | 6.5% | |
BROOKS AUTOMATION - - 20162018 Proxy Statement3437 Independent of the 2015 – 2017 LTIP, Mr. Tenney received an RSU “new hire” grant of 100,000 units effective on his hire date. These units will vest based on a continuous service requirement at 50% on the first anniversary of the grant and 25% each on the second and third anniversaries.
 At the end of the 2015 fiscal year, we determined that our Life Science Systems revenue and gross margin metrics did not reachwere below threshold levels of performance andso the combined 60% weighting of performance RSUs grantedassociated with athe metrics for the 2015 Fiscal Year measurement period were forfeited. We will not knowFor the outcomethree-year metrics, our strong performance in Fiscal 2017 resulted in our Free Cash Flow metric and ROIC metric slightly exceeding the three-year goals, providing for a vesting percentage of 104.63% of the remaining metrics until the end of Fiscal 2017 at which time we will communicate our goals and achievementgrant attributed to the goals.two metrics. Our Named Executive Officers received the following shares as a result of the goal achievement. 2016 Incentive Compensation Program
| Original Grant | | | | Name | Total Units | RSUs | Granted PSUs | Forfeited PSUs | Remaining PSUs (vest 11/8/17) | Total PSUs Earned (vest 11/8/17) | Steve S. Schwartz | 160,000 | 40,000 | 120,000 | (72,000) | 48,000 | 50,222 | Maurice H. Tenney | 75,000 | 18,750 | 56,250 | (33,750) | 22,500 | 23,541 | Lindon G. Robertson | 75,000 | 18,750 | 56,250 | (33,750) | 22,500 | 23,541 | David E. Jarzynka | 45,000 | 11,250 | 33,750 | (20,250) | 13,500 | 14,125 | David C. Gray | 42,000 | 10,500 | 31,500 | (18,900) | 12,600 | 13,183 |
Changes toFiscal Years 2016 - 2018 LTIP
From our shareholder outreach, we learned that the large majority of our shareholders preferred a long-term incentive plan that is focused on achieving goals consistent with our longer-term strategy. Based on these preferences, we adopted a Plan in Fiscal 2016 PBVC and LTIPthat uses only three-year performance measures. As part of our ongoing effort to increase the performance orientation of our program and be responsive to concerns raised by our shareholders, we made changes to both our annual PBVC as well as our LTIP. For Fiscal 2016, the financialLTIP again was designed to assure that our metrics inand goals were consistent with our PBVC arelonger-term growth strategies. Our growth strategy is based on adjusted gross margin (40% weight) revenue (25% weight)the following tenets:
• Extend leadership in core Semiconductor and free cash flow (15% weight). The individual strategic objective componentadjacent markets • Advance the rapid growth of the PBVC will remain at 20% weight. We believe these metrics and weightings result in a balanced incentive program focused on near-term profitable growth through revenue and adjusted grossLife Sciences division • Drive margin and free cash generation to fund future growth.expansion • Exercise disciplined capital deployment Beginning in Fiscal 2016, we have moved entirely to 3-year measurements in our LTIP. The financial metrics are comprised of adjusted operating profit (40% weight), life sciences revenue (40% weight) and return on invested capital (20% weight). All three financial metrics will be measured against 3-year performance goals for the fiscal 2016-2018 performance period. Adjusted operating profit is a key performance indicator that motivates and rewards sustained growth in profit. Growing revenue in the life sciences business is a key element of our business strategy infor achieving growth, diversifying our business to a less cyclical model and achieving greater margins. We are intent on improving the results of our “return” metrics as we continue to grow revenue from the companies we have acquired over the past several years. Accordingly, we increased the weighting on return on invested capital to 20% from 10% in Fiscal 2015 in recognition of the importance of this key indicator of the success of our growth focused investments.
BROOKS AUTOMATION - 2018 Proxy Statement38
Back to Contents FINANCIALOBJECTIVESFISCAL2016-2018LTIP Long Term Incentive Plan Objectives – LTIP 2016 - 2018 | Strategic Objective | Weighting | Measurement
Time Frame | Metrics | Threshold 25% of Award | Target 100% of Award | Maximum +200% of Award | Adjusted Operating Profit(1) | 40% | 3 Year | Cumulative
Adjusted Operating Profit 2016 - 2018 | * | * | * | Life Sciences Revenue(2) | 40% | 3 Years | FY18 Life Sciences
Revenue | * | * | * | ROIC: (with acquisitions)(3) | 20% | 3 Years | 3 year average ROIC | * | * | * | (1) Adjusted Operating Profit: Cumulative Pre-tax Operating income before special charges; excludes: (1) amortization expense; (2) purchase accounting adjustments; (3) restructuring expenses; (4) interest income; (5) other income; (6) JV income; (7) other items that may be excluded from adjustment EPS. (2) Life Sciences Revenue: Total reported revenues of Life Sciences segment for FY 2018. (3) ROIC: GAAP income minus interest (after tax) as a percentage of average net assets, excluding cash and net deferred taxes. Each year’s average ROIC is equally weighted (Y1 + Y2 + Y3)/3 * We do not publicly disclose our goals during the performance periods due to the proprietary and competitive sensitivity of the information. We believe these goals to be consistent with our philosophy of establishing aggressive but achievable targets and after two year’s results, participants are on track to achieve the targets. |
Special Equity Incentive Grant Following a significant restructuring of the Company in April 2016 that was designed to streamline operational processes and flatten the organization with the elimination of over 100 positions including five executive level positions, a special RSU grant with a three year vesting cycle was made to a broad base of primarily non-executive key contributors in May 2016. This grant was designed to retain key performers and to recognize them for prior contributions. Coincident with this restructuring, we promoted Mr. Jarzynka to Senior Vice President and General Manager of the entire semiconductor product and services businesses, and we provided him with a special grant of 30,000 RSU’s, 40% of which is performance-based and tied to achievement of Fiscal 2017 adjusted Gross Margin targets for the semiconductor business, and 60% which is time-based that vest over a three year period. As a result of our gross margin performance in the semiconductor segment, Mr. Jarzynka earned 89.1%, or 10,692 of the 12,000 performance-based RSUs awarded to him in May, 2016. He vested 50% in these shares on November 8, 2017 and in the remaining 50% if employed by Brooks on November 8, 2018. Fiscal Years 2017 - 2019 LTIP Having established a cadence with our prior three year LTIP (FY 2016 - 2018) using three-year measurement of goals and focusing on longer-term metrics tied to our business strategy and model, the HRC Committee and Board of Directors approved a Plan comprised of cumulative adjusted operating profit (40% weight) average return on invested capital (20% weight) and cumulative free cash flow (40% weight). The adjusted operating profit and return on invested capital have been staples of our recent LTI Plans. The free cash flow metric had previously been a metric used in our annual cash PBVC incentive plan. The HRC Committee believed this metric is better suited for longer-term measurement and consistent with our growth strategy of generating sufficient cash from our businesses to reinvest in additional opportunities. Each metric’s goal was substantially increased from prior years achievement. BROOKS AUTOMATION - 2018 Proxy Statement39
Back to Contents FINANCIALOBJECTIVESFISCAL2017-2019LTIP Long Term Incentive Plan Objectives – LTIP 2017 - 2019 | Strategic Objective | Weighting | Measurement
Time Frame | Metrics | Threshold 25% of Award | Target 100% of Award | Maximum +200% of Award | Adjusted Operating Profit(1) | 40% | 3 Year | Cumulative
Adjusted Operating Profit (2017 - 2019) | * | * | * | Free Cash Flow(2) | 40% | 3 Years | Cumulative Free Cash Flow (2017-2019) | * | * | * | ROIC: (with acquisitions)(3) | 20% | 3 Years | 3 year average ROIC | * | * | * | (1) Adjusted Operating Profit: Cumulative Pre-tax Operating income before special charges; excludes: (1) amortization expense; (2) purchase accounting adjustments; (3) restructuring expenses; (4) interest income; (5) other income; (6) JV income; (7) other items that may be excluded from adjustment EPS. (2) Free Cash Flow: Operating Cash Flow less capital expenditures. (3) ROIC: GAAP income minus interest (after tax) as a percentage of average net assets, excluding cash and net deferred taxes. Each year’s average ROIC is equally weighted (Y1 + Y2 + Y3)/3 * We do not publicly disclose our goals during the performance periods due to the proprietary and competitive sensitivity of the information. We believe these goals to be consistent with our philosophy of establishing aggressive but achievable targets and after one year’s results, participants are on track to achieve the targets. |
Fiscal 2018 Incentive Compensation Program Changes to our Fiscal 2018 PBVC and LTIP For Fiscal 2018, the financial metrics in our PBVC will again be based on adjusted gross margin (25% weight), revenue (25% weight) and adjusted earnings per share (50% weight). The individual strategic objective component of the PBVC has been eliminated in favor of payment based on all financial goals and we reallocated the percentage of each financial metric as a result of this change. While most of the prior year’s individual objectives had a financial measure, the Committee believes the individual objectives should remain part of the Company’s performance management process and the PBVC achievement for named executive officers be wholly based on performance against the strategic metrics adopted. We have again established 3-year measurements in our LTIP. The financial metrics are comprised of cumulative adjusted operating profit (33% weight), cumulative free cash flow (33% weight) and return on invested capital (34% weight). All three financial metrics will be measured against 3-year performance goals for the fiscal 2018-2020 performance period. Adjusted operating profit is a key performance indicator that motivates and rewards sustained growth in profit. Growing free cash flow is a key element of our business strategy for providing cash for our growth strategy. We are again measuring an increased return on invested capital goal in recognition of the importance of this key indicator of the success of our investments in growth.our acquisitions and innovative organic products. Other Compensation and Policies Stock Ownership Guidelines Stock ownership guidelines require that within five years of the hire date, executive officers, including named executive officers Dr. Schwartz and Messrs. Morelli, Robertson, Tenney, Jarzynka and Dr. Gray, acquire and maintain beneficial ownership of Brooks shares at different multiples of salary depending upon position. For the chief executive officer, chief financial officerThe Chief Executive Officer and chief operating officers’ positions, the requirement isChief Financial Officer have ownership requirements of five (5) times and three (3) times base salary; for thesalary, respectively. The remaining positions covered by the policy the requirement ishave ownership requirements of two (2) times base salary. At the end of Fiscal 2015,2017, Dr. Schwartz exceeded his 3Xfive (5) times ownership requirementrequirement; Mr. Robertson exceeded his three (3) times ownership requirement; and the remaining named executive officers continued to make progress in acquiring and holding shares.also exceeded their two (2) times base salary requirement. The guidelines cease to apply to any executive officer after termination of employment. Beginning with Fiscal 2016, the Board approved increased stock ownership requirements for the CEO position to five (5) times base salary to differentiate the CEO role from the other executive officers and in response to shareholder feedback.
BROOKS AUTOMATION - - 20162018 Proxy Statement 3540
Back to Contents Risk Assessment Process The HRC Committee has assessed the risk profile of its compensation program to monitor whether any element of pay or policy encouraged inappropriate or unacceptable risk to the Company. The HRC Committee is provided with a series of analytical factors which focus upon several key areas of our compensation program, including: external market reference; pay mix; range and sensitivity of our PBVC and long-term incentive plans; selection of performance metrics; goal setting process; and our checks and balances on the payment of compensation. This provides a process to ensure that an appropriate balance between prudent business risk and resulting compensation is being maintained. The HRC Committee believes our policies and procedures achieve this balance. The Company also has clawback provisions in place as discussed in more detail below, as well as stock ownership guidelines to further align the executive’s interests with that of our shareholders. The HRC Committee regularly monitors the executives’ progress against our stock ownership guidelines. The HRC Committee believes our policies and rewards structure appropriately balance the creation of long-term value with shorter-term positive results. Clawback Provisions Clawback provisions which apply to the chief executive officer and chief financial officer are contained in employment agreements and/or offer letters and are consistent with the Sarbanes-Oxley Act of 2002. These provisions govern the recoupment of annual and long-term incentive compensation in the event of an accounting restatement due to material noncompliance by the Company that results from misconduct or gross negligence relating to any financial reporting requirements. In November 2013, the Board approved an incentive compensation recoupment policy that applies to all executive officers (including the chief executive officer and the chief financial officer), which is applicable to incentive-based compensation (such as the PBVC and performance-based restricted stock units) awarded to executive officers after the adoption of the policy. Pursuant to the policy, in the event we are required to prepare an accounting restatement due to material noncompliance with financial reporting requirements, we will use reasonable efforts to recover any amount in excess of what would have been paid to such executive officers (or such former executive officers) under the accounting restatement for any such incentive-based compensation during the three-year period preceding the restatement. Employment Agreements We currently have an employment agreement forwith Dr. Schwartz. The agreement provides for, among other things, a specified annual base salary and the target variable compensation award based on performance. It also provides that he will be entitled to severance of one year’s base salary and continued participation in benefit plans if his employment is terminated by us without “cause” or if he resigns for “good reason”. Severance and benefits are continued on a payroll to payroll basis if he remains unemployed following the initial twelve months of payment up to an additional twelve months. More information can be found under the section “Post Employment Benefits”. Messrs. Robertson, Morelli,Tenney and TenneyJarzynka and Dr. Gray have each have entered into offer letters that stipulate the terms and conditions of their employment with the Company. In June 2015, we modified the original offer letters to Mr. Morelli, Mr. Robertson and Mr. Tenney to provide for the same severance provisions as Dr. Schwartz (one year’s base salary and benefits and up to an additional 12 months if the executive remains unemployed). In November 2016 we modified the offer letters to Mr. Jarzynka and Dr. Gray to provide severance pay of six months base salary and benefits and up to an additional six months of severance and benefits if the executive remains unemployed. We believe this change isthese changes are appropriate as it reflectsthey reflect customary market practice for executives and providesprovide our executives the proper focus when analyzing potential transactions. Change-In-Control and Non-Compete Agreements We currently have provisions within our stock award agreements that provide for accelerated vesting at target in the event of a double-trigger change in control (termination of employment within a year following a change-in-control). In June 2015, we extended the double-trigger change in control provisions to our severance and benefits arrangements with Dr. Schwartz and Messrs. Morelli, Robertson and Tenney and increased the protected termination period following a change in control to two years. The arrangement includes: • Cash severance, payable bi-weekly, equal to two times the amount of their current base salary and annual target bonus • | Cash severance, payable bi-weekly, equal to two times the amount of their current base salary and annual target bonus | | | • | A lump sum payment to cover the approximate cost of the Company’s portion of premiums for coverage under their welfare benefit plans for two years following termination |
• A lump sum payment to cover the approximate cost of the Company’s portion of premiums for coverage under their welfare benefit plans for two years following termination BROOKS AUTOMATION - 2018 Proxy Statement41
Back to Contents In exchange for the change in control agreement, we entered into a non-competition agreement with Dr. Schwartz and Messrs. Morelli, Robertson and Tenney where each executive agrees that during the term of the agreement and for 12 months following termination for any reason, the executive: • Shall not work or invest in any business that is competitive with Brooks • | Shall not work or invest in any business that is competitive with Brooks | | | • | Shall not solicit for employment any employee of the Company or solicit a customer (within the last two years) of the Company |
• Shall not solicit for employment any employee of the Company or solicit a customer (within the last two years) of the Company In November 2016 we extended the Change-In-Control provisions and Non-Compete Agreements to Mr. Jarzynka and Dr. Gray on the same basis as described for Dr. Schwartz, Mr. Robertson, and Mr. Tenney. BROOKS AUTOMATION - 2016 Proxy Statement36
Indemnification Agreements We entered into an indemnification agreement at the time of hire with our chief executive officer. The indemnification agreement provides that we will pay amounts incurred in connection with any civil or criminal action or proceeding, specifically including actions by or in the Company’s name where the involvement is by reason of the fact that he is or was an officer. Such amounts include, to the maximum extent permitted by law, attorney’s fees, judgments, civil or criminal fines, settlement amounts, and other expenses customarily incurred in connection with legal proceedings. Under the indemnification agreement, the chief executive officer will receive indemnification unless he or she is adjudged not to have acted in good faith and in a manner he or she reasonably believed to be in the best interests of Brooks. Tax Considerations Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) provides an exception to the $1,000,000 deductibility limit for performance-based compensation if certain procedural requirements, including shareholder approval of the material terms of the performance goals, are satisfied. CompensationPrior to Fiscal 2016, compensation paid under our performance-based variable compensation framework doesdid not currently qualify for the exception for performance-based compensation as the framework haswas not been approved by our shareholders. TheAt our 2016 Annual Meeting, our shareholders approved the Executive Performance-Based Variable Compensation Plan that is subjectwhich now permits us to ratification by our shareholders at this annual meeting is intended to permit the grant of our performance-based variable compensation that qualifies as performance-based compensation underin compliance with Section 162(m) of the Code. Since then, our bonuses have been granted pursuant to this Plan. In addition, our executives receive RSU awards that provide for time-based vesting which do not qualify for the exception from the deductibility limitation of Section 162(m). However, we believe our performance-based RSU awards qualify for the exception for performance-based compensation beginning with our Fiscal 2014 equity grants. Section 280G and related sections of the Code provide that executive officers and directors who hold significant stockholder interests and certain other service providers could be subject to significant additional taxes if they receive payments or benefits that exceed certain limits in connection with a change in control event, and that we could lose a deduction on the amounts subject to the additional tax. We have not provided any executive officer, including Dr. Schwartz, with a commitment to gross up or reimburse other tax amounts that the executive might pay pursuant to Section 280G of the Internal Revenue Code. In January 2010, the Board of Directors voted that it would not make any gross-up or tax reimbursement commitments to any executives. Section 409A of the Internal Revenue Code also imposes additional significant taxes on an executive officer, director or service provider who receives “deferred compensation” that does not meet the requirements of Section 409A. To assist in the avoidance of additional tax under Section 409A, we intend to structure equity awards and other deferred compensation payments in a manner to comply with the applicable Section 409A requirements. BROOKS AUTOMATION - 2018 Proxy Statement42
Back to Contents Human Resources and Compensation Committee Report To The Stockholders: The Human Resources and Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on its review and discussions with management, the Human Resources and Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement. Respectfully submitted, Human Resources and Compensation Committee as of September 30, 20152017 Ellen M. Zane, Chairman
Robyn C. Davis
Kirk P. Pond
Alfred Woollacott III BROOKS AUTOMATION-2016 2018 Proxy Statement 3743
Back to Contents COMPENSATION TABLES FOR NAMED EXECUTIVE OFFICERS Summary Compensation Table The following table sets forth certain information concerning compensation of each named executive officer during the fiscal years indicated below: Name and Principal
Position | | | Fiscal
Year | | | Salary | | | | Bonus | | | Stock
Awards(1) | | | Non-Equity
Incentive Plan
Compensation(2) | | | All Other
Compensation | | | Total | | | Stephen S. Schwartz | | | 2015 | | | $ | 625,000 | | | | | | | $ | 1,910,400 | | | $ | 531,750 | | | $ | 13,850 | (3) | | $ | 3,081,000 | | | Chief Executive Officer | | | 2014 | | | $ | 611,154 | | | | | | | $ | 1,512,000 | | | $ | 671,108 | | | $ | 76,617 | | | $ | 2,870,879 | | | | | | 2013 | | | $ | 536,298 | | | | | | | $ | 1,227,000 | | | $ | 125,000 | | | $ | 86,490 | | | $ | 1,974,788 | | | Mark D. Morelli | | | 2015 | | | $ | 500,000 | | | | | | | $ | 1,194,000 | | | $ | 425,000 | | | $ | 11,475 | (4) | | $ | 2,130,475 | | | President & Chief | | | 2014 | | | $ | 479,231 | | | | | | | $ | 1,039,500 | | | $ | 526,243 | | | $ | 11,475 | | | $ | 2,056,449 | | | Operating Officer | | | 2013 | | | $ | 396,394 | | | | | | | $ | 818,000 | | | $ | 106,250 | | | $ | 69,178 | | | $ | 1,389,822 | | | Lindon G. Robertson | | | 2015 | | | $ | 425,000 | | | | | | | $ | 895,500 | | | $ | 361,250 | | | $ | 76,831 | (5) | | $ | 1,758,581 | | | Executive Vice | | | 2014 | | | $ | 415,192 | | | | | | | $ | 1,271,551 | | | $ | 455,923 | | | $ | 73,646 | | | $ | 2,216,312 | | | President & Chief | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Financial Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Maurice H. Tenney III | | | 2015 | | | $ | 375,962 | (6) | | $ | 175,000 | (7) | | $ | 2,094,500 | | | $ | 102,215 | | | $ | 12,797 | (8) | | $ | 2,760,474 | | | President, Brooks | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Life Sciences | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | David C. Gray | | | 2015 | | | $ | 350,000 | | | | | | | $ | 501,480 | | | $ | 178,500 | | | $ | 21,133 | (10) | | $ | 1,051,113 | | | Senior Vice President, | | | 2014 | | | $ | 336,875 | (9) | | | | | | $ | 741,000 | | | $ | 230,601 | | | $ | 1,817 | | | $ | 1,310,293 | | | Chief Strategy and | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | New Business Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) | Awards consist of restricted stock unit (RSU) awards. In November 2014, the Board issued both time-based and performance-based RSUs to each of the named executive officers. The value of an award is based on the fair value as of the grant date calculated in accordance with FASB ASC Topic 718 (previously FAS 123R). The grant date fair value of the RSUs assuming the maximum potential value is achieved is $3,343,200 for Dr. Schwartz; $1,507,425 for Mr. Robertson; $2,089,500 for Mr. Morelli; $2,706,425 for Mr. Tenney and $877,590 for Dr. Gray. In addition, the award shown for Mr. Tenney includes a new hire grant of 100,000 time-based RSUs. | (2) | Amounts consist of cash incentive compensation awards earned for services rendered in the relevant fiscal year under the Company’s performance-based variable compensation plan. | (3) | Represents amounts paid or accrued by the Company on behalf of Dr. Schwartz as follows: $13,850 in matching contributions to Dr. Schwartz’s account under the Company’s qualified 401(k) plan. | (4) | Represents amounts paid or accrued by the Company on behalf of Mr. Morelli as follows: $11,475 in matching contributions to Mr. Morelli’s account under the Company’s qualified 401(k) plan. | (5) | Represents amounts paid or accrued by the Company on behalf of Mr. Robertson as follows: $12,238 in matching contributions to Mr. Robertson’s account under the Company’s qualified 401(k) plan, $34,578 in temporary housing allowance, and $30,015 in relocation expense. Pursuant to the Company’s policies, relocation benefits are made available to both executive and non-executive relocated employees. | (6) | The salary for Mr. Tenney is pro-rated based on his date of hire on November 3, 2014. His annualized salary base salary for fiscal year 2015 was $425,000. | (7) | Amount represents sign-on bonuses paid to Mr. Tenney pursuant to his offer letter. | (8) | Represents amounts paid or accrued by the Company on behalf of Mr. Tenney as follows: $11,475 in matching contributions to Mr. Tenney’s account under the Company’s qualified 401(k) plan, and $1,322 in relocation expense. | (9) | The salary reported for Dr. Gray in 2014 includes $249,375 in consulting fees paid to Dr. Gray prior to his date of hire on June 23, 2014. | (10) | Represents amounts paid by the Company on behalf of Dr. Gray as follows: $21,133 in matching contributions to Dr. Gray’s account under the Company’s qualified 401(k) plan. |
Name and Principal Position | Fiscal Year | Salary | | | Bonus | | | Stock Awards(1) | Non-Equity Incentive Plan Compensation(2) | | All Other Compensation | | Total | Stephen S. Schwartz | 2017 | $ | 625,000 | | $ | | | $ | 2,061,640 | $ | 1,195,031 | | $ | 12,150 | (3) | $ | 3,893,821 | President and
| 2016 | $ | 625,000 | | $ | | | $ | 1,760,800 | $ | 490,625 | | $ | 12,375 |
| $ | 2,888,800 | Chief Executive Officer | 2015 | $ | 625,000 | | $ | | | $ | 1,910,400 | $ | 531,750 | | $ | 13,850 | | $ | 3,081,000 | Lindon G. Robertson | 2017 | $ | 436,250 | (9) | $ | | | $ | 908,236 | $ | 597,575 | | $ | 12,150 | (4) | $ | 1,954,211 | Executive Vice President | 2016 | $ | 425,000 | | $ | | | $ | 795,200 | $ | 314,500 | | $ | 113,462 |
| $ | 1,648,163 | & Chief Financial Officer | 2015 | $ | 425,000 | | $ | | | $ | 895,500 | $ | 361,250 | | $ | 76,831 | | $ | 1,758,581 | Maurice H. Tenney III | 2017 | $ | 432,500 | (10) | $ | 100,000 | (5) | $ | 891,520 | $ | 236,485 | | $ | 12,150 | (6) | $ | 1,672,655 | President, Brooks | 2016 | $ | 425,000 | | $ | | | $ | 908,800 | $ | 214,917 | | $ | 108,223 |
| $ | 1,656,941 | Life Sciences | 2015 | $ | 375,962 | | $ | | | $ | 2,094,500 | $ | 102,215 | | $ | 12,797 | | $ | 2,585,474 | David E. Jarzynka | 2017 | $ | 346,250 | (11) | $ | | | $ | 626,850 | $ | 359,641 | | $ | 12,719 | | $ | 1,345,460 | Senior Vice President | 2016 | $ | 319,192 | | $ | | | $ | 798,300 | $ | 188,044 | | $ | 12,802 | (7) | $ | 1,318,338 | Brooks Semiconductor | | | | | | | | | | | | | | | | | | Solutions Group | | | | | | | | | | | | | | | | | | David C. Gray | 2017 | $ | 350,000 | | $ | | | $ | 487,550 | $ | 287,658 | | $ | 12,115 | | $ | 1,137,323 | Senior Vice President, | 2016 | $ | 350,000 | | $ | | | $ | 511,200 | $ | 157,500 | | $ | 11,960 | (8) | $ | 1,030,660 | Chief Strategy and New Business Officer | 2015 | $ | 350,000 | | $ | | | $ | 501,480 | $ | 178,500 | | $ | 21,133 | | $ | 1,051,113 | (1) Awards consist of restricted stock unit (RSU) awards. In November 2016, the Board issued both time-based and performance-based RSUs under our Fiscal Year 2017-2019 Long-Term Incentive Plan to each of the named executive officers. The value of an award is based on the fair value as of the grant date calculated in accordance with FASB ASC Topic 718 (previously FAS 123R). The grant date fair value of the performance-based RSUs assuming the maximum potential value is achieved is $3,092,460 for Dr. Schwartz; $1,362,354 for Mr. Robertson; $1,337,280 for Mr. Tenney; $940,275 for Mr. Jarzynka and $731,325 for Dr. Gray. (2) Amounts consist of cash incentive compensation awards earned for services rendered in the relevant fiscal year under the Company’s executive performance-based variable compensation plan. (3) Represents amounts paid or accrued by the Company on behalf of Dr. Schwartz as follows: $12,150 in matching contributions to Dr. Schwartz’s account under the Company’s qualified 401(k) plan. (4) Represents amounts paid or accrued by the company on behalf of Mr. Robertson as follows: $12,150 in matching contributions to Mr. Robertson’s account under the Company’s qualified 401k plan. (5) Amount consists of a special, discretionary, one-time bonus paid to Mr. Tenney. (6) Represents amounts paid or accrued by the company on behalf of Mr. Tenney as follows: $12,150 in matching contributions to Mr. Tenney’s account under the Company’s qualified 401k plan. (7) Represents amounts paid by the Company on behalf of Mr. Jarzynka as follows: $12,719 in matching contributions to Mr. Jarzynka’s account under the Company’s qualified 401(k) plan. (8) Represents amounts paid by the Company on behalf of Dr. Gray as follows: $12,115 in matching contributions to Dr. Gray’s account under the Company’s qualified 401(k) plan. (9) Mr. Robertson’s base pay was increased from $425,000 to $440,000 effective January 1, 2017. (10) Mr. Tenney’s base pay was increased from $425,000 to $435,000 effective January 1, 2017. (11) Mr. Jarzynka’s base pay was increased from $335,000 to $350,000 effective January 1, 2017. |
BROOKS AUTOMATION -2016 2018 Proxy Statement 3844
Back to Contents Grants of Plan Based Awards Table Fiscal Year 20152017 During the fiscal year ended September 30, 20152017 the following plan based awards were granted to the named executive officers: | | | Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards(1) | Estimated Future Payouts
Under Equity Incentive
Plan Awards | All Other
Stock Awards: Number of Shares of Stock or Units (#) | | | | Name | Grant Date | Target
($) | Maximum
($) | | Threshold
(#) | Target
(#) | | Maximum
(#) | Grant Date
Fair Value of Stock Awards
($) | Stephen S. Schwartz | | | $ | 687,500 | $ | 1,250,000 | | | | | | | | | | | 11/09/2016 | (2) | | | | | | | | | | 37,000 | | $ | 515,410 | | 11/09/2016 | (3) | | | | | | 27,750 | 111,000 | | 222,000 | | | $ | 1,546,230 | Lindon G. Robertson | | | $ | 440,000 | $ | 616,000 | | | | | | | | | | | 11/09/2016 | (2) | | | | | | | | | | 16,300 | | $ | 227,059 | | 11/09/2016 | (3) | | | | | | 12,225 | 48,900 | | 97,800 | | | $ | 681,177 | Maurice H. Tenney III | | | $ | 326,250 | $ | 456,750 | | | | | | | | | | | 11/09/2016 | (2) | | | | | | | | | | 16,000 | | $ | 222,880 | | 11/09/2016 | (3) | | | | | | 12,000 | 48,000 | | 96,000 | | | $ | 668,640 | David E. Jarzynka | | | $ | 262,500 | $ | 367,500 | | | | | | | | | | | 11/09/2016 | (2) | | | | | | | | | | 11,250 | | $ | 156,713 | | 11/09/2016 | (3) | | | | | | 8,438 | 33,750 | | 67,500 | | | $ | 470,138 | David C. Gray | | | $ | 210,000 | $ | 294,000 | | | | | | | | | | | 11/04/2015 | (2) | | | | | | | | | | 8,750 | | $ | 121,888 | | 11/04/2015 | (3) | | | | | | 6,563 | 26,250 | | 52,500 | | | $ | 365,663 | (1) These grants were made pursuant to a performance-based variable compensation framework for fiscal year 2017 and reflect the target and maximum payouts with respect to fiscal year 2017. Payouts at less than target may be awarded if a threshold level of achievement (less than target achievement) of each performance metric is reached. (2) Amount shown is the number of time-based RSUs awarded on November 9, 2016. The RSUs will vest at a rate of one-third of the grant per year on November 15, 2017, November 15, 2018 and November 15, 2019. (3) Amount shown is the number of performance-based RSUs awarded on November 9, 2016 that may be earned, in part or in full, based on achieving certain three-year performance targets for the period ending September 30, 2019 and reflect threshold, target and maximum number of RSUs eligible to be earned. Any earned RSUs will vest at the end of the three-year period at the later of date of determination by the Company’s Board of Directors of the achievement attained or November 15, 2019. |
| | | | | | Estimated Future | | | | | | | | | | | All Other | | | | | | | | | | | Payouts Under | | | Estimated Future Payouts | | Stock Awards: | | | | | | | | | | | Non-Equity Incentive | | | Under Equity Incentive | | Number | | | Grant Date | | | | | | | | Plan Awards(1) | | | Plan Awards | | of Shares of | | | Fair Value of | | | | | | | | Target | | | Maximum | | | Threshold | | | Target | | | Maximum | | Stock or Units | | | Stock Awards | | | Name | | Grant Date | | | ($) | | | ($) | | | (#) | | | (#) | | | (#) | | (#) | | | ($)(6) | | | Stephen S. Schwartz | | | | | $ | 625,000 | | | $ | 1,125,000 | | | | | | | | | | | | | | | | | | | | | | | | 11/05/2014 | (2) | | | | | | | | | | | | | | | | | | | | | | 40,000 | | | $ | 477,600 | | | | | 11/05/2014 | (3) | | | | | | | | | | | 18,000 | | | | 72,000 | | | | 144,000 | | | | | | $ | 859,680 | | | | | 11/05/2014 | (4) | | | | | | | | | | | 12,000 | | | | 48,000 | | | | 96,000 | | | | | | $ | 573,120 | | | Mark D. Morelli | | | | | $ | 500,000 | | | $ | 700,000 | | | | | | | | | | | | | | | | | | | | | | | | 11/05/2014 | (2) | | | | | | | | | | | | | | | | | | | | | | 25,000 | | | $ | 298,500 | | | | | 11/05/2014 | (3) | | | | | | | | | | | 11,250 | | | | 45,000 | | | | 90,000 | | | | | | $ | 537,300 | | | | | 11/05/2014 | (4) | | | | | | | | | | | 7,500 | | | | 30,000 | | | | 60,000 | | | | | | $ | 358,200 | | | Lindon G. Robertson | | | | | $ | 425,000 | | | $ | 595,000 | | | | | | | | | | | | | | | | | | | | | | | | 11/05/2014 | (2) | | | | | | | | | | | | | | | | | | | | | | 18,750 | | | $ | 223,875 | | | | | 11/05/2014 | (3) | | | | | | | | | | | 8,438 | | | | 33,750 | | | | 67,500 | | | | | | $ | 402,975 | | | | | 11/05/2014 | (4) | | | | | | | | | | | 5,625 | | | | 22,500 | | | | 45,000 | | | | | | $ | 268,650 | | | Maurice H. Tenney III | | | | | $ | 318,750 | | | $ | 446,250 | | | | | | | | | | | | | | | | | | | | | | | | 11/05/2014 | (2) | | | | | | | | | | | | | | | | | | | | | | 18,750 | | | $ | 223,875 | | | | | 11/05/2014 | (3) | | | | | | | | | | | 8,438 | | | | 33,750 | | | | 67,500 | | | | | | $ | 402,975 | | | | | 11/05/2014 | (4) | | | | | | | | | | | 5,625 | | | | 22,500 | | | | 45,000 | | | | | | $ | 268,650 | | | | | 11/04/2014 | (5) | | | | | | | | | | | | | | | | | | | | | | 100,000 | | | $ | 1,199,000 | | | David C. Gray | | | | | $ | 210,000 | | | $ | 294,000 | | | | | | | | | | | | | | | | | | | | | | | | 11/05/2014 | (2) | | | | | | | | | | | | | | | | | | | | | | 10,500 | | | $ | 125,370 | | | | | 11/05/2014 | (3) | | | | | | | | | | | 4,725 | | | | 18,900 | | | | 37,800 | | | | | | $ | 225,666 | | | | | 11/05/2014 | (4) | | | | | | | | | | | 3,150 | | | | 12,600 | | | | 25,200 | | | | | | $ | 150,444 | |
(1) | These grants were made pursuant to a performance-based variable compensation framework for fiscal year 2015 and reflect the target and maximum payouts with respect to fiscal year 2015. Payouts at less than target may be awarded if a threshold level of achievement (less than target achievement) of each performance metric is reached. | (2) | Amount shown is the number of time-based RSUs awarded on November 5, 2014. The RSUs will vest at a rate of one-third of the grant per year on November 5, 2015, November 5, 2016 and November 5, 2017. | (3) | Amount shown is the number of performance-based RSUs awarded on November 5, 2014 that may be earned, in part or in full, based on achieving certain one-year performance targets for the fiscal year ended September 30, 2015 and reflect threshold, target and maximum number of RSUs eligible to be earned. On November 4, 2015, the Company’s Board of Directors determined that none of the performance criteria was met and no award was earned. | (4) | Amount shown is the number of performance-based RSUs awarded on November 5, 2014 that may be earned, in part or in full, based on achieving certain three-year performance targets for the period ended September 30, 2017 and reflect threshold, target and maximum number of RSUs eligible to be earned. Any earned RSUs will vest at the end of the three-year period following determination by the Company’s Board of Directors of the achievement attained. | (5) | Amount shown is the number of time-based RSUs awarded on November 4, 2014. The RSUs vest at a rate of one-half of the grant per year on November 4, 2015, one-fourth on November 4, 2016 and one-fourth on November 4, 2017. | (6) | The value of RSUs are based on the fair value as of the grant date calculated in accordance with FASB ASC Topic 718 (previously FAS 123R) and for the value of the performance-based RSUs is based on the probable outcome of such performance conditions on the grant date. |
BROOKS AUTOMATION - 2018 Proxy Statement45
Back to Contents Under the fiscal year 2015 performance-based variable compensation plan,2017 PBVC, participants were eligible to receive a cash bonus based on the achievement against corporate financial targets for totaladjusted gross margin, revenue and total operating income,adjusted earnings per share, in each case for the fiscal year ended September 30, 2015,2017, as well as non-financial individual performance goals for each named executive officer based on an assessment of each executive’s accomplishments at the conclusion of the fiscal year. Payouts for non-financial individual performance goals were predicated upon the Company first realizing a threshold level of revenue and operating income at predetermined targets. On November 4, 2015,8, 2017 the Company’s Board of Directors determined that the Company’s financial performance for the 20152017 fiscal year, as well as each named executive officer’s achievement of individual objectives, resulted in approximately 85%the following percentages of the target cash awardbonus being earned. earned: 174% for Dr. Schwartz, 136% for Mr. Robertson, 73% for Mr. Tenney, 137% for Mr. Jarzynka, and 136% for Mr. Gray. Under the 20152017 - 20172019 LTIP, participants were granted an award of RSUs on November 9, 2016, of which 25% vest based on the passage of time with a continuous service requirement of one-third of the grant per year on November 5, 2015,15, 2017, November 5, 201615, 2018 and November 5, 201715, 2019 and 75% will be earned based on the achievement of Company financial performance metrics, of which 60% will be earned based BROOKS AUTOMATION-2016 Proxy Statement39
on one-year metrics for Life Sciences Revenue and total Gross Margin measured at the end of Fiscal Year 2015, and 40% will be earned based on Cumulative Free Cash Flowcumulative adjusted operating profit over the three-year period, 40% will be earned based on cumulative free cash flow over the three-year period, and 20% will be earned based on average Returnreturn on Invested Capital (ROIC)invested capital for the three-year period covering Fiscal Years 2015-2017 and if earned will vest whenon the later of the date the achievement is determined by the Company’s Board of Directors onHRC Committee or about November 5, 2017.15, 2018. Each financial metric is weighted and contains a minimum achievement threshold, which if not met would result in no vesting as to that metric’s weighted percentage of RSUs. If the Company’s performance exceeded the target threshold for any metric, the eligible participants could achieve up to 200% of the number of performance-based RSUs. On November 4, 2015, the Company’s Board of Directors determined that the Company’s performance for the 2015 fiscal year resulted in 0% of the target award tied to the one-year financial metrics being earned.
A discussion of the material terms of the named executive officers’ employment arrangements can be found in the Compensation Discussion and Analysis included elsewhere in this proxy statement. BROOKS AUTOMATION - 2018 Proxy Statement46
Back to Contents Outstanding Equity Awards at Fiscal Year End Table Fiscal Year 20152017 The following table sets forth certain information concerning outstanding equity awards for each named executive officer as of September 30, 2015.2017. There is no information regarding stock options because none of the named executive officers have been granted any stock options. | | | Stock Awards | | | | | | | | | | | | Number of Equity Incentive | | | Equity Incentive Plan | | | | | | Number of | | | Market Value of | | Plan Awards; Number | | | Awards: Market or Payout | | | | | | Shares or Units of | | | Shares or Units of | | of Unearned Shares, | | | Value of Unearned Shares, | | | | | | Stock That Have | | | Stock That Have | | Units or Other Rights | | | Units or Other Rights That | | Stock Awards | | Name | | Not Vested (#)(10) | | | Not Vested ($)(12) | | | That Have Not Vested (#) | | | Have Not Vested ($) | | Number of
Shares or Units of Stock That Have
Not Vested (#) | | Market Value of Shares or Units of Stock That Have Not Vested ($)(10) | Number of Equity Incentive Plan Awards; Number
of Unearned Shares, Units
or Other Rights That
Have Not Vested (#) | | Equity Incentive Plan
Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That
Have Not Vested ($) | | Stephen S. Schwartz | | 12,500 | (1) | | $ | 146,375 | | | | | | | 13,336 | (1) | $ | 404,881 | | | | | | | | | 38,250 | (2) | | $ | 447,908 | | | | | | | | | | | | | | | 26,667 | (3) | | $ | 312,271 | | | | | | | | | | | | 48,000 | (2) | $ | 1,457,280 | | | | | 185,640 | (4) | | $ | 2,173,844 | | | | | | | | | 25,834 | (3) | $ | 784,320 | | | | | | | | 40,000 | (5) | | $ | 468,400 | | | | | | | | | | | | 116,250 | (4) | $ | 3,529,350 | | | | | | | | | | | | 72,000 | (7) | | $ | 843,120 | | 37,000 | (5) | $ | 1,123,320 | | | | | | | | | | | | | | | 48,000 | (8) | | $ | 562,080 | | | | | 111,000 | (6) | $ | 3,369,960 | | Lindon G. Robertson | | | 40,000 | (6) | | $ | 468,400 | | | | | | | | | 6,251 | (1) | $ | 189,780 | | | | | | | | 12,500 | (3) | | $ | 146,375 | | | | | | | | | | | | 22,500 | (2) | $ | 683,100 | | | | | 87,019 | (4) | | $ | 1,018,992 | | | | | | | | | 11,667 | (3) | $ | 354,210 | | | | | | | | 18,750 | (5) | | $ | 219,563 | | | | | | | | | | | | 52,500 | (4) | $ | 1,593,900 | | | | | | | | | | | | 33,750 | (7) | | $ | 395,212 | | 16,300 | (5) | $ | 494,868 | | | | | | | | | | | | | | | 22,500 | (8) | | $ | 263,475 | | | | | 48,900 | (6) | $ | 1,484,604 | | Mark D. Morelli | | | 8,334 | (1) | | $ | 97,591 | | | | | | | | | | Maurice H. Tenney III | | 25,000 | (7) | $ | 759,000 | | | | | | | | 25,500 | (2) | | $ | 298,605 | | | | | | | | | 6,251 | (1) | $ | 189,780 | | | | | | | | 18,334 | (3) | | $ | 214,691 | | | | | | | | | | | | 22,500 | (2) | $ | 683,100 | | | | | 127,628 | (4) | | $ | 1,494,524 | | | | | | | | | 13,334 | (3) | $ | 404,820 | | | | | | | | 25,000 | (5) | | $ | 292,750 | | | | | | | | | | | | 60,000 | (4) | $ | 1,821,600 | | | | | | | | | | | | 45,000 | (7) | | $ | 526,950 | | 16,000 | (5) | $ | 485,760 | | | | | | | | | | | | | | | 30,000 | (8) | | $ | 351,300 | | | | | 48,000 | (6) | $ | 1,457,280 | | Maurice H. Tenney III | | | 18,750 | (5) | | $ | 219,563 | | | | | | | | | | David E. Jarzynka | | 3,750 | (1) | $ | 113,850 | | | | | | | | | 13,500 | (2) | $ | 409,860 | | | 7,500 | (3) | $ | 227,700 | | | | | | | | | 33,750 | (4) | $ | 1,024,650 | | | 11,250 | (5) | $ | 341,550 | | | | | | | | | | | | | | | 33,750 | (7) | | $ | 395,212 | | | | | 33,750 | (6) | $ | 1,024,650 | | | | | | | | | | | | 22,500 | (8) | | $ | 263,475 | | 12,000 | (7) | $ | 364,320 | | | | | | | | 100,000 | (11) | | $ | 1,171,000 | | | | | | | | | | | | 12,000 | (9) | $ | 364,320 | | David C. Gray | | | 33,335 | (9) | | $ | 390,353 | | | | | | | | | 3,500 | (1) | $ | 106,260 | | | | | | | | 38,675 | (10) | | $ | 452,884 | | | | | | | | | | | | 12,600 | (2) | $ | 382,536 | | | | | 10,500 | (5) | | $ | 122,955 | | | | | | | | | 7,500 | (3) | $ | 227,700 | | | | | | | | | | | | | | | 18,900 | (7) | | $ | 221,320 | | | | | 33,750 | (4) | $ | 1,024,650 | | | | | | | | | | | | 12,600 | (8) | | $ | 147,546 | | 8,750 | (5) | $ | 265,650 | | | | | | | | | 26,250 | (6) | $ | 796,950 | (1) The unvested units consist of RSUs granted on November 5, 2014, which vest on November 5, 2017. (2) The unvested units consist of RSUs granted on November 5, 2014 that will be earned and vest based on achieving certain performance targets measured over the three-year period ending September 30, 2017. On November 7, 2017, the Human Resources and Compensation Committee determined that the Company’s financial performance over this period resulted in 104.63% or 124,612 shares of the RSUs being earned and vested. (3) The unvested units consist of RSUs granted on November 4, 2015, which vest in two equal installments on November 4, 2017 and on November 4, 2018. | | (1) The unvested units consist of RSUs granted on November 5, 2014, which vest on November 5, 2017. (2) The unvested units consist of RSUs granted on November 5, 2014 that will be earned and vest based on achieving certain performance targets measured over the three-year period ending September 30, 2017. On November 7, 2017, the Human Resources and Compensation Committee determined that the Company’s financial performance over this period resulted in 104.63% or 124,612 shares of the RSUs being earned and vested. (3) The unvested units consist of RSUs granted on November 4, 2015, which vest in two equal installments on November 4, 2017 and on November 4, 2018. |
BROOKS AUTOMATION-2016 2018 Proxy Statement 4047
Back to Contents (4) (1) | The unvested units consist of RSUs granted on December 21, 2012, with the last one-third vesting on November 6, 2015. | (2) | The unvested units consist of RSUs granted on December 21, 2012 which were earned at the end of the 2013 fiscal year based on achieving certain performance targets with the second half of this award vesting on November 6, 2015. | (3) | The unvested units consist of RSUs granted on November 6, 2013, which vest in three equal installments with the last two-thirds vesting equally on November 6, 2015 and November 6, 2016. | (4) | The unvested units consist of RSUs granted on November 6, 2013 which were earned at the end of the 2014 fiscal year based on achieving certain performance targets with one-half to vest on November 6, 2015 and one-half to vest on November 6, 2016. | (5) | The unvested units consist of RSUs granted on November 5, 2014, which vest in three equal installments on November 5, 2015, November 5, 2016 and November 5, 2017. | (6) | The unvested units consist of RSUs granted on October 1, 2013, which vest in three equal installments with the last two-thirds vesting equally on October 1, 2015 and October 1, 2016. | (7) | The unvested units consist of RSUs granted on November 5, 2014 which were earned at the end of the 2015 fiscal year based on achieving certain performance targets with 50% vesting on November 5, 2016, and 50% vesting on November 5, 2017. On November 4, 2015 the Company’s Board of Directors determined that the Company’s financial performance over this period resulted in none of the RSUs being earned. | (8) | The unvested units consist of RSUs granted on November 5, 2014 that will be earned and vest based on achieving certain performance targets measured over the three-year period ending September 30, 2017 | (9) | 2018.(5) The unvested units consist of RSUs granted on July 29, 2014,November 9, 2016 which vest in three equal installments with the last two-thirds vesting equally on November 6, 201515, 2017, November 15, 2018 and November 6, 2016. | (10) | 15, 2019.(6) The unvested units consist of RSUs granted on July 29, 2014 which wereNovember 9, 2016 that will be earned at the end of the 2014 fiscal yearand vest based on achieving certain performance targets with one-half to vest on November 6, 2015 and one-half to vest on November 6, 2016. | (11) | target measured over the three-year period ending September 30, 2019.(7) The unvested units consist of RSUs granted on November 4, 2014, the last installment of which vest 50%vests on November 4, 2015, 25%2017 (8) The unvested units consist of RSUs granted on NovemberMay 4, 2016, which vest in two equal installments on May 4, 2018 and 25%May 4, 2019. (9) The unvested units consist of RSUs granted on May 4, 2016 that will be earned based on achieving certain performance targets measured over a one-year period ending September 30, 2017 and vest on or about November 4, 2017. | (12) | 8, 2017 and November 8, 2018. On November 7, 2017, the Human Resources and Compensation Committee determined that the Company’s financial performance over this period resulted in 89.1% of the RSUs or 10,692 sharesbeing earned and vested.(10) The market value is calculated on September 30, 201529, 2017 ($11.71)30.36), the last business day of the fiscal year. All performance-based awards are valued at target, not maximum. |
Stock Vested Table Fiscal Year 20152017 The following table sets forth certain information concerning all vesting of restricted stock units for each named executive officer during the fiscal year ended September 30, 2015.2017. | Stock Awards | Name | Number of Shares
Acquired on Vesting
(#) | Value Realized
on Vesting
($)(1) | Stephen S. Schwartz | 132,402 | $ | 2,060,175 | Lindon G. Robertson | 81,841 | $ | 1,234,446 | Maurice H. Tenney III | 37,915 | $ | 589,957 | David E. Jarzynka | 43,355 | $ | 739,404 | David C. Gray | 43,257 | $ | 673,079 | (1) The value realized equals the closing price of Common Stock on the vesting dates, multiplied by the number of shares that vested. |
Nonqualified Deferred Compensation | | | Stock Awards | | | Name | | Number of Shares
Acquired on Vesting
(#) | | | Value Realized
on Vesting
($)(1) | | | Stephen S. Schwartz | | | 64,083 | | | $ | 764,510 | | | Lindon G. Robertson | | | 26,250 | | | | 283,763 | | | Mark D. Morelli | | | 72,165 | | | $ | 868,220 | | | Maurice H. Tenney III | | | 0 | | | | 0 | | | David C. Gray | | | 16,665 | | | $ | 198,813 | |
(1) | The value realized equals the closing price of Common Stock on the vesting dates, multiplied by the number of shares that vested. |
None of the Named Executive Officers participate in our nonqualified deferred compensation plan. BROOKS AUTOMATION-2016 Proxy Statement41Pension Benefits
Pension Benefits
We do not have any qualified or non-qualifiednonqualified defined benefit plans. BROOKS AUTOMATION - 2018 Proxy Statement48
Back to Contents Post-Employment Benefits The following table sets forth the estimated payments and benefits that would be provided to each of the named executive officers, upon termination or a termination following a change in control. The payments and benefits were calculated assuming that the triggering event took place on September 30, 2015,29, 2017, the last trading day of our fiscal year, and using the closing market price of the Company’s stock on that date ($11.71)30.36). | | | | | Salary & | | | Health | | | | | | | | | | | | | Other Cash | | | Insurance | | | Vesting of | | | | | | Name | | Event | | Payment | | | Contribution | | | Stock Awards | | | Total | | | Stephen S. Schwartz | | Termination Without Cause or for Good Reason | | $ | 625,000 | (1) | | $ | 13,570 | | | | | | | $ | 638,570 | | | | | Change of Control with Termination | | $ | 2,500,000 | (2) | | $ | 29,820 | | | $ | 4,110,878 | (3)(4) | | $ | 6,640,698 | | | Mark D. Morelli | | Termination Without Cause or for Good Reason | | $ | 500,000 | (1) | | $ | 13,570 | | | $ | — | | | $ | 513,570 | | | | | Change of Control with Termination | | $ | 2,000,000 | (2) | | $ | 29,820 | | | $ | 2,749,461 | (3)(4) | | $ | 4,779,281 | | | Lindon G. Robertson | | Termination Without Cause or for Good Reason | | $ | 425,000 | (1) | | $ | 13,109 | | | $ | — | | | $ | 438,109 | | | | | Change of Control with Termination | | $ | 1,700,000 | (2) | | $ | 31,898 | | | $ | 2,116,805 | (3)(4) | | $ | 3,848,703 | | | Maurice H. Tenney III | | Termination Without Cause or for Good Reason | | $ | 425,000 | (1) | | $ | 13,109 | | | $ | — | | | $ | 438,109 | | | | | Change of Control with Termination | | $ | 1,487,500 | (2) | | $ | 29,451 | | | $ | 1,654,038 | (3)(4) | | $ | 3,170,989 | | | David C. Gray | | Termination Without Cause or for Good Reason | | $ | — | | | $ | 13,570 | | | $ | — | | | $ | 13,570 | | | | | Change of Control with Termination | | $ | — | | | $ | 31,898 | | | $ | 1,113,738 | (3)(4) | | $ | 1,145,636 | |
(1) | Under the terms of Dr. Schwartz’s employment agreement and each of the other executive’s offer letters, (other than Dr. Gray) if the executive is terminated by the Company without cause, or if he resigns for good reason, the Company shall pay an amount equal to one year’s current base salary, paid in bi-weekly payments as severance in salary continuation; an amount equal to the pro rata incentive bonus for the completed portion of the current annual pay period (for purposes of this table, we have assumed each executive received his bonus for the fiscal year). During the salary continuation period, the Company will continue to pay the employer portion of the cost of the health insurance plans in which the executive was a participant as of the termination date. If he has not found a full-time comparable executive position with another employer during the initial salary continuation period, the Company will extend the bi-weekly salary on a payroll to payroll basis until the earlier to occur of (A) one additional year (26 additional bi-weekly payments) or (B) the date he secures full-time employment. For purposes of this table we have assumed the executive will find a full-time comparable executive position with another employer during the initial salary continuation period. | (2) | Under the terms of each executive’s Change in Control Agreement (other than Dr. Gray), if the executive is terminated without cause, or resigns for good reason, within two years following or the six month period prior to a change in control, the executive will be entitled to receive a severance amount equal to two times the sum of the executive’s annual base salary plus the executive’s target annual cash bonus payable in bi-weekly installments over the two-year period. In addition, the executive will entitled to a lump sum payment equal to the estimated cost of the executive’s continued welfare benefits (health, dental, and life and disability insurance) for a two-year period following termination. | (3) | Under the terms of each named executive officer’s equity award agreement, in the event of a change-in-control, followed by a termination without cause within one year, all unvested awards would immediately vest, including any performance-based awards that have not yet been earned calculated at the target award amount. | (4) | Amount shown excludes the value of the performance-based RSU award relating to the one-year financial metrics under the 2015-2017 LTIP. On November 4, 2015, the Company’s Board of Directors determined that the Company’s financial performance over this period resulted in the vesting of 0% of such RSUs. The amount excluded from the table for these RSUs are as follows: $843,120 for Dr. Schwartz; $526,950 for Mr. Morelli; $395,212 for Mr. Robertson; $395,212 for Mr. Tenney; and $221,320 for Dr. Gray. |
Name | Event | Salary & Other Cash Payment | | Health Insurance Contribution | | Vesting of Stock Awards | | | Total | Stephen S. Schwartz | Termination Without Cause or for Good Reason | $ | 625,000 | (1) | $ | 11,104 | | | | | $ | 636,104 | | Change of Control with Termination | $ | 2,625,000 | (2) | $ | 25,440 | | $ | 10,736,571 | (3) | $ | 13,387,011 | Lindon G. Robertson | Termination Without Cause or for Good Reason | $ | 440,000 | (1) | $ | 14,970 | | $ | | | $ | 454,970 | | Change of Control with Termination | $ | 1,760,000 | (2) | $ | 35,799 | | $ | 4,832,067 | (3) | $ | 6,627,866 | Maurice H. Tenney III | Termination Without Cause or for Good Reason | $ | 435,000 | (1) | $ | 15,689 | | $ | | | $ | 450,689 | | Change of Control with Termination | $ | 1,522,500 | (2) | $ | 34,223 | | $ | 5,832,945 | (3) | $ | 7,389,668 | David E. Jarzynka | Termination Without Cause or for Good Reason | $ | 175,000 | (4) | $ | 7,485 | | $ | | | $ | 182,485 | | Change of Control with Termination | $ | 1,120,000 | (2) | $ | 35,131 | | $ | 3,850,164 | (3) | $ | 5,005,295 | David C. Gray | Termination Without Cause or for Good Reason | $ | 175,000 | (4) | $ | 7,845 | | $ | | | $ | 182,485 | | Change of Control with Termination | $ | 1,225,000 | (2) | $ | 33,570 | | $ | 2,821,446 | (3) | $ | 4,080,016 | (1) Under the terms of Dr. Schwartz’s employment agreement and each of the other executive’s offer letters, (other than Dr. Gray and Mr. Jarzynka) if the executive is terminated by the Company without cause, or if he resigns for good reason, the Company shall pay an amount equal to one year’s current base salary, paid in bi-weekly payments as severance in salary continuation; an amount equal to the pro rata incentive bonus for the completed portion of the current annual pay period (for purposes of this table, we have assumed each executive received his bonus for the fiscal year). During the salary continuation period, the Company will continue to pay the employer portion of the cost of the health insurance plans in which the executive was a participant as of the termination date. If he has not found a full-time comparable executive position with another employer during the initial salary continuation period, the Company will extend the bi-weekly salary on a payroll to payroll basis until the earlier to occur of (A) one additional year (26 additional bi-weekly payments) or (B) the date he secures full-time employment. For purposes of this table we have assumed the executive will find a full-time comparable executive position with another employer during the initial salary continuation period. (2) Under the terms of each executive’s Change in Control Agreement, if the executive is terminated without cause, or resigns for good reason, within two years following or the six month period prior to a change in control, the executive will be entitled to receive a severance amount equal to two times the sum of the executive’s annual base salary plus the executive’s target annual cash bonus payable in bi-weekly installments over the two-year period. In addition, the executive will entitled to a lump sum payment equal to the estimated cost of the executive’s continued welfare benefits (health, dental, and life and disability insurance) for a two-year period following termination. (3) Under the terms of each named executive officer’s equity award agreement, in the event of a change-in-control, followed by a termination without cause within one year, all unvested awards would immediately vest, including any performance-based awards that have not yet been earned calculated at the target award amount. (4) Under the terms of Dr. Gray’s and Mr. Jarzynka’s offer letters entered into in November 2016, if the executive is terminated by the Company without cause, or if he resigns for good reason, the Company shall pay an amount equal to six months of current base salary, paid in bi-weekly payments as severance in salary continuation; an amount equal to the pro rata incentive bonus for the completed portion of the current annual pay period (for purposes of this table, we have assumed each executive received his bonus for the six month period). During the salary continuation period, the Company will continue to pay the employer portion of the cost of the health insurance plans in which the executive was a participant as of the termination date. If he has not found a full-time comparable executive position with another employer during the initial salary continuation period, the Company will extend the bi-weekly salary on a payroll to payroll basis until the earlier to occur of (A) six additional months (13 additional bi-weekly payments) or (B) the date he secures full-time employment. For purposes of this table we have assumed the executive will find a full-time comparable executive position with another employer during the initial salary continuation period. (5) The amount shown includes 89.1% of Mr. Jarzynka’s May 4, 2016 Performance Grant. On November 8, 2017, the Company’s Board of Directors determined that the goal financial performance over this period will result in a 89.1% award being earning. The value of the excluded PSUs is $39,711. |
BROOKS AUTOMATION-2016 2018 Proxy Statement4249
Back to Contents EQUITY COMPENSATION PLAN INFORMATION The table below sets forth certain information as of September 30, 20152017 regarding the shares of our Common Stock available for grant or granted under stock option plans that (i) were approved by our stockholders, and (ii) were not approved by our stockholders. Plan Category | Number of
Securities to be
Issued Upon Exercise
of Outstanding
Options, Warrants
and Rights | Weighted-Average Exercise Price
of Outstanding
Options, Warrants
and Rights | Number of Securities
Remaining Available for Future Issuance
Under Equity Compensation
Plans(2) | | Equity compensation plans approved by security holders(1) | 2,474,011 | | 4,709,828 | (3) | Equity compensation plans not approved by security holders | 0 | | 0 | | Total | 2,474,011 | | 4,709,828 | | (1) Consists of restricted stock units. (2) Excludes securities reflected in the first column of the table. (3) Includes 1,250,000 shares available for issuance under our Employee Stock Purchase Plan. |
| Plan Category | | Number of
Securities to be
Issued Upon Exercise
of Outstanding
Options, Warrants
and Rights | | Weighted-Average
Exercise Price
of Outstanding
Options, Warrants
and Rights | | Number of Securities
Remaining Available
for Future Issuance
Under Equity
Compensation
Plans(2) | | | Equity compensation plans approved by security holders(1) | | 3,257,413 | | | | 5,377,525 | (3) | | Equity compensation plans not approved by security holders | | 0 | | | | 0 | | | Total | | 3,257,413 | | | | 5,377,525 | |
(1) | Consists of restricted stock units. | (2) | Excludes securities reflected in the first column of the table. | (3) | Includes 448,655 shares available for issuance under our Employee Stock Purchase Plan. |
RELATED PARTY TRANSACTIONS Under existing SEC rules, some transactions, commonly referred to as “related party transactions,” are required to be disclosed to stockholders. Examples of related party transactions include transactions or proposed transactions between us and: • an executive officer, director or director nominee; • | an executive officer, director or director nominee; | | | • | any person who is known to be the beneficial owner of more than 5% of our common stock; | | | • | any person who is an immediate family member (as defined under Item 404 of Regulation S-K) of an executive officer, director or director nominee or beneficial owner of more than 5% of our common stock; and | | | • | any firm, corporation or other entity in which any of the foregoing persons is employed or is a partner or principal or in a similar position or in which such person, together with any other of the foregoing persons, has a 5% or greater beneficial ownership interest. |
• any person who is known to be the beneficial owner of more than 5% of our common stock; • any person who is an immediate family member (as defined under Item 404 of Regulation S-K) of an executive officer, director or director nominee or beneficial owner of more than 5% of our common stock; and • any firm, corporation or other entity in which any of the foregoing persons is employed or is a partner or principal or in a similar position or in which such person, together with any other of the foregoing persons, has a 5% or greater beneficial ownership interest. Under the Nasdaq Stock Market rules we are required to conduct an appropriate review of any such transaction and either the Audit Committee or the independent directors are required to approve the transaction. All related party transactions must also be disclosed in our applicable filings with the Securities and Exchange Commission as required under SEC rules. Our Audit Committee Charter also requires that members of the Audit Committee approve all related party transactions for which such approval is required under applicable law, including SEC and Nasdaq rules. In addition, the Conflicts of Interest provisions of our Standards of Conduct cover, among other things, all transactions involving our relationships with service providers and suppliers. It requires the disclosure of any relationship that could be seen to affect the application of independent and sound judgment in the choice of suppliers. In the case of employees this calls for disclosure of any relationship to management. Members of our Board of Directors would normally make this disclosure to the chairman of the board. We entered into no related party transactions during fiscal year 2015. 2017. BROOKS AUTOMATION -2016 2018 Proxy Statement 4350
Back to Contents PROPOSAL NO. 2 | ADVISORY VOTE ON EXECUTIVE COMPENSATION |
The Dodd-Frank Wall Street Reform and Consumer ProtectionWe are seeking your advisory vote as required by Section 14A of the Securities Exchange Act of 2010, or1934, as amended, on the Dodd-Frank Act, enables our stockholders to vote to approve, on a nonbinding, advisory basis,approval of the compensation of our named executive officers as disclosed in this proxy statement under the heading “Executive Officers” including “Compensation Discussion and Analysis,” the tabular disclosure regarding such compensation, and the accompanying narrative disclosure. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices of executive compensation described in this proxy statement. The advisory vote is not a vote on the Company’s compensation practices for non-executive employees or the Company’s Board of Directors. The Dodd-Frank Act requires the Company to hold the advisory vote on executive compensation at least once every three years. We have determined to hold an advisory vote to approve the compensation of our named executive officers annually, and the next such advisory vote will occur at the 2017 annual meeting of stockholders.
As described in detail under the heading “Executive Officers-Compensation Discussion and Analysis,” our executive compensation programs are designed to attract, motivate, and retain our named executive officers, who are critical to our success. Under these programs, our named executive officers are rewarded for the achievement of specific short-term and long-term goals. Please see the “Compensation Discussion and Analysis” for additional details about our executive compensation philosophy and programs, including information about the fiscal year 20152017 compensation of our named executive officers. Our Board of Directors is asking stockholders to provide a non-binding advisory vote that the compensation paid to the Company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC, included in this proxy statement under the heading “Executive Officers-Compensation Discussion and Analysis,” the tabular disclosure regarding such compensation and the accompanying narrative disclosure, is approved. The Human Resources and Compensation Committee continually reviews the compensation programs for our named executive officers to ensure they achieve the desired goals of aligning our executive compensation structure with our stockholders’ interests and current market practices. This vote on the compensation of our named executive officers is advisory, and therefore not binding on the Company, the Human Resources and Compensation Committee or our Board of Directors. Our Board of Directors and our Human Resources and Compensation Committee value the opinions of our stockholders and to the extent there is any significant vote against the named executive officer compensation as disclosed in this proxy statement, we will consider our stockholders’ concerns and the Human Resources and Compensation Committee and the Board of Directors will evaluate whether any actions are necessary to address those concerns. THEBOARDOFDIRECTORSBELIEVESTHATTHEPROPOSALTOAPPROVE,ONANON-BINDING,
ADVISORYBASIS,THEEXECUTIVECOMPENSATIONCONTAINEDINTHEPROXYSTATEMENTISINTHE
BESTINTERESTSOFBROOKSANDOURSTOCKHOLDERSANDTHEREFORERECOMMENDSAVOTE
““FOR”THISPROPOSAL. BROOKS AUTOMATION -2016 2018 Proxy Statement 4451
Back to Contents PROPOSAL NO. 3 | RATIFICATION OF THE ADOPTION OF THE COMPANY’S EXECUTIVE PERFORMANCE-BASED VARIABLE COMPENSATION PLAN |
We are asking stockholders to recommend, on an advisory basis, the frequency with which our stockholders will cast future advisory votes on executive compensation as described in Proposal Two above. For convenience, in this Proposal Three the stockholders’ advisory vote on executive compensation provided for in Proposal Two above is referred to as the “say-on-pay vote.” The advisory vote on the frequency of the say-on-pay vote is a non-binding vote as to how often the say-on-pay vote should occur: every year, every two years, or every three years. The Dodd-Frank Act requires the Company to hold the advisory vote on the frequency of the say-on-pay vote at least once every six years. Our Board of Directors has determined that a non-binding advisory vote on executive compensation that occurs every year is the most appropriate alternative for the Company, and therefore our Board of Directors recommends that you vote for a one-year interval for the say-on-pay vote. In formulating its recommendation, our Board of Directors considered that an annual say-on-pay vote will allow our stockholders to provide us with their direct input on our compensation philosophy, policies and practices as disclosed in our proxy statement every year. While the Company currently recommends a vote in favor of an annual vote, you may cast your vote on your preferred voting frequency by choosing the option of one year, two years, or three years when you vote on this proposal. However, because this vote is advisory and not binding on the Board of Directors or the Company, the Board of Directors may decide that it is in the best interests of our stockholders and the Company to hold a say-on-pay vote more or less frequently than the option approved by our stockholders. Our board of directors has adopted the Brooks Automation, Inc. Executive Performance-Based Variable Compensation Plan (the “Executive PBVC Plan”) effective as of November 4, 2015, subject to the ratification by an affirmative vote of a majority of the votes cast affirmatively or negatively in person or by proxy at the annual meeting. If such ratification is not obtained by our shareholders, the Executive PBVC Plan and all awards issued thereunder will be terminated.
The following summary of the principal features of the Executive PBVC Plan and its operation is qualified in its entirety by reference to the Executive PBVC Plan, a copy of which is attached to this proxy statement as Appendix A. This summary may not contain all of the information about the Executive PBVC Plan that is important to you. We encourage you to read carefully the Executive PBVC Plan in its entirety.THE
Purpose
The Executive PBVC Plan is intended to increase shareholder value and the success of the Company by motivating key executives to (1) perform to the best of their abilities, and (2) achieve the Company’s objectives.
The Executive PBVC Plan is designed to permit the grant of awards that qualify as “performance-based” compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended (“Section 162(m)”). Under Section 162(m), the Company may not receive a federal income tax deduction for compensation paid to our Chief Executive Officer and certain other highly compensated executive officers to the extent that any of these persons receives more than $1 million in any one year. However, if we pay compensation that is “performance-based” under Section 162(m), the Company may still receive a federal income tax deduction for the compensation even if it is more than $1 million during a single year. The Executive PBVC Plan allows us to pay incentive compensation that is performance-based and therefore fully tax deductible on the Company’s federal income tax return.
Eligibility to Participate
The Human Resources and Compensation Committee, or another committee designated by the board comprised of members who are “outside directors” under Section 162(m) (the “Committee”) selects which of our employees (and employees of our affiliates), which may be up to our total number of employees, who will be eligible to receive awards under the Executive PBVC Plan for any performance period. The actual number of employees who will be eligible to receive an award during any particular year cannot be determined in advance because the Committee has discretion to select the participants, but it is expected that at least our executive officers will be eligible to participate in the Executive PBVC Plan in any given year. Participation in the Executive PBVC Plan is in the sole discretion of the Committee, and on a performance period by performance period basis. Accordingly, an employee who is a participant in a given performance period in no way is guaranteed or assured of being selected for participation in any subsequent performance period.
Target Awards and Performance Goals
For each performance period, the Committee assigns each participant a target award and performance goal or goals that must be achieved before an award will be paid to the participant. The participant’s target award is expressed as a dollar amount or as a percentage of his or her base salary, as the Committee may determine. The performance goals require the achievement of objectives for one or more of the following measures: cash flow (including but not limited to free cash flow and cash flow from operations); total earnings; earnings per share (diluted or basic); earnings per share from continuing operations (diluted or basic); earnings before interest and taxes; earnings before interest, taxes, depreciation, and amortization; pre-tax profit; earnings from operations; net asset turnover; inventory turnover; capital expenditures; net earnings; net operating earnings; operating income; gross or operating margin; profit margin; margin percentage; debt; working capital; return on equity; return on net assets; return on total assets; return on capital; return on investment; return on invested capital; return on sales; net or gross sales or revenue; market share; economic value added; cost of capital; change in assets; expense reduction levels; debt reduction; productivity; operating efficiency; quality achievement; new product introductions; delivery performance; safety record; stock price; individual objectives; business expansion; completion of acquisitions; and total shareholder return.
BOARDOFDIRECTORSBELIEVESTHATTHEPROPOSALTOAPPROVEONCEEVERYYEAR
ASTHEFREQUENCYWITHWHICHSTOCKHOLDERSAREASKEDTOCASTANON-BINDING
ADVISORYVOTEONEXECUTIVECOMPENSATIONISINTHEBESTINTERESTSOFBROOKSANDOURSTOCKHOLDERSANDTHEREFORERECOMMENDSVOTING“FOR”AFREQUENCY
OFEVERYONEYEAR. BROOKS AUTOMATION -2016 2018 Proxy Statement 4552 Actual Awards
After the performance period ends, the Committee certifies in writing the extent to which the pre-established performance goals actually were achieved or exceeded. The actual award that is payable to a participant is determined using a formula that increases or decreases the participant’s target award based on the level of actual performance attained. However, the Executive PBVC Plan limits actual awards to a maximum of $2,000,000 per person in any performance period, even if the formula otherwise indicates a larger award.
The Committee may eliminate or reduce the actual award paid to any participant below the amount that otherwise would be payable under the payout formula. Payment of awards to any one participant is not dependent upon payment of awards to any other participant. A reduction for one participant during the performance period shall not increase the amount payable to any other participant during the performance period.
Determination of the amount and payment of each actual award shall be made as soon as practical following the end of the fiscal year end performance period for which performance is being measured and in any event, within two and one-half months following the end of such fiscal year end performance period. Notwithstanding the foregoing, an award may provide that all or a portion of the award be paid upon a change in control, death of the participant or disability prior to the achievement of the performance goals set forth in such award provided that the participant remains employed through the date of such event.
Amendment and Termination
The Committee administers the Executive PBVC Plan. The board of directors of the Company may amend or terminate the Executive PBVC Plan at any time and for any reason. If the Company determines that that Executive PBVC Plan should continue to comply with Section 162(m), the Company will submit for shareholder approval any future amendments to the Executive PBVC Plan that require such shareholder approval.
New Plan Benefits
Because awards under the Executive PBVC Plan are determined based on actual performance, it is not presently possible to determine the dollar amounts that will be paid to participants under the Executive PBVC Plan in respect of fiscal 2016 or in future years. However, set forth below are the Target Award amounts that were approved by the Committee, subject to ratification of the Executive PBVC Plan by our shareholders, for 2016. The actual award may be less than or greater than the Target Award, set forth below depending on actual performance, but in no case may the actual award exceed 200% of the Target Award.
| Executive | | Title | | | Target Award | | | Stephen S. Schwartz | | Chief Executive Officer | | $ | 625,000 | | | Mark D. Morelli | | President and Chief Operating Officer | | $ | 500,000 | | | Lindon G. Robertson | | Chief Financial Officer | | $ | 425,000 | | | Maurice H. Tenney III | | President, Brooks Life Science Systems | | $ | 318,750 | | | David C. Gray | | Chief Strategy and New Business Officer | | $ | 210,000 | |
The Company reserves the right to pay bonuses or other types of compensation outside of the Executive PBVC Plan. No employee has a guaranteed right to any discretionary bonus as a substitute for the 2016 awards described above in the event that the performance targets are not met or that our shareholders fail to approve the Executive PBVC Plan.
Unless instructions are otherwise given, your shares of our Common Stock will be voted “FOR” the ratification of the adoption of the Executive PBVC Plan.
THE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 3 TO BE IN THE BEST INTERESTS OF BROOKS
AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE “FOR” PROPOSAL NO. 3.
BROOKS AUTOMATION - 2016 Proxy Statement46
AUDIT COMMITTEE REPORT To The Stockholders: Management has the primary responsibility for the financial statements and the reporting process, including the systems of internal control over financial reporting. The independent auditors are responsible for performing an independent audit of our consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) and issuing a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes. Management has represented to the Audit Committee that our consolidated financial statements for the fiscal year ended September 30, 20152017 were prepared in accordance with accounting principles generally accepted in the United States. The Audit Committee has reviewed and discussed the consolidated financial statements with management and separately with the independent auditors. It is the Audit Committee that engaged our independent auditors for the year ended September 30, 2015,2017, and the Audit Committee determines annually who shall act as our independent auditors. For the year ended September 30, 2015,2017, the Audit Committee sought and obtained from our stockholders the ratification of their choice of independent auditors. The Audit Committee is seeking similar ratification of their choice of independent auditors for the fiscal year that will end September 30, 2016. 2018. The Audit Committee, in accordance with its charter and recurring meeting agenda, reviewed with the independent auditors the accounting policies and practices critical to our financial statements, the alternative treatments within general accepted accounting principles for policies and practices related to material items that have been discussed with management, the ramifications of each alternative, and the independent auditors’ preferred treatment. The Audit Committee also reviewed the material written communications between management and the independent auditors. The Audit Committee reviewed management’s assessment of the effectiveness of our internal control over financial reporting and also met with the independent auditors, with and without management present, to discuss the independent auditors’ evaluations of our internal controls and the overall quality of our financial reporting. The Audit Committee also regularly reviews whether there have been communications to our telephone and electronic hotlines and reviews and monitors the responses to any such communications. All call reports from the independent company that staffs and operates these hotlines are directed in the first instance to, among others, the Chairman of the Audit Committee, except where local law requires otherwise. The Audit Committee further reviews whether there have been any changes to our Standards of Conduct and whether any waivers to those standards have been granted. The Audit Committee has discussed with the independent auditors the matters required to be discussed as required under Public Company Accounting Oversight Board Auditing Standard No. 16, Communications with Audit Committees. The Audit Committee has also discussed the results of the internal audit examinations. As noted under “Board Risk Oversight”, the Audit Committee operates under the direction of the Executive Committee in helping to assess and address the Company’s business risks. In that process, the Audit Committee reviews with management the process employed by management to conduct a risk assessment survey, and also reviews and discusses with management and the registered public accounting firm the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures. Our independent auditors provided the Audit Committee with the written disclosures and the letter required by PCAOB Ethics and Independence Rule 3526 (Communications with Audit Committees Concerning Independence) which requires auditors annually to disclose in writing all relationships that in the auditor’s professional opinion may reasonably be thought to bear on independence, to confirm their independence and to engage in a discussion of independence. The Audit Committee also reviewed with the independent auditors the relevant SEC rules with respect to independence of auditors. Based on its review, the Audit Committee has recommended to the Board of Directors that our audited consolidated financial statements for the fiscal year ended September 30, 2015,2017, management’s report on its assessment on the effectiveness of internal control over financial reporting as of September 30, 2015,2017, and the independent auditors’ reports be included in our annual report on Form 10-K for the fiscal year ended September 30, 2015.2017. Further, the Audit Committee has determined to engage PricewaterhouseCoopers LLP as our independent auditors for the fiscal year ending September 30, 2016.2018. Respectfully submitted,
Audit Committee:
John K. McGillicuddy, ChairmanCo-Chairman
Robyn C. Davis
Alfred Woollacott, III, Co-Chairman
Mark S. Wrighton
Ellen M. Zane BROOKS AUTOMATION -2016 2018 Proxy Statement 4753
Back to Contents INDEPENDENT AUDITOR FEES AND OTHER MATTERS Set forth below are the fees paid by Brooks to its independent registered public accounting firm, BDO USA,PricewaterhouseCoopers LLP (“BDO”PwC”), for the fiscal years ended September 30, 20152017 and 2014.September 30, 2016. | | 2017 | | | 2016 | | Audit Fees | $ | 2,026,500 | | $ | 1,579,678 | | Audit-Related Fees | $ | 148,850 | | $ | 8,000 | | Tax Fees | $ | 148,500 | | $ | 42,141 | | All Other Fees | $ | 3,000 | | $ | 3,000 | |
| | | | 2015 | | | 2014 | | | Audit Fees | | $ | 1,203,312 | | $ | 1,129,940 | | | Audit-Related Fees | | $ | 42,000 | | $ | — | | | Tax Fees | | $ | 25,650 | | $ | 15,000 | | | All Other Fees | | $ | — | | $ | — | |
Description of Services AuditFees: Comprise fees and expenses for professional services rendered in connection with the audit of our financial statements for the fiscal years ended September 30, 20152017 and 2014,2016, respectively, for the reviews of the financial statements included in each of our Quarterly Reports on Form 10-Q during those years, and for services provided in connection with statutory and regulatory filings or engagements in those years. Audit-RelatedFees:Comprise fees for professional services for assurance and related services reasonably related to the performance of an audit or review in the fiscal years ended September 30, 20152017 and 2014.2016. In fiscal year 2015,2017, the Company incurred $42,000$113,000 in audit-related fees to BDOPwC for technical accounting consulting services and $35,850 in connection with SEC filings. In fiscal year 2016, the audit of the Company’s 401(k) plan. Company incurred $8,000 in audit-related fees to PwC in connection with SEC filings. TaxFees: Comprise fees for tax compliance, tax advice and tax planning. Tax services encompass a variety of permissible services including international tax compliance, expatriate tax services and tax consulting. For fiscal years 20152017 and 2014,2016, the aggregate tax fee amount consists of fees related to non-US tax compliance. AllOtherFees: The Company did not incur any otherComprise fees for certain web-based accounting research tools paid to BDOPwC in fiscal year 2015 or 2014.years 2017 and 2016. The Audit Committee’s charter sets forth the Audit Committee’s obligations relating to the approval of all audit and non-audit services that are to be performed by our independent registered public accounting firm. The charter provides that the Committee shall pre-approve all auditing services and non-audit services (including the fees and terms thereof) permitted to be provided by the Company’s registered public accounting firm contemporaneously with the audit. PROPOSAL NO. 4 | RATIFICATION OF THE SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
The Audit Committee has considered and determined that the provision of the non-audit services noted in the foregoing table is compatible with maintaining PwC’s independence. BROOKS AUTOMATION - 2018 Proxy Statement54
Back to Contents The Company’s Audit Committee has appointed PricewaterhouseCoopers, LLP (“PwC”)PwC to serve as the Company’s independent registered public accounting firm for the fiscal year ending September 30, 2016,2018, and stockholders are asked to ratify the selection at the Annual Meeting. Representatives of PwC will be present at the Annual Meeting and will be available to respond to appropriate questions.questions and to make a statement if they so desire. We do not expect the representatives to make any statements apart from responding to inquiries. Even if the selection is ratified, the Audit Committee, in its sole discretion, may change the appointment at any time during the year if it determines that such a change would be in the best interests of our Company and our stockholders. BDO USA, LLP (“BDO”) served as the Company’s independent registered public accounting firm for fiscal year 2015 and reported on the Company’s consolidated financial statements for that year. Representatives of BDO will not be present at the Annual Meeting.
Change in Independent Registered Public Accounting FirmTHE
On December 3, 2015, the Audit Committee approved the engagement of PwC as our independent registered public accounting firm for the fiscal year ending September 30, 2016 and the dismissal of BDO as our independent registered public accounting firm. PwC’s engagement, and BDO’s dismissal, became effective on December 3, 2015.
The audit reports of BDO on our consolidated financial statements for the years ended September 30, 2015 and 2014 do not contain any adverse opinion or disclaimer of opinion, nor are they qualified or modified as to uncertainty, audit scope, or accounting principles.
BOARDOFDIRECTORSDEEMSPROPOSALNO.4TOBEINTHEBESTINTERESTSOFBROOKS AUTOMATION - 2016 Proxy Statement48 During the fiscal years ended September 30, 2014 and 2015, and subsequent interim period through December 3, 2015, (i) the Company had no disagreements with BDO on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, any of which that, if not resolved to BDO’s satisfaction, would have caused it to make reference to the subject matter of any such disagreement in connection with its reports for such years and interim period and (ii) there were no reportable events within the meaning of Item 304(a)(1)(v) of Regulation S-K.
In accordance with Item 304(a)(3) of Regulation S-K, the Company furnished a copy of the above disclosures to BDO and requested that BDO provide a letter addressed to the SEC stating whether or not it agrees with the statements made above. A copy of such letter is filed as Exhibit 16.1 to the Company’s Form 8-K/A dated December 8, 2015.
During the fiscal years ended September 30, 2014 and 2015, and subsequent interim period through December 3, 2015, neither the Company nor anyone on its behalf has consulted with PwC regarding (i) the application of accounting principles to a specific transaction, either completed or proposed, (ii) the type of audit opinion that might be rendered on the Company’s financial statements, (iii) management’s assessment of the effectiveness of internal control over financial reporting or the effectiveness of internal controls over financial reporting, (iv) any matter that was the subject of a disagreement within the meaning of Item 304(a)(1)(iv) of Regulation S-K or (v) a reportable event within the meaning of Item 304(a)(1)(v) of Regulation S-K.
ANDITSSTOCKHOLDERSANDRECOMMENDSTHATTHE BOARD OF DIRECTORS DEEMS PROPOSAL NO. 4 TO BE IN THE BEST INTERESTS OF BROOKS AND
ITS STOCKHOLDERS AND RECOMMENDS THAT THE STOCKHOLDERS VOTE“FOR”PROPOSALNO.4. OTHER MATTERS Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors, and persons who own more than 10% of our Common Stock, to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the SEC. Executive officers and directors are required to furnish us with copies of all Forms 3, 4 and 5 they file. Based solely on our review of the copies of such forms we have received and written representations from certain reporting persons that they were not required to file Forms 5 for the fiscal year ended September 30, 2015,2017, we believe that all of our executive officers and directors complied with all Section 16(a) filing requirements applicable to them during our fiscal year ended September 30, 20152017 with the exception of a Form 4 filed on behalf of board members, A. Clinton Allen, Robynmember and executive Stephen S. Schwartz, and executives Lindon G. Robertson, Maurice H. Tenney III, David C. Davis, John K. McGillicuddyGray, David E. Jarzynka, William T. Montone, Jason W. Joseph and Kirk P. PondDavid F. Pietrantoni on July 2, 2015,November 21, 2016 reporting a transaction that occurred on June 26, 2015;November 15, 2016; a Form 4 filed on behalf of board member A. Clinton Allenexecutive David E. Jarzynka on July 27, 2015May 10, 2017, reporting a transaction that occurred on July 22, 2015;May 5, 2017; and a Form 4 filed on behalf of board member A. Clinton Allenexecutive David F. Pietrantoni on September 23, 2015May 10, 2017 reporting a transaction that occurred on August 11, 2015.May 5, 2017 and another transaction that occurred on May 4, 2016. Standards of Conduct Pursuant to the requirements of the Sarbanes-Oxley Act of 2002 and the Nasdaq Stock Market rules, we have adopted Standards of Conduct that apply to all officers, directors and employees, covering a wide range of matters, including finance and accounting standards specifically applicable to our senior financial officers related to the protection of the integrity of our financial records and reports. A copy of our Standards of Conduct is publicly available on our website atwww.brooks.comwww.brooks.com.. If we make any substantive amendment to the Standards of Conduct or grant any waiver, including any implicit waiver, from a provision thereof to the persons covered by the Standards of Conduct, we are obligated to disclose the nature of such amendment or waiver, the name of the person to whom any waiver was granted, and the date of waiver on the above-named website or in a report on Form 8-K. BROOKS AUTOMATION - 2018 Proxy Statement55
Back to Contents Stockholder Proposals and Recommendations For Director Proposals which stockholders intend to present at our 20172019 annual meeting of stockholders and wish to have included in our proxy materials pursuant to Rule 14a-8 promulgated under the Securities Exchange Act of 1934 must be received by the Company no later than August 13, 2016.15, 2018. If a proponent fails to notify us by October 27, 20162018 of a non-Rule 14a-8 stockholder proposal which it intends to submit at our 20172018 annual meeting of stockholders, the proxy solicited by the Board of Directors with BROOKS AUTOMATION - 2016 Proxy Statement49
respect to such meeting may grant discretionary authority to the person named in each proxy to vote with respect to such matter. Stockholders may make recommendations to the Nominating and Governance Committee of candidates for its consideration as nominees for director by submitting the name and qualifications of such person to the Nominating and Governance Committee, c/o Board of Directors, Brooks Automation, Inc. at our principal executive offices, 15 Elizabeth Drive, Chelmsford, MA 01824. Nominations for directors in connection with the 20172019 annual meeting of stockholders should be received by the Company no later than October 29, 2016.November 10, 2018. Any persons recommended should at a minimum meet the criteria and qualifications referred to in the Nominating and Governance Committee’s charter. The letter of recommendation from one or more stockholders should state whether or not the person(s) making the recommendation have beneficially owned 5% or more of our Common Stock for at least one year. Voting Results The preliminary voting results will be announced at the annual meeting, and we will publish preliminary, or final results if available, in a Current Report on Form 8-K within four business days of the annual meeting. If final results are unavailable at the time we file the Form 8-K, then we will file an amended report on Form 8-K to disclose the final voting results within four business days after the final voting results are known. Householding of Proxy Materials SEC rules permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially provides extra convenience for stockholders and cost savings for companies. We and some brokers household proxy materials, delivering a single proxy statement to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from us or your broker that they will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement, or if you are receiving multiple copies of the proxy statement and wish to receive only one, please notify your broker if your shares are held in a brokerage account or us if you hold registered shares. You can also request prompt delivery of a copy of this proxy statement. All such requests should be made in writing to our Investor Relations department at the following address: Investor Relations, Brooks Automation, Inc., 15 Elizabeth Drive, Chelmsford, MA 01824 or by telephone at the following number: (978) 262-2400. Material Not Incorporated by Reference To the extent that this proxy statement has been or will be specifically incorporated by reference into any filing by us under the Securities Act of 1933 or the Securities Exchange Act of 1934, the sections of the proxy statement entitled “Audit Committee Report,” and “Human Resources and Compensation Committee Report” shall not be deemed to be so incorporated, unless specifically otherwise provided in any such filing. BROOKS AUTOMATION - 2018 Proxy Statement56
Back to Contents Annual Report on Form 10-K Copies of our Annual Report on Form 10-K for the fiscal year ended September 30, 20152017 as filed with the SEC are being made available to our stockholders of record with this proxy statement and are available to stockholders without charge upon written request addressed to Investor Relations, Brooks Automation, Inc., 15 Elizabeth Drive, Chelmsford, Massachusetts 01824. It is also available at our website www.brooks.comwww.brooks.com.. ITISIMPORTANTTHATPROXIESBEAUTHORIZEDPROMPTLY.THEREFORE,STOCKHOLDERS
AREURGEDTOCOMPLETE,SIGNANDRETURNTHEACCOMPANYINGFORMOFPROXYINTHE
ENCLOSEDENVELOPE. BROOKS AUTOMATION -2016 2018 Proxy Statement 5057 APPENDIX A | BROOKS AUTOMATION, INC. EXECUTIVE PERFORMANCE-BASED VARIABLE COMPENSATION PLAN |
Back to Contents SECTION 1 | BACKGROUND, PURPOSE AND DURATION |
| | 1.1 | Effective Date. The Plan is effective as of November 4, 2015, subject to ratification by an affirmative vote of the holders of a majority of the Shares that are present in person or by proxy and entitled to vote at the 2016 Annual Meeting of Stockholders of the Company. | | | 1.2 | Purpose of the Plan. The Plan is intended to increase shareholder value and the success of the Company by motivating key executives (1) to perform to the best of their abilities, and (2) to achieve the Company’s strategic objectives. The Plan is intended to permit the grant of awards that qualify as performance-based compensation under Section 162(m) of the Code. |
The following words and phrases shall have the following meanings unless a different meaning is plainly required by the context:
2.1 | “Actual Award” means as to any Performance Period, the actual award (if any) payable to a Participant for the Performance Period. Each Actual Award is determined by the Payout Formula for the Performance Period, subject to the Committee’s (as defined below) authority under Section 3.6 to eliminate or reduce the Actual Award otherwise determined by the Payout Formula. | | | 2.2 | “Affiliate” means any corporation or other entity (including, but not limited to, partnerships and joint ventures) controlled by the Company. | | | 2.3 | “Base Salary” means as to any Performance Period, the Participant’s base salary earned during the Performance Period. Such Base Salary shall be before both (a) deductions for taxes or benefits, and (b) deferrals of compensation pursuant to Company-sponsored plans. | | | 2.4 | “Board” means the Board of Directors of the Company. | | | 2.5 | “Change in Control” shall have the meaning set forth in the Form of Change in Control Agreement filed with the SEC on June 9, 2015 as an Exhibit to the Company’s Current Report on Form 8-K. | | | 2.6 | “Code” means the Internal Revenue Code of 1986, as amended. Reference to a specific section of the Code or regulation thereunder shall include such section or regulation, any valid regulation promulgated thereunder, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation. | | | 2.7 | “Committee” means the Human Resources and Compensation Committee of the Board, or such other committee, comprised exclusively of members of the Board who are “outside directors” within the meaning of Section 162(m) of the Code and Treasury Regulation § 1.162-27(c)(4), as may be designated by the Board to administer the Plan. | | | 2.8 | “Company” means Brooks Automation, Inc., a Delaware corporation, or any successor thereto. | | | 2.9 | “Determination Date” means the latest possible date that will not jeopardize a Target Award or Actual Award’s qualification as performance-based compensation under Section 162(m) of the Code and Treasury Regulation § 1.162-27(e). The Determination Date shall be the earlier of (i) not later than ninety (90) days after the start of the first Fiscal Year of the applicable Performance Period or (ii) the completion of twenty-five percent (25%) of the Performance Period. | | | 2.10 | “Disability” means a permanent and total disability determined in accordance with uniform and nondiscriminatory standards adopted by the Committee from time to time. In the absence of any other specification by the Committee, disability shall be determined in accordance with the Company’s long term disability plan. | | | 2.11 | “Employee” means any employee of the Company or of an Affiliate, whether such employee is so employed at the time the Plan is adopted or becomes so employed subsequent to the adoption of the Plan. | | | 2.12 | “Fiscal Year” means the fiscal year of the Company. | | | 2.13 | “Maximum Award” means as to any Participant for any Performance Period, $2,000,000. | | | 2.14 | “Participant” means as to any Performance Period, an Employee who has been selected by the Committee for participation in the Plan for that Performance Period. | | | 2.15 | “Payout Formula” means as to any Performance Period, the formula or payout matrix established by the Committee pursuant to Section 3.4 in order to determine the Actual Awards (if any) to be paid to Participants. The formula or matrix may contain a range of goals (e.g., minimum threshold, target and maximum) and may differ from Participant to Participant. |
BROOKS AUTOMATION - 2016 Proxy StatementA-1
2.16 | “Performance Period” means any Fiscal Year or such other period not in excess of three Fiscal Years, as determined by the Committee in its sole discretion. | | | 2.17 | “Performance Goals” means the objective goal(s) (or combined objective goal(s)) determined by the Committee (in its discretion) to be applicable to a Participant for a Target Award for a Performance Period. As determined by the Committee, the Performance Goals for any Target Award applicable to a Participant may provide for a targeted level or levels of achievement using one or more of the following measures: cash flow (including but not limited to free cash flow and cash flow from operations); total earnings; earnings per share (diluted or basic); earnings per share from continuing operations (diluted or basic); earnings before interest and taxes; earnings before interest, taxes, depreciation, and amortization; pre-tax profit; earnings from operations; net asset turnover; inventory turnover; capital expenditures; net earnings; net operating earnings; operating income, gross or operating margin; profit margin; margin percentage; debt; working capital; return on equity; return on net assets; return on total assets; return on capital; return on investment; return on invested capital, return on sales; net or gross sales or revenue; market share; economic value added; cost of capital; change in assets; expense reduction levels; debt reduction; productivity; operating efficiency; quality achievement; new product introductions; delivery performance; safety record; stock price; individual objectives; business expansion; completion of acquisitions; and total shareholder return. The Performance Goals may differ from Participant to Participant and from Target Award to Target Award. Prior to the Determination Date, the Committee shall determine whether any element(s) shall be included in or excluded from the calculation of any Performance Goal with respect to any Participants. The foregoing criteria shall have any reasonable definitions that the Committee may specify in the applicable Target Award, which may include or exclude any or all of the following items, as the Committee may specify: extraordinary, unusual or non-recurring items; effects of changes in tax law, accounting principles or other such laws or provisions affecting reported results; effects of currency fluctuations; effects of financing activities (e.g., effect on earnings per share of issuing convertible debt securities); expenses for restructuring, productivity initiatives or new business initiatives; impairment of tangible or intangible assets; litigation or claim judgments or settlements; non-operating items; acquisition expenses; and effects of assets sales or divestitures. The Committee shall have discretion to establish objectives which may require subjective assessments by the Committee. Notwithstanding the foregoing, the maximum possible payout shall be based solely on the Performance Goals. | | | 2.18 | “Plan” means the Brooks Automation, Inc. Executive Performance-Based Variable Compensation Plan, as set forth in this instrument and as hereafter amended from time to time. | | | 2.19 | “Shares” means shares of the Company’s common stock. | | | 2.20 | “Target Award” means the target award payable under the Plan to a Participant for the Performance Period, expressed as a dollar amount or as a percentage of his or her Base Salary, as determined by the Committee in accordance with Section 3.3. |
SECTION 3 | SELECTION OF PARTICIPANTS AND DETERMINATION OF AWARDS |
3.1 | Selection of Participants. The Committee, in its sole discretion, shall select the Employees of the Company who shall be Participants for any Performance Period. Participation in the Plan is in the sole discretion of the Committee, and on a Performance Period by Performance Period basis. Accordingly, an Employee who is a Participant for a given Performance Period in no way is guaranteed or assured of being selected for participation in any subsequent Performance Period. | | | 3.2 | Determination of Performance Goals. The Committee, in its sole discretion, shall establish the Performance Goals for each Participant for the Performance Period. The Performance Goals shall be pre-established in writing prior to the Determination Date at a time when the achievement of such Performance Goals is substantially uncertain. | | | 3.3 | Determination of Target Awards. The Committee, in its sole discretion, shall establish a Target Award for each Participant. Each Participant’s Target Award shall be determined by the Committee in its sole discretion, and each Target Award shall be set forth in writing. | | | 3.4 | Determination of Payout Formula or Formulae. On or prior to the Determination Date, the Committee, in its sole discretion, shall establish a Payout Formula or Formulae consistent with the Performance Goals for purposes of determining the Actual Award (if any) payable to each Participant. Each Payout Formula shall (a) be in writing, (b) be based on a comparison of actual performance to the Performance Goals, (c) provide for the payment of a Participant’s Target Award if the Performance Goals for the Performance Period are achieved, and (d) provide for an Actual Award range greater than or less than the Participant’s Target Award, depending upon the extent to which actual performance exceeds or falls below the Performance Goals. Notwithstanding the preceding, in no event shall a Participant’s Actual Award for any Performance Period exceed the Maximum Award. | | | 3.5 | Date for Determinations. The Committee shall make all determinations under Section 3.1 through 3.4 on or before the Determination Date at a time when the outcome of any such determinations are substantially uncertain. | | | 3.6 | Determination of Actual Awards. After the end of each Performance Period, the Committee shall certify in writing the extent to which the Performance Goals applicable to each Participant under the Target Award for the Performance Period were achieved or exceeded. The Actual Award for each Participant shall be determined by applying the Payout Formula |
BROOKS AUTOMATION - 2016 Proxy StatementA-2
| under the Target Award to the level of actual performance that has been certified by the Committee. Notwithstanding any contrary provision of the Plan, the Committee, in its sole discretion, may eliminate or reduce the Actual Award payable to any Participant below that which otherwise would be payable under the Payout Formula, and determine what Actual Award, if any, will be paid. No reduction hereunder for one Participant during the Performance Period shall increase the amount payable to any other Participant during the Performance Period. No Target Award shall become an Actual Award until the Committee completes its certification process as set forth herein. | | | 3.7 | Change in Control, Death or Disability. A Target Award may, in accordance with Treasury Regulation § 1.162-27(e)(2) (v), provide that all or a portion of a Target Award may be paid upon a Change in Control, death of the Participant or Disability prior to the achievement of the Performance Goals set forth in such Target Award provided that the Participant remains employed through the date of such event. |
SECTION 4 | PAYMENT OF AWARDS |
4.1 | Right to Receive Payment. Each Actual Award that may become payable under the Plan shall be paid solely from the general assets of the Company. Nothing in this Plan shall be construed to create a trust or to establish or evidence any Participant’s claim of any right to payment of an Actual Award other than as an unsecured general creditor with respect to any payment to which he or she may be entitled. | | | 4.2 | Timing of Payment. Payment of each Actual Award shall be made as soon as practical following the determination and certification of the Actual Award as set forth in Section 3.6, but in any event before the fifteenth day of the third month of the Fiscal Year immediately following the Fiscal Year in which the Participant’s Actual Award is no longer subject to a “substantial risk of forfeiture” as determined in accordance with Section 409A of the Code;provided, however, that any payment that is delayed due to an unforeseeable event, as described in Treasury Regulation § 1.409A-1(b)(4)(ii), shall be paid as soon as practicable. Except as otherwise determined by the Committee, in its sole discretion, a Participant shall not be entitled to payment of an Actual Award if such Participant is not employed by the Company or an Affiliate on the payment date for such Actual Award. | | | | It is the intent of the Company that this Plan is exempt from Section 409A of the Code under the “short-term deferral” rule and any ambiguities herein will be interpreted in a manner consistent with the short-term deferral rule. | | | 4.3 | Form of Payment. Each Actual Award shall be paid in cash (or its equivalent) in a single lump sum. The Participant may elect to defer a portion of his or her Award in accordance with the terms of the Company’s deferred compensation plan and consistent with the requirements of Section 409A of the Code. | | | 4.4 | Payment in the Event of Death. If a Participant dies prior to the payment of an Actual Award earned by him or her prior to death for a prior Performance Period, the Actual Award shall be paid to his or her estate. |
5.1 | Committee is the Administrator. The Plan shall be administered by the Committee. The Committee shall consist of not less than two (2) members of the Board. The members of the Committee shall be appointed from time to time by, and serve at the pleasure of, the Board. Each member of the Committee shall qualify as an “outside director” under Section 162(m) of the Code. | | | 5.2 | Committee Authority. It shall be the duty of the Committee to administer the Plan in accordance with the Plan’s provisions. The Committee shall have all powers and discretion necessary or appropriate to administer the Plan and to control its operation, including, but not limited to, the power to (a) determine which Employees shall be granted awards, (b) prescribe the terms and conditions of awards, (c) interpret the Plan and the awards, (d) adopt such procedures and subplans as are necessary or appropriate to permit participation in the Plan by Employees who are foreign nationals or employed outside of the United States, (e) adopt rules for the administration, interpretation and application of the Plan as are consistent therewith, and (f) interpret, amend or revoke any such rules. | | | 5.3 | Decisions Binding. All determinations and decisions made by the Committee, the Board, and any delegate of the Committee pursuant to the provisions of the Plan shall be final, conclusive, and binding on all persons, and shall be given the maximum deference permitted by law. | | | 5.4 | Delegation by the Committee. The Committee, in its sole discretion and on such terms and conditions as it may provide, may delegate all or part of its authority and powers under the Plan to one or more directors and/or officers of the Company; provided, however, that the Committee may delegate its authority and powers only with respect to awards that are not intended to qualify as performance-based compensation under Section 162(m) of the Code. |
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SECTION 6 | GENERAL PROVISIONS |
6.1 | Tax Withholding and Consequences. The Company shall withhold all applicable taxes from any Actual Award, including any federal, state and local taxes (including, but not limited to, the Participant’s FICA obligations). The Company makes no guarantee of any tax consequences to any Participant, his or her estate, the beneficiary of any Participant, any successor in interest of any Participant or any other persons with respect to the payments under this Plan. | | | 6.2 | No Effect on Employment. Nothing in the Plan shall interfere with or limit in any way the right of the Company to terminate any Participant’s employment or service at any time, with or without cause. Employment with the Company and its Affiliates is on an at-will basis only. The Company expressly reserves the right, which may be exercised at any time and without regard to when during a Performance Period such exercise occurs, to terminate any individual’s employment with or without cause, and to treat him or her without regard to the effect which such treatment might have upon him or her as a Participant. | | | 6.3 | Participation. No Employee shall have the right to be selected to receive an award under this Plan, or, having been so selected, to be selected to receive a future award. | | | 6.4 | Successors. All obligations of the Company under the Plan, with respect to awards granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business or assets of the Company. | | | 6.5 | Beneficiary Designations. If permitted by the Committee, a Participant under the Plan may name a beneficiary or beneficiaries to whom any vested but unpaid award shall be paid in the event of the Participant’s death. Each such designation shall revoke all prior designations by the Participant and shall be effective only if given in a form and manner acceptable to the Committee. In the absence of any such designation, any vested benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate. | | | 6.6 | Nontransferability of Awards. No award granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will, by the laws of descent and distribution, or to the limited extent provided in Section 6.5. All rights with respect to an award granted to a Participant shall be available during his or her lifetime only to the Participant. |
SECTION 7 | AMENDMENT, TERMINATION AND DURATION |
7.1 | Amendment, Suspension or Termination. The Board, in its sole discretion, may amend or terminate the Plan, or any part thereof, at any time and for any reason. The amendment, suspension or termination of the Plan shall not, without the consent of the Participant, alter or impair any rights or obligations under any Target Award theretofore granted to such Participant. No award may be granted during any period of suspension or after termination of the Plan. | | | 7.2 | Duration of the Plan. The Plan shall commence on the date specified herein, and subject to Section 7.1 (regarding the Board’s right to amend or terminate the Plan), shall remain in effect thereafter. |
SECTION 8 | LEGAL CONSTRUCTION |
8.1 | Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural. | | | 8.2 | Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included. | | | 8.3 | Requirements of Law. The granting of awards under the Plan shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. | | | 8.4 | Governing Law. The Plan and all awards shall be construed in accordance with and governed by the laws of the State of Delaware, but without regard to its conflict of law provisions. | | | 8.5 | Captions. Captions are provided herein for convenience only, and shall not serve as a basis for interpretation or construction of the Plan. |
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Brooks Automation, Inc.
BrooksAutomation,Inc.
15 Elizabeth Drive
Chelmsford, MA 01824
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