BRKS Brooks Automation Inc

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

SCHEDULE 14A INFORMATION

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

BROOKS AUTOMATION, INC.

(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Table of Contents

Proposal No. 1: Election of Directors for a One-Year Term

For the election of directors, you may either vote “for” a director or “withhold” your vote for such director. An affirmative vote of a plurality of votes properly cast, in person or by proxy, is required for the election of each of the nominees. Broker non-votes will have no effect on the voting outcome with respect to the election of directors.

Proposal No. 2: Advisory Vote on Executive Compensation

For the advisory vote to approve executive compensation, you may either vote “for,” “against” or “abstain.” Although this proposal asks for a non-binding, advisory vote, we will consider an affirmative vote of a majority of the votes cast affirmatively or negatively as approval of Proposal No. 2. We value the opinions expressed by our stockholders in this advisory vote, and our Human Resources and Compensation Committee, which is responsible for overseeing and administering our executive compensation programs, will consider the outcome of the vote when designing our executive compensation programs and making future compensation decisions for our named executive officers. Abstentions and broker non-votes, if any, will not have any effect on the results of those deliberations.

Proposal No. 3: Ratification of the Company’s Independent Registered Public Accounting Firm

For the proposal to ratify the selection of PricewaterhouseCoopers LLP (“PwC”) as the Company’s independent registered public accounting firm, you may either vote “for,” “against” or “abstain.” An affirmative vote of a majority of the votes cast affirmatively or negatively is required to approve Proposal No. 3. Abstentions will have no effect on the results of the vote on Proposal No. 3. We do not expect there will be any broker non-votes on this matter as the approval of Proposal No. 3 is considered to be routine and a broker or other nominee is generally empowered to vote on such routine proposals, however, if we do have any broker non-votes they will not affect the voting outcome.

Voting of Proxies

General

If your shares of Common Stock are registered directly in your name with our transfer agent, Computershare, Inc., you are considered the stockholder of record, or record holder, of those shares. In that case these proxy materials have been sent directly to you and you have the right with these proxy materials to grant your proxy directly to Brooks or to vote in person or by mail, telephone or via the Internet as described below.

If your shares of Common Stock are held in a brokerage account (street name) or by another person on your behalf, you are considered to be the beneficial owner of those shares, and these proxy materials are being forwarded to you by your broker or other nominee together with a voting instruction card, and you are also invited to attend the Annual Meeting.

Proxies Without Voting Instructions

Proxies that are properly submitted and dated but which do not contain voting instructions will be voted for the election of the nominees as directors described in this proxy statement, for the approval of the non-binding vote on executive compensation, and for the ratification of the selection of PwC as the Company’s independent registered accounting firm for the 2020 fiscal year. If any other matters properly come before the Annual Meeting, proxies will be voted by the authorized proxies in accordance with their best judgment.

Voting Shares held through Broker by Proxy

If your shares of Common Stock are held by your broker, your broker will vote your shares for you if you provide instructions to your broker on how to vote your shares. You should follow the directions provided by your broker on a voting instruction card regarding how to instruct your broker to vote your shares. In the absence of such instructions, the broker will be able to vote your shares on matters with respect to which it has discretionary voting power. The broker will have discretionary voting power only with respect to the ratification of the selection of PwC as the Company’s independent registered public accounting firm for the 2020 fiscal year, but not with respect to the election of the nine nominees for director or the advisory vote on executive compensation.

Voting of Shares held through Broker in Person

If your shares of Common Stock are held by your broker or other nominee and you wish to vote those shares in person at the Annual Meeting, you must obtain from the broker or other nominee holding your shares a properly executed legal proxy, identifying you as a stockholder, authorizing you to act on behalf of the broker or other nominee at the Annual Meeting and specifying the number of shares with respect to which the authorization is granted.

CORPORATE GOVERNANCE

Board of Directors

The Board of Directors has responsibility for establishing broad corporate policies and reviewing overall performance rather than day-to-day operations. The Board’s primary responsibility is to oversee management and, in so doing, to serve the Company’s and its stockholders’ best interests while also promoting corporate social responsibility. Management keeps the directors informed of our activities through regular written reports and presentations at Board and Committee meetings. The Board has adopted the Corporate Governance Guidelines that are publicly available on our website at www.brooks.com. The guidelines call for, among other things, the maintenance of Board leadership that is separate from the Company’s executive leadership, whether that comes in the form of an independent chairman or an independent lead director. The independent chairman presides over the regularly held executive sessions of the Board, noted below, at which the chief executive officer is not present. Each director is required to stand for election annually.

The Board has assessed each of the nine nominees for director against the SEC and the Nasdaq Stock Market standards for independence and determined that Messrs. Allen, Martin and Woollacott, Professor Palepu, Drs. Rosenblatt and Wrighton, and Mses. Davis and Zane, eight of the nine director nominees, meet the general definition of an independent director as defined by the Nasdaq Stock Market. The Board has further determined that all members of the Audit Committee (among others) meet the Nasdaq Stock Market’s stricter definition of independence required for members of an Audit Committee, and determined that each member of the Audit Committee qualifies as an audit committee financial expert, except Dr. Rosenblatt.

The Board of Directors held eight meetings during the fiscal year ended September 30, 2019 and took action twice by written consent. Each current director attended at least 75% of the meetings of the Board of Directors and of committees of which he or she was a member held while he or she was a director during the last fiscal year. In connection with each of the Board’s four regularly scheduled meetings, all non-employee members of the Board met in executive session without the chief executive officer being present.

The Board of Directors encourages stockholders to communicate with our senior management and directly with members of the Board of Directors on matters of concern related to our business and affairs. Stockholders who wish to communicate with members of the Board of Directors may do so by the following means:

As a matter of policy, we encourage the directors to attend meetings of stockholders, in person or by telephone. All of the nominees for election as director were directors at the time of the last stockholder meeting in January 2019, and all attended that meeting, except for Mr. Allen and Dr. Rosenblatt.

In accordance with our Corporate Governance Guidelines, members of the Board are encouraged to periodically attend formal continuing education programs for directors, with a recommended frequency of at least once every two years. The Company supports and encourages Board members to take advantage of director education opportunities. There are many public company director educational venues available, and the Company believes that its Board members should keep current on the fast changing areas of corporate governance and related regulations. The Brooks Board members have participated in, and continue to attend, public company director education venues and many of our Board members hold professional director certifications earned by accumulating from 30 to 150 director education credit hours.

Chairman of the Board

The Board of Directors has elected Joseph R. Martin to serve as chairman of the Board. The chairman assists the chief executive officer in setting the agenda for meetings of the Board of Directors, presides over executive sessions of the Board and performs such other duties as the Board may assign.

to management concerning the Company’s strategic planning and implementation, as well as taking the lead for the Board in ensuring that the Company implements and employs the processes necessary to understand, address and manage the Company’s business and enterprise risks. The Executive Committee is currently comprised of Messrs. Martin (Chair) and Woollacott, Professor Palepu, Ms. Zane and Dr. Schwartz, each of whom will remain on the Committee during fiscal 2020, if reelected by the stockholders. The Executive Committee met on five occasions during fiscal year 2019 and took no action by written consent.

Finance Committee

The purpose of the Finance Committee is to assess and provide recommendations to the Board of Directors on the Company’s capital structure, including financial strategies, policies, practices and transactions. Among other things, the Finance Committee recommends how to employ the Company’s cash resources and assists the management and the Board in the consideration and review of possible strategic transactions. Its purposes do not include the evaluation of financial performance and controls delegated under the charter of the Audit Committee, nor does it preclude direct action by the Board on any issue if the Board so chooses. The charter of the Finance Committee is publicly available on our website at www.brooks.com. The Finance Committee is comprised of Mr. Allen (Co-Chair) and Ms. Davis (Co-Chair), Mr. Pond, Professor Palepu and Drs. Rosenblatt and Wrighton. Mr. Allen, Ms. Davis, Professor Palepu, and Drs. Rosenblatt and Wrighton will each remain on the Committee during fiscal 2020, if reelected by the stockholders, and each of whom meets the definition of an independent director. The Finance Committee met on four occasions during fiscal year 2019 and took one action by written consent.

Human Resources and Compensation Committee

The Human Resources and Compensation Committee has overall responsibility for our compensation philosophy, evaluates and approves executive compensation including cash bonuses to be issued pursuant to the Company’s Performance-Based Variable Compensation Plan, assists the Board in the discharge of its responsibilities with respect to executive compensation and develops the leadership capabilities of our executives. The Human Resources and Compensation Committee is responsible for the annual compilation of the Chief Executive Officer’s strategic performance objectives and manages his/her annual performance assessment and feedback. Additionally, the Human Resources and Compensation Committee is responsible for planning the succession process for the Chief Executive Officer and the executive staff. It also has been delegated the authority to supervise the administration of our stock plans, and it is required to review and approve the incorporation of our compensation discussion and analysis report in this proxy statement in accordance with SEC rules. The Human Resources and Compensation Committee also reviews all grants to employees under our stock plans and recommends the approval of those grants by the full Board of Directors. The Human Resources and Compensation Committee is authorized to retain independent advisors to assist it in fulfilling its responsibilities. Under its charter and the requirements of the Nasdaq Stock Market, the Human Resources and Compensation Committee must consist of at least three directors, each of whom satisfies certain requirements of the securities and other laws and satisfies the independence requirements of the Nasdaq Stock Market. The charter of the Human Resources and Compensation Committee is publicly available on our website at www.brooks.com. The Human Resources and Compensation Committee is currently comprised of Ms. Zane (Chair), Mr. Pond and Ms. Davis. Ms. Zane and Ms. Davis will remain on the Human Resources and Compensation Committee during fiscal 2020, if reelected by the stockholders. Mr. Martin is expected to join the Human Resources and Compensation Committee following the annual meeting, if reelected by the Stockholders. Each of these Human Resources and Compensation Committee members meets the definition of an independent director and the other requirements for membership.

The Human Resources and Compensation Committee met on six occasions during fiscal year 2019 and took no action by written consent.

Please see also the report of the Human Resources and Compensation Committee set forth elsewhere in this proxy statement.

Under its charter, as supplemented by the rules of the Nasdaq Stock Market, the Nominating and Governance Committee must consist of not less than three members, each of whom satisfies the independence requirements of the Nasdaq Stock Market. A copy of the charter of the Nominating and Governance Committee is publicly available on our website at www.brooks.com. The members of the Nominating and Governance Committee are Professor Palepu (Chair), Messrs. Allen and Martin and Ms. Zane, each of whom will remain on the Nominating and Governance Committee during fiscal 2020, if reelected by the stockholders, and each of whom meets the definition of an independent director.

The Nominating and Governance Committee is responsible for identifying candidates to serve as directors, whether such directorships are filled by the Board or by stockholders. The Nominating and Governance Committee may consider nominees recommended by stockholders and other sources, such as directors, third-party search firms or other appropriate sources. In evaluating candidates the Nominating and Governance Committee seeks the strength that is derived from a variety of experiences among board members, embracing the criteria and qualifications set forth in the Nominating and Governance Committee’s charter, which include personal integrity, sound business judgment, business and professional skills and experience, independence (as defined under SEC and Nasdaq rules), potential conflicts of interest, proven leadership and management experience as chief executive officer or chairman of a public company or other large, complex organization, diversity, expertise resulting from significant academic or research activities, and experience on one or more boards of significant public, private, or non-profit organizations, the extent to which a candidate would fill a present need, and concern for the long-term interests of stockholders. In any particular situation, the Nominating and Governance Committee may focus on persons possessing a particular background, experience or qualifications, which the Nominating and Governance Committee believes would be important to enhance the effectiveness of the Board. It is the practice of the Nominating and Governance Committee in nominating and evaluating candidates for the Board to take into account their ability to contribute to the experience represented on the Board. The evaluation process for stockholder recommendations is the same as for candidates from any other source. If stockholders wish to recommend a candidate for director for election at the 2020 annual meeting of stockholders, they must follow the procedures described in “Other Matters-Stockholder Proposals and Recommendations For Director.”

The Nominating and Governance Committee also initiates and administers the Board’s annual self-evaluation and performance review process. This annual process is initiated by each Board member being sent a written questionnaire dealing with a variety of elements of the governance process, including the Board’s structure, its effectiveness in carrying out key responsibilities, the quality and efficiency of the meeting processes of the Board and its Committees, the responsibilities and effectiveness of the Board’s Committees, and, more generally, Board members’ overall analysis and comments concerning the effectiveness of the Board, its processes and the quality of its deliberations. After these questionnaires are completed and returned, the chairman of the Nominating and Governance Committee conducts individual interviews with each Board member in order to understand fully the perceptions and analysis of each director. The chairman then presents the information that has been collected through these processes to the Nominating and Governance Committee and then, following that discussion, presents observations and recommendations to the full Board for discussion and such action as the Board determines to be appropriate. The Board views these activities as part of its overall process of on-going self-evaluation and continuous improvement.

The Nominating and Governance Committee met on four occasions during fiscal year 2019 and took no action by written consent.

Board Risk Oversight

Management is responsible for the day-to-day management of risks the Company faces, while the Board of Directors, as a whole and through its Committees, has the ultimate responsibility for the oversight of risk management. The Board has delegated to the Executive Committee responsibility to ensure that the Board and management implement and regularly employ the processes necessary to understand, address and manage the Company’s business risks. The Executive Committee is authorized to delegate this responsibility to other Committees of the Board with respect to specific areas of business risk where the Executive Committee deems this to be appropriate. Periodically, working initially through the Audit Committee, management and the Board jointly develop and/or review a list of important risks that the Company prioritizes. These are reviewed during the year by management and by the Board and the committees to which the Executive Committee has delegated specific areas of responsibility. The Board of Directors also specifically engages in cybersecurity risk oversight through detailed annual reports, as well as periodic updates from the Company’s chief information officer.

The Board’s risk oversight processes build upon management’s regular risk assessment and mitigation processes, which include standardized reviews conducted with members of management across and throughout the Company in areas such as financial and management controls, strategic and operational planning, regulatory compliance, environmental compliance and health and safety processes. The results of these reviews are then discussed and analyzed at the most senior level of management, which assesses both the level of risk posed in these areas and the likelihood of their occurrence, coupled with planning for the mitigation of such risks and occurrences.

Following this senior management level assessment, the Executive Committee is then tasked to coordinate the risk assessment process at the Board level and to ensure that mitigation and corrective actions are being taken where appropriate.

Board Leadership Structure

The Company’s Corporate Governance Guidelines, as set out on the Company’s corporate web site under “Company” and “Investors” and “Corporate Governance”, provides that there will always be independent leadership of the Board. In accordance with the Policy, the Board may select the chief executive officer to also serve as Board chairman, but its current practice is to have an independent director serve as chairman. The Guidelines also makes clear that in the event that the same person serves as chief executive officer and chairman, the Board shall select a lead independent director who shall be responsible for chairing meetings of the independent directors in addition to any other responsibilities designated by the Board. Under this separation of responsibilities, an independent director will always be in a position of Board leadership.

The Company’s Corporate Governance Guidelines also provide that the independent directors of the board shall meet in executive session (separate from any inside directors) on a regular basis, at least as frequently as may be required by applicable Nasdaq or SEC rule or regulation. It has been the consistent practice of the chairman to conduct such meetings of independent directors at each in-person meeting of the Board of Directors.

In addition, under the Corporate Governance Guidelines, the chairman (with the assistance of the Company Secretary) is (i) primarily responsible for monitoring communications from stockholders and (ii) providing copies or summaries of such communications to the other directors as he or she considers appropriate.

We believe that the separation of the roles of chief executive officer and chairman of the Board of Directors continues to offer benefits including the following:

DIRECTOR NOMINEES

Information on Nominees

Following is certain information with respect to the nine nominees, in each case setting forth the particular experience, qualifications, attributes and skills of each director nominee that led the Board to conclude that such person should serve as a director of Brooks.

Director Since October 2003     Age 75	A. Clinton Allen
	Nominee Information Mr. Allen is chairman and chief executive officer of A.C. Allen & Company, an investment banking consulting firm, and principal of the American College of Corporate Directors, an organization that provides educational and other services to public company directors, chief executive officers and corporate counsel. From 1989 to 2002, Mr. Allen served as vice chairman of the board of Psychemedics Corporation, a biotechnology company with a proprietary drug testing product, and as chairman of the board of Psychemedics from 2002 to 2003. Mr. Allen rejoined the board of Psychemedics in 2015. Mr. Allen also serves as lead director of LKQ Corporation, a supplier of recycled OEM automotive parts. He also served as the non-executive chairman and a director of Collectors Universe, Inc., a publicly traded company that provides third-party authentication and grading service for high-value collectibles, until December 2018. Mr. Allen holds an Executive Master Professional Director Certification from the American College of Corporate Directors.     Qualifications The Board of Directors has concluded that Mr. Allen should continue to serve as a director of the Company because of his broad-based investment banking and financial market expertise, which enables him to provide the Company and the Board with valuable insights in both merger and acquisition analysis and in the approach to capital markets generally, as well as his leadership experience serving as chairman and director for diverse publicly traded companies. The Board has also determined, in light of the Company’s guideline retirement age of 75, after reviewing Mr. Allen’s specific qualifications and experience, his contributions to the Company and the Board and the matters likely to be addressed by the Board during the year, as well as the overall Board succession planning, that it is in the best interests of the Company to nominate Mr. Allen for re-election to the Board.

Director Since June 2013     Age 58	Robyn C. Davis
	Nominee Information Ms. Davis has been managing director of AngelHealthcare Investors, LLC, an early-stage private equity investment group focused on medical devices, life sciences and specialty pharmaceutical companies, since 2000. Prior to AngelHealthcare, Ms. Davis was a director of the merchant banking services practices for Barents Group, LLC, and a strategy consultant at Bain & Company. Ms. Davis also serves as a director of two early-stage, privately held healthcare companies, Akston Bioscience Corporation and CRA Health, LLC. Ms. Davis holds an Executive Masters Professional Director Certification from the American College of Corporate Directors.     Qualifications The Board of Directors has concluded that Ms. Davis should continue to serve as a director of the Company because of her extensive business experience, particularly with early stage life sciences companies, and her banking and finance expertise.

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, 2019, each of the non-employee directors, except Dr. Rosenblatt who joined the Board in September 2018, has exceeded the target ownership amount. The Board may at any time revoke or modify the policy.

The Nominating and Governance Committee and the full Board review director compensation periodically in light of business and market conditions and such other factors as they deem appropriate. In 2019, 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 recommended the following changes to our director compensation program which were reviewed and adopted by the Board of Directors:

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. Ms. Davis elected to defer cash compensation in 2019. 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 fully vested 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, 2019.

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.

Mr. David F. 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.

COMPENSATION DISCUSSION AND ANALYSIS

Executive Summary

Our executive compensation program is built on a foundation of pay for performance, which we continually evolve to maintain the appropriate alignment. Our shareholders have benefited from the successful execution of our business strategy and continue to express support for our pay programs that we believe are strongly aligned to our business strategy and provide appropriate incentives and recognition for our executives to perform. For the fourth consecutive year we received support from over 99% of our shareholders who voted at our January 2019 Annual Meeting to approve our “say-on-pay” proposal.

Our current design and structure of the executive compensation program have been consistent for several years and we anticipate this to continue. This past year, our Human Resources and Compensation Committee undertook a comprehensive review of the design and metrics of our incentive plans to assure alignment with our business strategy. The results of this review, discussed further below, affirmed our belief that our incentive plans are strongly aligned to our business strategy. In this Compensation Discussion and Analysis we describe the material elements of our Fiscal 2019 compensation for the following named executive officers:

Shareholder Outreach and Engagement

In Fiscal 2019, we continued our practice of inviting many of our larger shareholders to discuss our pay programs and practices. These sessions were led by our Chairman of the Board and our Chair of the Human Resources and Compensation Committee, or HRC Committee. In addition to receiving shareholder feedback, we engaged their perspectives on topical executive pay issues to assist in guiding the ongoing management of our executive compensation program. This year, the shareholders we spoke with were asked to provide their input on:

The several shareholders who accepted our invitation were complimentary of our executive compensation program and asked insightful questions around specific pay elements or design. As in prior years, many of the shareholders we contacted indicated that no discussion or meeting was necessary. Shareholders who did engage with us also used the discussion opportunity to comment on other governance matters. The feedback from our outreach efforts is provided to the rest of the HRC Committee and the full Board. No substantive changes to the executive compensation program were recommended by the shareholders when we spoke.

We intend to maintain an ongoing dialogue with our shareholders to ensure that our executive compensation program continues to take their views into consideration. We encourage our shareholders to provide us with feedback on our executive compensation program and governance matters. To facilitate this process we have established a link to provide feedback on the investor section of our website. Please visit https://brooks.investorroom.com/shareholder-feedback.

Fiscal 2019 Company Performance and Financial Highlights

We believe that our business strategy continues to prove its value and sustainability and we remain committed to our internal and acquisition related investments to further our growth. During Fiscal 2019 we accelerated our transformation strategy as we welcomed GENEWIZ to our company and divested our Semiconductor Cryogenics business.¹ Even with the significant work associated with completing these two transactions, we remained focused on our ongoing business and continued to deliver exceptional growth in capturing market share across our business lines while advancing our technology and market leadership positions in each of the semiconductor and life sciences markets.

In Fiscal 2019, we continued to capture market share in the Semiconductor Solutions Group with well over 100 design-in-wins; both the Sample Management and GENEWIZ businesses continued their revenue growth while adding hundreds of new customers; we managed our balance sheet during the GENEWIZ and Semiconductor Cryogenics transactions; and we spent most of the year preparing for a global system upgrade in managing our business through the Oracle cloud.

In concluding another transformative year that we believe has set the foundation for increased growth and profitability, our achievements for Fiscal 2019 include:

Adjusted Gross Margin, Adjusted EPS and Adjusted Operating Income are non-GAAP financial measures. An explanation of the adjustments to our GAAP financial measures used in this proxy statement and a reconciliation of the adjusted financial measures to the comparable GAAP financial measures are included in Appendix A to this proxy statement.

Fiscal 2019 Company Performance and Financial Highlights

Our long-term financial model that we share with our investors and shareholders forms the basis for our annual performance targets. The chart below shows the alignment between financial performance and CEO pay over the last four years.

In the final quarter of Fiscal 2018, we announced two transactions consistent with our overall corporate strategy to transform our company. We entered into an agreement to sell our Semiconductor Cryogenics business that is part of our Semiconductor Solutions segment to Edwards Vacuum LLC (a member of the Atlas Copco Group). Additionally, we announced our agreement to acquire GENEWIZ, a leading provider of genomics services based in New Jersey and Suzhou, China. The GENEWIZ acquisition closed on November 15, 2018. The divestiture of the Semiconductor Cryogenics business closed on July 1, 2019.

Pay for Performance Alignment

We have focused on the alignment of the pay of our executive leadership team with our performance against certain core business metrics. These metrics, which are incorporated into our incentive compensation plans, are chosen to coordinate with our financial and strategic objectives and to appropriately balance our short- and long-term goals. Our performance goals are designed to incentivize 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 business strategy and our cash (or Performance-Based Variable Compensation Plan, sometimes referred to as our PBVC) and equity (or Long-Term Incentive Plan, sometimes referred to as our LTIP) incentive plans for Fiscal 2018 and 2019.

We do not define specific percentages of fixed, variable, and long-term compensation for our executives. 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” variable compensation which is paid for based upon 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 shareholders’ 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 stock ownership guidelines		No above-median pay benchmarking
	Maintain clawback provisions		No gross-up provisions
	Provide for double-trigger change-in-control benefits		No pension plans or other post-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 dividends on RSUs until they vest
	Conduct evaluations of performance goal rigor		No hedging or pledging of our stock
	Solicit shareholder input and incorporate their feedback
	Require minimum vesting periods on equity awards

In allocating total direct compensation among these 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 additional compensation where aggressive but achievable performance objectives are met. For Fiscal 2019, our CEO’s and other named executive officers’ target pay mix emphasized variable at-risk pay opportunities as illustrated below:

Determining Executive Compensation

The 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. Ms. Ellen M. Zane is Chair of the HRC Committee having been appointed in February 2015, and she is currently joined on the HRC Committee by Mr. Kirk P. Pond and Ms. Robyn C. Davis.

Each year our 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 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 our CEO’s compensation, as well as other significant aspects of our executive compensation programs, for final approval by our full Board. The recommendations of the HRC Committee typically include the following:

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 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 2019, the HRC Committee continued its engagement with its independent compensation consultant, Pearl Meyer, a national executive compensation consulting firm, to review and provide recommendations concerning all of the elements of our executive compensation program. Pearl Meyer performs services solely on behalf of the HRC Committee and has no relationship with the Company or management except as it may relate to performing such services. The HRC Committee has assessed the independence of Pearl 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 Pearl Meyer from independently representing the HRC Committee. Services provided by Pearl Meyer in Fiscal 2019 included:

The information provided by Pearl 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 compensation.

Before each meeting, the HRC Committee is provided appropriate materials and information necessary to make informed decisions about our executive compensation practices. These materials may be supplemented by reports prepared by Pearl Meyer or our Human Resources department. The HRC Committee uses its judgment supported by facts and documentation in making compensation recommendations that it believes supports our philosophy and objectives.

Peer Group

In consultation with Pearl Meyer, the HRC Committee annually reviews our 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. We generally exclude companies from the peer group that primarily make integrated circuit, or IC, chips because of the significantly different business model of those chip makers versus semiconductor capital equipment manufacturers like us. Publicly traded life sciences services and equipment companies within our financial ranges are also included in the peer group.

We modified our Fiscal 2018 peer group to construct our peer group for 2019 compensation determination. For Fiscal 2019 the HRC Committee removed Analogic Corporation from the peer group as it was acquired during 2018 and ceased to operate as an independent public company. We also removed Photronics, Inc. based on its lower market capitalization. The HRC Committee approved two additions to the peer group: one life sciences company in order to increase the mix of companies targeting the life sciences market to more closely reflect our current business profile; and one semiconductor capital equipment company. The semiconductor addition was: Rudolph Technologies, Inc., now known as Onto Innovation, Inc., a manufacturer that supplies photonics, vision and precision motion components and sub-systems to original equipment manufacturers in medical and industrial markets, and the life sciences addition was Novanta, Inc. a designer and manufacturer of process and process control equipment and software for the semiconductor and microelectronic manufacturing industries.

We believe the Fiscal 2019 peer group has balance between revenue and market capitalization for size and includes a sizable presence of life sciences companies or those offering life science products. This growing number of peer group companies with life sciences products is reflective of the evolving strategic focus of the Company.

Lindon G. Robertson - Executive Vice President and Chief Financial Officer

Guojuan (Amy) Liao, President GENEWIZ

David E. Jarzynka - President, Brooks Semiconductor Solutions Group

David C. Gray - Senior Vice President, Chief Strategy and New Business Officer

Annual Cash Incentive for Fiscal 2019 – Performance-Based Variable Compensation (PBVC)

Each year the HRC Committee, with management, reviews the annual operating plan to determine the critical financial metrics and goals they believe will drive shareholder value when achieved. For Fiscal 2019, the HRC Committee voted to retain the Revenue, Adjusted Gross Margin and Adjusted EPS metrics for the PBVC as each is aligned to the Company’s emphasis on accelerating profitable growth.

In reviewing the metrics and goals, the HRC Committee was guided by the following:

The HRC Committee met over several sessions and engaged our compensation consultant to review our (and our peer group’s) historical achievement levels on the proposed metrics to ensure appropriate rigor in setting these goals. The consultant’s report noted that because of the significant transformation of our business during Fiscal 2019 that includes the sale of the Semiconductor Cryogenics business and the purchase of GENEWIZ, Pearl Meyer was more limited in deploying certain methodologies historically used to evaluate the rigor of our performance goals. Nevertheless, based on its independent assessment, Pearl Meyer concluded that the Fiscal 2019 incentive compensation performance goals were of appropriate rigor reflecting:

Fiscal 2019 PBVC Financial Performance Goals

Our Fiscal 2019 PBVC metrics and goals were key performance measures that anticipated continued growth in our Semiconductor Solutions Group and Life Sciences segments, despite a cyclical softening within the semiconductor industry. The goals for the Fiscal 2019 PBVC included one quarter of the results from our Semiconductor Cryogenics business, as the sale was originally anticipated to close in the second quarter of Fiscal 2019. The goals also included 10.5 months of the results from GENEWIZ as we acquired GENEWIZ on November 15, 2018.

Annual Revenue:

Adjusted Gross Margin:

Adjusted EPS:

Although our Fiscal 2019 results fell short of the PBVC target goals we established last year, we continued to grow our business while adding significant market value. Our metrics performance relative to the goals was impacted by a cyclical pullback in semiconductor capital equipment spending and more moderate growth of our Sample Management portfolio of products. GENEWIZ performed as expected and added significantly to our 70% business growth in revenues in our Life Sciences segment. Overall, Sample Management added 70 new customers with stronger go-to-market activities. Even with the cyclical softening of the semiconductor industry and the wafer-fab equipment market declining approximately 20% as compared to the prior fiscal year, our Semiconductor Solutions business grew 3%, led by our Contamination Control Systems and Advanced Packaging product performance.

Grant Process

The value of each year’s LTIP equity grant for the CEO and our other named executive officers is based on a variety of factors including market and peer group data as provided by Pearl Meyer, the ability of the executive to impact long-term shareholder value, the executive’s prior contributions and performance and the current outstanding equity grants held by the executive. For executive officers, this translates into a projected equity value to target cash compensation ratio generally ranging from 1.0 to 1.5. A combination of performance and time-based RSUs are used as part of our LTIP. Performance-based RSUs are intended to focus and align management leadership to increasing share value and profitable growth, while time-based RSUs help promote retention of key leadership talent.

The following table shows the LTIP grant date value for the Fiscal 2017, 2018 and 2019 Plans.

LTIP Grant Date Value
$000

Equity Plan Analysis

The most recent Pearl Meyer executive pay analysis, completed in September 2019, 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) was at the 35^th percentile of our 2019 compensation peer group. Our share burn rate, which is the sum of options and full-value shares granted divided by weighted average shares outstanding (where all options and full-value shares are counted equally) average of 1.1% in Fiscal 2019 (1.1% burn rate was also the three-year average as shown in the chart below) was slightly above the 50^th percentile of our peer group. We believe this judicious use of equity awards affords the HRC Committee flexibility in incenting executive behaviors to drive strategic initiatives.

Fiscal 2017 - 2019 LTIP

For Fiscal 2017, the LTIP was designed to ensure that our metrics and goals were consistent with our longer-term growth strategies. Our growth strategy is based on the following tenets:

The financial metrics were comprised of cumulative Adjusted Operating Profit (40% weight), cumulative Free Cash Flow (40% weight) and ROIC (20% weight). All three financial metrics were measured against performance goals for the fiscal 2017-2019 performance period.

Following the end of Fiscal 2019, we measured our performance against the goals. Our strong financial performance over the last three year period resulted in our Free Cash Flow and Adjusted Operating Profit metrics exceeding the stretch (maximum) goal while the ROIC metric reached 170% of target providing for an overall vesting percentage of 193.4% of each NEO’s performance-based RSU granted to our named executive officers.

Definitions:

The following table summarizes the awards earned by our named executive officers under the Fiscal 2017 - 2019 LTIP:

Fiscal 2018 - 2020 LTIP

The Fiscal 2018 LTIP covering the fiscal years 2018 – 2020 was approved by the HRC Committee and the full Board in November 2017 and was designed with the same metrics as the Fiscal 2017 – 2019 LTIP but with significantly greater goals for each metric that took into account the strong performance in Fiscal 2017 and the Company’s longer-term financial models that we believe support a strategy of profitable growth. The HRC Committee decided to make each metric equally weighted at one-third by increasing the weighting of the ROIC metric to help focus on growing our acquired companies.

Definitions:

Prior to the start of the 2019 fiscal year on October 1, 2018, we announced that we were in the process of divesting our Semiconductor Cryogenics business to Edwards Vacuum LLC (a member of the Atlas Copco group) for $675 million and buying genomics services provider GENEWIZ for $450 million. The GENEWIZ acquisition closed on November 15, 2018 and it was anticipated that the divestiture of the Semiconductor Cryogenics business would close sometime in the second fiscal quarter (January – March 2019).

Based on these two transformative transactions, we assessed the goals for the 2018 – 2020 LTIP established in November 2017 and determined they were not consistent with the profile of the Company that would now include GENEWIZ for almost two full years of the LTIP while excluding the Semiconductor Cryogenics business for a similar period. The Committee reviewed several options to better align the goals of the Plan with the new profile of the Company to maintain the LTIP’s relevance and motivational value. After modeling several options, the HRC Committee recommended and the Board approved revised goals for Fiscal 2018 – 2020 LTIP using the following methodology:

We believe establishing revised goals was essential to maintaining the motivational value of the Fiscal 2018 – 2020 LTIP allowing us to equitably measure management’s performance over the three-year period while retaining the prior goals that were established under a significantly different financial profile which would have had the opposite effect. With only one year of the three-year LTIP period completed, we believed that revising the goals was the most prudent approach to retain the motivational value of the LTIP.

The revised goals at target were amended by the following percentages:

Fiscal 2019 – 2021 LTIP

The Fiscal 2019 LTIP metrics were again based on cumulative Adjusted Operating Profit, cumulative Free Cash Flow and a three-year average of our ROIC, all equally weighted. The threshold, target and stretch (maximum) goals excluded all financial results from the Semiconductor Cryogenics business and included GENEWIZ results as of our November 15, 2018 acquisition of the business. The goals also excluded the substantial gain on the sale of the Cryogenics business.

Definitions:

Elements of Our Fiscal 2020 PBVC and LTIP

In establishing our metrics and goals for the Fiscal 2020 short- and long-term incentive plans, we again relied upon the comprehensive review undertaken to ensure our plan designs and metric selection were strongly aligned to our business and optimized to help drive shareholder value.

The review affirmed the appropriateness of our current plan design and features for both the PBVC and LTIP.

For the Fiscal 2020 – 2022 LTIP, the financial metrics are comprised of cumulative Adjusted Operating Profit (33% weight), cumulative Free Cash Flow (33% weight) and ROIC (34% weight). All three financial metrics will be measured against three-year performance goals for the Fiscal 2020 - 2022 performance period.

Other Compensation and Policies

Stock Ownership Guidelines

Stock ownership guidelines require that within five years of their hire date, executive officers, including our named executive officers Dr. Schwartz and Messrs. Robertson and Jarzynka, Dr. Gray and Dr. Liao, acquire and maintain beneficial ownership of Brooks shares at different multiples of salary depending upon position. The HRC Committee approved an increase to the CEO requirement to six (6) times base salary from the previous five (5) times base salary in Fiscal 2018. The CFO has an ownership requirement of three (3) times base

salary. The remaining positions covered by the policy have ownership requirements of two (2) times base salary. At the end of Fiscal 2019, Dr. Schwartz exceeded his six (6) times ownership requirement; Mr. Robertson exceeded his three (3) times ownership requirement; and the remaining named executive officers, other than Dr. Liao, who is new within an accumulation period, also exceeded their two (2) times base salary requirement. The guidelines cease to apply to any executive officer after termination of their employment.

Risk Assessment Process

The HRC Committee has assessed the risk profile of its compensation program to monitor whether any element of compensation or any policy encouraged inappropriate or unacceptable risk to the Company on an annual basis. The HRC Committee is provided with a series of Company 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 LTIP; selection of performance metrics; goal setting process; and our checks and balances on the payment of compensation. We believe 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 balances the creation of long-term value with shorter-term positive results.

Clawback Provisions

Clawback provisions which apply to the CEO and CFO 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 CEO and the CFO), which is applicable to incentive-based compensation (such as the PBVC and performance-based RSUs) 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) whose intentional misconduct caused or contributed to the need for the restatement 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 with 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 and Jarzynka and Dr. Gray have each entered into offer letters that stipulate the terms and conditions of their employment with the Company. In June 2015, we modified the original offer letter to Mr. Robertson to provide for the same severance provisions as Dr. Schwartz (one year’s base salary and benefits and up to an additional 12 months so long as 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 so long as the executive remains unemployed. We believe these changes are appropriate as they reflect customary market practice for executives and provide our executives the proper focus when analyzing potential transactions.

In September 2019, Mr. Tenney separated from service and entered into a Separation Agreement with the Company consistent with the provisions of his employee agreement with the Company. The Separation Agreement provided for the following in exchange for a standard release of claims:

Change-In-Control and Non-Compete Agreements

We currently have provisions within our equity award agreements that provide for accelerated vesting at target in the event of a double-trigger change in control (termination of employment without “cause” or for “good reason” within a year following or six months prior to 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 Mr. Robertson and increased the protected termination period following a change in control to two years. The arrangement includes:

In exchange for the change in control agreement, we entered into a non-competition agreement with Dr. Schwartz and Mr. Robertson where each executive agrees that during the term of the agreement and for 12 months following termination for any reason, the executive:

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 and Mr. Robertson.

Indemnification Agreements

We entered into an indemnification agreement at the time of hire with our CEO and our other named executive officers. 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 CEO 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 Deductibility

Section 162(m) of the Internal Revenue Code of 1986, as amended by the recently-enacted Tax Cuts and Jobs Act, restricts deductibility for federal income tax purposes of annual individual compensation in excess of $1 million to our named executive officers, effective for tax years beginning after 2017, subject to a transition rule for written binding contracts which were in effect on November 2, 2017, and which were not modified in any material respect on or after such date. In the past, Section 162(m)’s deductibility limitation was subject to an exception for compensation that qualified as performance-based. Certain of our compensation programs were designed to permit us to qualify for the performance-based exception, although the Company reserved the right to pay compensation that did not qualify as “performance-based”. While the HRC Committee has considered the deductibility of compensation as a factor in making compensation decisions, it has retained the flexibility to provide compensation that is consistent with the Company’s goals for its executive compensation program, even if such compensation would not be fully tax-deductible. The HRC Committee is continuing to assess the impact of Section 162(m) of the Internal Revenue Code, as amended, on our compensation programs.

Section 280G and related sections of the Internal Revenue 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 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.