UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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Soliciting Material Pursuant to §240.14a-12

CONMED CORPORATION
(Name of Registrant as Specified In Its Charter)

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CONMED CORPORATION
 
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
 
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of CONMED Corporation (the “Company”) will be held at the offices of the Company at 525 French Road, Utica, New York 13502 on Thursday, May 21, 2020 at 1:30 p.m (New York time), for the following purposes:

(1)
To elect ten directors to serve on the Company’s Board of Directors;
(2)
To ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2020;
(3)
To hold an advisory vote on named executive officer compensation;
(4)
To approve the reincorporation of the Company from New York to Delaware (the “Reincorporation”), including adoption of the Agreement and Plan of Merger required to effect the Reincorporation and approval of the Company’s proposed Delaware Certificate of Incorporation and Delaware By-laws;
(5)
To approve procedural matters with respect to shareholder action by written consent to be included in the Delaware Certificate of Incorporation in connection with the Reincorporation;
(6)
To approve an exculpation provision eliminating director liability for monetary damages to be included in the Delaware Certificate of Incorporation in connection with the Reincorporation;
(7)
To approve the Amended and Restated 2020 Non-Employee Director Equity Compensation Plan;
(8)
To approve amendments to the Company’s Employee Stock Purchase Plan; and
(9)
To transact such other business as may properly be brought before the meeting or any adjournment or postponement thereof.

The shareholders of record at the close of business on April 3, 2020, are entitled to notice of, and to vote at, the Annual Meeting or any adjournment or postponement thereof.

Due to the public health and safety concerns arising from the COVID-19 pandemic, and the restrictions currently imposed on public gatherings in New York, we anticipate that this year’s Annual Meeting will be a “hybrid” meeting, meaning that shareholders may attend and participate in the Annual Meeting either in person or virtually via an online platform. We strongly encourage shareholders to participate remotely due to the potential health risks involved with in-person attendance in the current environment. To minimize these potential risks, we will allow the number of shareholders to attend the Annual Meeting in person (on a first-come, first served basis) that we are legally permitted to admit in accordance with New York law and will implement reasonable procedures to adhere to the CDC guidelines and best practices for social gatherings. If you are considering attending the Annual Meeting in person, please request, as early as possible, additional information from the General Counsel of CONMED Corporation, 525 French Road, Utica, New York 13502 at GeneralCounsel@Conmed.com. Details on how to register for and participate in the Annual Meeting remotely by means of the online platform will be provided in a press release posted on the Company’s website and filed with the SEC as additional proxy materials prior to the meeting date. We are actively monitoring COVID-19 and in the event we determine that it is not permissible or advisable to allow in-person attendance at the meeting, we will announce such decision in the same manner. If you are planning on participating in the Annual Meeting, please check the Company’s website prior to the meeting date.

Even if you plan to participate in the Annual Meeting, we request that you mark, date, sign and return your proxy in the enclosed self-addressed envelope as soon as possible so that your shares may be certain of being represented and voted at the meeting. Any proxy given by a shareholder may be revoked by that shareholder at any time prior to the voting of the proxy.






 
By Order of the Board of Directors,
 
 
 
/s/ Daniel S. Jonas
 
 
 
Daniel S. Jonas
Executive Vice President, Legal Affairs, General Counsel & Secretary
 
April 10, 2020

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2020 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 21, 2020

The Company’s Proxy Statement for the 2020 Annual Meeting of Shareholders, the Company’s Annual Report to Shareholders for the fiscal year ended December 31, 2019 and the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 are available at www.investorvote.com/CNMD.



TABLE OF CONTENTS
Contents
Page
Contents
Page
 
 




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CONMED CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 21, 2020
The enclosed proxy is solicited by and on behalf of the Board of Directors of CONMED Corporation (the “Company”) for use at the Annual Meeting of Shareholders to be held on Thursday, May 21, 2020 at 1:30 p.m. (New York time), at the offices of the Company at 525 French Road, Utica, New York 13502, and any adjournment or postponement thereof (the “Annual Meeting”). The matters to be considered and acted upon at the Annual Meeting are described in the foregoing notice of the meeting and this proxy statement. This proxy statement, the related form of proxy and the Company’s Annual Report to Shareholders, including the Company’s Annual Report on Form 10-K, are being mailed on or about April 10, 2020 to all shareholders of record on April 3, 2020, which is the record date for the Annual Meeting. Shares of the Company’s common stock, par value $.01 per share (“Common Stock”), represented in person, remotely via the online platform or by proxy will be voted as described in this proxy statement or as otherwise specified by the shareholder. Any proxy given by a shareholder may be revoked by the shareholder at any time prior to the voting of the proxy by executing and delivering a later-dated proxy, by delivering a written notice to the Secretary of the Company or by attending the meeting and voting in person or remotely.
The persons named as proxies are Daniel S. Jonas and Sarah M. Oliker, who are, respectively, the Executive Vice President, Legal Affairs, General Counsel & Secretary, and Assistant General Counsel and Assistant Secretary, of the Company. The cost of preparing, assembling and mailing the proxy, this proxy statement and other material enclosed, and all clerical and other expenses of the solicitation of proxies on the Company’s behalf, will be borne by the Company. In addition to the solicitation of proxies on behalf of the Company by use of mail, directors and officers of the Company and its subsidiaries may solicit proxies for no additional compensation by telephone, telegram, e-mail or personal interview. The Company also will request brokerage houses and other custodians, nominees and fiduciaries to forward soliciting material to the beneficial owners of Common Stock held of record by such parties and will reimburse such parties for their expenses in forwarding soliciting material.
Votes at the Annual Meeting will be tabulated by a representative of Computershare, which has been appointed by the Company’s Board of Directors to serve as the inspector of election.
As part of our precautions regarding the coronavirus (COVID-19), the Company is permitting shareholders to participate in the Annual Meeting by means of remote communication. We will announce the details on how to participate remotely as soon as practicable, and these details will be available at https://www.conmed.com/en/about-us/investors/investor-relations and filed with the SEC. If we are required or permitted by New York to allow for in-person attendance, we will allow the number of shareholders to attend the Annual Meeting in person (on a first-come, first served basis) that we are legally permitted to admit in accordance with New York law and will implement reasonable procedures to adhere to the CDC guidelines and best practices for social gatherings. If you are considering attending the Annual Meeting in person, please request, as early as possible, additional information from the General Counsel of CONMED Corporation, 525 French Road, Utica, New York 13502 at GeneralCounsel@Conmed.com.
PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING
There are eight proposals expected to be submitted for shareholder approval at the Annual Meeting, one which is advisory in nature. The first proposal concerns the election of directors. The second proposal concerns ratifying the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm. The third proposal concerns the advisory vote on named executive compensation. The fourth proposal concerns reincorporation in Delaware. The fifth proposal concerns procedural matters with respect to shareholder action by written consent to be included in the Delaware Certificate of Incorporation in connection with the Reincorporation. The sixth proposal concerns an exculpation provision eliminating director liability for monetary damages to be included in the Delaware Certificate of Incorporation in connection with the Reincorporation. The seventh proposal concerns amendments to reserve additional shares for the equity plan for non-employee directors. The eighth proposal concerns amendments to the employee stock purchase plan. These proposals are more fully described below.

VOTING RIGHTS

The holders of record of the 527 shares of Common Stock outstanding on April 3, 2020 will be entitled to one vote for each share held on all matters coming before the meeting. The holders of record of a majority of the outstanding shares of Common Stock present in person, remotely via the online platform or by proxy will constitute a quorum for the transaction of business at the meeting. Abstentions and “broker non-votes,” as further described below, will be counted for purposes of determining whether

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there is a quorum for the transaction of business at the meeting. Shareholders are not entitled to cumulative voting rights. Under the rules of the Securities and Exchange Commission, or the SEC, boxes and a designated blank space are provided on the proxy card for shareholders if they wish either to abstain on one or more of the proposals or to withhold authority to vote for one or more nominees for director. In accordance with New York law, such abstentions are not counted in determining the votes cast at the meeting.
The voting requirements for each proposal are as follows:

For Proposal (1) (Election of Directors), under New York law the director nominees who receive the greatest number of votes at the meeting will be elected to the Board of Directors of the Company (subject to the Company’s majority voting principles described below on page 4 under the heading (Proposal One: Election of Directors). Votes against, and votes withheld in respect of, a candidate have no legal effect, except in the case of votes withheld to the extent they revoke earlier dated proxy cards.
Proposal (2) (Ratification of PricewaterhouseCoopers LLP as independent registered public accounting firm) requires the affirmative vote of the holders of a majority of the votes cast at the meeting in order to be approved by the shareholders.
Proposal (3) (Advisory Vote on Named Executive Officer Compensation) seeks the favorable vote of a majority of the votes cast at the meeting required for approval, on an advisory basis.
Proposal (4) (Reincorporation) requires the affirmative vote of the holders of at least two-thirds of the Company’s outstanding shares entitled to vote on the proposal in order to be approved by the shareholders.
Proposal (5) (Written Consent Procedural Provision) requires the affirmative vote of the holders of a majority of the Company’s outstanding shares entitled to vote on the provision in order to be approved by the shareholders.
Proposal (6) (Director Exculpation Provision) requires the affirmative vote of the holders of a majority of the Company’s outstanding shares entitled to vote on the provision in order to be approved by the shareholders.
Proposal (7) (amendment to Non-Employee Director Plan) requires the affirmative vote of the holders of a majority of the votes cast at the meeting in order to be approved by the shareholders; and
Proposal (8) (amendment to Employee Stock Purchase Plan) requires the affirmative vote of the holders of a majority of the votes cast at the meeting in order to be approved by the shareholders.

When properly executed, a proxy will be voted as specified by the shareholder. If no choice is specified by the shareholder, a proxy will be voted “for all” portions of Proposal (1), “for” Proposals (2), (3), (4), (5), (6), (7) and (8) and in the proxies’ discretion on any other matters coming before the meeting.

Under the rules of the New York Stock Exchange, which effectively govern the voting by any brokerage firm holding shares registered in its name or in the name of its nominee on behalf of a beneficial owner, Proposals (1), (3), (4), (5), (6), (7) and (8) are considered “non-discretionary” items and shareholders who do not submit any voting instructions to their brokerage firm will not have their shares counted in determining the outcome of these proposals at the Annual Meeting. This is known as a “broker non-vote.” The broker non-votes are counted as votes present for purposes of determining a quorum but are not considered votes cast. Proposal (2) (independent registered public accounting firm) will be considered a “discretionary” item upon which brokerage firms may vote in their discretion on behalf of their clients if such clients have received proxy materials only from the Company and have not furnished voting instructions within ten days prior to the Annual Meeting.

GOVERNANCE HIGHLIGHTS

We have implemented several governance best practices, and we are proposing additional best practices in connection with reincorporating to Delaware:

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Effective Board Leadership and Independent Oversight
Highly Independent Board: 9 out of 10 directors independent (see page 32)
All Committees other than the Pricing Committee are 100% Independent (see pages 36)
Regular Executive Sessions of Independent Directors
Annual Board and Committee Review Process (see page 35).
Robust Independent Board Chair or Lead Independent Director Role (see page 36 and 37).
Enterprise Risk Management Process, including oversight of cyber-security, overseen by full Board of Directors, with annual in-depth review and regular updates on key risks (see page 37).
Corporate Social Responsibility, including entity-wide environmental and social policies, overseen by Corporate Governance and Nominating Committee (see page 42).
Board Diversity and Refreshment
Strong Ongoing Refreshment Practice, with 5 new directors since 2015 (see page 5).
Average Board Tenure of approximately 5 years for nominees (see page 5)
Average Age of Independent Directors is 59 (see page 5).
Commitment to Diversity, with all three most recently added directors being women, including one African-American woman (See page 5).
Board Directors Nominated Based on Skills Matrix Designed to Ensure Board Has Requisite Skills (see page 35).
Focus on Shareholder Rights
Majority Voting Standard for Uncontested Director Elections (see page 4)
Reincorporation Will Provide for Proxy Access, Shareholder Action by Written Consent and Shareholder Ability to Call Special Meeting (see page 8 and 9)
Reincorporation Will Remove Supermajority Voting Requirements for Certain Fundamental Transactions (Including Mergers) (see page 8)
Transparency and Accountability
Annual Election of All Directors
Significant Stock Ownership Requirements for Officers and Directors (see page 53, 54 and 70)
Regular Engagement With Shareholders to Seek Feedback
Members of Board of Directors and Executive Officers Are Not Permitted to Hedge Their Stock Ownership, or To Pledge Their CONMED Stock as Collateral for a Loan (see page 54 and 70).

PROPOSAL ONE: ELECTION OF DIRECTORS
As a result of the Board’s thoughtful approach to board composition, including its commitment to diversity and refreshment, our Board is comprised of ten highly-qualified individuals who provide the Board with a well-rounded variety of skills, experience and diversity, and represent an effective mix of fresh perspectives and deep Company knowledge. Our directors include international business leaders, financial experts, and individuals with extensive backgrounds in healthcare, technology and talent development. Each director is individually qualified to make unique and substantial contributions to the Board, and, collectively, our directors’ diverse viewpoints and skill sets ensure that our Board is well-suited to provide the Company with valuable insight and effective oversight with respect to its business, overall performance and strategic direction. To further convey the diverse skills of our Board, we have a skills matrix and have identified on page 35 certain of the key skills and qualifications that each of our directors possess that contributed to his or her nomination to the Board.

At the Annual Meeting, ten directors are to be elected to serve on the Company’s Board of Directors. The shares represented by proxies will be voted as specified by the shareholder. If the shareholder does not specify his or her choice, the shares will be voted in favor of the election of all of the nominees listed on the proxy card. Each director nominee listed below has consented to being named in this proxy statement and has agreed to serve if elected. The Company has no reason to believe that any Board-nominated director nominee will be unavailable or will decline to serve. However, in the event that any nominee named in this proxy statement is unable to serve or for good cause will not serve, the shares represented by proxies will be voted for the election of such substitute nominee as the Corporate Governance and Nominating Committee of the Board of Directors may recommend, to the extent this is not prohibited by the Company’s by-laws and applicable law. The ten director nominees who receive the greatest number of votes “for” at the meeting will be elected to the Board of Directors of the Company, subject to the majority voting standard adopted by the Board of Directors and reflected in the Corporate Governance Principles, as described below. Votes

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against, and votes withheld in respect of, a candidate will have no effect on the outcome of the election of directors, except in the case of votes withheld to the extent they revoke earlier dated proxy cards. Shareholders are not entitled to cumulative voting rights.
Notwithstanding the plurality voting standard for election of directors, under Section IV of our Corporate Governance Principles, if the election of directors is uncontested, a director nominee who does not receive the vote of at least the majority of the votes cast with respect to such director’s election or re-election is expected to tender his or her resignation to the Board of Directors. The Corporate Governance and Nominating Committee will recommend to the Board whether to accept or to reject the tendered resignation within 90 days after the certification of the election results. The Board will act on the resignation, taking into account the Corporate Governance and Nominating Committee’s recommendation, and will publicly disclose the decision and the rationale behind it. If the Board does not accept the director nominee’s resignation, the director will continue to serve until his or her successor is duly elected or any earlier resignation, removal or separation. If the Board accepts the director nominee’s resignation, then the Board may, in its sole discretion, fill any resulting vacancy or decrease the size of the Board pursuant to our Certificate of Incorporation, by-laws and applicable corporate law.
The Board of Directors presently consists of ten directors. Directors generally hold office for terms expiring at the next annual meeting of shareholders and until their successors are duly elected and qualified. Each of the nominees proposed for election at the Annual Meeting is presently a member of the Board of Directors. The Company has a policy in its Corporate Governance Principles under which non-executive directors are expected to offer not to stand for reelection upon having completed 15 years of service as a director. For directors who have completed 15 years of service as a director during their terms, the expectation is that they will offer not to stand for reelection but will complete their terms. Notwithstanding the foregoing, the expected retirement can be waived if the Corporate Governance and Nominating Committee determines that there is good cause for such a waiver and that a waiver would be in the best interests of the Company. Executive directors are not subject to the 15-year tenure limit.

The following table sets forth certain information regarding the members of, and nominees for, the Board of Directors:


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NOMINEES FOR ELECTION AT THE ANNUAL MEETING
Name
 
Age
 
Served as
Director
Since
 
Principal Occupation or
Position with the Company
David Bronson
 
67
 
2015
 
Former Executive Vice President and Chief Financial Officer of PSS World Medical, Inc.; Director of the Company. As noted below, the Board of Directors has determined that Mr. Bronson is independent, and is an audit committee financial expert.
 
 
 
 
 
 
 
Brian P. Concannon
 
62
 
2013
 
Former President and Chief Executive Officer of Haemonetics Corporation (NYSE:  HAE); Director of the Company. As noted below, the Board of Directors has determined that Mr. Concannon is independent.
 
 
 
 
 
 
 
LaVerne Council
 
58
 
2019
 
Former National Managing Principal, Enterprise Technology Strategy & Innovation for Grant Thornton LLP. As noted below, the Board has determined that Ms. Council is independent.
 
 
 
 
 
 
 
Charles M. Farkas
 
68
 
2014
 
Advisory Partner at Bain & Company; former Global Co-Head of Bain’s Healthcare Practice; Director of the Company.  As noted below, the Board of Directors has determined that Mr. Farkas is independent.
 
 
 
 
 
 
 
Martha Goldberg Aronson
 
52
 
2016
 
Former Executive Vice President and President of Global Healthcare for Ecolab, Inc. (NYSE:  ECL); Former President of North America, Hill-Rom Holdings, Inc. (NYSE:  HRC); Former Senior Vice President, Medtronic (NYSE:  MDT); Director of Cardiovascular Systems, Inc. (NASDAQ: CSII); Director of Beta Bionics, Inc. since February 2020; Director of Methode Electronics, Inc. (NYSE: MEI) through September 2019; Director Clinical Innovations, LLC through December 2019; and Director of the Company.  As noted below, the Board of Directors has determined that Ms. Goldberg Aronson is independent.
 
 
 
 
 
 
 
Curt R. Hartman
 
56
 
2014
 
President & Chief Executive Officer of the Company; Director of the Company; former Interim Chief Executive Officer and Vice President, Chief Financial Officer of Stryker (NYSE: SYK).
 
 
 
 
 
 
 
Jerome J. Lande
 
44
 
2014
 
Partner and Head of Special Situations for Scopia Capital Management L.P.; Former Managing Partner of Coppersmith Capital; formerly a Partner at MCM Capital Management; Director of the Company;  Director for Itron, Inc. (NASDAQ: ITRI). As noted below, the Board of Directors has determined that Mr. Lande is independent.
 
 
 
 
 
 
 
Barbara J. Schwarzentraub
 
53
 
2019
 
Director and Divisional Chief Financial Officer for the Global Information Services Division of Caterpillar, Inc. (NYSE: CAT) through February 2020. As noted below, the Board of Directors has determined that Ms. Schwarzentraub is independent and is an audit committee financial expert.
 
 
 
 
 
 
 
Mark E. Tryniski
 
59
 
2007
 
President and Chief Executive Officer of Community Bank System, Inc. (NYSE: CBU); former partner of PricewaterhouseCoopers LLP; Chair of the Board of the Company and previous Lead Independent Director; Director of New York Bankers Association; and Director of the New York Business Development Corporation.  As noted below, the Board of Directors has determined that Mr. Tryniski is independent, and is an audit committee financial expert.
 
 
 
 
 
 
 
Dr. John L. Workman
 
68
 
2015
 
Former Chief Executive Officer of Omnicare, Inc. and also former President, Chief Financial Officer and Executive Vice President; Director of the Company. Director of Agiliti, Inc. (formerly Universal Hospital Services); Director of Federal Signal Corp. (NYSE:  FSS) and former Director for Care Capital Properties (NYSE:  CCP).  As noted below, the Board of Directors has determined that Mr. Workman is independent, and is an audit committee financial expert.

More information concerning the directors and nominees is set forth below under the heading “Corporate Governance Matters – Directors, Executive Officers and Nominees for the Board of Directors.”

The Board of Directors unanimously recommends a vote “FOR ALL” for this proposal.

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PROPOSAL TWO: INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The independent registered public accounting firm for the Company has been PricewaterhouseCoopers LLP since 1982. The Audit Committee appointed PricewaterhouseCoopers LLP to be nominated as our independent registered public accounting firm for 2020, subject to shareholder ratification.
Unless otherwise specified, shares represented by proxies will be voted for the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2020. Neither our certificate of incorporation nor our by-laws require that shareholders ratify the appointment of our independent registered public accounting firm. We are doing so because we believe it is a matter of good corporate governance. The affirmative vote of a majority of votes cast at the meeting is the threshold for shareholder ratification of the appointment for 2020. If the shareholders do not ratify the appointment, the Audit Committee will reconsider whether to retain PricewaterhouseCoopers LLP, but may elect to retain them. Even if the appointment is ratified, the Audit Committee in its discretion may change the appointment at any time during the year if it determines that such change would be in the best interests of the Company and its shareholders.
Representatives of PricewaterhouseCoopers LLP are expected to be present at the meeting either in-person or remotely via the online platform. Those representatives will have the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions.
The Board of Directors unanimously recommends a vote “FOR” this proposal.
PROPOSAL THREE: ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
In accordance with Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Board requests your advisory vote on named executive officer compensation.
The Compensation Discussion and Analysis (“CD&A”) beginning on page 44 describes the Company’s compensation philosophy and pay practices relative to the Named Executive Officers (“NEOs”). As described in the CD&A, compensation paid to the NEOs is heavily influenced by the Company’s financial performance, balancing the incentives to drive short-term and long-term goals. Further, the Compensation Committee and the Board of Directors believe that the Company’s compensation policies, procedures and philosophy serve to attract, retain and motivate the NEOs to achieve value for our shareholders.
The Board encourages shareholders to read the CD&A for a more complete description of the Company’s executive compensation policies and practices, as well as the Summary Compensation Table and other related compensation tables and narratives. The Compensation Committee and the Board of Directors believe the Company’s policies and procedures are effective in achieving our goals and that the compensation of our NEOs reported in this proxy statement reflects and supports these compensation policies and procedures.
Accordingly, we are asking shareholders to approve the following non-binding resolution:
RESOLVED, that the shareholders of the Company approve, on an advisory basis, the compensation of the Company’s Named Executive Officers disclosed pursuant to Item 402 of Regulation S-K in the Compensation Discussion and Analysis, the Summary Compensation Table and the related compensation tables and narrative disclosure in the proxy statement.
This advisory resolution, commonly referred to as a “say-on-pay” resolution, is non-binding on the Board of Directors. Although non-binding, the Compensation Committee and the Board of Directors will review the voting results when evaluating our executive compensation programs.
The Company’s current policy is to provide shareholders with an opportunity to approve, on an advisory basis, the compensation of the NEOs each year at the annual meeting of shareholders. The next advisory vote on the compensation of our NEOs will occur at the Company’s 2021 annual meeting of shareholders.
The Board of Directors unanimously recommends a vote “FOR” this advisory resolution.

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OVERVIEW OF PROPOSALS FOUR, FIVE AND SIX
Proposal 4 (the “Reincorporation Proposal”) is a proposal to change the Company’s state of incorporation from New York to Delaware. As described further in Proposal 4, if the Reincorporation is approved by the Company’s shareholders and implemented by the Company, the Company’s current New York charter and by-laws will be replaced by a new Delaware charter and by-laws. The new Delaware charter will implement certain governance changes (described further below) as compared to the Company’s current New York charter, including the subject matter covered in Proposal 5 (Written Consent) and Proposal 6 (Exculpation) (together, the “Delaware Charter Provision Proposals”). After a careful and thorough review of governance practices and trends, the Board made decisions with respect to proposing governance practices that promote shareholder democracy, Board accountability and responsiveness to shareholders while preserving appropriate flexibility for the Board to make value-maximizing decisions, all considered over the long term. As a practical matter, and as a matter of Delaware Law, the Board is presenting a single charter and set of by-laws for shareholder approval, in order for the Reincorporation Proposal to be effective under Delaware Law. After conducting this review, the Board believes that including the provisions set forth in the Delaware Charter Provision Proposals in the Company’s Delaware governing documents in connection with the proposed Reincorporation is in the best interests of the Company and its shareholders.

The Company’s shareholders are being asked to consider and vote separately on the Delaware Charter Provision Proposals in order to comply with the SEC’s guidance on the “unbundling” of proxy statement proposals under Rule 14a-4(a)(3), which requires a company to present separately for shareholder approval proposed changes to a company’s charter in connection with a transaction (such as the Reincorporation) when such changes would require shareholder approval if proposed in the absence of the transaction. Notwithstanding that each of Proposals 4, 5 and 6 is subject to a separate vote of the Company’s shareholders, these three proposals are being submitted to shareholders as a package and are each cross-conditioned on the approval of the others, for the reasons outlined above. Accordingly, if any of Proposals 4, 5 or 6 is not approved by shareholders, then the Company will not pursue the Reincorporation, at this time, and will continue to be incorporated in New York and governed by its current New York charter and by-laws.

PROPOSAL FOUR: REINCORPORATION OF THE COMPANY FROM NEW YORK TO DELAWARE

Our Board has unanimously approved and recommends to our shareholders this proposal to change the Company’s state of incorporation from New York to Delaware (the “Reincorporation”), subject to shareholder approval. The Reincorporation would be effected pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) by and between the Company and CONMED Corporation, a wholly-owned subsidiary of the Company incorporated in Delaware (“Newco”), in the form attached to this proxy statement under Exhibit A. Following the Reincorporation, the Company will no longer be a New York corporation governed by the Company’s current Certificate of Incorporation (the “New York Charter”) and its current By-laws (the “New York By-laws” and, together with the New York Charter, the “New York Governing Documents”) and will instead be a Delaware corporation governed by the proposed Delaware Certificate of Incorporation (the “Delaware Charter”) and the proposed Delaware By-laws (the “Delaware By-laws” and, together with the Delaware Charter, the “Delaware Governing Documents”), each in the form attached to this proxy statement under Exhibits B and C, respectively. These forms assume that the proposed provisions described in Proposals 5 and 6 are approved. Our Board has determined that the terms of the Merger Agreement, the Merger, the Delaware Charter and the Delaware By-laws are fair to, and in the best interests of, the Company and our shareholders.

For the reasons discussed below, the Board of Directors recommends that the shareholders vote FOR the Reincorporation Proposal. Approval of the Reincorporation Proposal will constitute adoption of the Merger Agreement and approval of the Delaware Charter (other than as set forth in Proposals 5 and 6) and Delaware By-laws. As discussed above, if either of the Delaware Charter provisions contemplated by Proposals 5 or 6 are not approved by shareholders, we will not proceed with the Reincorporation.

Reasons for the Reincorporation
Prominence, Predictability and Flexibility of Delaware Law: For many years, Delaware has followed a policy of encouraging incorporation in that state and, in furtherance of that policy, has been a leader in adopting, construing and implementing comprehensive, modern and flexible corporate laws which are revised regularly to meet the changing legal and business needs of corporations organized in Delaware. To take advantage of Delaware’s flexible and responsive corporate laws, many corporations initially choose Delaware for their domicile or subsequently reincorporate there in a manner similar to that proposed by the Company. The Reincorporation will enable the Company and our shareholders to take advantage of the following benefits of incorporation in Delaware:

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the Delaware General Assembly, which each year considers and adopts statutory amendments that are designed to meet changing business needs;
the General Corporation Law of the State of Delaware (the “DGCL”), which is generally acknowledged to be the most advanced and flexible corporate statute in the country;
a well-established body of case law construing the DGCL, which has been developed over the last century, will provide a greater measure of predictability than exists in any other jurisdiction;
the Delaware Court of Chancery, which brings to its handling of complex corporate issues a level of experience, a speed of decision, and a degree of sophistication and understanding unmatched by any other court in the country, as well as the highly regarded Delaware Supreme Court;
the responsiveness and efficiency of the Division of Corporations of the Secretary of State of Delaware;
the certainty afforded by the well-established principles of corporate governance under Delaware law, which will, among other benefits, assist the Company in continuing to attract and retain outstanding directors and officers; and
the ability to secure insurance for a broader range of risks (including punitive damages awards) under Delaware law than is permitted by New York law.

Increased Certainty of Law Concerning Exculpation Enhances Opportunity for Directors and Officers to Make Strategic, Value-Enhancing Decisions: The vast majority of public companies are incorporated in Delaware, whose corporate law is more familiar to directors and officers, and offers greater certainty and stability from the perspective of those who serve as corporate officers and directors. Additionally, although both New York and Delaware law permit a corporation to include a provision in the charter to reduce or eliminate the monetary liability of directors for breaches of fiduciary duty in certain circumstances, the Company’s New York Charter does not include this provision and the parameters of director and officer liability are more extensively addressed in Delaware court decisions and are therefore better defined and understood than under New York law.  The Board of Directors believes that the Reincorporation will enhance our ability to allow directors and officers to continue to make independent, value-enhancing decisions in good faith on behalf of the Company. We are in a competitive industry and compete to secure transactions and to take advantage of strategic opportunities. We believe our ability to make good decisions quickly is a competitive advantage. This is important given that the growing frequency of claims and litigation pursued against directors and officers has greatly expanded the risks facing directors and officers of corporations in carrying out their respective duties. The amount of time and money required to respond to and defend against such claims, regardless of the merit or the lack thereof, can be substantial. As a result, we believe that the better understood and comparatively stable corporate environment afforded by Delaware law will enable us to compete more effectively by creating more certainty around our decision-making, and that as more fully described in Proposal 6, the Reincorporation will help ensure that concerns about exposure to personal liability will not adversely affect the ability to make the difficult, potentially value-maximizing business decisions that are necessary in today’s highly competitive business environment.

Shareholder Friendly Governance Changes: If the Reincorporation is effected, shareholders will continue to elect all directors on an annual basis under a plurality voting standard (subject to a resignation policy for directors that do not receive a majority of votes cast in uncontested elections, as further described under Proposal 1). Additionally, in connection with the Reincorporation the Company plans to make the following changes to the corporate governance provisions in the Company’s current charter and by-laws in order to promote shareholder participation and enhance corporate democracy (all of which are discussed in more detail below):

Elimination of Supermajority Voting Requirements for Certain Transactions. The Board believes that majority shareholder approval for corporate transactions is consistent with the principles of corporate democracy. Under New York law and the Company’s New York Charter, two-thirds supermajority approval is required for mergers not involving interested shareholders or subsidiaries of the company. A two-thirds supermajority approval requirement allows a minority of the Company’s shareholders to block approval of transactions that may otherwise have the support of a majority of the Company’s shareholders. In contrast, under Delaware law and the Delaware Charter, only majority shareholder approval will be required for such mergers.
Creation of Shareholder Special Meeting Rights: The Board believes that shareholders benefit from being able to call meetings of shareholders between annual meetings to consider matters that require prompt attention, subject to appropriate procedures to prevent abuse and a waste of corporate resources by a small minority of shareholders. While the Company’s New York By-laws do not permit shareholders to call special meetings, the Delaware By-laws will.

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Action by Written Consent: The Board believes that shareholder participation and corporate democracy are enhanced if shareholders, subject to reasonable safeguards, have the right to take action without a meeting by written consent. The New York By-laws require unanimous written consent, which, as a practical matter, makes acting by written consent extremely difficult. As a result of the Reincorporation, the threshold for shareholder action by written consent will be lowered to the minimum number of votes necessary to take the action (generally, a majority). Additionally, as further described in Proposal 5, this right to act by written consent will be subject to reasonable requirements to protect against abuse and the disenfranchisement of minority shareholders by ensuring, among other things, that all shareholders are given the opportunity to consider any proposed action, express their views and vote on the proposed action.
Adoption of Proxy Access: Proxy access allows shareholders who meet certain requirements to nominate directors on the company’s proxy card, which makes it easier and more cost effective for a shareholder to nominate a director to the board. The Company’s New York By-Laws do not contain a proxy access provision, however, the Delaware By-Laws will.

While the Board of Directors believes that the Reincorporation is in the best interests of the Company and its shareholders, it should be noted that the interests of the Board, management and affiliated shareholders in voting on the Reincorporation may not be the same as those of unaffiliated shareholders. Delaware law does not afford minority shareholders all of the same substantive rights and protections available under New York law. On the other hand, Delaware law allows a majority of shareholders to take certain actions that New York law only allows to be taken if all shareholders unanimously agree. For a comparison of shareholders’ rights under Delaware and New York law, see the section entitled “Comparison of Shareholder Rights Before and After the Reincorporation” below.
The Reincorporation Process
The following discussion is qualified in its entirety by reference to the Merger Agreement and by the applicable provisions of New York law and Delaware law.

The Reincorporation will effect only a change in the legal domicile of the Company and other changes of a legal nature. The Reincorporation will not result in any change in the name, business, management, fiscal year, accounting, location of the principal executive offices, assets or liabilities of the Company. The current officers and directors of the Company will continue as officers and directors of Newco.

If this Reincorporation Proposal and the Delaware Charter Provision Proposals are approved, then in order to effect the Reincorporation, at the effective time (the “Effective Time”):

the Company will merge with and into Newco (the “Merger”) and Newco will be the surviving entity and the Company will cease to exist as a separate entity;
the shareholders of the Company will become the shareholders of Newco;
the outstanding shares of the Company’s Common Stock will automatically convert on a one-to-one basis into shares of the common stock of Newco (“Newco Common Stock”);
each outstanding option to purchase shares of the Company’s Common Stock will be converted into an option to acquire an equal number of shares of Newco Common Stock, with no change in the exercise price or other terms or provisions of the option;
each other equity award relating to the Company’s Common Stock will be deemed to be an equity award for the same number of shares of Newco Common Stock, with no change in the terms or provisions of the equity award;
Newco will possess all of the assets, liabilities, rights, privileges and powers of the Company and Newco;
Newco will be governed by the applicable laws of Delaware and by the Delaware Charter and Delaware By-laws;
the officers and directors of the Company will become the officers and directors of Newco; and
Newco will operate under the name CONMED Corporation and the Newco Common Stock will be listed on the New York Stock Exchange with the ticker symbol of CNMD.
    
Certain material differences between the corporate laws of New York and Delaware, and between the Company’s current New York Governing Documents and the Delaware Governing Documents that Newco will be governed by, are discussed further below under the heading “Comparison of Shareholders Rights Before and After the Reincorporation.” A copy of the existing certificate of incorporation and by-laws of the Company are available for inspection by our shareholders upon reasonable notice during regular business hours, at the Company’s principal executive offices located at 525 French Road, Utica New York.

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The Reincorporation will become effective upon the filing of the certificate of ownership and merger (the “Delaware Certificate of Merger”) with the Secretary of State of Delaware and the certificate of merger (the “New York Certificate of Merger”) with the Secretary of State of New York. These filings are anticipated to be made as soon as practicable after receiving the requisite shareholder approval and all other necessary approvals (if any). Nonetheless, the Board will have the right, at any time prior to the Effective Time, to abandon the Merger and thus the Reincorporation and take no further action towards reincorporating the Company in Delaware, even after shareholder approval, if for any reason the Board determines that it is not advisable to proceed with the Reincorporation.
Regulatory Approvals and Third-Party Consents
Other than receipt of shareholder approval and the filing of the Delaware Merger Certificate with the Delaware Secretary of State and the New York Merger Certificate with the New York Secretary of State, to our knowledge there are no federal or state regulatory requirements or approvals that must be obtained in order for us to consummate the Reincorporation. Although the Reincorporation will require a technical relisting of our CONMED stock on the New York Stock Exchange following the Reincorporation, our common stock will continue to be traded on the New York Stock Exchange under the same ticker symbol, “CNMD.” To the extent the Reincorporation will require the consent or waiver of a third party (for example, the consent of the Company’s primary lender), the Company will use commercially reasonable efforts to obtain such consent or waiver before completing the Reincorporation. If a material consent cannot be obtained, the Company may determine not to proceed with the Reincorporation.

Employee and Director Benefit Matters

All employee benefit plans of the Company will be continued by the Newco. The Company’s other employee benefit arrangements will also be continued by Newco upon the terms and subject to the conditions in effect prior to the Reincorporation. The Reincorporation will not accelerate the time of payment or vesting, or increase the amount of compensation or benefits under, any of the Company’s agreements with its directors and employees or any of its compensation and benefit programs.
Effect of the Reincorporation on Stock Certificates
If this Reincorporation Proposal and both of the Delaware Charter Provision Proposals are approved, and the Company proceeds with the Reincorporation, it will not be necessary for shareholders to exchange their existing stock certificates for Newco stock certificates. However, if at any time on or after the Effective Time a shareholder wishes to acquire a stock certificate referring to Delaware as Newco’s state of incorporation, the shareholder may do so by surrendering its, his or her certificate to the transfer agent for Newco with a request for a replacement certificate. Following the Reincorporation, the transfer agent for Newco will continue to be Computershare Trust Company, N.A.

The Reincorporation will have no effect on the transferability of outstanding stock certificates representing the Company’s common stock.
Dissenters’ Rights of Appraisal
Pursuant to New York law, if the Reincorporation is approved by the Company’s shareholders, shareholders who dissent from the Reincorporation will not be entitled to appraisal rights.
Certain U.S. Federal Income Tax Consequences of the Reincorporation
The following is a brief summary of certain U.S. federal income tax consequences to holders of the Company’s Common Stock who receive Newco Common Stock as a result of the Reincorporation. The summary sets forth such consequences to the Company’s shareholders who hold their shares as a capital asset (generally, an asset held for investment).

This summary is for general information only and does not purport to be a complete discussion or analysis of all potential tax consequences that may apply to a shareholder. Shareholders are urged to consult their tax advisors to determine the particular tax consequences of the Reincorporation, including the applicability and effect of federal, state, local or foreign tax laws. This summary is based on the Internal Revenue Code of 1986, as amended (the “Code”), the Treasury Regulations promulgated thereunder, and rulings and decisions in effect as of the date of this proxy statement, all of which are subject to change, possibly with retroactive effect, and to differing interpretations.


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The Company has neither requested nor received a tax opinion from legal counsel with respect to the U.S. federal income tax consequences of the Reincorporation. No rulings have been or will be requested from the Internal Revenue Service as to the federal income tax consequences of the Reincorporation.

The Reincorporation provided for in the Merger Agreement is intended to be treated as a “tax-free” reorganization as described in Section 368(a)(1)(F) of the Code. Assuming that the Reincorporation qualifies as a “tax-free” reorganization, no gain or loss will be recognized to the holders of the Company’s Common Stock as a result of the consummation of the Reincorporation, and no gain or loss will be recognized by the Company or Newco. The basis of the acquired assets in the hands of Newco will be the same as CONMED's basis in such assets. Each former holder of the Company’s Common Stock will have the same basis in Newco Common Stock received by that holder pursuant to the Reincorporation as was the basis in the Company Common Stock held at the time the reincorporation was consummated. Each shareholder’s holding period with respect to the Newco Common Stock will include the period during which that shareholder held the corresponding the Company’s Common Stock, provided the latter was held by such holder as a capital asset at the time the Reincorporation was consummated.
Accounting Treatment
The Reincorporation would be accounted for as a reverse merger under which, for accounting purposes, Newco would be considered the acquirer and would be treated as the successor to the Company’s historical operations. Accordingly, the Company’s historical financial statements would be treated as the financial statements of Newco.
Comparison of Shareholder Rights Before and After the Reincorporation
Subject to shareholder approval prior to the Effective Time, the Company will change its state of incorporation to Delaware and will thereafter be governed by the DGCL, the Delaware Charter and the Delaware By-laws. There are certain differences between the rights of our shareholders under:

the DGCL, the proposed Delaware Charter and the proposed Delaware By-laws (collectively, such rights, the “Delaware Rights”); and
the New York Business Corporation Law (the “NYBCL”), the New York Charter and the New York By-laws (collectively, such rights, the “New York Rights”), copies of which have been filed with the Securities and Exchange Commission.

Set forth below is a table that summarizes some of the significant differences in the Delaware Rights and the New York Rights. Unless otherwise specified in the table, the New York Governing Documents do not differ from the default provisions of the NYBCL and the Delaware Governing Documents do not differ from the default provisions of the DGCL. The following summary does not purport to be a complete statement of the Delaware Rights and the New York Rights, and is qualified in its entirety by reference to the full text of the New York Governing Documents, the Delaware Governing Documents, the NYBCL and the DGCL.

Provision
New York
Delaware
Removal of Directors
Under the NYBCL, shareholders can remove directors for cause and, if provided in the certificate of incorporation or by-laws, without cause. The board can remove directors with or without cause if provided in the charter or a bylaw adopted by shareholders.
Under the New York Charter, directors may be removed by the vote of the Board or a majority of shareholders entitled to vote, in each case only for cause.
With limited exceptions applicable to classified boards and cumulative voting provisions, under the DGCL directors may be removed, with or without cause, by the holders of a majority of shares then entitled to vote in an election of directors. Under the DGCL, directors may not be removed by the board of directors.
Filling Board Vacancies and Newly Created Vacancies
Under the New York By-laws, if a director resigns or is removed for cause, then the board may fill the vacancy, but if a director is removed without cause, shareholders must fill the vacancy. Newly created directorships resulting from an increase in the number of directors may be filled by the board.
The Delaware By-laws provide that a vacancy on the Board, whether created as a result of death, resignation or otherwise, or a newly created directorships created by an increase in the total number of directors may be filled by the affirmative vote of a majority of the remaining directors then in office, although less than a quorum. Under the DGCL, vacancies and newly created directorships may also be filled by the shareholders entitled to vote thereon unless the bylaws otherwise provide. The Delaware By-laws do not provide otherwise.

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Shareholder Right to Call Special Meetings

Under the New York By-laws, special meetings of shareholders may only be called by the Board, the Chair or the President.

Under the Delaware By-laws, special meetings of shareholders may be called by the Board, the Chair, the Lead Independent Director or the President. In addition, the Delaware By-laws provide that, upon the written request of one or more shareholders holding at least 25% of the Company’s outstanding stock entitled to vote, the Company will call a special meeting of shareholders, subject to the procedural and informational requirements for calling special meetings of shareholders set forth in the Delaware By-laws.

Shareholder Action by Written Consent
Under the NYBCL, unless otherwise specified in the certificate of incorporation, shareholder action in lieu of a meeting is permitted to be taken by unanimous written consent of those shareholders who would have been entitled to vote on a given action at a meeting.
The New York By-Laws requires unanimous written consent in order for shareholders to take action without a meeting.
Under the DGCL, unless the certificate of incorporation provides otherwise, any action required or permitted to be taken at a meeting of the stockholders may be taken without a meeting if the holders of outstanding stock having at least the minimum number of votes that would be necessary to authorize or take such action at a meeting consent to the action in writing.
Under the Delaware Charter, shareholders can take action by written consent if stockholders holding not less than the minimum number of votes required to authorize or take such action consent. Subject to the approval of Proposal 5 and as further described in Proposal 5 below, the Delaware Charter will provide for certain procedural safeguards in connection with actions taken by written consent, include a minimum ownership threshold, a requirement that written consents must be solicited from all shareholders, and a waiting period before consents can be delivered to ensure that all shareholders have sufficient time to consider the merits of any proposals.
Notice of Shareholder Meetings
Under the New York By-laws, notice of shareholder meetings must be given personally or by first class mail to each shareholder entitled to vote at the meeting not less than 10 nor more than 50 days before the meeting.
Under the DGCL and the Delaware By-laws, notice of shareholder meetings may be given by mail, courier service, email (unless the shareholder has notified the Company of an objection to receiving notice by email) or another form of electronic transmission consented to by the shareholder. Notice to each shareholder, regardless of method of delivery, will be delivered not less than 10 nor more than 60 days before the meeting.
Advance Notice Requirements

Under the New York By-laws, in order to submit a proposal or a director nomination at an annual meeting of shareholders, shareholders must provide the Company with advance notice of such proposal or nomination not less than 60 nor more than 90 days prior to the meeting; provided, however, that if the Company provides less than 70 days’ notice or prior public disclosure of the date of the annual meeting, then shareholders must deliver their notice no later than 10 days following the date the Company provided the notice or public disclosure of the meeting date.

Under the Delaware By-laws, in order to submit a proposal or director nomination at an annual meeting of shareholders, shareholders must provide the Company with advance notice of such proposal or nomination not less than 60 nor more than 90 days prior to the first anniversary of the previous year’s annual meeting; provided, however, that if the date of the upcoming meeting is delayed or advanced more than 30 days from such anniversary, then the notice must be received on the later of the 90th day prior to the upcoming annual meeting date or the 10th day following the day on which public announcement of the upcoming annual meeting date is first made.


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Shareholder Vote Required for Certain Transactions
Under the NYBCL, a merger, consolidation or sale of all or substantially all of a corporation’s assets must be approved by the corporation’s board of directors and, for companies in existence prior to February 22, 1998 (including the Company), unless the certificate of incorporation of the corporation provides otherwise, two-thirds of outstanding shares entitled to vote in order to adopt the plan of merger.
In a merger between a parent and a subsidiary corporation (in which the parent owns at least 90% of the outstanding shares), there is no requirement of shareholder approval from either corporation, provided the subsidiary is merged into a parent corporation.
Notwithstanding shareholder authorization and at any time prior to the filing of the certificate of merger or consolidation, the plan of merger or consolidation may be abandoned pursuant to a provision for such abandonment, if any, contained in the plan of merger or consolidation.
Pursuant to the terms of the Merger Agreement, the Merger may be abandoned by the Board. at any time prior to the Effective Date.
Under the DGCL, a merger, consolidation or sale of all or substantially all of a corporation’s assets must generally be approved by the corporation’s board of directors and a majority of the outstanding shares entitled to vote.
In a merger between a parent and a subsidiary corporation (in which the parent owns at least 90% of the subsidiary's outstanding stock), there is no requirement of shareholder approval from either corporation, provided the subsidiary is merged into a parent corporation.
Delaware law does not require a shareholder vote of the surviving corporation in a merger (unless the corporation provides otherwise in its certificate of incorporation) if:
(a) the plan of merger does not amend the existing certificate of incorporation; 
(b) each share of stock of the surviving corporation outstanding immediately before the effective date of the merger is an identical outstanding share after the merger; and
(c) either (i) no shares of common stock of the surviving corporation and no shares, securities or obligations convertible into such stock are to be issued or delivered under the plan of merger, or (ii) the authorized unissued shares or shares of common stock of the surviving corporation to be issued or delivered under the plan of merger plus those initially issuable upon conversion of any other shares, securities or obligations to be issued or delivered under such plan do not exceed 20% of the shares of common stock of such constituent corporation outstanding immediately prior to the effective date of the merger.
Limitations on Director Liability; Exculpation
Under the NYBCL, if a corporation’s certificate of incorporation so provides, the personal liability of a director for breach of fiduciary duty as a director may be eliminated or limited. A corporation’s certificate of incorporation, however, may not limit or eliminate a director’s personal liability (a) if a judgment or other final adjudication adverse to the director establishes that the director acted in bad faith or engaged in intentional misconduct or a knowing violation of law, personally gained a financial profit to which the director was not legally entitled, or violated certain provisions of the NYBCL, or (b) for any act or omission prior to the adoption of such provision in the certificate of incorporation.
The New York Charter does not currently contain a provision limiting the personal liability of directors.
Under the DGCL, if a corporation’s certificate of incorporation so provides, the personal liability of a director for monetary damages for breach of fiduciary duty as a director may be eliminated or limited. A corporation’s certificate of incorporation, however, may not limit or eliminate a director’s personal liability (a) for any breach of the director’s duty of loyalty to the corporation or its shareholders, (b) for acts or omissions not in good faith or involving intentional misconduct or a knowing violation of law, (c) for the payment of unlawful dividends, stock repurchases or redemptions, or (d) for any transaction in which the director received an improper personal benefit.
Subject to approval of Proposal 6 and as further described in Proposal 6 below, the Delaware Charter will contain a provision eliminating the personal liability of directors for monetary damages to the fullest extent permitted by law.

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Indemnification
Under the NYBCL, a corporation may indemnify any person made, or threatened to be made, a party to an action or proceeding (other than one by or in the right of the corporation to procure a judgment in its favor), whether civil or criminal, including an action by or in the right of any other corporation of any type or kind, by reason of the fact that he was a director or officer of the corporation, or served such other corporation in any capacity, against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys’ fees actually and necessarily incurred as a result of such action or proceeding, or any appeal therein, if such director or officer acted, in good faith, for a purpose which he reasonably believed to be in, or, in the case of service for any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise, not opposed to, the best interests of the corporation and, in criminal actions or proceedings, in addition, had no reasonable cause to believe that his conduct was unlawful. Unless judicially authorized, corporations may not indemnify a person in connection with a proceeding by or in the right of the corporation in which the person was adjudged liable to the corporation. However, no indemnification may be made to or on behalf of any director or officer if a judgment or other final adjudication adverse to the director or officer establishes that his acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated, or that he personally gained in fact a financial profit or other advantage to which he was not legally entitled.
The New York By-laws require the Company to indemnify directors and officers to the fullest extent of the law, but provides that no indemnification is required with respect to any settlement or disposition of a proceeding unless the Company has given its prior consent to such settlement/disposition. The New York By-laws also permit the Company to indemnify employees and to advance expenses to any person entitled to indemnification upon request.
Under the DGCL, a corporation may indemnify any person who was or is a party or is threatened to be made a party to a proceeding (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation against amounts reasonably incurred by the person in connection with such proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. Unless judicially authorized, corporations may not indemnify a person in connection with a proceeding by or in the right of the corporation in which the person was adjudged liable to the corporation. However, a corporation must indemnify an officer or director “to the extent” the person is successful on the merits or otherwise in defending himself or herself.
Similar to the New York By-laws, the Delaware Charter contains a provision requiring the indemnification of directors and officers to the fullest extent permitted by law, but provides that no indemnification is required with respect to any settlement or disposition of a proceeding unless the Company has given its prior consent to such settlement/disposition. The Delaware By-laws also permits the Company to indemnify employees and to advance expenses to any person entitled to indemnification upon request.
Appraisal Rights
Under the NYBCL, shareholders who follow certain procedures are entitled to exercise appraisal rights in the event of certain mergers or consolidations, share exchanges, sales, leases, exchanges or other dispositions of all or substantially all of the property of the Company.
However, in the case of a merger or consolidation appraisal rights are not available:
(a) to a shareholder of the parent corporation in a merger between a parent and a subsidiary corporation;
(b) to a shareholder of the surviving corporation in a merger authorized under the NYBCL, other than a merger specified above, unless such merger effects one or more of certain specified changes in the rights of the shares held by such shareholder; or
In addition, in the case of a merger, consolidation or share exchange, appraisal rights are not available to a shareholder for the shares of any class or series of stock, which shares or depository receipts, at the record date fixed to determine the shareholders entitled to receive notice of the meeting of shareholders to vote upon the plan of merger or consolidation, were listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc.
Because the Company is listed on the New York Stock Exchange, no appraisal rights are available to the Company’s shareholders under New York law in the event of a merger, consolidation or share exchange.
Under the DGCL, shareholders of record who follow certain procedures are generally entitled to appraisal rights only in the case of certain mergers or consolidations.
However, appraisal rights are generally not available under the DGCL with respect to shares of any class or series of stock that is listed on a national securities exchange or held of record by more than 2,000 shareholders unless the shares are entitled to receive in the merger or consolidation anything other than:
(a) shares of stock of the corporation surviving or resulting from such merger or consolidation,
(b) shares of stock of any other corporation which at the effective date of the merger of consolidation will be either listed on a national securities exchange or held of record by more than 2,000 shareholders,
(c) cash in lieu of fractional shares of the corporation described in the foregoing clauses (a) and (b), or
(d) any combination of clauses (a), (b), or (c).
In cases where appraisal rights are available, the DGCL permits a shareholder who has received notice of appraisal rights, and who has not voted in favor of the merger (i.e., the shareholder can either vote against or abstain from voting) and who has submitted a timely written demand for appraisal, to file a petition with the Court of Chancery of the State of Delaware to demand a determination of the fair value of such shareholders’ shares. Such petition must be filed within 120 days after the effective date of a merger or consolidation.

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Shareholder Right to Inspect Shareholder List
Under the NYBCL, a shareholder of record may inspect the list of record shareholders upon giving at least five days’ written demand to do so. The inspection may be denied if the shareholder refuses to give an affidavit that such inspection is not desired for a purpose which is in the interest of a business other than the business of the corporation and that the shareholder has not been involved in selling or offering to sell any list of shareholders of any corporation within the preceding five years.
Under the DGCL, any shareholder may upon making a demand under oath stating the purpose thereof, inspect the shareholders’ list for any purpose reasonably related to the person’s interest as a shareholder. In addition, for at least 10 days prior to each shareholder meeting, a Delaware corporation must make available for examination a list of shareholders entitled to vote at the meeting.
Business Combinations with Interested Shareholders
Under the NYBCL, a publicly traded New York corporation is prohibited from engaging in any “business combination” with an “interested shareholder” for a period of five years following the date the shareholder became an interested shareholder, unless:
(a) the board of directors approves either the business combination or the acquisition of stock by the interested shareholder before the interested shareholder acquires his or her shares;
(b) five years after such interested shareholder acquires his or her shares, the holders of a majority of the outstanding voting stock not beneficially owned by such interested shareholder approves the business combination; or
(c) the business combination meets certain fair price procedural requirements.
An “interested shareholder” under the NYBCL is generally a beneficial owner of at least 20% of the corporation’s outstanding voting stock.
“Business combinations” under the NYBCL include mergers and consolidations between corporations or with an interested shareholder; sales, leases, mortgages or other dispositions to an interested shareholder of assets with an aggregate market value which either equals 10% or more of the corporation’s consolidated assets or outstanding stock, or represents 10% or more of the consolidated earning power or net income of the corporation; issuances and transfers to an interested shareholder of stock with an aggregate market value of at least 5% of the aggregate market value of the outstanding stock of the corporation; liquidation or dissolution of the corporation proposed by or in connection with an interested shareholder; reclassification or recapitalization of stock that would increase the proportionate stock ownership of an interested shareholder; and the receipt by an interested shareholder of any benefit from loans, guarantees, pledges or other financial assistance or tax benefits provided by the corporation.
A New York corporation may elect to waive the above restrictions in its original certificate of incorporation or in a by-law, which is approved by the affirmative vote of a majority of the outstanding voting stock of the corporation, excluding the stock owned by the interested shareholders and its affiliates and associates.
Neither the New York Charter nor the New York By-laws have waived these restrictions.
Under the DGCL, subject to certain exceptions specified therein, a corporation is prohibited from engaging in any “business combination” with any “interested shareholder” for a three-year period following the date that such shareholder becomes an interested shareholder unless:
(a) prior to such date, the board of directors of the corporation approved either the business combination or the transaction which resulted in the shareholder becoming an interested shareholder;
(b) upon consummation of the transaction which resulted in the shareholder becoming an interested shareholder, the interested shareholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced (excluding shares held by directors who are also officers and employee stock purchase plans in which employee participants do not have the right to determine confidentially whether plan shares will be tendered in a tender or exchange offer); or
(c) on or subsequent to such date, the business combination is approved by the board of directors of the corporation and by the affirmative vote at an annual or special meeting, and not by written consent, of at least 66 2/3% of the outstanding voting stock which is not owned by the interested shareholder.
An “interested stockholder” under the DGCL is any person other than the corporation and its majority-owned subsidiaries who owns at least 15% of the outstanding voting stock, or who is an affiliate or associate of the corporation and owned at least 15% within the preceding three years.
“Business combinations” under the DGCL include, subject to certain exceptions specified therein, mergers and consolidations between corporations or with an interested shareholder; sales, leases, mortgages or other dispositions to an interested shareholder of assets of the corporation or one of its majority-owned subsidiaries with an aggregate market value which either equals 10% or more of the corporation’s consolidated assets or outstanding stock; issuances and transfers to an interested shareholder of stock; any transaction with an interested shareholder that would increase the proportionate stock ownership of an interested shareholder; and the receipt by an interested shareholder of any benefit from loans, guarantees, pledges or other financial benefits provided by the corporation.
A Delaware corporation may elect to waive the above restriction in its certificate of incorporation.
The Delaware Charter does not exclude Newco from the restrictions imposed under Section 203 of the DGCL.
Anti-Greenmail Provision

Under the NYBCL, the Company is prohibited from purchasing or agreeing to purchase more than 10% of its stock from a shareholder at a price greater than the market value of the stock unless the purchase is approved by the Board and a majority of shareholders entitled to vote. However, this restriction does not apply when the Company offers to purchase shares from all of its shareholders or with respect to stock that a shareholder has owned beneficially for more than two years.

The DGCL does not contain a similar restriction on the Company’s ability to purchase its own stock.


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Other Constituency Statute

Under the NYBCL when making corporate decisions, directors are entitled to consider the long-term and/or short-term effects of any action on shareholders, employees, customers, creditors and the communities in which the corporation does business.

The DGCL does not expressly permit directors to consider constituencies other than stockholders when making corporate decisions.

Transactions with Officers and Directors
Under the NYBCL, a contract or other transaction between a corporation and one or more of its directors, or an entity in which they have an interest, is not void or voidable solely because of such interest or the participation of the director or in a meeting of the board of directors or a committee which authorizes the contract or transaction if:
(a) the material facts as to such director’s interest in such contract or transaction and as to any such common directorship, officership or financial interest are disclosed in good faith or known to the board or committee, and the board or committee approves such contract or transaction by a vote sufficient for such purpose without counting the vote of such interested director or, if the votes of the disinterested directors are insufficient to constitute an act of the board, by unanimous vote of the disinterested directors; or
(b) the material facts as to such director’s interest in such contract or transaction and as to any such common directorship, officership or financial interest are disclosed in good faith or known to the shareholders entitled to vote thereon, and such contract or transaction is approved by vote of such shareholders; or
(c) the contract or transaction was fair and reasonable as to the corporation at the time it was approved by the board, a committee or the shareholders.
Under the DGCL, a contract or transaction between a corporation and one or more of its officers or directors or an entity in which they have an interest is not void or voidable solely because of such interest or the participation of the director or officer in a meeting of the board of directors or a committee which authorizes the contract or transaction if:
(a) the material facts as to the relationship or interest and as to the contract or transaction are disclosed or are known to the board of directors or the committee, and the board of directors or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of disinterested directors, even though the disinterested directors are less than a quorum;
(b) the material facts as to the relationship or interest and as to the contract or transaction are disclosed or are known to the shareholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the shareholders; or
(c) the contract or transaction is fair as to the corporation as of the time it is authorized, approved or ratified by the board of directors, a committee thereof or the shareholders.
Loans to, and Guarantees of, Directors
Under the NYBCL, a corporation may not lend money to, or guarantee the obligation of, a director unless (1) the shareholders (other than the interested director) approve the transaction; or (2) for corporations in existence on February 22, 1998 (including the Company), if the certificate of incorporation provides that the board may approve the transaction if it determines that the loan or guarantee benefits the corporation and either approves the specific loan or guarantee or a general plan authorizing loans and guarantees. The NYBCL provides that a guarantee may not be given by a New York corporation, if not in furtherance of its corporate purposes, unless it is authorized by two-thirds of the votes of all outstanding shares entitled to vote.
Under the New York By-laws, no loan, except advances in connection with indemnification, may be made by the Company to any of its directors unless authorized by the Company’s shareholders.
Under the DGCL, a board of directors may generally authorize loans by the corporation to, and guarantees by the corporation of any obligations of, any director of the corporation who is also an officer or other employee of the corporation whenever, in the judgment of the board of directors, such loan or guarantee may reasonably be expected to benefit the corporation and such guarantee is necessary or convenient to the conduct, promotion or attainment of the business of the corporation. The DGCL does not include a restriction on guarantees by a corporation similar to those imposed under the NYBCL.

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Exclusive Forum
There is no statutory provision in the NYBCL explicitly authorizing a company to designate an exclusive forum for certain types of litigation. The New York Charter and By-laws do not specify an exclusive forum.
As permitted under the DGCL, the Delaware By-laws provide that unless the Company consents in writing to the selection of an alternative forum, (a) the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s shareholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, the Delaware Charter or the Delaware By-laws, (iv) any action to interpret, apply, enforce or determine the validity of the Delaware Charter or the Delaware By-laws, or (v) any action asserting a claim governed by the internal affairs doctrine (or, if the Court of Chancery does not have jurisdiction, then the Superior Court of the State of Delaware, or if no state court in Delaware has jurisdiction, the federal district court for the District of Delaware); and (b) the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended.
Amendments to Charter
Under the NYBCL, except for certain ministerial changes, and except as otherwise required under a certificate of incorporation, a corporation’s certificate of incorporation may be amended only if authorized by the board of directors and approved by the holders of a majority of the outstanding stock entitled to vote on such amendment.
However, wherever the certification of incorporation requires action by the board or the holders of securities having voting power greater than is required by law, then such provision may not be altered, amended or repealed except by such greater vote.
Additionally, wherever the NYBCL requires a vote greater than a majority of the outstanding stock, then any amendment to the certificate of incorporation for the purpose of reducing this voting threshold may not be adopted except by the vote of shareholders having voting power that is at least equal to that which would be required to take the action.
Under the DGCL, except for certain ministerial changes, and except where a greater shareholder vote is required by a certificate of incorporation, a corporation’s certificate of incorporation may be amended only if the board adopts a resolution setting forth the proposed amendment and deeming it advisable and such proposed amendment is approved by the holders of a majority of the outstanding stock entitled to vote on such amendment.
However, wherever the certificate of incorporation requires action by the board or the holders of securities having voting power that is greater than is required by law, such provision may not be altered, amended or repealed except by such greater vote.
Additionally, the DGCL provides that the holders of the outstanding shares of a class shall be entitled to vote as a class on any amendment, whether or not entitled to vote thereon by the certificate of incorporation, to increase or decrease the aggregate number of authorized shares of such class (unless the certificate of incorporation provides otherwise), increase or decrease the par value of the shares of such class, or alter or change the powers, preferences, or special rights of the shares of such class so as to affect them adversely (provided that in the case of any such amendment that adversely affects the powers, preferences or special rights of one or more series of any class but does not so affect the entire class, then only the shares of the series so affected shall be considered a separate class for this purpose).
Amendment of By-laws
Under the NYBCL, a corporation’s by-laws may be amended by the vote of the holders of a majority of the votes cast with respect to such amendment (rather than a majority of the shares outstanding) or, if permitted under the corporation’s certificate of incorporation or a bylaw adopted by the shareholders, by the board of directors.
The New York Charter provides that the Board may amend the New York By-laws without shareholder approval, but any bylaw adopted by the Board may be amended or repealed by the shareholders.
Under the DGCL, the vote of a majority of the shares cast at a meeting of the shareholders is required to adopt, amend or repeal the by-laws, unless the certificate of incorporation or by-laws provide otherwise. If permitted under the corporation’s certificate of incorporation, the board of directors may also take such action.
Under the Delaware By-laws, shareholders may amend the bylaws by the vote of a majority of the outstanding shares of the Company entitled to vote thereon. The Delaware Charter also provides that the Board may amend the Delaware By-laws without shareholder approval, however, any bylaw adopted by the Board may be amended or repealed by shareholders.
Expiration of Proxies
Under the NYBCL, a proxy executed by a shareholder will remain valid for eleven months unless the proxy provides for a longer period.
Under the DGCL, a proxy executed by a stockholder will remain valid for a period of three years unless the proxy provides for a longer period.

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Required Vote
The Reincorporation has been approved by the Board of Directors. Under New York law, the affirmative vote of the holders of two-thirds of the Company’s outstanding shares entitled to vote on this Reincorporation Proposal is required for approval of the Reincorporation.
Consequences of Shareholder Vote
This Proposal 4 is separate from, but contingent upon the approval of, both Proposals 5 and 6. As a result, if either or both of Proposals 5 and 6 are not approved by shareholders, we will not proceed with the Reincorporation regardless of whether this Proposal 4 is approved. Further, if this Proposal 4 is not approved, neither Proposal 5 nor Proposal 6 will become effective and we will continue to be incorporated in New York and governed by our New York Governing Documents.

The Board of Directors unanimously recommends a vote “FOR” this proposal.

PROPOSAL FIVE: WRITTEN CONSENT PROCEDURAL PROVISION
As described in Proposal 4 above, consistent with the default threshold under New York law, the Company’s current New York By-laws require unanimity in order for shareholders to act by written consent without a meeting. As a practical matter, this makes acting by written consent extremely difficult. If the Reincorporation-related proposals are approved and implemented, then the Board plans to instead adopt the Delaware law default for shareholder action by written consent by lowering the threshold for action by written consent to the minimum number of votes necessary to take the action at which the holders of all shares entitled to vote thereon were present and voted (generally, a majority of the outstanding shares). The Board believes that shareholder participation and corporate democracy are enhanced if shareholders have the right to take action without a meeting by written consent, provided that this right is subject to reasonable safeguards to enhance transparency and prevent the disenfranchisement of minority shareholders and the waste of corporate resources. As a result, the Board has unanimously approved, and recommends to shareholders for approval, this proposal to include the provision set forth in the Fifth Article of the Delaware Charter with the following procedural and other safeguards in connection with taking action by written consent:

To reduce the risk that a small group of short-term, special interest or self-interested shareholders initiate actions that are not in the best interests of the Company or its shareholders and reduce unnecessary financial and administrative burdens on the Company as a result of a consent solicitation that has received limited support, the proposed provision requires holders of at least 25% of the Company’s outstanding common stock (provided that such shares are determined to be Net Long Shares (as defined in the Delaware By-Laws) that have been held continuously for at least one year prior to the request) to request that the Board set a record date to determine the shareholders entitled to act by written consent. The Board believes that this 25% threshold strikes the right balance between enhancing the ability of our shareholders to initiate shareholder action and discouraging certain shareholders from engaging in consent solicitations that are only relevant or meaningful to very narrow constituencies.

To protect against minority shareholder disenfranchisement, written consents will have to be solicited from all shareholders, giving each shareholder the right to consider and act on the proposed action. This safeguard will eliminate the possibility that a small group of shareholders can take an action that could have significant implications for the Company and all shareholders without a public and transparent discussion of the merits of any proposed action and without notice to, or input from, all of our shareholders.

To ensure a prompt and orderly process for shareholder action and establish a reasonable deadline for the Board to properly evaluate and respond to a shareholder request for setting a record date, the proposed provision requires that the Board act, with respect to a valid request, to set a record date by the later of (i) 20 days after delivery of a valid request to set a record date; and (ii) 10 days after delivery by the shareholder(s) of any information requested by the Company to determine the validity of the request for a record date or to determine whether the requested action may be effected by written consent. In addition, the record date for determining the shareholders entitled to act by written consent cannot be more than 10 days after the date on which the Board takes action to set a record date. Should the Board fail to set a record date by the required date, the record date will be deemed to be the date on which the first signed consent is delivered to the Company.


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To ensure transparency in the written consent process, any shareholder(s) seeking to act by written consent will be required to provide the same information as would be required with respect to a proposal to nominate a director or to be acted upon at a shareholders’ meeting.

To ensure that shareholders have sufficient time to consider the merits of any matter proposed to be acted upon by written consent, any statements in opposition to the proposed action by the other shareholders and the Board’s presentation of its views regarding such matter, the proposed amendments prohibit dating and delivering consents until 60 days after the delivery of a valid request to set a record date.

To avoid an unduly protracted campaign that will disrupt the Company and as required under Delaware law, in order for an action to be effective, consents signed by a sufficient number of shareholders must be delivered to the Company no later than 60 days after the first date on which a consent is delivered to the Company.

To ensure that written consent is in compliance with applicable laws and is not duplicative, the written consent process would not be available for a limited number of matters, specifically: (i) those matters that are not a proper subject for shareholder action under applicable law, or if the request involves a violation of the federal proxy rules or other applicable law, (ii) if the request to set a record date is received by the Company during the period commencing 90 days prior to the first anniversary of the date of the immediately preceding annual meeting and ending on the date of the next annual meeting, (iii) if an identical or substantially similar item (other than the election or removal of directors) was presented at a meeting of shareholders held not more than 12 months before the request for a record date is received by the Company, (iv) if an identical or substantially similar item consisting of the election or removal of directors was presented at a meeting of shareholders held not more than 90 days before the request for a record date was received by the Company, or (v) if an identical or substantially similar item is included in the Company’s notice of meeting for a meeting that has been called but not yet held or that is called to be held within 90 days after the request for a record date is received by the Company.

The foregoing summary of the proposed written consent provision does not purport to be complete and is qualified in its entirety by reference to the text of the Fifth Article of the proposed Delaware Charter, which is attached to this proxy statement as Exhibit B.
Required Vote
Approval of this Proposal 5 requires the affirmative vote of a majority of the outstanding shares of the Company’s stock entitled to vote on this proposal.
Consequences of Shareholder Vote
This Proposal 5 is separate from, but contingent upon on the approval of, both Proposals 4 and 6. As a result, if either of Proposals 4 or 6 is not approved by shareholders, this Proposal 5 will not become effective and we will continue to be governed by the unanimous written consent provision included in our New York By-laws. Further, if this Proposal 5 is not approved by shareholders, we will not proceed with the Reincorporation regardless of whether shareholders approve Proposals 4 and/or 6.

The Board of Directors unanimously recommends a vote “FOR” this proposal.

PROPOSAL SIX: DIRECTOR EXCULPATION PROVISION

As discussed in Proposal 4, Section 102(b)(7) of the DGCL permits a Delaware corporation to include an exculpation provision in its charter eliminating or limiting the personal liability of directors for monetary damages arising out of breaches of their duty of care. Such a provision, however, may not be used to limit or eliminate a director’s personal liability for (i) breaches of their duty of loyalty, (ii) acts or omissions not in good faith or involving intentional misconduct or knowing violation of law (iii) the payment of unlawful dividends, stock repurchases or redemptions, or (iv) transactions in which the director received an improper personal benefit.

Although New York law permits New York corporations to include a similar provision in their charters, this law was not adopted until after the Company’s charter came into effect and, as a result, the Company’s New York Charter does not include such a provision. As part of the Reincorporation, the Board has unanimously approved, and recommends to shareholders for

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approval, this proposal to include the provision set forth in the Eighth Article of the Delaware Charter providing for the elimination of personal liability of a director to the Company and its shareholders for monetary damages to the fullest extent permitted by Delaware law.
 
The Board believes this exculpation provision, which is common for public companies incorporated in Delaware, is necessary to ensure that concerns about exposure to personal liability will not adversely affect the ability of our directors to make the difficult, potentially value-maximizing business decisions that are necessary in today’s highly competitive business environment. We are in a competitive industry and compete to secure transactions and to take advantage of strategic opportunities. More than ever before, strong indemnification and exculpation provisions are vital to the company's directors to make value enhancing decisions with more certainty, given the growing frequency of claims and litigation pursued against directors and the substantial costs associated with defending against them, regardless of their merit or their lack thereof.

The foregoing summary of the proposed exculpation provision does not purport to be complete and is qualified in its entirety by reference to the text of the Eighth Article of the proposed Delaware Charter, which is attached to this proxy statement as Exhibit B.
Required Vote
Approval of this Proposal 6 requires the affirmative vote of a majority of the outstanding shares of the Company’s stock entitled to vote on this proposal.
Consequences of Shareholder Vote
This Proposal 6 is separate from, but contingent upon, the approval of both Proposals 4 and 5. As a result, if either of Proposals 4 or 5 is not approved by shareholders, this Proposal 6 will not become effective and we will continue to be governed by our New York Charter, which does not include a director exculpation provision. Further, if this Proposal 6 is not approved by shareholders, we will not proceed with the Reincorporation even if shareholders approve Proposals 4 and/or 5.

The Board of Directors unanimously recommends a vote “FOR” this proposal.

PROPOSAL SEVEN: AMENDED AND RESTATED 2020 NON-EMPLOYEE DIRECTOR EQUITY COMPENSATION PLAN
On December 12, 2019, upon the recommendation of the Compensation Committee, our Board of Directors unanimously approved the Amended and Restated 2020 Non-Employee Director Equity Compensation Plan (the “NED Plan”), subject to approval by our shareholders. The NED Plan was adopted in order to ensure that there will be sufficient shares available for delivery pursuant to the grant of equity-based awards, and to reflect anticipated changes to the Company’s non-employee director compensation program. The NED Plan will be applicable only to awards granted on or after the date the NED Plan is approved by our shareholders (the “Effective Date”). The NED Plan revises the Company’s 2016 Non-Employee Director Equity Compensation Plan, which was originally approved by our shareholders on May 25, 2016 (the “2016 Plan”). Certain significant ways in which the NED Plan terms differ from the terms of the 2016 Plan are summarized below, as are certain material terms of the NED Plan itself. These summaries are qualified in their entireties by reference to the complete text of the NED Plan, which is attached hereto as Exhibit D.
The NED Plan provides for the issuance of equity-based awards covering up to an additional 150,000 shares of Common Stock, plus the 64,342 shares of Common Stock that remain available for issuance under the 2016 Plan as of April 3, 2020. The NED Plan includes a number of provisions designed to protect shareholder interests and to reflect appropriately our non-employee director compensation philosophy, the placement of annual limits on non-employee director compensation, and express prohibitions against repricing stock options or stock appreciation rights (“SARs”), repurchasing out-of-the-money stock options or SARs or subjecting stock options or SARs to automatic reload provisions, in each case, without the approval of the Company’s shareholders.

The Compensation Committee, with approval of the full Board, and pursuant to recommendations of its independent compensation consultant, has been issuing value-based awards of equity compensation to directors generally intended to align with the 50th percentile of peer companies (described on pages 48 - 49 of the CD&A). Since 2019, the Compensation Committee, with the approval of the full Board, has granted our non-employee directors with equity awards with a grant date value of approximately $150,000 annually ($200,000 for the Chair of the Board), with such equity grants comprised of a ratio of 3:1 of restricted stock units (“RSUs”) to stock options. With the increase in the size of the Board in 2019, the number of shares available

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to provide equity awards for the Board of Directors will need to increase. Further, the Compensation Committee reviews director compensation every three years, and it is possible that director compensation may increase over time, as other companies within the peer group increase their director compensation, and as the Company grows. The Compensation Committee and the Board believe that additional shares are needed to continue to provide an appropriate level of equity compensation to directors beyond 2020.
 
Our Board believes that the additional 150,000 shares available for grant under the NED Plan would provide sufficient shares for the non-employee director equity-based compensation needs of the Company for approximately four to five years following the effective date of the NED Plan. This estimate is based on our anticipated share usage for 2020 and following years and our history of grants to non-employee directors, taking into account potential changes in our stock price, increased equity usage compared to cash fees and providing for the possibility of new directors who would be eligible to receive initial “staking” grants, we estimate that on average we will grant approximately 25,000 to 35,000 shares in the aggregate per year to our non-employee directors (although our actual grants may be higher or lower than this estimate based on numerous factors, primarily driven by stock price and number of directors).
 
Currently, the 2016 Plan authorized the issuance of 150,000 shares of Common Stock that may be delivered pursuant to equity granted under the 2016 Plan, of which 64,342 shares remain available for delivery as of April 3, 2020, not taking into account grants of awards that will be made in connection with our 2020 annual meeting of shareholders. We estimate that based on our estimated share usages, our remaining shares available for grant will be insufficient to sustain our expected grant practices after 2020. Therefore, if shareholders do not approve the NED Plan, our future ability to issue equity-based awards other than cash-settled awards will be limited, and could, among other things:
 
Inhibit alignment with shareholders: As described in the Director Compensation sections of this proxy statement, the Company awards equity compensation to our non-employee directors in order to align their interests with those of shareholders, which would not be possible if our non-employee director share reserve were exhausted; and

Increase volatility in reported earnings and compensation expense: If we were required in the future to grant cash-settled awards instead of equity-settled awards, our reported director compensation expenses could increase and could thus contribute to volatility in our reported earnings. Under current accounting rules, the charges for cash-settled awards would be based on quarterly fluctuations in our stock price. This would increase the cost of compensation if our stock price appreciates and lead to unpredictable quarterly results.

The incremental dilution resulting from the NED Plan is estimated to be negligible, at approximately 0.526% calculated, in each case as of the record date, as (x) 150,000 shares newly available under the NED Plan divided by (y) 28,527,662 shares outstanding as of April 3, 2020. The Company takes into account the relevant accounting and tax impact of all potential forms of equity awards in designing our grants. We believe that the benefits to our shareholders resulting from equity award grants to our non-employee directors, including alignment with shareholder interests, outweigh the potential dilutive effect of grants under the NED Plan.
  
In addition to the increase in share authorization, the NED Plan adds a one-year minimum vesting requirement generally applicable to awards granted under the NED Plan, and maintains an annual limit on the aggregate value of compensation granted to any one non-employee director in respect of any calendar year with respect to his or her service as a non-employee director at $400,000, which we believe should allow the Company to attract and maintain highly qualified directors. The NED Plan also clarifies that all directors who are not current employees of the Company are eligible to participate (as opposed to directors who are not current or former employees, as under the 2016 Plan), which allows the Company flexibility to issue awards in the event a future director is a former employee of the Company. In connection with the Reincorporation (as described under Proposal 4 (Reincorporation) of this proxy statement), the governing law for the NED Plan has been changed from New York to Delaware. Certain other non-material changes are reflected in the complete text of the NED Plan, which is attached hereto as Exhibit D.
 
Overview of the NED Plan
 
The purpose of the NED Plan is to attract, retain and motivate directors who serve on the Board of Directors for the Company, to compensate them for their contributions to the long-term growth and profits of the Company and to encourage them to acquire a proprietary interest in the success of the Company. The NED Plan will be administered by the Compensation Committee, which may delegate any of its powers under the NED Plan to a subcommittee thereof. Awards may be made to any non-employee director who may perform services for the Company and its subsidiaries and affiliates selected by the Compensation Committee. The NED Plan provides for grants of SARs, RSUs, and stock options (collectively, “Awards”).
 
Eligibility

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All members of the Board of Directors who are not current employees of the Company or any of its subsidiaries are eligible to participate in this Plan, which as of the date of this proxy statement comprises nine individuals.
 
Administration
 
The NED Plan will be administered by the Compensation Committee, which will consist of at least two members of the Board of Directors who will be appointed by, and will serve at the pleasure of, the Board of Directors. In addition, the Compensation Committee may delegate any of its powers under the NED Plan to a subcommittee of the Compensation Committee (which hereinafter will also be referred to as the Compensation Committee). The Compensation Committee may allocate among its members and delegate to any person who is not a member of the Compensation Committee any of its administrative responsibilities. The Board of Directors may, in its sole discretion, at any time and from time to time, grant Awards under the NED Plan or administer the NED Plan. The Board of Directors will have all of the authority and responsibility granted to the Compensation Committee.
 
Amendment
 
The Board of Directors may, at any time, suspend, discontinue, revise or amend the NED Plan in any respect whatsoever, and may also suspend the ability of a recipient of an Award to exercise or otherwise realize the value of his or her Award. Any amendment that materially adversely affects a recipient, however, requires such recipient’s prior written consent. In general, shareholder approval of any suspension, discontinuance, revision or amendment will be obtained only to the extent necessary to comply with any applicable law, rule or regulation.
 
Shares Subject to the NED Plan; Other Limitations of Awards
 
The total number of shares of Common Stock that may be delivered pursuant to Awards granted under the NED Plan may not exceed 150,000 shares, plus the 64,342 shares of Common Stock that remain available for issuance under the 2016 Plan as of April 3, 2020. These shares may be authorized but unissued shares of Common Stock or authorized and issued shares of Common Stock held in our treasury or otherwise acquired for the purposes of the NED Plan. If any Award under the NED Plan (or any award granted under the 2016 Plan) is forfeited or otherwise terminates or is canceled without the delivery of shares of Common Stock or shares of Common Stock are surrendered or withheld from any Award (or any award granted under the 2016 Plan) to satisfy a grantee’s income tax or other withholding obligations, or if shares of Common Stock owned by the grantee are tendered to pay for the exercise of a stock option under the NED Plan, then the shares covered by such expired, forfeited, terminated or canceled Award (or award under the 2016 Plan) which are equal to the number of shares surrendered or withheld in respect thereof will again become available to be delivered pursuant to Awards granted or to be granted under the NED Plan.
 
Types of Awards
 
Awards under the NED Plan may consist of: (i) SARs granted pursuant to Section 5.1 of the NED Plan, (ii) RSUs granted pursuant to Section 5.2 of the NED Plan, and (iii) nonstatutory stock options granted pursuant to Section 5.3 of the NED Plan. Each Award will be evidenced by an award agreement (an “Award Agreement”) which will govern that Award’s terms and conditions.
 
No grantee of an Award (or other person having rights pursuant to an Award) will have any rights of a stockholder of the Company with respect to shares of Common Stock subject to an Award until the delivery of such shares. Other than with respect to Award adjustments described in Section 4.2 of the NED Plan, regarding recapitalization adjustments, no adjustments will be made for dividends or distributions of any kind, on, or other events relating to, shares of Common Stock subject to an Award for which the record date is prior to the date such shares are delivered. Notwithstanding any other provision of the NED Plan to the contrary, all Awards under the NED Plan will be subject to the Company’s Recoupment Policy, as it may be amended from time to time.
 
New Plan Benefits
 
The amount of each recipient’s Award for the 2020 calendar year (and subsequent years) is not currently known and will be determined based on numerous factors but is generally intended to align with the 50th percentile of peer companies (described on pages 48 - 49 of the CD&A). Our current practice is to grant our non-employee directors equity awards with a grant date value of approximately $150,000 annually ($200,000 for the Chair of the Board), with such equity grants comprised of a ratio of 3:1 in value of restricted stock units (“RSUs”) to stock options. If the NED Plan had been in effect in 2019 when awards for that year were granted, the benefits or amounts received by, or allocated to, our non-employee directors would have been consistent with the benefits or amounts actually received by or allocated to such persons under the 2016 Plan (as described on pages 68 - 70) in

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that the proposed terms of the NED Plan would not have an impact on the amount or nature of the awards the Compensation Committee issued in 2019 or may issue thereafter.
 
U.S. Federal Tax Considerations
 
The following is a brief description of the U.S. federal income tax consequences generally arising with respect to Awards. This summary is not intended to constitute tax advice and is not intended to be exhaustive and, among other things, does not describe state, local or foreign tax consequences. Recipients of Awards are advised to consult with their own independent tax advisors with respect to the specific tax consequences that, in light of their particular circumstances, might arise in connection with their Awards.
 
Stock Options and SARs
 
The grant of an option or SAR will create no tax consequences for the recipient or the Company. Upon exercising a stock option or a SAR, a non-employee director will realize ordinary income (not as capital gain) in an amount equal to the excess of the fair market value on the exercise date of the shares subject to the stock option or SAR over the exercise price or reference price of the stock option or SAR. The Company will be entitled to a corresponding deduction in an amount equal to the excess of the fair market value on the exercise date of the shares subject to the stock option or SAR over the exercise price or reference price of the stock option or SAR. The non-employee director will have a basis in the shares received as a result of the exercise, for purposes of computing capital gain or loss, equal to the fair market value of the shares on the exercise date and the non-employee director’s holding period in the shares received will commence on the day after the date of exercise. Income recognized by a non-employee director in connection with the exercise of a stock option or SAR may be subject to certain self-employment taxes to be paid by the director.
  
Restricted Stock Units
 
Generally, a recipient of an RSU will not recognize ordinary income at grant unless the RSU is vested at grant. Instead, the recipient generally will recognize ordinary income and the Company will be entitled to a corresponding deduction when the RSU becomes vested (or if later is settled), equal to the fair market value of the stock covered by the RSU on the date it becomes vested (or if later, is settled). The recipient’s basis for determining gain or loss upon the subsequent disposition of shares acquired pursuant to the RSU will be the amount of any ordinary income recognized either when the RSU becomes vested (or if later, is settled). Upon the disposition of any shares received pursuant to the award, the difference between the sales price and the recipient’s basis in the shares will be treated as a capital gain or loss and generally will be characterized as long- or short-term depending on the period the recipient held such shares after the vesting (or if later, settlement) date. Income recognized by a non-employee director in connection with the vesting or settlement of an RSU may be subject to certain self-employment taxes to be paid by the director.
 
Net Investment Income Tax 
 
A recipient of an award will also be subject to a 3.8% tax on the lesser of (i) the recipient’s “net investment income” for the relevant taxable year and (ii) the excess of the recipient’s modified adjusted gross income for the taxable year over a certain threshold (ranging from $125,000 to $250,000, depending on the recipient’s circumstances). A recipient’s net investment income generally includes net gains from the disposition of shares. Recipients are urged to consult their tax advisors regarding the applicability of this Medicare tax to their income and gains in respect of their investment in the shares.
 
Section 409A
 
If an award is subject to Section 409A of the Code, but does not comply with the requirements of Section 409A of the Code, the taxable events as described above could apply earlier than described, and could result in the imposition of additional taxes and penalties.
Required Vote
Approval of the NED Plan requires the affirmative vote of a majority of the votes cast at the Annual Meeting. The Board of Directors believes that the approval of the NED Plan is in the best interests of the Company because it will ensure that there will be sufficient shares available for delivery to non-employee directors pursuant to the grant of equity-based awards and reflects anticipated changes to the Company’s non-employee director compensation program.


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The Board of Directors has unanimously approved the NED Plan and unanimously recommends a vote “FOR” approval of the NED Plan.

PROPOSAL EIGHT: AMENDED AND RESTATED 2020 EMPLOYEE STOCK PURCHASE PLAN

On December 12, 2019, upon the recommendation of the Compensation Committee, our Board of Directors unanimously approved the CONMED Corporation Amended and Restated 2020 Employee Stock Purchase Plan (the “Employee Plan”). The Employee Plan was adopted to reflect anticipated changes to the Company’s employee stock purchase program. The Employee Plan revises the Company’s 2002 Employee Stock Purchase Plan, which was originally approved by our shareholders on May 14, 2002 (the “2002 Plan”) and further amended on January 1, 2006. Certain significant ways in which the Employee Plan terms differ from the terms of the 2002 Plan are summarized below, as are certain material terms of the Employee Plan itself. These summaries are qualified in their entireties by reference to the complete text of the Employee Plan, which is attached hereto as Exhibit E.

If approved by shareholders, the Employee Plan will provide to employees of the Company and its designated subsidiaries and affiliates the opportunity to invest from one percent (1%) to ten percent (10%) of their annual compensation to purchase shares of the Common Stock at a purchase price equal to ninety percent (90%) of the fair market value of the Common Stock at the end of such quarterly period (provided that an alternative discount rate in the range between eighty-five percent (85%) and one hundred percent (100%) may be set prior to the commencement of a future offering period). All employees of the Company or any of its subsidiaries or affiliates designated by the Employee Plan Committee (as defined below) will be eligible for participation in the Employee Plan, subject to certain excluded categories as detailed below. If the proposed amendments are approved, approximately 2,000 U.S. CONMED employees, and additional 1,400 CONMED international employees may be eligible for participation under the Employee Plan.

The number of shares of Common Stock which remain available to be purchased under the 2002 Plan as of April 3, 2020, is 753,367, subject to adjustment in the event of a recapitalization, stock dividend, stock split, repurchase of shares or other changes in the outstanding Common Stock. The shares usable under the Employee Plan are authorized but previously unissued shares of Common Stock or authorized and issued Common Stock held in the Company's treasury or acquired by the Company for purposes of the Employee Plan. Shares subject to any lapsed or expired option shall again become available for transfer pursuant to options granted or to be granted under the Employee Plan.

Summary of Other Significant Changes to the 2002 Plan
 
The Employee Plan improves our employee stock purchase program with the following features:

Changes to Purchase Discount: The Employee plan allows eligible employees to purchase Common Stock at ninety percent (90%) of its fair market value, which was previously ninety-five percent (95%) under the 2002 Plan, as amended. The Employee plan also now provides the Employee Plan Committee (as defined below) discretion to set, prior to the commencement of a future offering period, an alternative discount rate in the range between eighty-five percent (85%) and one hundred percent (100%);
Clarifying Eligibility Requirements and International Offerings: The Employee Plan clarifies certain eligibility requirements under the 2002 Plan in accordance with Section 423 of the Code, so as to permit CONMED’s international employees, who account for approximately 46% of the corporate-wide revenues, to participate in the employee stock purchase plan, to the extent permitted by local laws, and to allow CONMED to make separate offerings under the Employee Plan that do not qualify under Section 423 of the Code, thus enhancing CONMED’s ability to recruit and retain employees internationally; and
Other Changes: In connection with the Reincorporation (as described in the Proposal 4 section of this proxy statement), the governing law for the Employee Plan has been changed from New York to Delaware.

Overview of the Employee Plan

The Employee Plan is designed to encourage employees to increase their ownership interest in the Company and to motivate them to exert their maximum efforts toward the success of the Company. The Employee Plan provides employees of the Company and its designated subsidiaries and affiliates the opportunity to invest a percentage of their annual compensation to purchase shares of the Common Stock from the Company at a discounted price.

Eligibility

Employees eligible to participate in the Employee Plan consist of all employees of the Company or any of its designated subsidiaries or affiliates other than any employee who (1) has not completed at least 90 days of continuous full-time employment

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with the Company or any of its participating subsidiaries, (2) customarily works five months per year or less, or (3) owns (or would own upon participation in an offering) five percent (5%) or more of the voting securities of the Company; provided that if exclusion of an employee pursuant to (1) or (2) above is in violation of applicable law, such employee will be eligible to participate in the Employee Plan but may be required to participate in a non-Section 423 offering if participation in a Section 423 offering is not in compliance with Section 423 of the Code (all such eligible employees, “Participants”). Participants shall be permitted to purchase shares of the Common Stock under the Employee Plan. Participants shall designate a percentage of their pay ranging from one percent (1%) to a maximum of ten percent (10%) (or such other percentage as the Employee Plan Committee may establish) to be withheld on a regular basis in order to purchase shares of the Common Stock on a quarterly basis through the exercise of rights granted under the Employee Plan (“Payroll Payments”). In order to be eligible to make Payroll Payments, enrollment and payroll deduction forms must be filed or authorization instructions must be given through other means as the Employee Plan Committee may permit by specified dates. Once enrolled for Payroll Payments, a Participant will continue to be enrolled in subsequent months at the percentage of pay selected until the Participant either elects a different rate by filing appropriate forms or giving appropriate instructions or terminates these Payroll Payments.

Administration

The Employee Plan is to be administered by a designated committee from management (the “Employee Plan Committee”) if the Employee Plan is approved at the Annual Meeting of Shareholders.

Stock Purchase Discount

On a quarterly basis, the administrator of the Employee Plan will credit to the account of a Participant the number of whole shares, and fractional shares at the Company's option, of Common Stock derived by dividing the total amount of the Participant’s Payroll Payments during a quarterly period by ninety percent (90%) of the fair market value of the Common Stock on the last business day of the quarterly period. The Employee plan provides the Employee Plan Committee discretion to set, prior to the commencement of a future offering period, an alternative discount rate in the range between eighty-five percent (85%) and one hundred percent (100%). However, no Participant will be granted the right to purchase shares of Common Stock under the Employee Plan and all other employee stock purchase plans of the Company, if any, at a rate which exceeds $25,000 of the fair market value at the date of grant for each calendar year in which such right is outstanding. For purposes of the Employee Plan, the “fair market value” of the Common Stock on a particular day shall be the last reported sale price (on that date) on the New York Stock Exchange, or such other national market on which the Company’s stock may be listed. The Committee may designate separate offerings under the Employee Plan (the terms of which need not be identical) in which Participants will participate (even if the dates of the applicable offering periods of each such offering are identical) and the provisions of the Employee Plan will separately apply to each offering.

Termination of Employment

Upon termination, including voluntary termination, retirement or death, of a Participant during an offering period, the payroll deductions remaining credited to the Participant’s account will be returned to the Participant or his or her estate and the Participant’s option will automatically terminate.

Withdrawal; Assignment or Transfer

A Participant may withdraw Payroll Payments credited to the Participant’s account under the Employee Plan if the amounts have not already been used to purchase Common Stock by giving at least thirty days prior written notice, or such other notice period as the Employee Plan Committee may establish. The cash balance will then be paid to the Participant and no further payroll deductions will be made from the Participant’s pay until the Participant reenrolls in the Employee Plan and elects such payroll deductions.

Participants do not have the ability to assign or transfer their rights to purchase Common Stock under the Employee Plan.

Adjustments

In the event that the outstanding shares of Common Stock have been increased, reduced, changed into or been exchanged for a different number of or kind of shares of Company securities by reason of a reclassification, recapitalization, merger, consolidation, reorganization, stock dividend, stock split or reverse stock split, combination or exchange of shares, repurchase of shares, change in corporate structure, distribution of an extraordinary dividend or otherwise the Employee Plan Committee may make appropriate adjustments to the number and/or kind of shares which may be offered under the Employee Plan.

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Amendment

The Board of Directors has the authority to terminate or amend the Employee Plan; provided that the Board of Directors may not make any change in any option granted thereunder which adversely affects the rights of any Participant or, without the approval of the shareholders of the Company, increase the maximum number of shares which may be issued under the Employee Plan.

New Plan Benefits

Because participation in the Employee Plan will vary from employee to employee and levels of participation among Participants will also vary, it is not possible to determine the value of benefits which may be obtained by executive officers and other employees under the Employee Plan.

U.S. Federal Tax Considerations

The Employee Plan is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Code. In addition, the Plan authorizes the grant of purchase rights which do not qualify under Section 423 of the Code, pursuant to any rules, procedures, or sub-plans adopted by the Committee for such purpose.

In general, a Participant will not recognize ordinary compensation income upon the exercise of the rights granted under the Employee Plan, provided that the Participant holds the Common Stock acquired upon purchase for at least one year from the date of election and two years from the date of grant (the “Holding Period”). Upon the subsequent disposition of the acquired Common Stock, the Participant will recognize ordinary compensation income in an amount equal to the lesser of (i) the excess of the fair market value of the Common Stock upon disposition over the exercise price thereof or (ii) the excess of the fair market value of the Common Stock at the time of grant over the exercise price thereof. Any additional gain upon the sale of the acquired Common Stock will be long-term capital gain. The Company will not be entitled to a deduction for any long-term capital gain income recognized by the Participant pursuant to either the exercise of options granted under the Employee Plan or the sale of the acquired Common Stock.

If a Participant disposes of the Common Stock acquired prior to the end of the Holding Period, the Participant will recognize ordinary compensation income in the year of the disqualifying disposition in an amount equal to the difference between the fair market value of the Common Stock on the date of exercise over the exercise price thereof. The Company will be entitled to an income tax deduction equal to the amount of the ordinary compensation income recognized by the Participant. Any additional gain (or loss) on the sale of the Common Stock by the Participant will be taxed as short-term capital gain (or loss), as the case may be.

If the requirements of Section 423 of the Code are not satisfied upon the date of purchase, the Participant will recognize ordinary compensation income equal to the difference between the fair market value of the Common Stock at purchase and the exercise price on the date of exercise. The Company will be entitled to an income tax deduction equal to the amount of the ordinary compensation income recognized by the Participant.
Required Vote
Approval of the Employee Plan requires the affirmative vote of a majority of the votes cast at the Annual Meeting. The Board of Directors believes that the approval of the Employee Plan is in the best interests of the Company because it will provide an incentive for the Company’s employees to increase their ownership in the Company and will motivate them to improve their performance and hence enhance shareholder value.

The Board of Directors has unanimously approved the Employee Plan and recommends a vote “FOR” approval of the Employee Plan.

OTHER BUSINESS
Management knows of no other business that will be presented for consideration at the Annual Meeting, but should any other matters be brought before the meeting, it is intended that the persons named in the accompanying proxy will vote such proxy at their discretion.

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SHAREHOLDER PROPOSALS FOR 2021 ANNUAL MEETING
Any shareholder desiring to present a proposal to the shareholders at the 2021 Annual Meeting, which currently is expected to be scheduled on or about May 19, 2021, and who desires that such proposal be included in the Company’s proxy statement and proxy card relating to that meeting, must transmit that proposal to the Company so that it is received by the Company at its principal executive offices on or before December 10, 2020.
All such proposals should be in compliance with applicable SEC regulations. The Company’s Corporate Governance and Nominating Committee will consider nominees for election as directors who are proposed by shareholders if the following procedures are followed. Shareholders wishing to propose matters for consideration at the 2021 Annual Meeting or to propose nominees for election as directors at the 2021 Annual Meeting must follow specified advance notice procedures contained in the Company’s by-laws, a copy of which is available on request to the General Counsel of the Company, c/o CONMED Corporation, 525 French Road, Utica, New York 13502 (Telephone (315) 797-8375). As of the date of this proxy statement, shareholder proposals, including director nominee proposals, must comply with the conditions set forth in Sections 1.13 and 2.10 of the Company’s by-laws, as applicable, and to be considered timely, notice of a proposal must be received by the Company between February 18, 2021 and March 20, 2021.

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CORPORATE GOVERNANCE MATTERS
DIRECTORS, EXECUTIVE & OTHER OFFICERS AND NOMINEES FOR THE BOARD OF DIRECTORS
The Company’s directors are elected at each annual meeting of shareholders and serve until the next annual meeting and until their successors are duly elected and qualified. Mr. Hartman’s employment is at-will. The Company’s officers are appointed by the Board of Directors and, except as set forth below, hold office at the will of the Board of Directors.

Directors

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DAVID BRONSON (age 67) has served as a Director of the Company since July 2015. Mr. Bronson served as Executive Vice President and Chief Financial Officer of PSS World Medical, Inc. from 2002 until it was acquired by McKesson Corp in 2013. Prior to that, he was Chief Financial Officer of Digineer, Inc. from 2001 to 2002 and of VWR Scientific Products from 1995 to 1999, when it was acquired by Merck KGaA. Mr. Bronson previously spent 15 years at Baxter Healthcare, Inc., where he held various senior financial executive positions. He was a Director and a member of the Audit Committee of Labsco, Inc. until 2016 and was a Director and Audit Committee Chair of AxelaCare, Inc. through November 2015. Mr. Bronson received his Master of Science Degree in Management Studies from Northwestern University’s Kellogg School of Business and his Bachelor of Science Degree in Accounting from California State University, Fullerton. The Board of Directors has determined that Mr. Bronson is independent within the meaning of the rules of the New York Stock Exchange, and that he is an audit committee financial expert within the meaning of the rules of the Securities and Exchange Commission.

Mr. Bronson’s qualifications for election to CONMED’s Board include his extensive experience as a Chief Financial Officer generally, and in the health-care industry in particular, as well as his financial and accounting expertise acquired through his prior positions. His exposure to, and familiarity with, health care services matters provides an important perspective to the Board. He has the ability and willingness to serve on a Board, and the correct fit to work in a collegial manner with the other directors.
 
Committees:
- Corporate Governance and Nominating (chair)
- Audit
- Pricing
 

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BRIAN P. CONCANNON (age 62) has served as a Director of the Company since July 2013. Mr. Concannon served as President and CEO of Haemonetics Corporation, a publicly traded company (NYSE: HAE) from April 2009 to October 2015. He joined Haemonetics in 2003 and served in various roles to include the President, Global Markets in 2006 and the Chief Operating Officer in 2007-2009. In April 2009, Mr. Concannon was promoted to President and Chief Executive Officer, and elected to the Haemonetics board of directors. Prior to joining Haemonetics, Mr. Concannon was the President, Northeast Region, for Cardinal Health Medical Products and Services where he was employed since 1998. From 1985 to 1998, he was employed by American Hospital Supply Corporation, Baxter Healthcare Corp and Allegiance Healthcare in a series of sales and operations management positions of increasing responsibility. He has served in leadership roles within the healthcare industry for more than 30 years. Mr. Concannon was also a member of the board of directors of South Shore Health and was elected Vice-Chair in January 2017 through December 2019. Mr. Concannon is a member of the board of directors of VetAccel since November 2019. Mr. Concannon was also appointed as the Civilian Aide to the Secretary of the Army for Massachusetts in October 2017. Mr. Concannon is a 1979 graduate of West Point. The Board of Directors has determined that Mr. Concannon is independent within the meaning of the rules of the New York Stock Exchange.

Mr. Concannon’s qualifications for election to CONMED’s Board include his experience as a former CEO and director of a publicly-traded medical device company, and the former president of a distribution company. Mr. Concannon offers industry experience from a sales and marketing perspective. He has the ability and willingness to serve on a Board, and the correct fit to work in a collegial manner with the other directors.
 
Committees:
- Compensation
- Strategy

 






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LAVERNE COUNCIL (age 58) has served as a Director of the Company since she was appointed to the Board in December 2019. Ms. Council is the Chief Executive Officer of Emerald One, LLC, a consulting company, focused on helping business and technology organizations transform through digital change. She is the former National Managing Principal, Enterprise Technology Strategy & Innovation for Grant Thornton LLP from December 2017 until November 2019. She served as the Senior Vice President and General Manager for MITRE Corporation from 2017 through 2018 and as the Assistant Secretary for Information & Technology and Chief Information Officer for the United States Department of Veteran Affairs from 2015 through 2017. Ms. Council was the Chief Executive Officer of Council Advisory Services, LLC from 2012 through 2015 and served as the Corporate Vice President and Global Chief Information Officer for Johnson & Johnson from 2006 through 2011. Before that, she served in several roles of increasing responsibility at DELL, Inc., most recently as the Global Vice President Information Technology, Global Business Solutions, and Development Services. Ms. Council received her Master of Business Administration from Illinois State University and her Bachelor of Business Administration in Computer Science from Western Illinois University. The Board of Directors has determined that Ms. Council is independent within the meaning of the rules of the New York Stock Exchange.

Ms. Council’s qualifications for appointment to CONMED’s Board include her extensive experience as a global operations and information technology executive with budgets ranging up to $4.5 billion per year. The Board strongly believes that the Board and Company benefit from the perspectives that Ms. Council brings from her experience, her gender, and racial diversity. She has the ability and willingness to serve on a Board, and the correct fit to work in a collegial manner with the other directors.
 
Committees:
- Compensation
- Corporate Governance and Nominating

 

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CHARLES M. FARKAS (age 68) has served as a Director of the Company since July 2014. Mr. Farkas has spent the past 40 years at Bain & Company. Mr. Farkas became an Advisory Partner effective July 1, 2015. Prior to this, Mr. Farkas was a Senior Partner at Bain & Company, served as the Global Co-Head of Bain's Healthcare Practice and advised leading medical technology and pharmaceutical companies in the United States, Europe, and Asia. He also advised academic medical centers and provider organizations in the United States. Mr. Farkas advised chief executives and senior managers in a wide variety of industries on issues critical to long-term success, including strategy, mergers and acquisitions, and operational effectiveness. He has served as the managing director of Bain Canada and as the global leader of Bain & Company's Financial Services practice. Prior to working at Bain, Mr. Farkas received a Bachelor of Arts degree from Princeton University and a Masters in Business Administration from Harvard Business School. Mr. Farkas is also on the Board of John A. Hartford Foundation, a Corporator of Partners Healthcare and from 2005 to 2017 on the Board of the Harvard Medical School. Mr. Farkas is also a special advisor to Altamont Capital Partners, where he advises on and supports their investments in small-cap healthcare businesses. The Board of Directors has determined that Mr. Farkas is independent within the meaning of the rules of the New York Stock Exchange.

Mr. Farkas’ qualifications for election to CONMED’s Board include his almost 40 years working in healthcare in the US and around the world. Mr. Farkas is a highly-respected leader and he offers the other directors strategic and governance perspectives, drawing on his vast experience inside and outside the healthcare industry. He has the ability and willingness to serve on a Board, and the correct fit to work in a collegial manner with the other directors.
Committees:
- Strategy (chair)
- Compensation

 
 



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MARTHA GOLDBERG ARONSON (age 52) was appointed to the Board on February 23, 2016. Ms. Goldberg Aronson has had responsibility for global health care businesses ranging in size from $500 million to $1.0 billion. She was the Executive Vice President and President of Global Healthcare for Ecolab, Inc. (NYSE: ECL) from 2012 through 2015, having previously served as the Senior Vice President and President – North America for Hill-Rom Holdings, Inc. (NYSE: HRC) from 2010-2012. Prior to that, Ms. Goldberg Aronson was the Senior Vice President and Chief Talent Officer for Medtronic, Inc. (NYSE: MDT), having held various prior general management positions within Medtronic, both in the United States and Internationally. Ms. Goldberg Aronson holds a Bachelor of Arts Degree in Economics from Wellesley College, and a Masters in Business Administration from Harvard Business School. Ms. Goldberg Aronson also served on the board of directors of Methode Electronics, Inc. (NYSE: MEI) through September 2019, and Clinical Innovations, LLC through December 2019, and continues to serve on the board of Cardiovascular Systems, Inc. (NASDAQ: CSII) as well as Beta Bionics since February 2020. The Board of Directors has determined that Ms. Goldberg Aronson is independent within the meaning of the rules of the New York Stock Exchange.

Ms. Goldberg Aronson’s qualifications for election to CONMED’s Board include her extensive experience in the global healthcare markets, including leadership roles within medical device companies, including her experience in marketing and talent development. The Board strongly believes that the Board and Company benefits from the perspectives that Ms. Goldberg Aronson brings to the Board and the Company as a result of her gender diversity. She has the ability and willingness to serve on a Board, and the correct fit to work in a collegial manner with the other directors.
Committees:
- Compensation (chair)
- Corporate Governance and Nominating

 
 
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CURT R. HARTMAN (age 56) has served as President & Chief Executive Officer of the Company since November 9, 2014 after serving as Interim Chief Executive Officer of the Company from July 2014 to November 2014, and as a Director of the Company since March 2014. He had a twenty-two year career at Stryker Corporation (“Stryker”) (NYSE: SYK) from 1990 through February 2013. Most recently, he served as the Interim Chief Executive Officer of Stryker from February 2012 to October 2012. Prior to this role, Mr. Hartman was the Vice President of Finance and Vice President, CFO of Stryker from November 2008 to October 2012. Prior to this Mr. Hartman was Global President, of the Stryker Instruments Division from September 1999 to October 2008. Mr. Hartman has a Bachelor of Science degree in Aerospace Engineering from the University of Michigan and a Harvard Advanced Management Program Certificate from the Harvard Business School. Prior to Mr. Hartman’s appointment as Interim CEO, the Board of Directors had determined that he was independent.

Mr. Hartman’s qualifications for election to CONMED’s Board include his vital role as both Chief Executive Officer and Interim Chief Executive Officer of the Company, as well as his experience as a former CFO of a publicly-traded medical device company in the orthopedic space. He offers industry experience from a commercial, operational and financial perspective.
Committees:
- Pricing


 
 
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JEROME J. LANDE (age 44) has served as a Director of the Company since March 2014. As of April 4, 2016, Mr. Lande became Head of Special Situations for Scopia Capital Management L.P. (“Scopia”) and as of January 1, 2018 also became a Partner of Scopia. Prior to Scopia, Mr. Lande was the Managing Partner of Coppersmith Capital, which he co-founded in April 2012. Previously, Mr. Lande was a partner at MCM Capital Management, LLC (“MCM”), from January 2006 until February 2012, and served as an Executive Vice President at MCM from January 2005 until he left the company. MCM was the general partner of MMI Investments, L.P., a small-cap deep value fund where Mr. Lande was responsible for all areas of portfolio management. He served as a Vice President of MCM from February 2002 to January 2005 and as an Associate from January 1999 to February 2002. Mr. Lande served as Corporate Development Officer of Key Components, Inc., a global diversified industrial manufacturer that was formerly an SEC reporting company, from January 1999 until its acquisition by Actuant Corporation in February 2004. Mr. Lande also serves on the Board of Directors, Audit and Finance Committee for Itron, Inc. (NASDAQ: ITRI). Mr. Lande holds a B.A. from Cornell University. The Board of Directors has determined that Mr. Lande is independent within the meaning of the rules of the New York Stock Exchange.

Mr. Lande’s qualifications for election to CONMED’s Board include his experience as an investor in CONMED and in other stocks. He offers the perspective of a professional investor, with over 20 years of experience investing in healthcare companies in general and medical device companies in particular. He brings a distinct focus on governance, capital markets and shareholder matters to the Board. He has the ability and willingness to serve on a Board, and the correct fit to work in a collegial manner with the other directors.
Committees:
- Compensation
- Strategy


 
 


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BARBARA J. SCHWARZENTRAUB (age 53) has served as a Director of the Company since she was appointed to the Board in September 2019. Ms. Schwarzentraub was with Caterpillar, Inc since 1990 and served as a Director and Divisional Chief Financial Officer for their Global Information Services Division from 2017 until February 2020. From 2016 through 2017, Ms. Schwarzentraub was the Director of Caterpillar’s Global Component Manufacturing and Supply Chain, having previously served as the Director of Caterpillar’s Parts Distribution and Vice President of Caterpillar Logistics Services Inc from 2010 through 2016. She also served as the Director of Global Finance Transformation from 2006 through 2010. Prior to these roles, Ms. Schwarzentraub held a number of positions of increasing responsibility within Caterpillar. Ms. Schwarzentraub received her Master of Business Administration and Bachelor of Science in Accounting from Bradley University. The Board of Directors has determined that Ms. Schwarzentraub is independent within the meaning of the rules of the New York Stock Exchange, and that she is an audit committee financial expert, within the meaning of the rules of the Securities and Exchange Commission.

Ms. Schwarzentraub’s qualifications for appointment to CONMED’s Board include her extensive experience in information technology and supply chain management on a global basis, experience in leading large organizations, financial and accounting experience, and having recently held an active leadership position. The Board strongly believes that the Board and Company benefits from the perspectives that Ms. Schwarzentraub brings to the Board and the Company as a result of her gender diversity. She has the ability and willingness to serve on a Board, and the correct fit to work in a collegial manner with the other directors.
 
Committees:
- Audit



 

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MARK E. TRYNISKI (age 59) has served as a Director of the Company since May 2007 and was the Lead Independent Director from May 2009 until he became Chair of the Board in February 2014. He is the President and Chief Executive Officer of Community Bank System, Inc. (NYSE: CBU), where he served as Executive Vice President and Chief Operating Officer from February 2004 through August 2006. From June 2003 through February 2004, Mr. Tryniski was the Chief Financial Officer. Prior to joining Community Bank in June 2003, Mr. Tryniski was a partner with PricewaterhouseCoopers LLP. Mr. Tryniski also serves on the Board of Directors of the New York Bankers Association as well as the New York Business Development Corporation. Mr. Tryniski holds a B.S. degree from the State University of New York at Oswego. The Board of Directors has determined that Mr. Tryniski is independent within the rules of the New York Stock Exchange, and that he is an audit committee financial expert, within the meaning of the rules of the Securities and Exchange Commission.

Mr. Tryniski’s qualifications for election to CONMED’s Board include his extensive experience as an active Chief Executive Officer of a public financial institution as well as his financial and accounting expertise acquired through his experience as an audit partner with PricewaterhouseCoopers LLP. His exposure to, and familiarity with, banking and financial matters offers a number of contacts and level of familiarity with financial matters that is unique on the Board. Further, his experience engaging with shareholders makes him well-suited to serve in the role of Chair of the Board.
 
Committees:
- Board Chair
- Audit
- Strategy

 

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DR. JOHN L. WORKMAN (age 68) was appointed to the Board in July 2015. Mr. Workman served as Chief Executive Officer of Omnicare, Inc. from 2012 to 2014, as President and Chief Financial Officer from 2011 to 2012, and as Executive Vice President and Chief Financial Officer from 2009 to 2010. From 2004 to 2009, he was Chief Financial Officer of HealthSouth Corporation (now Encompass Health Corporation), where he oversaw a comprehensive financial statement reconstruction and reduced the company’s debt level by 50% through both a recapitalization and asset divestitures. Prior to HealthSouth, Mr. Workman served as Chief Executive Officer of U.S. Can Corporation from 2002 - 2004. Mr. Workman started his career at KPMG, where he was a partner from 1981 to 1984. He is currently Chairman of the Board and Audit Committee Chair of Agiliti, Inc. (formerly Universal Hospital Services), a company owned by a private equity fund, and a Director, Audit Committee Chair and member of the Compensation Committee and Nominating and Governance Committee of Federal Signal Corp (NYSE: FSS). Mr. Workman also served on the Board of Care Capital Properties from August 2016 until its merger with Sabra Health Care REIT in August 2017. Mr. Workman received his EdD from Olivet Nazarene University, his Master of Business Administration in Finance and Accounting from the University of Chicago and his Bachelor of Science Degree in Accounting from Indiana University. The Board of Directors has determined that Mr. Workman is independent within the rules of the New York Stock Exchange, and that he is an audit committee financial expert, within the meaning of the rules of the Securities and Exchange Commission.

Mr. Workman’s qualifications for election to CONMED’s Board include his extensive experience as a Chief Financial Officer generally, and in the healthcare industry in particular, as well as his financial and accounting expertise acquired through his experience as a partner with KPMG. His exposure to, and familiarity with, health care services matters and capital structure issues provides valuable insights and perspectives to the Board. He has the ability and willingness to serve on a Board, and the correct fit to work in a collegial manner with the other directors.
Committees:
- Audit (chair)
- Pricing




 
 

The Board of Directors has determined that Messrs. Bronson, Concannon, Farkas, Lande, Tryniski, and Workman and Mses. Council, Goldberg Aronson and Schwarzentraub have no material relationship with the Company and are independent under the standards of the New York Stock Exchange. The independent directors meet in executive session during each in-person Board meeting.

Executive & Other Officers

TERENCE M. BERGE (age 50) joined the Company in June 1998 as Assistant Corporate Controller and served as the Company’s Treasurer from March 2008 through March 2015. In March 2013, Mr. Berge’s title was changed to Corporate Vice President, Treasurer and Assistant Controller. On April 1, 2015, Mr. Berge was promoted to Vice President, Corporate Controller. Prior to joining the Company, Mr. Berge was employed by Price Waterhouse LLP from 1991 through 1998 where he served most recently as an audit manager. Mr. Berge is a certified public accountant and holds a B.S. degree in Accounting from the State University of New York at Oswego.

PATRICK J. BEYER (age 54) joined the Company as President of CONMED International in December 2014. Prior to joining the Company, Mr. Beyer served as Chief Executive Officer of ICNet, a privately held infectious control software company from 2010 to 2014 when the company was sold. Prior to this, Mr. Beyer spent 21 years at Stryker Corporation where he led Stryker Europe from 2005-2009; Stryker UK, South Africa and Ireland from 2002 to 2005 and Stryker Medical from 1999 to 2002. Mr. Beyer graduated from Kalamazoo College with a BA in Economics, Western Michigan University with an MBA in Finance and Harvard Business School’s Advanced Management Program.

HEATHER L. COHEN (age 47) joined the Company in October 2001 as Associate Counsel and served as Deputy General Counsel from March 2002 to February 2015 and as the Company’s Secretary since March 2008. In June 2008, Ms. Cohen was also named the Vice President of Corporate Human Resources. In March 2013, Ms. Cohen’s title was changed to Executive Vice President, Human Resources, Deputy General Counsel and Secretary and in April 2015 her title changed to Executive Vice President, Human Resources & Secretary. In May 2018, Ms. Cohen relinquished the Secretary title. Prior to joining the Company, Ms. Cohen was an Associate Attorney with the law firm Getnick Livingston Atkinson Gigliotti & Priore, LLP from 1998 to 2001. Ms. Cohen holds a B.A. in Political Science and Education from Colgate University and a J.D. from Emory University.

NATHAN FOLKERT (age 45) joined the Company as the Vice President, General Manager, U.S. Orthopedics in September 2015. Prior to joining CONMED, Mr. Folkert served in leadership positions with Zimmer, most recently as the President, Trauma Division from January 2013 to June 2015, prior to this as the General Manager, Canada from January 2010 to January 2013 and other managerial positions from 2007 to 2010. Prior to Zimmer, Mr. Folkert was employed by Wheelchair Professionals from 2005 to 2007 and by Stryker Corporation from 2000 to 2005. Mr. Folkert graduated with a B.S. degree in Political Science

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from the United States Military Academy at West Point and also earned his M.B.A. from the University of Notre Dame Mendoza College of Business.

TODD W. GARNER (age 51) joined the Company as Executive Vice President & Chief Financial Officer on January 2, 2018. Prior to joining CONMED, he served as Vice President - Investor Relations for C.R. Bard, Inc. from 2011 until December 2017. Mr. Garner’s prior roles with C.R. Bard, Inc. include Vice President, Controller (Division Chief Financial Officer) for its Medical division from 2007 through 2011, Director of Financial Reporting from 2005 through 2007 and the Controller of the Reynosa Operations from 2003 through 2005. Prior to working at C.R. Bard, Inc., Mr. Garner was the acting CFO and Controller at Echopass Corporation (currently Genesys Corporation) from 2000 to 2003, the Controller and Value Planning Manager at Futura Industries, Corp. from 1997 to 2000, Accounting Manager at Excel Communications in 1997 and Accounting Coordinator at Verizon from 1995 to 1996. Mr. Garner began his career with Arthur Andersen LLP, where he was a senior auditor from 1992 to 1995. Mr. Garner holds an MBA from the University of Texas - Pan American, and a B.S. in accounting from Brigham Young University. Mr. Garner is also a Certified Public Accountant.

DANIEL S. JONAS (age 56) joined the Company as General Counsel in August 1998 and in addition became the Vice President-Legal Affairs in March 1999. In March 2013, Mr. Jonas’ title was changed to Executive Vice President, Legal Affairs & General Counsel. In May 2018, Mr. Jonas assumed the role of Secretary. Prior to his employment with the Company, Mr. Jonas was a partner with the law firm of Harter, Secrest & Emery, LLP in Syracuse from January 1998 to August 1998, having joined the firm as an Associate Attorney in 1995. Mr. Jonas holds an A.B. in Classics (Latin) from Brown University and a J.D. from the University of Pennsylvania Law School.

JOHN E. (JED) KENNEDY (age 62) joined the Company in September 2012 as Vice President and General Manager, Visualization and Endomechanical. In January 2015, Mr. Kennedy became Vice President and General Manager, U.S. Endoscopic Technologies. In February 2020, Mr. Kennedy became Group Executive Vice President, Patient Care and Endoscopic Technologies. Prior to joining the Company, Mr. Kennedy served as President and Chief Executive Officer of Viking Systems, Inc. from January 2010 to September 2012. Mr. Kennedy had formerly served as President and Chief Operating Officer of Viking Systems, Inc. from October 2007 to December 2009. Prior to October 2007, Mr. Kennedy was the President of the Vision Systems Group at Viking Systems, Inc. From January 1997 to September 2007, Mr. Kennedy held various executive positions with Vista Medical Technologies, Inc. Prior to joining Vista Medical Technologies, Inc., Mr. Kennedy held various positions in Manufacturing, Quality Engineering and Product Development at Smith & Nephew Endoscopy from 1984 through January 1997. Prior to 1984, he held various engineering positions at Honeywell’s Electro-Optics and Avionics divisions. Mr. Kennedy received a B.S. in Manufacturing Engineering from Boston University.
    
SARAH M. OLIKER (age 43) joined the Company in April 2014 as Assistant General Counsel. She became Assistant General Counsel and Assistant Secretary in May 2018. Prior to joining the Company, she was Senior Counsel for ProCure Treatment Centers, Inc. in New York City, having previously spent five years with Epstein Becker & Green in its Health Care & Life Sciences group based in Washington, D.C. Ms. Oliker is the current Chair of the Board of Directors of MedTech, a New York Life Sciences non-profit. Ms. Oliker holds a B.A. in Political Science from Colgate University and a J.D. from Syracuse University College of Law.

JOHONNA PELLETIER (age 47) joined the Company in 2005 as Tax Director. Effective April 1, 2015, Ms. Pelletier was promoted to Treasurer and Vice President, Tax. Prior to joining the Company, she was employed by PricewaterhouseCoopers LLP where she most recently served as a tax senior manager. She is a certified public accountant and graduated with a B.S. degree in Accounting from Le Moyne College.

STANLEY W. (BILL) PETERS (age 45) joined the Company as Vice President and General Manager, U.S. Advanced Surgical in January 2015. Prior to joining the Company, Mr. Peters served as Director of Sales for Mako Surgical Corporation from 2012 to 2014. Mako was purchased by Stryker Corporation in December 2013. Prior to this, Mr. Peters served as an executive with EndoGastric Solutions from 2011 to 2012 and in sales leadership roles at Intuitive Surgical from 2009 to 2011. Prior to Intuitive Surgical, Mr. Peters was employed at Stryker Corporation in sales leadership from 2004 to 2009. Mr. Peters graduated from Ohio University with a B.B.A. degree in Finance.

WILFREDO RUIZ-CABAN (age 55) joined the Company as the Executive Vice President, Quality Assurance & Regulatory Affairs in September 2015 and in February of 2016 was named Executive Vice President, Quality Assurance, Regulatory Affairs and Operations. Prior to joining the Company, Mr. Ruiz served as the Director, Americas Global Manufacturing from June 2015 to September 2015 and prior to this as the Worldwide Quality Operations Director from August 2012 to June 2015 with Johnson & Johnson, DePuy Synthes. Prior to Johnson & Johnson, Mr. Ruiz served as the Senior Manufacturing Director for Medtronic from June 2009 to August 2012. Mr. Ruiz also held a number of managerial positions in manufacturing and quality

33


operations. Mr. Ruiz graduated from Cornell University with a B.S. degree in both Electrical and Material Science Engineering and a G.M.B.A. from the Thunderbird School of Global Management.

PETER K. SHAGORY (age 51) joined the Company as Executive Vice President, Strategy and Corporate Development in May 2015. Mr. Shagory has more than 20 years of experience in healthcare venture investing and mergers and acquisitions through his previous venture capital, investment banking and corporate roles. Prior to joining the Company, Mr. Shagory led the strategy and business development efforts for Cardinal Health's Medical Products Group within the Medical Segment from June 2013 to May 2015 where he played a key role in Cardinal Health’s entry into the interventional cardiovascular and the advanced wound care categories. Prior to that, Mr. Shagory led the healthcare and life sciences investment effort at Baird Venture Partners from January 2004 to mid-2013, focusing on medical technology and research tools and diagnostics. Mr. Shagory earned an MBA from Dartmouth’s Tuck School of Business and a B.S. in Finance from Miami University in Oxford, Ohio.



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SKILLS MATRIX, BOARD REFRESHMENT AND DIVERSITY
The Board has a comprehensive, ongoing director succession and board refreshment planning process designed to provide the Board with an appropriate mix of viewpoints, perspectives, skills and experiences necessary to promote and support and oversee the Company’s strategy. The Board regularly evaluates the Company’s evolving needs and adds new skills, qualifications and experience to the Board as necessary to ensure that the Board remains capable of addressing the risks, trends and opportunities that the Company will face in the future.

The Board is committed to achieving a diverse and broadly inclusive membership. The Corporate Governance and Nominating Committee considers a diverse range of skills, experiences and attributes in determining whether an individual is qualified to serve as a director of the Company, including diversity in gender, ethnicity, differences in viewpoint, geographic location, skills, education, and professional and industry experience. The Board is proud of its ongoing efforts to improve its board diversity, with its three most recently-appointed directors consisting of diverse candidates.

The Corporate Governance and Nominating Committee maintains a skills matrix, which it reviews and updates as needed annually, to serve two primary purposes. First, it includes all of the skills and backgrounds the Committee believes are particularly valuable for the Board to oversee the Company and its management. Second, it allows the Board to compare the skills required against the inventory of skills and backgrounds represented individually and collectively by all directors, so that the Corporate Governance and Nominating Committee can recommend changes to the Board, as needed, as the skills or backgrounds needed, or represented, change over time. During 2019, the Board identified the need for increased representation of the following skills and backgrounds: actively engaged executive level perspective; information technologies; gender diversity; and racial diversity. This review resulted in the additions of Barbara J. Schwarzentraub and LaVerne Council to the Board of Directors, who bring these skills and backgrounds to the Board.

The key qualifications, skills, experience and perspectives that each director brings to the Board are included in their individual biographies and also summarized below. While all of these qualifications were considered by the Corporate Governance and Nominating Committee and the Board in making this year’s nomination decisions, and as part of the Board refreshment process, the following summary does not encompass all of the skills, experience, qualifications and attributes of the director nominees and the fact that a particular skill, experience, qualification or attribute for a nominee is not listed below does not mean that he or she does not possess that skill, experience, qualification or attribute. The Board firmly believes that its highly-qualified director nominees provide the Board with a diverse complement of specific business skills, experience and perspectives necessary to ensure effective oversight. The skills the Board considers include, among others, the following:

Independent
Strategy/M&A
Senior Leadership Experience
Risk Management
Active Executive
Operations
Medical Device
Technology
Finance
Shareholder/Capital Markets
Sales/Marketing
Diversity


ANNUAL BOARD SELF-EVALUATION
The Board recognizes that a robust and constructive evaluation process is an essential component of Board effectiveness. As such, the Board, and each committee, conduct annual self-assessments with the assistance of the General Counsel. Each director submits responses anonymously to the General Counsel, who then summarizes the results to the Corporate Governance and Nominating Committee, identifying any themes or issues that have emerged. These self-assessments are designed to elicit suggestions about a range of topics designed to assess Board and committee performance, including Board and committee composition, structure, responsibilities, information received, accountability and effectiveness, among other topics. The Corporate Governance and Nominating Committee considers the ways in which the Board processes and effectiveness may be enhanced based on the results of the evaluation process. The Corporate Governance and Nominating Committee then reports on the results of the evaluation process and recommends its suggested changes to the full Board of Directors. As a result of the evaluation, in an effort to bring fresh perspectives, the Board has made a number of changes, including, for example, changes in the Committee chairs during 2019, with the result that two of the four Board committees have two new chairs, as well as adding new topics or devoting more time to particular topics of interest to meeting agendas.


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MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES,
LEADERSHIP STRUCTURE AND RISK OVERSIGHT
During 2019, the full Board of Directors met seven times in person or by telephone conference and acted by unanimous written consent three times. Each director attended or participated in all of the board meetings.
Leadership Structure
The Board’s Leadership Structure is designed to promote Board effectiveness, and to allocate authority and responsibility appropriately between the Board and management. All members of our board committees other than the Pricing Committee -namely, the Audit Committee, the Compensation Committee, the Corporate Governance and Nominating Committee and the Strategy Committee - are independent. The independent members of the Board of Directors also meet regularly without management.

The Board of Directors is committed to independent oversight of management, but believes it is important to retain flexibility to determine the leadership structure based on the particular composition of the Board, of management and the needs and opportunities of the Company, as they all change and evolve over time. The Board currently has a leadership structure with an independent Chair, whose role includes the following:

Setting the agenda for meetings of the Board of Directors, in consultation with the chairs of the various Board Committees and management;
Providing leadership for the Board of Directors during the meetings by presiding over the meetings, and for communications among directors between meetings;
Establishing the schedule for Board and Committee meetings in light of the quarterly reporting obligations, investor conferences and meetings, and conflicting scheduling demands;
Presiding over the meetings of the independent directors in executive session;
Presiding over the Annual Shareholder Meeting;
Being available, as needed, to meet with shareholders;
Establishing the priorities for Board of Directors;
Working with the Nominating and Corporate Governance Committee and the General Counsel in connection with the annual self-assessment of the Board of Directors; and
Serving as the liaison between the Chief Executive Officer and the independent directors.

In December 2019, Mr. Tryniski informed the Board that he did not wish to stand for reappointment as Chair of the Board following the 2020 Annual Meeting of Shareholders, although he was prepared to continue to serve as a director. Acting through the Corporate Governance and Nominating Committee, the Board undertook a thoughtful and thorough reassessment of its leadership structure, and consulted with independent advisors on current trends and governance practices, following which Mr. Tryniski consulted directors individually. The Board then held discussions, including executive sessions, at its February 2020 meeting and continued these discussions into March 2020.

As a result, the Board unanimously concluded that combining the roles of Chair and CEO effective upon the expiration of Mr. Tryniski’s term as Chair following the 2020 Annual Meeting of Shareholders was in the best interest of the Company, together with the simultaneous appointment of Ms. Goldberg Aronson as Lead Independent Director in order to maintain strong independent oversight of management. The Board believes that having a combined CEO and Chair is effective in allowing Mr. Hartman to draw on his intimate knowledge of the operations of the business and industry developments to provide leadership on the broad strategic issues considered by the Board. At the same time, a strong Lead Independent Director, along with the Board’s independent committees and substantial majority of independent directors, establishes an effective balance between management leadership and appropriate oversight by independent directors.
In this regard, the Board has defined the roles of Chair and Lead Independent Director as outlined below, so that the respective duties and responsibilities of management authority in the Chair and Board oversight through the Lead Independent Director are clear, effective and balanced:

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Chair
Lead Independent Director
Prepares the agenda for meetings of the Board of Directors and committees, in consultation with the Lead Independent Director, and the chairs of the various Board Committees
Provides advice and consultation to Chair, and consults as to the agenda for meetings of the Board of Directors and committees, and has the authority to add items to the agenda
Establishes the schedule for Board and Committee meetings in light of the quarterly reporting obligations, investor conferences and meetings, and conflicting scheduling demands
Consults with Chair concerning schedule for meetings to ensure there is sufficient time to discuss all agenda items
Provides leadership for the Board of Directors during the meetings by presiding over the meetings, and for communications among directors between meetings
Presides over the meetings of the independent directors in executive session, and in the absence of the Chair
Guides the Board’s annual self-assessment
Serves as the liaison between the Chief Executive Officer and the independent directors between meetings, including providing feedback of discussions during executive sessions
Presides over the Annual Shareholder Meeting
Has the authority to call a meeting of the Board, including a meeting of the independent directors
 
Acts as a sounding board for the Chair and CEO
 
Speaks to or meets individually with the Chair and CEO prior to and following each Board meeting or calls as appropriate
 
Establishes the priorities for the Board of Directors
 
Advises the CEO of the Board’s information needs
 
Guides the Board’s annual assessment of the CEO
 
Be available, as needed, to meet with shareholders

Risk Oversight

While the Company’s management is responsible for day-to-day risk management, the Board has the ultimate responsibility for overseeing the Company’s risk management process. The Company has instituted a thorough, comprehensive enterprise risk management program, which is a Company-wide effort to identify, assess, manage, report and monitor enterprise-wide risks that may affect our ability to achieve our business objectives. This program involves regular Board oversight along with quarterly updates on key risks by management, with the CEO and the General Counsel reporting at each Board meeting of any material changes during the course of the year as they arise. To create the enterprise risk management assessment, executive management works with the General Counsel to:
aggregate all significant risks that may have a material impact on the Company;
assess industry-wide risks as experienced by competitors and others in the same industry as well as emerging risks, including, for example, cyber-security and data privacy;
identify a plan to mitigate, reduce or manage each identified risk, to the extent possible;
review each identified risk quarterly, with more frequent monitoring of significant risks; and
provide the Board with reports on the overall enterprise risk management process, including a dashboard showing the likelihood and potential of each risk identified, as well as an identification of the trends for each risk, with management providing more in depth reviews of key risks identified by management, or as requested by the Board of Directors.

The Board’s oversight of risk includes monitoring management’s efforts to identify risks and manage risk parameters, including those relating to FDA compliance, anti-corruption compliance and cyber-security.
 
BOARD COMMITTEES
The Company’s Board of Directors currently has four standing committees: the Audit Committee, the Compensation Committee, the Corporate Governance and Nominating Committee and the Strategy Committee. In addition, during 2019, the Board formed a Pricing Committee in connection with the issuance of convertible notes. Current members of the individual committees are named below:

37


Audit Committee
 
Compensation Committee
 
Corporate
Governance and
Nominating Committee
 
Strategy Committee
 
 
 
 
 
 
 
Dr. John L. Workman,
Chair
 
Martha Goldberg Aronson,
Chair
 
David Bronson,
Chair
 
Charles M. Farkas,
Chair
David Bronson
 
Brian P. Concannon
 
LaVerne Council
 
Brian P. Concannon
Barbara J. Schwarzentraub
 
LaVerne Council
 
Martha Goldberg Aronson
 
Jerome J. Lande
Mark E. Tryniski
 
Charles M. Farkas
 
 
 
Mark E. Tryniski
 
 
Jerome J. Lande
 
 
 
 
Pricing Committee
 
David Bronson
Curt R. Hartman
Dr. John L. Workman

The Audit Committee was established in accordance with Section 3(a)(58)(A) of the Exchange Act and currently consists of four independent directors. As more fully detailed in its charter, the Audit Committee is charged with (a) oversight of the Company’s accounting and financial reporting principles, policies and internal accounting controls and procedures; (b) oversight of the Company’s financial statements and the independent audit thereof; (c) nominating the outside independent registered public accounting firm to be proposed for shareholder approval; (d) evaluating and, where deemed appropriate, replacing the independent registered public accounting firm; (e) pre-approving all services permitted by law to be performed by the independent registered public accounting firm; (f) approving all related-party transactions above $5,000; (g) establishing procedures for (i) the receipt, retention and treatment of complaints by the Company regarding accounting, internal accounting controls or auditing matters, and (ii) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters; and (h) the oversight of the Company’s response to claims involving potential financial fraud or ethics matters. The Audit Committee has delegated its authority to pre-approve work by the independent registered public accounting firm and related-party transactions to the Chair of the Audit Committee, who is required to disclose any such pre-approvals at the Audit Committee’s next meeting. The Audit Committee met ten times during 2019. All then-current members of the Audit Committee attended every meeting. The current Audit Committee Charter is on the Company’s website in the corporate governance tab of the investor relations section (at http://www.conmed.com/en/about-us/investors/investor-relations). The charter is also available in print to any shareholder who requests it.
The Compensation Committee currently consists of five independent directors. As set forth in its charter, the Compensation Committee is charged with reviewing and establishing levels of salary, bonuses, benefits and other compensation for the Company’s CEO and the CEO's direct reports. The Compensation Committee met six times during 2019. All then-current members of the Compensation Committee attended every meeting. The Compensation Committee, and the full Board of Directors, has determined that the Company’s compensation policies and practices are not reasonably likely to have a material adverse effect on the Company because the value of senior management’s short-term incentives are balanced by the value of longer-term incentives. Employees below the senior management level are provided annual incentives that are lower in relation to salary and therefore do not have an incentive that results in risk to the Company as a result of compensation practices or structure. The current Compensation Committee Charter is available on the Company’s website in the corporate governance tab of the investor relations section (at http://www.conmed.com/en/about-us/investors/investor-relations). The charter is also available in print to any shareholder who requests it.
The Corporate Governance and Nominating Committee currently consists of three independent directors. As stated in its charter, the Corporate Governance and Nominating Committee is responsible for recommending individuals to the full Board of Directors for nominations as members of the Board of Directors, for making recommendations to the full Board of Directors on all matters concerning corporate governance practices, including the development of a set of corporate governance principles and evaluation of the board and committees, and for overseeing the Company’s approach to environmental, social and governance matters. In this regard, while the Corporate Governance and Nominating Committee ensures that the full Board of Directors oversees the Company’s approach to environmental and governance matters, including the Company’s approach to human rights, and to diversity and inclusion.

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As to nominees for the Board, the Corporate Governance and Nominating Committee will consider, but is not obligated to accept, shareholder recommendations for individuals to be nominated provided that such recommendations are submitted in writing to the Company’s General Counsel within the time frame for shareholder proposals for the Annual Meeting, (more information concerning director nominations is set forth below under the heading Corporate Governance and Nominating Committee Report). The Corporate Governance and Nominating Committee and the full Board seek directors with expertise and experience in managing companies both public and private, in financial matters, experience with United States and international business, and in the medical field in a variety of functions and areas, as well as diversity in background and gender. In this regard, the Corporate Governance and Nominating Committee and the full Board are committed to creating a Board with diversity of expertise, experience, background and gender and expect to seek to identify, recruit and advance candidates offering such diversity in future searches. The Corporate Governance and Nominating Committee met seven times during 2019. All then-current members of the Corporate Governance and Nominating Committee attended every meeting. The current Corporate Governance and Nominating Committee Charter and Corporate Governance Principles are available on the Company’s website in the corporate governance tab of the investor relations section (at http://www.conmed.com/en/about-us/investors/investor-relations). The charter is also available in print to any shareholder who requests it.
The Strategy Committee currently consists of four independent directors. As stated in its charter, the Strategy Committee is responsible for overseeing management's long-term strategic plan for the Company, the risks and opportunities related to such strategy, and strategic decisions regarding investments, acquisitions and divestitures of the Company. The Strategy Committee met six times in 2019. All members of the Strategy Committee attended every meeting. The current Strategy Committee Charter is available on the Company’s website in the corporate governance tab of the investor relations section (at http://www.conmed.com/en/about-us/investors/investor-relations). The charter is also available in print to any shareholder who requests it.
The Pricing Committee was formed in connection with the issuance of convertible notes during 2019, and consisted of three directors, two of whom were independent. The Pricing Committee met once during 2019.


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AUDIT COMMITTEE REPORT
The role of the Audit Committee is to assist the Board of Directors in its oversight of the financial management, independent auditor and financial reporting controls and accounting policies and procedures of the Company. The Board of Directors, in its business judgment, has determined that all members of the Audit Committee are “independent”, as required by the applicable listing standards of the New York Stock Exchange and the rules under the Exchange Act in that no member of the Audit Committee has received any payments, other than compensation for Board services, from the Company, and has not participated in the preparation of the financial statements of the Company or any current subsidiary of the Company at any time during the past four years. Messrs. Bronson, Tryniski and Workman are not currently engaged professionally in the practice of auditing or accounting, while Ms. Schwarzentraub was engaged during 2019 in the practice of accounting in connection with her employment with another company, her service on the Audit Committee is not in the capacity as an accountant. Having considered this, the Audit Committee and Board of Directors have determined that Messrs. Bronson, Tryniski and Workman and Ms. Schwarzentraub qualify as “audit committee financial experts” within the meaning of Section 407 of the Sarbanes-Oxley Act of 2002 and the implementing regulations and that such qualifications were acquired through relevant education and work experience. The Audit Committee operates pursuant to a Charter that was last amended by the Board of Directors in January 2020. A copy of the amended charter, which more fully describes the duties and responsibilities of the Audit Committee, is available on the Company’s website in the corporate governance tab of the investor relations section (at http://www.conmed.com/en/about-us/investors/investor-relations).
Management is responsible for the Company’s internal controls, financial reporting process and compliance with laws and regulations. The independent registered public accounting firm is responsible for performing an integrated audit of the Company’s consolidated financial statements and of its internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (“PCAOB”). The Audit Committee’s responsibility is to monitor and oversee these processes, as well as to attend to the matters set forth in the amended charter. In this regard, during 2019, the Audit Committee continued to work with the Head of Internal Audit, who reports directly to the Audit Committee, in connection with the Audit Committee’s oversight of the financial management, independent auditor and financial reporting controls and accounting policies and procedures of the Company.
In this context, the Audit Committee met ten times during 2019 and held numerous discussions with management and with the independent registered public accounting firm, including executive meetings without management present. Management represented to the Audit Committee that the Company’s audited consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Committee has reviewed and discussed the audited consolidated financial statements with management and the independent registered public accounting firm. The Audit Committee discussed with the independent registered public accounting firm matters required to be discussed under PCAOB Auditing Standard No. 16 (Communication with Audit Committees).
The Company’s independent registered public accounting firm also provided to the Audit Committee the written disclosures and the letter regarding the independent registered public accounting firm’s independence required by the PCAOB (Rule 3526, Communications with Audit Committees Concerning Independence) and the Audit Committee discussed with the independent registered public accounting firm its independence. In this regard, the Audit Committee evaluates the fees proposed and billed for non-audit services and also considers the nature and scope of non-audit services when evaluating the independence of the independent registered public accounting firm, all of which the Audit Committee pre-approves. Taking all of these matters into consideration, the Audit Committee has determined that the provision of non-audit services by the independent registered public accounting firm, and the fees and costs incurred in connection with those services, are compatible with the auditor’s independence in light of the nature and extent of permissible non-audit services provided to the Company.
In order to assure continuing auditor independence, the Audit Committee periodically considers whether there should be a regular rotation of the company’s independent registered public accounting firm. In connection with considering whether to retain PricewaterhouseCoopers LLP, the Audit Committee considers, among other things, its familiarity with the Company’s business and operations, its knowledge of and exposure to the industry as a whole, its quality of communication with the Audit Committee, its ability to provide knowledgeable staff, and the expertise and responsiveness of the national office and other experts in various fields within the audit firm. The members of the Audit Committee and the Board have considered the length of the independent registered public accounting firm’s engagement with the Company, the amount of the fees charged and the tenor of the negotiations concerning such fees, as well as the shareholder ratification of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm. Considering all of these factors, the members of the Audit Committee and the Board believe that the continued retention of PricewaterhouseCoopers LLP to serve as the Company’s independent registered public accounting firm is in the best interests of the Company and its shareholders.
Members of the Audit Committee rely without independent verification on the information provided to them and on the representations made by management and the independent registered public accounting firm. Accordingly, the Audit Committee’s

40


oversight does not provide an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or appropriate internal control and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the Audit Committee’s considerations and discussions referred to above do not assure that the audit of the Company’s financial statements has been carried out in accordance with generally accepted auditing standards, that the financial statements are presented in accordance with generally accepted accounting principles or that the Company’s auditors are in fact “independent”.
Based upon the Audit Committee’s review and discussions referred to above, and subject to the limitations on the role and responsibilities of the Audit Committee referred to above and in the Charter, the Audit Committee recommended that the Board of Directors include the Company’s audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission.
Submitted by the Audit Committee,
 Dr. John L. Workman (Chair)
David Bronson
 Barbara J. Schwarzentraub
Mark E. Tryniski


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CORPORATE GOVERNANCE AND NOMINATING COMMITTEE REPORT
The role of the Corporate Governance and Nominating Committee is to recommend individuals to the Board for nomination as members of the Board and its committees to develop and recommend to the Board a set of corporate governance principles applicable to the Company, and to oversee the Company’s approach to environmental, social and governance matters. The Board of Directors, in its business judgment, has determined that all members of the Corporate Governance and Nominating Committee are “independent”, as required by applicable listing standards of the New York Stock Exchange, in that no member of the Corporate Governance and Nominating Committee has received any payments, other than compensation for Board services, from the Company. The Corporate Governance and Nominating Committee operates pursuant to a Charter that was last amended and restated by the Board of Directors in December 2019. A copy of the amended and restated charter is available on the Company’s website in the corporate governance tab of the investor relations section.
The Corporate Governance and Nominating Committee has no fixed process for identifying and evaluating potential candidates to be nominees. The Corporate Governance and Nominating Committee has no fixed set of qualifications that must be satisfied before a candidate will be considered, although the Corporate Governance and Nominating Committee and the Full Board are committed to creating a Board with diversity, including diversity of expertise, experience, background, and gender and is committed to identifying, recruiting, and advancing candidates offering such diversity in future searches. The Corporate Governance and Nominating Committee has opted to retain the flexibility to consider such factors as it deems appropriate. These factors may include judgment, skill, diversity, reputation, experience with businesses and other organizations of comparable size as executives, directors or in other leadership positions, an understanding of finance and financial reporting processes, a corporate governance background, the ability to dedicate significant time for service on the Company’s Board of Directors, the interplay of the candidate’s experience with the experience of other Board members, and the extent to which the candidate would be a desirable addition to the Board and any committees of the Board. In this regard, the Corporate Governance and Nominating Committee also looks for the skills and expertise required to satisfy the listing requirements of the New York Stock Exchange, on which the Company’s stock is traded.
During 2019, the Corporate Governance and Nominating Committee considered the Board’s committee structure, leadership and the succession planning for the Committees, and concluded that it was appropriate for rotation of the chairs of the Corporate Governance and Nominating Committee as well as with respect to the Compensation Committee. In addition, the Corporate Governance and Nominating Committee determined during 2019 that it was advisable and in the best interests of shareholders to increase the size of the Board, and to enhance the diversity of the Board, with the appointments of Ms. Schwarzentraub and Ms. Council.
The Committee may consider candidates proposed by management, but is not required to do so. As previously disclosed, the Corporate Governance and Nominating Committee will consider any nominees submitted to the Company by shareholders wishing to propose nominees for election as directors at the 2021 Annual Meeting, provided that the shareholders proposing any such nominees have adhered to specified advance notice procedures contained in the Company’s by-laws, a copy of which is available on request to the General Counsel of the Company, CONMED Corporation, 525 French Road, Utica, New York 13502 (Telephone (315) 797-8375).
Submitted by the Corporate Governance and Nominating Committee,
David Bronson (Chair)
LaVerne Council
Martha Goldberg Aronson
 


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SHAREHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS
Shareholders who wish to communicate with the Board of Directors as a group or an individual director may do so by sending correspondence to the attention of the General Counsel of the Company at 525 French Road, Utica, New York 13502 with a cover letter specifying the intended recipient. At this time, no communications received by the Company in this manner will be screened, although this could change without prior notice. As set forth in the Company’s Corporate Governance Principles, the Company’s policy is that directors will attend the Annual Meeting of Shareholders, absent exceptional circumstances. All directors attended the 2019 Annual Meeting of Shareholders (the “2019 Annual Meeting”) in person.
ETHICS DISCLOSURE
The Company adopted, as of March 31, 2003, and updated on February 28, 2017, an ethics program which applies to all employees, including senior financial officers and the principal executive officer. The ethics program is available on the Company’s website in the corporate governance tab of the investor relations section (http://www.conmed.com/en/about-us/investors/investor-relations), and is administered by the Company’s General Counsel. The Program codifies standards reasonably necessary to deter wrongdoing and to promote honest and ethical conduct, avoidance of conflicts of interest, full, fair, accurate, timely and understandable disclosure, compliance with laws, prompt internal reporting of code violations and accountability for adherence to the code and permits anonymous reporting by employees to an independent third party, which forwards reports if and when it receives any anonymous reports. No waivers under the Ethics Program have been granted.
PRINCIPAL ACCOUNTING FEES AND SERVICES
The Audit Committee is responsible for the audit fee negotiations associated with the retention of PricewaterhouseCoopers LLP. The aggregate fees and expenses billed by PricewaterhouseCoopers LLP for professional services rendered for the audit of the Company’s annual financial statements for the years ended December 31, 2019 and December 31, 2018, for the reviews of the financial statements included in the Company’s Quarterly Reports on Form 10-Q for those years, for the audit of the Company’s internal control over financial reporting as of December 31, 2019 and December 31, 2018, and all other audit related, tax consulting and other fees and expenses, are set forth in the table below.
Fee Summary
 
2019
 
2018
Audit Fees:
 
 

 
 

Audit of Annual Financial Statements and Interim Reviews
 
$
2,275,000

 
$
2,073,800

Audit of Internal Control over Financial Reporting
 
Included above

 
Included above

SEC Registration Statements
 
$

 
$

Total Audit Fees
 
$
2,275,000

 
$
2,073,800

Audit Related Fees:
 
 

 
 

Assurance and Related Services1
 
$
232,500

 
$

Tax Fees:
 
 

 
 

Tax Compliance and Consulting Services
 
$
185,983

 
$
217,228

All Other Fees:
 
 

 
 

Research Service License
 
$
2,700

 
$
2,700

Total Fees and Expenses
 
$
2,696,183

 
$
2,293,728

 
1 In conjunction with the Company's acquisition of Buffalo Filter, PricewaterhouseCoopers LLP was engaged to perform an audit of the 2018 Buffalo Filter financial statements. Assurance and related service fees shown above represent the fees associated with the audit.

The Audit Committee has adopted procedures requiring prior approval of particular engagements for services rendered by the Company’s independent registered public accounting firm. Consistent with applicable laws, the Audit Committee has delegated its authority to pre-approve work by the independent registered public accounting firm and related-party transactions to the Chair of the Audit Committee, who is required to disclose any such pre-approvals at the Audit Committee’s next meeting. All fee amounts set forth in the table above were pre-approved.


43


COMPENSATION DISCUSSION AND ANALYSIS
The following Compensation Discussion & Analysis (“CD&A”) describes the philosophy, objectives and structure of our fiscal year 2019 executive compensation program. This CD&A is intended to be read in conjunction with the tables beginning on page 59, which provide further historical compensation information for our named executive officers (“NEOs”) as identified below.
Name
 
Title
Curt R. Hartman
 
Chief Executive Officer
Todd W. Garner
 
Executive Vice President and Chief Financial Officer
Patrick J. Beyer
 
President, CONMED International
Nathan Folkert
 
Vice President & General Manager, U.S. Orthopedics
Stanley W. (Bill) Peters
 
Vice President & General Manager, U.S. Advanced Surgical

Quick CD&A Reference Guide
 
 
Executive Summary
 
Section I
Business Strategy Link to Compensation
 
Section II
Objectives and Philosophy
 
Section III
Compensation Decision-Making Process
 
Section IV
Competitive Market Analysis
 
Section V
Elements of Executive Compensation
 
Section VI
Share Ownership: Prohibition on Hedging and Pledging
 
Section VII
Additional Compensation Policies and Practices
 
Section VIII

I.
Executive Summary

Our compensation program is designed to reward executives for focus and achievement of the Company’s short- and long-term performance goals. This is important, as our Company’s performance is very much dependent on the talents, skills and engagement of our people. We measure Company performance by growth in sales and earnings, and these goals are directly reflected in our annual bonus plan. Strengthening our stock price performance over the long-term is also a focus; as such, our equity incentives are delivered as stock options and, to a lesser degree, restricted stock units (“RSUs”). Finally, our executives are measured by their individual contributions to the Company’s success, and this is reflected in a small portion of the annual bonus as well as in base salary adjustments.

II.
Business Strategy Link to Compensation

The Company’s business strategy is to increase revenues and earnings through a dual focus on organic revenues and acquisitions. Over the past several years we have experienced the following growth:

The Company’s International revenues have increased through the introduction of the new orthopedic products, through the Advanced Surgical acquisitions, and, in some cases, through channel changes in certain geographies.
The Company’s Advanced Surgical revenues have increased through organic sales growth, but has also had the benefit of acquisitions: SurgiQuest in 2016 and Buffalo Filter in 2019.
The Company’s Orthopedic revenues have increased primarily through organic sales increases from new product introductions.
As revenues grow, CONMED has been able to leverage its structure to increase earnings.

On a corporate-wide basis, the Company’s 2019 results reflect these accomplishments:

The Company’s net sales increased 11.1% in 2019. Acquisitions contributed approximately 580 basis points of growth.
The Company’s Adjusted Operating Margin increased to 13.4% in 2019. A reconciliation of GAAP to Adjusted EPS is shown on page 52.

44


The Company’s Adjusted Earnings Per Share ("EPS") increased to $2.64 in 2019. A reconciliation of GAAP to Adjusted EPS is shown on page 52.

The Company’s compensation structure advances the business strategy in the following ways:
Pay Element
Description
Link to Strategy and Performance
Base Salary
Base salaries are based on a review of competitive positions with peer companies, and adjusted annually based on individual performance
To attract and retain high-performing and experienced leaders at a competitive compensation.
Annual Bonus Plan
Bonus targets as a percentage of salary ranging from 55% to 100% of salary to drive focus on annual goals, with a significant portion of the goals based on pre-determined financial metrics, with the remainder based on individual strategic goals.
A significant portion of executive pay is tied to annual corporate wide sales and adjusted EPS. As noted at pages 50 and 51, to drive increased focus on EPS, the weighting of the bonus tied to EPS was increased in 2019 as compared to the 2018 weighting.

The approach to the annual bonus plan is to reward executives primarily for Company-wide performance, because the various businesses and functions must work together with limited resources to ensure corporate-wide success. To encourage the cooperation required to achieve company-wide goals, 73% - 100% of the executives’ bonus plans are based on company-wide results.

As executives other than the CEO must focus on his or her unique functional or business goals, up to approximately 27% of each executive’s performance goals are individual in nature, although the goals are intended to advance Company-wide performance.

The Compensation Committee also has the discretion to award discretionary bonuses in recognition of exceptional individual performance.
Equity Compensation
A significant portion of overall compensation, ranging from 70% for the CEO to an average of 61% for the other NEOs consists of equity compensation vesting over 4-5 years.
Directly aligns the interests of our executives with those of our shareholders. Stock options only have value for executives if operating performance results in appreciation of stock price.

The relative value of the stock options over time ensure that executives are focused on long-term success, and will not sacrifice long-term value creation at the altar of short-term performance, the majority of executive compensation is in the form of equity compensation which vests over longer periods - five years for stock options. Further, this compensation does not provide value to executives unless the stock increases in value over time, which we believe results from steady increases in revenues and adjusted earnings.

We also utilize RSUs, when appropriate, to emphasize retention and stock ownership given the grants have value immediately upon vesting.

Overview of Pay Program

Our pay program is reflective of our business strategy, our desire to fairly and appropriately pay our executive team, and our desire to align management with shareholder interests.

While there is no fixed formula, the Compensation Committee seeks an appropriate balance between cash and non-cash compensation, short and long term incentives, at-risk compensation and the appropriate mix of different forms of equity compensation. In addition, the Compensation Committee believes that senior executives who have a greater and more direct impact and influence over the Company’s overall performance should receive a significant proportion of equity relative to their total compensation, thus seeking to align the executive’s incentives and impact with the value he or she brings to the Company-wide performance.

45



Our executive pay program consists of three major elements:
Base Salary
 
     Individual salaries are established at time of hire and adjusted thereafter by committee discretion
     Designed to be competitive within the market and industry, and to reflect individual performance and contribution
 
 
 
Short-Term Incentive
(“STI”)
 
     Cash incentives intended to reward the achievement of annual Company financial goals as well as individual accomplishments and contributions
     For 2019, cash performance measures were Total Net Sales (FX Adjusted) and Adjusted EPS, as well as individual performance goals
 
 
 
Long-Term Incentives
(“LTI”)
 
     Equity awards with meaningful vesting periods for retentive purposes as well as to focus executives on long-term share price appreciation, which are intended to align shareholder and management interests
     For 2019 and 2018, equity was delivered as stock options and RSUs
     Outstanding equity awards include performance share units (“PSUs”) awarded to our CEO in 2015
 
Target Pay
To promote the performance-based culture as described above, and to align the interests of management and shareholders, our executive compensation program focuses on variable compensation. Our CEO’s and other NEO’s average pay mix at target in 2019 illustrate this:

TARGETPAYMIXA11.JPG




46


Compensation Program Governance
Best Practices We Employ
Practices We Avoid
Majority of NEO compensation tied to long-term performance
Hedging is not permitted
Equity awards granted in 2015 and beyond require a double trigger for Change in Control vesting acceleration
Our equity plan does not allow repricing of underwater options without shareholder approval
Stock ownership guidelines of 4x salary for CEO, 3x for the CFO, and 1x for other NEOs
We do not provide executive perquisites other than international employees where such perquisites are common
Appropriate caps on incentive plan payouts
Excise tax gross-ups are not permitted
Compensation Committee is comprised entirely of independent directors
We do not pay dividends on unvested equity awards
Compensation Committee engages an independent consultant
 
Compensation Committee regularly meets in executive session without management present
 
Annual risk assessment of the compensation program
 
Robust holding requirements until minimum share ownership requirements are achieved
 
Minimum vesting schedule of at least 12 months for equity awards
 
Incentive program designs do not encourage excessive risk taking
 
The Company CEO is not present during any deliberations or voting of the Compensation Committee or Board regarding CEO compensation
 
2019 Say-on-Pay Vote Results
The Compensation Committee reviewed the voting results on the advisory resolution, commonly referred to as a “say-on-pay” resolution, when evaluating our executive compensation programs and noted 97.9% of the shares that were voted by shareholders at the 2019 Annual Shareholders meeting voted in favor of the compensation program. The Compensation Committee believes that these voting results reflect strong shareholder support for our current compensation practices. Accordingly, we did not make significant changes to our executive compensation practices or programs based on the results of the vote. The Compensation Committee will continue to review our executive compensation program as well as consider the outcome of our “say on pay” votes when making future compensation decisions for the NEOs.
III.
Objectives and Philosophy

The Company’s executive compensation program reflects the following principles:
Attract, retain and motivate top talent.
Provide incentives that reward the achievement of performance goals that directly correlate to the enhancement of shareholder value, as well as facilitate executive retention.
Align the executives’ interests with those of shareholders through long-term incentives linked to specific performance of objective goals.

IV.
Compensation Decision-Making Process

Role of Board of Directors and Compensation Consultant
The Compensation Committee oversees all aspects of compensation for the CEO and the CEO's direct reports ("the Executive Team"). The Compensation Committee structures the executive compensation program to balance the goals of linking pay-to-performance and creating alignment with shareowner interests with the challenge of retaining and motivating a qualified Executive Team to provide business continuity and strategic leadership.
In the fall of 2015, the Compensation Committee, after a thorough review process, retained Radford as its independent compensation consultant in connection with the compensation paid to the Executive Team, and to review director compensation.

47


Radford does not provide any material services to management and the Compensation Committee has determined that it does not have any business or personal relationship with any member of the Committee or management.
In determining executive compensation, the Compensation Committee obtains input and advice from Radford, and reviews recommendations from our CEO and the Executive Vice President of Human Resources with respect to the performance and compensation of our other Executive Team members. The Board of Directors, upon recommendation from the Compensation Committee, reviews and approves CEO and NEO compensation.
Risk Assessment
The Compensation Committee annually evaluates the Company’s compensation programs to assess whether such programs as designed or administered would facilitate or encourage excessive risk-taking by employees. In 2019, the Committee concluded that the programs are not reasonably likely to have a material adverse effect on the Company in part due to the following program elements: (i) limits provided on annual incentive and long-term performance awards, (ii) the potential opportunity derived from long-term incentive programs outweigh the benefit available under the annual incentive programs thereby creating a focus on sustained Company operational and financial performance, and (iii) the stock ownership guidelines impacting all of the Executive Team.
V.
Competitive Market Analysis

Our compensation committee utilizes a comparative framework to help define specific peer companies and several other survey data sources to help with the assessment.
Primary Market
(Peer Companies)
Secondary Market
(Survey Data)
Data Sources
      Specific peers in the medical device and healthcare equipment industry with a similar business and financial profile
      Broader, size-appropriate comparisons in the medical device industry
      Public SEC filings for specific peers
      Radford Global Life Sciences Survey

We regularly review this competitive data which includes data with respect to salary, bonus, and equity across a range of percentiles. There is no fixed formula or percentile of market-established compensation levels which the Company strives to meet and the benchmark data reviewed includes a range from the 25th percentile to the 75th percentile. This data is but one factor considered in our evaluation. Other factors considered include the scope of the executive’s role within our Company, the performance of the individual, and the expected future contributions of the individual.

2019 Peer Group
Each year the Compensation Committee works with our independent compensation consultant to review compensation for similar positions at other corporations within a designated peer group of companies to help ensure that the Company’s overall compensation levels, and the components thereof, are appropriate.
As our Company evolves, we continue to revisit and refine, as needed, this peer group. To select peers for 2020, we worked with Radford to consider companies which generally fit within the following criteria:
Market Capitalization – 1/3 to 3x the Company’s current market capitalization, now ranging from $900 million to $8.2 billion;
Revenue – 1/3 to 3x the Company’s trailing twelve-month revenue, now ranging from $320 million to $2.9 billion;
Headcount – 1/3 - 3x the Company’s current headcount, now ranging from 1,150 to 10,500.

As a result of our review, we removed the following:
Removed Company
Reasoning
NXStage Medical
Invacare
NxStage was acquired during 2019, and Invacare was removed from the peer group as its financials were no longer comparable.


48


Our 2019 Peer Group was as follows:
Company
LFY # of EEs
LFY Revenues
30-Day Avg. Market Cap ($M)
Align Technology
14,530
$
2,407

$
21,616

Cantel Medical
2,775
$
918

$
3,109

Globus Medical
2,000
$
785

$
5,767

Haemonetics
3,216
$
968

$
5,963

ICU Medical
8,000
$
1,266

$
3,812

Integer
8,250
$
1,258

$
2,590

Integra LifeSciences
4,000
$
1,518

$
5,166

Masimo
1,600
$
938

$
8,370

Merit Medical Systems
6,355
$
995

$
1,668

Natus Medical
1,484
$
495

$
1,082

NuVasive
2,800
$
1,168

$
3,932

Orthofix Medical
1,055
$
460

$
873

West Pharmaceutical Services
8,200
$
1,840

$
10,988

Wright Medical Group
3,030
$
921

$
3,823

 
 
 
 
 
 
 
 
75th Percentile
7,589
$
1,264

$
5,914

50th Percentile
3,123
$
981

$
3,877

25th Percentile
2,194
$
919

$
2,719

 
 

 

 

 
 
 
 
CONMED
3,300

$
955

$
3,170

Percentile Rank
55%
43%
31%

We have excluded NXStage Medical from the table above as it was acquired during 2019. Invacare was excluded as the financial data was no longer comparable as of December 31, 2019.

VI.
Elements of Executive Compensation

NEO compensation primarily consists of base salary, annual incentive awards, and annual grants of equity awards. These elements are in line with the level of responsibility and impact on our results for each executive.

Base Salary

An NEO’s salary is initially established based upon an evaluation of the competitive salaries for similar positions in the market. Absent a promotion or some other unusual circumstance, such as a change in responsibilities, salaries are reviewed once per year. In this process, the Compensation Committee considers the recommendation of the CEO along with the Executive Vice President of Human Resources in reviewing and approving the base salaries of the Executive Team (other than the CEO).

In making his recommendation for the Executive Team, the CEO considers the individual’s contribution to the Company’s performance and exercises judgment and discretion when considering any additional factors that should appropriately affect the executive’s salary such as current compensation data derived from the proxies of the peer companies described above and, as appropriate, compensation data gathered from third-party surveys generally available to the Company. No specific formula is used to weigh or evaluate these factors; rather, the CEO considers such factors on the whole when making a base salary recommendation.

As to the process for reviewing the base salary for the CEO, the Committee considers the Company’s performance, the CEO’s contribution and his responsibilities as well as the competitive talent market. No fixed formula or target percentile is established for setting the base salary. The salary adjustments in 2019 were as follows:

49


NEO
2019 Base Salary
 
2018 Base Salary
 
% Change
Curt R. Hartman

$850,000

 

$800,000

 
6.3
%
Todd W. Garner

$442,000

 

$425,000

 
4.0
%
Patrick J. Beyer

$419,075

1 

$387,192

1 
8.2
%
Nathan Folkert

$373,000

 

$364,000

 
2.5
%
Stanley W. (Bill) Peters

$374,000

 

$361,000

 
3.6
%
_________________
(1)
Mr. Beyer is located in the U.K., and, while the amounts shown in this table are expressed in U.S. dollars, his salary is paid in British pounds. These components were converted to U.S. dollars using exchange rates of £0.761 and £0.785 to U.S. $1.00 at December 31, 2019 and December 31, 2018, respectively.

Executive Bonus Plan
The Company maintains the shareholder-approved Executive Bonus Plan, which may be used to pay incentive compensation to the Company executives, including our NEOs. The Executive Bonus Plan, which was adopted in connection with the Company’s 2017 Annual Meeting of Shareholders, replaced in its entirety the Company’s 2012 Executive Bonus Plan. The Executive Bonus Plan is effective for performance periods commencing on or after January 1, 2018. For the NEOs, annual bonus targets and performance metrics are established in the first quarter of the year by the Compensation Committee and the Board of Directors at the meeting typically held in late February or early March.
Executive Bonus Plan Performance Goals for 2019
The Executive Bonus Plan performance goals for 2019 were established by the Compensation Committee in February 2019. The bonus payment is conditioned upon the achievement of certain threshold goals and is measured on a sliding scale between threshold and maximum performance. For 2019, each NEO’s bonus, other than the CEO's bonus, was based on three metrics: (i) Total Company Net Sales (Fx Adjusted); (ii) Adjusted EPS; and (iii) individual performance goals. The CEO's goals did not include any individual performance goals. The weighting of each performance metric (in each case, expressed as a percentage of the NEO’s annual base salary) varies by position, as follows:

50


 
Threshold
 
Target
 
Maximum
Curt R. Hartman
 

 
 

 
 

Net Sales (FX Adjusted)
24.0
%
 
40.0
%
 
80.0
%
Adjusted EPS
45.0
%
 
60.0
%
 
120.0
%
Total
69.0
%
 
100.0
%
 
200.0
%
 
 
 
 
 
 
Todd W. Garner
 

 
 

 
 

Net Sales (FX Adjusted)
13.5
%
 
22.5
%
 
45.0
%
Adjusted EPS
24.4
%
 
32.5
%
 
65.0
%
CFO Goals
0.0
%
 
15.0
%
 
30.0
%
Total
37.9
%
 
70.0
%
 
140.0
%
 
 
 
 
 
 
Patrick J. Beyer
 

 
 

 
 

Net Sales (FX Adjusted)
12.0
%
 
20.0
%
 
40.0
%
Adjusted EPS
22.5
%
 
30.0
%
 
60.0
%
International Goals
10.4
%
 
15.0
%
 
30.0
%
Total
44.9
%
 
65.0
%
 
130.0
%
 
 
 
 
 
 
Nathan Folkert
 

 
 

 
 

Net Sales (FX Adjusted)
9.0
%
 
15.0
%
 
30.0
%
Adjusted EPS
18.8
%
 
25.0
%
 
50.0
%
Orthopedics Goals
10.3
%
 
15.0
%
 
30.0
%
Total
38.1
%
 
55.0
%
 
110.0
%
 
 
 
 
 
 
Stanley W. (Bill) Peters
 

 
 

 
 

Net Sales (FX Adjusted)
9.0
%
 
15.0
%
 
30.0
%
Adjusted EPS
18.8
%
 
25.0
%
 
50.0
%
Advanced Surgical Goals
10.3
%
 
15.0
%
 
30.0
%
Total
38.1
%
 
55.0
%
 
110.0
%
    
The corporate goals were set and measured as follows:

Net sales (FX adjusted) goals were in the $922.9 million to $994.8 million range with payouts from 60% to 200%. The target was $942.4 million for 100% payout. Net Sales (FX Adjusted) is calculated by taking GAAP net sales and adjusting for the impact of actual foreign exchange rates versus budgeted foreign exchange rates.

Adjusted EPS goals were in the $2.48 to $2.95 range with payouts from 75% to 200%. The target was $2.54 for 100% payout.  Adjusted EPS for these purposes is adjusted for amortization of intangible assets, amortization of deferred financing fees and debt discount, unusual items, including restructuring charges, impairment charges, changes in tax or accounting rules, acquisitions or other special or nonrecurring events. The Compensation Committee structured this scale to incent executives with challenging targets based upon the Company’s internal goals and guidance to investors.

In addition, each NEO’s annual bonus, other than the CEO, was subject to performance goals specific to the individual’s areas of responsibility:

Mr. Garner’s goals included the development and implementation of strategic and operational initiatives;
Mr. Beyer’s goals included specific targets relative to the International business;
Mr. Folkert’s goals included specific targets relative to the U.S. Orthopedics business;
Mr. Peters’ goals included specific targets relative to the U.S. Advanced Surgical business.

2019 Actual Payouts
 
For 2019, the Company achieved:


51


Net Sales (FX Adjusted) of $955.9 million, which is 126% of target.
Adjusted EPS of $2.64, or 125% of target.

Below is a reconciliation of GAAP to Adjusted EPS (in $ thousands):
 
 
Twelve Months Ended December 31, 2019
 
 
Gross
Profit
 
Selling &
Administrative
Expense
 
Research & Development
Expense
 
Operating
Income
 
Interest Expense
 
Other Expense
 
Tax
Expense
 
Effective
Tax Rate
 
Net
Income
 
Diluted
EPS
As reported
 
$
524,715

 
$
400,141

 
$
45,460

 
$
79,114

 
$
42,701

 
$
5,188

 
$
2,605

 
8.3
%
 
$
28,620

 
$
0.97

% of sales
 
54.9
%
 
41.9
%
 
4.8
%
 
8.3
%
 
 
 
 
 
 

 
 

 
 

 
 

Business acquisition costs
 
1,335

 
(13,066
)
 

 
14,401

 

 

 
3,609

 
 

 
10,792

 
0.37

Manufacturing consolidation costs
 
2,858

 

 

 
2,858

 

 

 
354

 
 

 
2,504

 
0.08

Debt refinancing costs
 

 

 

 

 

 
(3,904
)
 
1,149

 
 
 
2,755

 
0.09

 
 
$
528,908

 
$
387,075

 
$
45,460

 
$
96,373

 
$
42,701

 
$
1,284

 
$
7,717

 
 
 
$
44,671

 
$
1.51

Adjusted gross profit %
 
55.4
%
 
 
 
 
 
 
 
 
 
 
 
 

 
 

 
 

 
 

Amortization
 
$
6,000

 
(26,075
)
 

 
32,075

 
(11,756
)
 

 
10,590

 
 

 
33,241

 
1.13

Adjusted net income
 
 

 
$
361,000

 
$
45,460

 
$
128,448

 
$
30,945

 
$
1,284

 
$
18,307

 
19.0
%
 
$
77,912

 
$
2.64

% of sales
 
 
 
37.8
%
 
4.8
%
 
13.4
%
 
 
 
 
 
 
 
 
 
 
 
 

Applying these results, as well as the achievement of the individual performance goals for each NEO, bonuses were earned as follows:
NEO
Bonus
Target (as
% of Base
Salary)
Net Sales (FX Adjusted)
Achieved
Adjusted
EPS
Performance
Achieved
Individual
Performance
Achieved
FY 2019
Actual
Performance
Achieved (as
% of target
bonus)
FY 2019
Earned Bonus
(as % of base
salary)
FY 2019
Earned
Bonus
($)
 
Curt R. Hartman
100%
126%
125%
N/A
125%
125%
$
1,065,900

 
Todd W. Garner
70%
126%
125%
117%
124%
87%
$
382,529

 
Patrick J. Beyer
65%
126%
125%
110%
122%
79%
$
331,908

1 
Nathan Folkert
55%
126%
125%
27%
99%
54%
$
202,278

 
Stanley W. (Bill) Peters
55%
126%
125%
100%
118%
65%
$
243,437

 
_________________
(1)
Mr. Beyer is located in the U.K., and, while the amounts shown in this table are expressed in U.S. dollars, his bonus compensation is paid in British pounds. These components were converted to U.S. dollars using an exchange rate of £0.761 to U.S. $1.00, which was the spot rate as of December 31, 2019 (the last business day of the year).
Discretionary Bonuses
The Compensation Committee has the discretion to award discretionary bonuses in recognition of exceptional individual performance, including awards upon the recommendation of the CEO. For 2019, discretionary bonuses were awarded based on strong performance with respect to a variety of corporate-wide initiatives, ranging from the execution of acquisitions, financing transactions, to the work associated with the listing on the New York Stock Exchange, financial and product introduction efforts. Mr. Garner, Mr. Beyer, Mr. Folkert and Mr. Peters were awarded discretionary bonuses in the amount of $60,000, $50,000, $25,000 and $35,000 (14%, 12%, 7% and 9% of annual salary) respectively.


52


Annual Equity Compensation
We believe our long-term incentive awards align the interests of NEOs with those of shareholders, encourage long-term retention, and provide an appropriate balance to the short-term incentives offered by the Company's annual incentive bonus program for NEOs. Given our growth strategy, we believe that an appropriate long-term emphasis on stock price appreciation is appropriate, which creates an immediate, strong alignment of shareholder and management interests. Accordingly, a significant portion of our long-term equity awards are granted in the form of stock options or stock appreciation rights (“SARs”). We also utilize RSUs, when appropriate, to emphasize retention and stock ownership given the grants have value immediately upon vesting. We have evaluated the use of Performance Share Units (“PSUs”) and have elected not to use this vehicle in our current annual equity program at this time and instead have elected to use stock options which we believe more closely align the interests of our executives (including our NEOs) to the long term interests of shareholders. We have used PSUs in the instance of the 2015 grant of PSUs to Mr. Hartman as described below. The Compensation Committee believes this approach is consistent with its philosophy that those employees, the NEOs in particular, who are in a position to most directly impact corporate performance should have the highest risk/reward potential tied to corporate performance. Equity compensation awards to our NEOs were granted under our 2018 Long-Term Incentive Plan (the "LTIP"). The Compensation Committee generally determines the amount of equity compensation for each NEO other than the CEO, based in part, on recommendations from the CEO and Executive Vice President of Human Resources. Additionally, the Committee reviews the annual and aggregate dilutive impact of our equity grants.
For 2019, our executive equity grants consisted of RSUs and stock options, as set forth below:
NEO
# RSUs
# Options
Curt R. Hartman

200,000

Todd W. Garner
6,400

48,000

Patrick J. Beyer

56,000

Nathan Folkert

32,000

Stanley W. (Bill) Peters

32,000

 
Our NEOs were granted annual awards of stock options effective March 1, 2019, following the review of 2018 performance at the February 2019 Board meeting. The stock option awards vest ratably over five years with 20% of each award vesting annually. The RSU awards vest ratably over four years with 25% of each award vesting annually. Although annual grants are generally intended to incentivize future performance, in determining the size of grants, the Committee may consider, among other factors, individual contributions and performance during the preceding fiscal year. The exercise price on all outstanding stock options and SARs is equal to the quoted closing price of the stock on the date of grant. Stock options, SARs, RSUs and PSUs are generally nontransferable other than on death and expire ten years from date of grant. The Company has a policy against cash buyouts of underwater stock options or SARs, and such repurchases are expressly prohibited by the LTIP, unless approved by shareholders.
These equity grants, as well as the annual equity grants made to NEOs since 2015 under the LTIP, are subject to “double-trigger” vesting on a termination of the NEO’s employment by the Company other than for “cause” or by the NEO for “good reason” (each as defined in the applicable award agreement) within two years following the change in control (as defined in the applicable award agreement). Our equity compensation awards also include standard non-compete, non-solicit restrictions, as well as trade secret and confidentiality obligations.
VII.
Share Ownership: Prohibition on Hedging and Pledging

Stock Ownership Guidelines
The Company’s stock ownership guidelines are designed to encourage share ownership so that our executives have a direct stake in the Company’s future and to directly align their interests with those long-term interests of the shareholder. The ownership guidelines cover the Executive Team of the Company, including all NEOs. The guidelines are as follows:
Position
Required Salary Multiple
President and CEO
4x base salary
CFO
3x base salary
All other executive officers
1x base salary

53


 
The following share types are included under these guidelines: shares directly owned, shares jointly owned and estimated net after tax shares of unvested RSUs and vested in-the-money stock options, also on an after-tax basis. Executives are required to be in compliance with these guidelines within five years of becoming subject to this policy. These ownership guidelines also contain a retention requirement for equity-based awards until such time as the minimum share ownership is achieved. A complete copy of these guidelines is available on the Company’s website in the investor relations section.
All NEOs were in compliance with the guidelines as assessed as of December 31, 2019.
Policy Prohibiting Hedging and Pledging of Company Stock
The Company also prohibits its Executive Team and directors from hedging or otherwise pledging stock or holding any derivatives of Common Stock other than those issued by the Company. The intent of this policy is to align the interests of senior management with those of the holders of the Common Stock.

VIII.
Additional Compensation Policies and Practices

Retirement Benefits

All employees in the United States, including the U.S. based NEOs, are eligible to participate in the Retirement Savings Plan. The Company maintains the Benefits Restoration Plan for eligible employees including the NEOs, except in the case of Mr. Beyer who participates in a program designed to compensate him in a similar fashion in accordance with practices in the UK. The following summary of the terms of these plans is qualified in its entirety by reference to the complete plan documents.
Retirement Savings Plan
The Retirement Savings Plan (the “Savings Plan”) is a tax-qualified (401(k)) retirement savings plan pursuant to which all U.S. employees are eligible after completing three months of service, including the NEOs who meet the Savings Plan’s requirements. The Savings Plan provides a 100% matching contribution up to a maximum of seven percent of the participant’s (including each NEO’s) compensation, provided the employee’s contributions are equally distributed across each pay period during the year.

Benefits Restoration Plan

The Company has established a Benefits Restoration Plan effective January 1, 2010. The Benefits Restoration Plan is a funded nonqualified deferred compensation plan that provides eligible employees, which include the NEOs, the opportunity to defer receipt of up to 50% of base salary and up to 100% of incentive compensation and to receive seven percent (7%) matching contributions or other contributions from the Company that would otherwise be unavailable under our Savings Plan because of limits imposed by the Internal Revenue Code of 1986, as amended (the “Code”). In addition, similar to the Savings Plan, the Company has discretion to contribute to the Benefits Restoration Plan in addition to the match. The funds are invested based upon the investments selected by the participant from the investments available under the Savings Plan.

A participant is 100% vested in the participant’s contributions and any earnings. Upon a “change in control”, the unvested portion of a participant’s account will automatically become vested. For purposes of the Benefits Restoration Plan, a “change in control” has the meaning provided in any written agreement between any participant and the employer, if applicable, and if there is no such written agreement with the employer defining a change in control, then a change in control generally means an acquisition of 25% or more of the outstanding voting shares or a change in a majority of the Board of Directors. The vesting requirements align with those of the Savings Plan, which provides for vesting of 20% of any Company contributions for each year of service, such that an employee is 100% vested in any Company contribution after five years of service.

Corporate Aviation Policy

In September 2019, the Board (excluding Mr. Hartman, who recused himself from voting) approved the purchase of a fractional share of a plane along with corresponding carbon-offsets, and a policy regarding the use of Company aircraft. The Board believes the use of the plane pursuant to the policy enhances productivity, minimizes distractions and maximizes the efficient use of travel time by Mr. Hartman, Mr. Garner, and other members of the executive management team. Pursuant to the Company policy, Mr. Hartman and Mr. Garner and other executives are permitted to use the plane for business purposes. Mr. Hartman and Mr. Garner are also permitted to use the plane for purposes of commuting to work, provided that they pay for the income imputed

54


for tax purposes at Standard Industry Fare Level (“SIFL”) rates and are responsible for paying the associated taxes. Likewise, if the spouse or guest of Mr. Hartman, Mr. Garner or another executive is permitted to accompany an executive on a flight or otherwise be on the plane, the corresponding executive is responsible for the income imputed for tax purposes, as well as any associated taxes. There was no personal use or imputed income for the use of the corporate plane during 2019.

Recoupment Policy

In the interest of further aligning the interests of the NEOs with those of our shareholders, the Company’s Recoupment Policy allows the Committee to require any participant or former participant in the Executive Bonus Plan or recipient of performance-based equity awards in any of the prior three years to repay to the Company all or a portion of the amount received in connection with a fiscal year in which either (i) there was a recalculation of a financial or other performance metric related to the determination of a bonus award or performance-based equity award due to an error in the original calculation or (ii) there was a restatement of earnings for the Company due to material noncompliance with any financial reporting requirement under either GAAP or federal securities laws, other than as a result of changes to accounting policy, rules or regulation; and (iii) the restated earnings or corrected performance measurement would have (or likely would have) resulted in a smaller award than the amount actually received by the participant. A similar recoupment provision is extended to non-executives who participate in other Company incentive programs.
Deductibility of Executive Compensation
Section 162(m) of the Code generally limits the tax deductibility of compensation (including performance-based compensation) in excess of $1,000,000 per year paid by a public company to its “covered employees.” The Committee considers the tax and accounting consequences, including those stemming from changes to Section 162(m) of the Code, as one factor when making a decision regarding executive compensation.

Under the recent tax legislation, for taxable years beginning after December 31, 2017, there is no longer an exception to the deductibility limit for qualifying “performance-based compensation” unless the compensation qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017 and not materially modified afterwards (the scope of which is currently uncertain). Also under the recent legislation, the definition of “covered employees” has been expanded to include a company’s chief financial officer, in addition to the chief executive officer and three other most highly paid executive officers. Any individual who has been a “covered employee” in any taxable year beginning after December 31, 2016 remains a covered employee in all future years.

The Committee continues to evaluate the changes to Section 162(m) and retains the ability to provide compensation that exceeds deductibility limits as it determines appropriate, including to recognize performance, meet market demands and retain key executives.

Employment Contracts
As a general matter, all Company employees are employed on an “at-will” basis, and the Company does not enter into employment agreements except as may be customary in regions outside of the United States (as is the case with Mr. Beyer’s compensation arrangements, discussed below).
Mr. Hartman’s Compensation Arrangements
Effective November 9, 2014, the Company entered into a letter agreement with Mr. Hartman, outlining the terms of his employment as President and CEO of the Company (the “CEO Employment Letter”). The CEO Employment Letter provided Mr. Hartman with a minimum base salary of $710,000 and a target bonus equal to 100% of his annual base salary. The CEO Employment Letter also provides that Mr. Hartman is subject to certain restrictive covenants, including confidentiality and non-disparagement covenants, and two-year post-termination restrictions on competition and solicitation of the Company’s customers and employees. Additionally, as outlined in the CEO Employment Letter, Mr. Hartman participates in the Executive Severance Plan as described below.
Mr. Hartman was awarded an equity grant on February 24, 2015 (“CEO Performance Award”) in the form of PSUs under the Amended and Restated 2015 Long-Term Incentive Plan. The CEO Performance Award provided for a target number of 100,000 PSUs, with the actual number of PSUs earned ranging from 0% to a maximum of 200% of target depending on the Company’s total shareholder return relative to the S&P 1500 Health Care Equipment Select Index over the performance period of January 1, 2015 to December 31, 2019:

55


Relative Performance
Percentage of Target Units
Earned
+15.8% above index
200%
+11.0% above index
150%
+8.2% above index
125%
+5.7% above index
100%
+3.6% above index
75%
+2.0% above index
50%
Below +2.0% above index
0%
 
The PSUs were to be earned, in three separate tranches, subject to adjustment from 0% to 200% based on the Company’s performance as of each of the three vesting dates: (1) 20,000 PSUs (at target) on December 31, 2017, (2) 20,000 PSUs (at target) on December 31, 2018 and (3) 100,000 PSUs (at target) on December 31, 2019, less the number of PSUs paid out based on actual performance in respect of earlier vesting dates. Mr. Hartman did not earn any portion of the 20,000 PSUs as of December 31, 2018, or the 20,000 as of December 31, 2017.
In general, Mr. Hartman was required to remain employed through the applicable vesting date in order to receive payment in respect of earned PSUs.
Upon a “change in control” of the Company (as defined in the CEO Performance Award agreement), outstanding unvested PSUs were to be deemed to be earned based on the level of performance actually achieved through the change in control date.
 
The goal of the CEO Performance Award was to present Mr. Hartman with the opportunity to earn a superior payment for superior Company performance based on the Company’s total shareholder return relative to a peer index. The Company’s stock price performance was to be measured against total shareholder return over a five-year performance period, in order to motivate longer-term performance and provide incentives for Mr. Hartman to remain with the Company. The five-year period is balanced by opportunities to earn awards after the third and fourth years of the performance period to drive shorter-term business objectives.
Total shareholder return, compared to an index of our industry peers, was selected by the Compensation Committee as the CEO Performance Award’s sole performance measure in order to provide strong alignment with shareholder interests and permit multi-year performance measurement without the need to establish multi-year goals. A rigorous payout schedule was established, so that substantial outperformance was required in order to earn awards above target levels. No PSUs were to be earned unless the Company’s total shareholder return exceeds the S&P 1500 Health Care Equipment Select Index by at least 2.0%, and in order for Mr. Hartman to earn the maximum number of PSUs, our total shareholder return for the performance period was to exceed the index by 15.8%.
As of December 31, 2019, the Company’s actual performance based on total shareholder return during the performance period was 22.61% relative to the S&P 1500 Health Care Equipment Select Index (16.54%), or 6.07% above the threshold level required for Mr. Hartman to earn an award of the PSUs. Based on the outperformance, Mr. Hartman earned 104,000 shares based on the terms of the Performance Award, as certified by the Compensation Committee as of January 31, 2020.
Mr. Beyer's Service Agreement

Mr. Beyer and CONMED U.K. Limited entered into a Service Agreement, dated April 25, 2019, outlining the terms of his continued employment as President, International (the “Service Agreement”). The Service Agreement provides Mr. Beyer with a base salary of £319,000, as well as a monthly car allowance of £1,000. Mr. Beyer may also participate in CONMED U.K. Limited’s occupational pension scheme, to which CONMED U.K. Limited will make contributions of £10,000 per annum for each year Mr. Beyer participates. CONMED U.K. Limited will also pay Mr. Beyer a pension allowance of £69,382.34, which it reserves the right to vary or withdraw at any time. Mr. Beyer may be awarded discretionary bonuses from time to time and may also be eligible to participate in the Executive Severance Plan (as described below) and the CONMED Corporation Executive Bonus Plan (as described above), and may also receive certain medical, life and disability insurance benefits.

Either party may terminate Mr. Beyer’s employment under the Service Agreement on six months written notice. CONMED U.K. Limited may terminate the agreement with immediate effect by paying to Mr. Beyer, within 28 days of giving notice of such termination, all or the remaining part of Mr. Beyer’s base salary for the then unexpired period of notice. In such event, the Company may reduce the payments or benefits otherwise due to Mr. Beyer under the Executive Severance Plan to avoid duplication of payments or benefits. Upon such termination, the Company may require Mr. Beyer not to perform any services (or perform only

56


specified services) in accordance with garden leave policies applicable to employees in the U.K. Under the Service Agreement, Mr. Beyer is subject to certain restrictive covenants, including confidentiality covenants and restrictions on competition and solicitation of the Company’s customers and employees that range from six-months to one-year post-termination.

Executive Severance Plan

The Company maintains an executive severance plan (the “Executive Severance Plan”) in which all of the NEOs as of December 31, 2019 participated. The CEO’s benefit under the Executive Severance Plan is two (2.0) times salary and the two-year average of the non-equity incentive plan compensation and discretionary bonus earned for a non-change in control involuntary termination and three (3.0) times salary and the three-year average of the non-equity incentive plan compensation and discretionary bonus earned for a change in control involuntary termination. The CFO's benefit under the plan is one and one-half (1.5) times salary and the two-year average of the non-equity incentive plan compensation and discretionary bonus earned for a non-change in control involuntary termination and two and one-half (2.5) times salary and the three-year average of the non-equity incentive plan compensation and discretionary bonus earned for a change in control involuntary termination. Each other NEO’s severance benefit is one (1.0) times salary and the two-year average of the non-equity incentive plan compensation and discretionary bonus earned for a non-change in control involuntary termination without cause or for good reason and two (2.0) times salary and the three-year average of the non-equity incentive plan compensation and discretionary bonus earned level for a change in control involuntary termination without cause or for good reason. Benefits due to a participant under the Executive Severance Plan may be reduced or eliminated in the event that the participant receives duplicative termination payments or benefits under any other plan, program, policy, individually negotiated agreement or other arrangement.

For purposes of the Executive Severance Plan, “Cause” generally means the NEO’s willful and continued failure to substantially perform his duties or willfully engaging in illegal conduct or gross misconduct which is demonstrably and materially injurious to the Company or its affiliates. “Good Reason” generally includes any material and adverse change in the NEO’s duties, responsibilities, titles or offices with the Company, a material reduction in the rate of annual base salary or annual target bonus opportunity, or any requirement that the NEO be based more than 50 miles from the office where he or she is located. “Change in Control” generally means a change in the majority combined voting power of the Company (other than transactions involving related parties), the shareholders approve a plan of complete liquidation or dissolution of the Company, or a sale of all or substantially all of the Company’s assets. Change in Control benefits apply for involuntary terminations without Cause or for Good Reason within the two (2) year period following a Change in Control. The Executive Severance Plan also contains certain restrictive covenants, including a non-disparagement covenant and one-year post-termination restrictions on competition and solicitation of the Company’s customers and employees.
The Compensation Committee periodically reviews the Executive Severance Plan as part of its overall review of the executive compensation program. No changes were made for 2019.

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COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussion, we recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.
Submitted by the Compensation Committee,
Martha Goldberg Aronson (Chair)
Brian Concannon
 
 
LaVerne Council
Charles M. Farkas
 
 
Jerome J. Lande
 


58


SUMMARY COMPENSATION TABLE
(a)
(b)
 
(c)
 
(d)
 
(e)
 
(f)
 
(g)
 
(h)
 
(i)
 
(j)
Name and
Principal Position
Year
 
Salary1($)
 
Bonus2
($)
 
Stock
Awards3
($)
 
Option
Awards4($)
 
Non-Equity
Incentive Plan
Compensation5
($)
 
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings ($)
 
All Other
Compensation6
($)
 
Total
Curt R. Hartman –
2019
 
$
842,489

 
$

 
$

 
$
4,136,000

 
$
1,065,900

 
$

 
$
135,871

 
$
6,180,260

President & Chief
2018
 
$
790,917

 
$

 
$

 
$
2,618,000

 
$
1,081,060

 
$

 
$
102,399

 
$
4,592,376

Executive Officer
2017
 
$
753,237

 
$

 
$

 
$
1,602,641

 
$
554,950

 
$

 
$
91,536

 
$
3,002,364

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Todd W. Garner –
2019
 
$
439,187

 
$
60,000

 
$
504,064

 
$
992,640

 
$
382,529

 
$

 
$
59,325

 
$