================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 ---------------------- FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED OCTOBER 31, 1999 COMMISSION FILE NO. 1-8597 ---------------------- THE COOPER COMPANIES, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) ---------------------- DELAWARE 94-2657368 (STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER OF INCORPORATION) IDENTIFICATION NO.) 6140 STONERIDGE MALL ROAD, SUITE 590 94588 PLEASANTON, CALIFORNIA (ZIP CODE) (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) 925-460-3600 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) ---------------------- SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NAME OF EACH EXCHANGE TITLE OF EACH CLASS ON WHICH REGISTERED Common Stock, $.10 Par Value, and New York Stock Exchange associated Rights Pacific Exchange SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] Aggregate market value of the voting stock held by non-affiliates of the registrant as of December 31, 1999: Common Stock, $.10 Par Value -- $413,012,274. Number of shares outstanding of the registrant's common stock, as of December 31, 1999: 14,063,223. DOCUMENTS INCORPORATED BY REFERENCE: DOCUMENT PART OF FORM 10-K Portions of the Annual Report to Stockholders for the Parts I and II fiscal year ended October 31, 1999 Portions of the Proxy Statement for the Annual Part III Meeting of Stockholders to be held March 28, 2000 ================================================================================
PART I ITEM 1. BUSINESS. INTRODUCTION The Cooper Companies, Inc. (the "Company," "Cooper" or "we" and similar pronouns), through its principal subsidiaries, develops, manufactures and markets healthcare products. CooperVision ("CVI") markets a range of contact lenses to correct visual defects, specializing in toric lenses that correct astigmatism. Its leading products are disposable-planned replacement toric and spherical lenses. CVI also markets conventional toric and spherical lenses and lenses for patients with more complex vision disorders. CooperSurgical ("CSI") markets diagnostic products, surgical instruments and accessories to the women's healthcare market. FORWARD-LOOKING STATEMENTS This report contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. To identify forward-looking statements, look for words like "believes," "expects," "may," "will," "should," "seeks," "approximately," "intends," "plans," "estimates" or "anticipates" and similar words or phrases. Discussions of strategy, plans or intentions often contain forward-looking statements. These, and all forward-looking statements, necessarily depend on assumptions, data or methods that may be incorrect or imprecise. Events, among others, that could cause actual results and future actions to differ materially from those described by or contemplated in the forward-looking statements include major changes in business conditions and the economy, loss of key senior management, major disruptions in the operations of Cooper's manufacturing facilities, new competitors or technologies, significant disruptions caused by third parties failing to address the year 2000 issue, or by problems with our year 2000 compliance program, the impact of an undetected virus on our computer systems, acquisition integration costs, foreign currency exchange exposure, investments in research and development and other start-up projects, dilution to earnings per share from acquisitions or issuing stock, regulatory issues, significant environmental clean-up costs above those already accrued, litigation costs, costs of business divestitures, and other factors described in Cooper's Securities and Exchange Commission filings, including the "Business" section in this Form 10-K for the year ended October 31, 1999 and the related portions of the Company's 1999 Annual Report to Stockholders ("1999 Annual Report") incorporated here by reference. The 1999 Annual Report is included as Exhibit 13 to this Form 10-K. GENERAL DESCRIPTION AND DEVELOPMENT OF BUSINESSES The information required for this item is incorporated here by reference to the caption "Letter to Shareholders" and the additional "CooperVision" section in the 1999 Annual Report. RESEARCH AND DEVELOPMENT Company-sponsored research and development expenditures during the fiscal years ended October 31, 1999, 1998 and 1997 were $2 million, $1.9 million and $1.7 million, respectively. During fiscal 1999, CooperVision spent about 52% and CooperSurgical spent about 48% of the total. Cooper did not conduct any customer-sponsored research and development programs. 2
Cooper employs 28 people in its research and development and manufacturing engineering departments. Outside specialists in lens design formulation science, polymer chemistry, microbiology and biochemistry support product development and clinical research for CooperVision products. CooperSurgical conducts research and development in-house and also employs outside surgical specialists, including members of its surgical advisory board. GOVERNMENT REGULATION The U.S. Food and Drug Administration ("FDA"), other federal agencies and foreign ministries of health regulate the development, testing, production and marketing of the Company's products. The Federal Food, Drug and Cosmetic Act and other statutes and regulations govern the testing, manufacturing, labeling, storage, advertising and promotion of such products. If applicable regulations are not followed, companies are subject to fines, product recall or seizure, suspension of production and criminal prosecution. Cooper develops and markets medical devices under different levels of FDA regulation depending upon the classification of the device. Class III devices, such as flexible and extended wear contact lenses, require extensive premarket testing and approval, while Class I and II devices require substantially lower levels of regulation. Before a new contact lens can be sold commercially, CooperVision ("CVI") must complete these steps: (1) compile data on its chemistry and toxicology, (2) determine its microbiological profile and (3) define the proposed manufacturing process. This data must be submitted to the FDA to support an application for an Investigational Device Exemption. Once this is granted, clinical trials can begin. These are subject to review and approval by an Institutional Review Board and, where a lens is determined to have a significant risk, the FDA. After the clinical trials are completed, a Premarket Approval Application must be submitted and approved by the FDA. In connection with some of Cooper's new products, it can submit an expedited procedure known as a 510(k) application for premarket notification to the FDA. Any product that can demonstrate that it is substantially equivalent to another device marketed before May 28, 1976 can use this procedure. If the new product is not substantially equivalent to a preexisting device or if the FDA rejected a claim of substantial equivalence, FDA approval to market would require extensive preclinical and clinical testing. This would increase the cost and would delay product marketing substantially. FDA and state regulations also require the Company to adhere to applicable "good manufacturing practices" ("GMP"). They require detailed quality assurance and record keeping and periodic unscheduled regulatory inspections. The Company believes it is in substantial compliance with GMP regulations. Health authorities in foreign countries regulate Cooper's human device clinical trials and medical device sales. The regulations vary widely from country to country. Even if the FDA has approved a product, the regulatory agencies in each country must approve new products before they are marketed. These regulatory procedures require considerable resources and usually result in a substantial time lag between new product development and marketing. Cooper cannot assure that all necessary approvals will be obtained, or obtained in a timely manner. If the Company does not maintain compliance with regulatory standards or if problems occur after marketing, product approval may be withdrawn. ISO 9000 CERTIFICATION AND CE MARK APPROVAL In addition to the FDA regulatory requirements, the Company also maintains ISO 9000 certification and CE Mark approvals for all lens products. These quality programs and approvals are required by the European Medical Device Directive and must be maintained for all products intended to be sold in the 3
European market. In order to maintain these prestigious quality benchmarks, the Company is subjected to rigorous biannual reassessment audits of their quality systems and procedures by globally recognized notified bodies and agencies. RAW MATERIALS In general, CVI's raw materials consist of various polymers and packaging materials. There are alternative supply sources of all of these materials. Raw materials used by CSI or its suppliers are generally available from more than one source. However, because some products require specialized manufacturing procedures, CSI could experience inventory shortages if it needed an alternative manufacturer on short notice. MARKETING AND DISTRIBUTION In the United States, Canada and certain European countries, CVI markets its products through its field sales representatives, who call on ophthalmologists, optometrists, opticians and optical chains. In the United States, field sales representatives also call on distributors. In Japan and certain European counties, CVI uses distributors and has given them the exclusive right to market our products. CSI's products are marketed worldwide by a network of field sales representatives and distributors. In the United States, Cooper augments its sales and marketing activities by employing telemarketing, direct mail, advertising in professional journals, and CSI uses a direct mail catalog. PATENTS, TRADEMARKS AND LICENSING AGREEMENTS Cooper owns or licenses a variety of domestic and foreign patents which, in total, are material to its businesses. The names of certain of Cooper's products are protected by trademark registrations in the United States Patent and Trademark Office and, in some cases, also in foreign trademark offices. Applications are pending for additional trademark registrations. Cooper aggressively enforces and defends its patents and other proprietary technology. DEPENDENCE ON CUSTOMERS Cooper's business does not materially depend on any one customer or any one affiliated group of customers. GOVERNMENT CONTRACTS Cooper's business is not materially subject to profit renegotiation or termination of contracts or subcontracts at the election of the United States government. COMPETITION Each of Cooper's businesses operates in a highly competitive environment. Competition in the healthcare industry revolves around the search for technological and therapeutic innovations in the prevention, diagnosis and treatment of illness or disease. Cooper competes primarily on the basis of product quality, program differentiation, technological benefit, service and reliability. 4
Many companies develop and manufacture contact lenses. CVI competes primarily on its product quality, service and reputation among medical professionals and by participating in specialty niche markets. It sponsors clinical studies to generate medical information to improve its lenses. Major competitors have greater financial resources and larger research and development and sales forces than CVI. Many of these competitors offer a greater range of contact lenses and a variety of other eyecare products, including lens care products and ophthalmic pharmaceuticals, which may give them a competitive advantage in marketing their lenses to high volume contract accounts. In the surgical segment, competitive factors include technological and scientific advances, product quality, price and effective communication of product information to physicians and hospitals. CSI believes that it benefits, in part, from the technological advantages of certain of its products and from developing new medical procedures that can create new markets for equipment and instruments. CSI competes by focusing on distinct niche markets and by supplying these with high quality equipment, instruments and disposable products. For certain procedures, medical practitioners can obtain all of the equipment, instruments and disposable products from CSI. As CSI develops products for new medical procedures, it offers to train medical professionals to perform them. CSI competes with a number of manufacturers in each of its niche markets, including larger manufacturers with greater financial and personnel resources who sell a substantially larger number of product lines. BACKLOG Backlog is not a material factor in Cooper's businesses. SEASONALITY CVI's contact lens sales in the first fiscal quarter are generally lower than subsequent quarters, as fewer patients visit practitioners during the holiday season. COMPLIANCE WITH ENVIRONMENTAL LAWS Federal, state and local provisions that regulate the discharge of materials into the environment, or relate to the protecting of the environment, do not currently materially effect Cooper's capital expenditures, earnings or competitive position. See "Environmental" in Note 11 of Notes to Consolidated Financial Statements of the Company included in the 1999 Annual Report, regarding certain anticipated remediation costs, which is incorporated here by reference. WORKING CAPITAL Cooper's businesses have not required any material working capital arrangements in the past five years. FINANCIAL INFORMATION ABOUT BUSINESS SEGMENTS, GEOGRAPHIC AREAS, FOREIGN OPERATIONS AND EXPORT SALES The information required for this item is incorporated here by reference to Note 12 "Business Segment Information" of Notes to Consolidated Financial Statements of the Company included in the 1999 Annual Report. 5
EMPLOYEES On October 31, 1999, Cooper employed approximately 1,750 persons. The Company believes that its relations with its employees are good. ITEM 2. PROPERTIES. The following are the principal facilities of Cooper as of October 31, 1999: <TABLE> <CAPTION> APPROXIMATE OWNED FLOOR AREA OR LEASE LOCATION OPERATIONS (SQ. FT.) LEASED EXPIRATION -------- ---------- ------------ ------ ---------- <S> <C> <C> <C> <C> United States Pleasanton, CA Executive Offices 13,700 Leased Sept. 2000 Irvine, CA Executive Offices, CVI Offices, Distribution and Customer Service 17,500 Leased Jan. 2000 Huntington Beach, CA CVI Manufacturing & Technical Offices 20,600 Leased March 2002 Fairport, NY CVI Administrative Offices & Marketing 23,500 Leased April 2003 Scottsville, NY CVI Manufacturing and Research 49,500 Owned N/A Henrietta, NY CVI Distribution and Warehouse Facility 56,000 Leased Feb. 2003 Shelton, CT CSI Manufacturing, Research and Development, Marketing, Distribution and Warehouse Facilities 35,000 Leased April 2002 Canada Markham, Ont. CVI Offices, Manufacturing Distribution and Warehouse Facilities 21,000 Leased Feb. 2000 United Kingdom Hamble, Hampshire, Aspect Manufacturing, England Research and Development, Marketing and Admin. Offices 93,800 Owned N/A Fareham, Hampshire, Distribution and Customer England Service 30,800 Leased Jan. 2018 Fareham, Hampshire, Manufacturing and England Warehouse 27,100 Leased June 2018 </TABLE> The Company believes its properties are suitable and adequate for its businesses. 6
ITEM 3. LEGAL PROCEEDINGS. The information required for this item is incorporated here by reference to "GT Labs" in Note 11 of Notes to Consolidated Financial Statements of the Company included in the 1999 Annual Report. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. During the fourth quarter of fiscal 1999, the Company did not submit any matters to a vote of the Company's security holders. 7
PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. The information required for this item is incorporated here by reference to the caption "Quarterly Common Stock Price Range" in the 1999 Annual Report. ITEM 6. SELECTED FINANCIAL DATA. The information required for this item is incorporated here by reference to the caption "Five Year Financial Highlights" in the 1999 Annual Report. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The information required for this item is incorporated here by reference to the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the 1999 Annual Report. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK The Company is primarily exposed to market risks that relate to changes in interest rates, foreign currency fluctuations and in the market value of its long-term debt obligations. The Company's policy is to minimize, to the extent reasonable and practical, its exposure to the impact of changing interest rates and foreign currency fluctuations by entering into interest rate swaps and foreign currency forward exchange contracts, respectively. In general, the Company does not enter into derivative financial instrument transactions for speculative purposes. Additional information for this item is included under the caption "Derivatives" in Note 1 "Summary of Significant Accounting Policies" and in Note 7 "Financial Instruments" in the 1999 Annual Report, which is incorporated here by reference. LONG-TERM DEBT Proceeds from the sale of HGA were used to pay down debt carrying an average interest rate of approximately 7%. Total debt was reduced to $62 million at October 31, 1999 from $90.2 million at October 31, 1998: <TABLE> <CAPTION> October 31, 1999 October 31, 1998 ---------------- ---------------- (In millions) <S> <C> <C> Short term $ 4.9 $11.5 Long term 57.1 78.7 ----- ----- Total $62.0 $90.2 ===== ===== </TABLE> On an annualized basis the debt reduction would result in a decrease in interest expense of approximately $2 million, assuming we do not raise debt for other purposes. The following table sets forth as of October 31, 1999, the Company's long-term debt obligations, excluding capitalized leases, principal cash flows by scheduled maturity, weighted average interest rates and estimated fair market value. 8
<TABLE> <CAPTION> Expected Maturity Date - Fiscal Year ---------------------------------------------------------------------------- There- Fair 2000 2001 2002 2003 2004 after Total Value ---- ---- ---- ---- ---- ----- ----- ----- <S> <C> <C> <C> <C> <C> <C> <C> <C> ($ in Millions) Long-term Debt Fixed interest rate ($US) $ -- $ -- $ -- $23.4 $ -- $ -- $ 23.4 $ 23.4 Average interest rate 8.00% 8.00% 8.00% 8.00% --% -- Variable interest rate ($US) $ 0.5 $ 0.6 $ 0.5 $22.1 $ 0.6 $ 2.3 $ 26.6 $ 26.6 Average interest rate 6.32% 6.34% 6.36% 6.12% 5.72% 5.66% </TABLE> INTEREST RATE EXPOSURES The Company enters into interest rate swap agreements to minimize the impact of changes in interest rates on its variable rate long-term debt obligations. The Company currently has three interest rate swap agreements on a total of $24.3 million of its outstanding variable rate debt obligations. These instruments have the effect of converting variable rate instruments to fixed rate instruments. The interest rate swap agreements assure that the Company will pay 6.19%, 4.88% and 7.13% on the aforementioned $24.3 million long-term debt obligations for the periods ending November 2002 (principal amount $17.4 million), January 2012 (principal amount $2.7 million) and April 2003 (principal amount $4.2 million), respectively. The table below shows the notional amount and weighted average interest rates of each of the Company's interest rate swaps by maturity. The receive rate is based on October 31, 1999 rates, and projected based on the consumer price index. Notional amounts are used to calculate the contractual payments to be made under the contracts. <TABLE> <CAPTION> Notional Amounts Maturing in Fiscal Year -------------------------------------------------------------------------- There- Fair 2000 2001 2002 2003 2004 after Total Value ---- ---- ---- ---- ---- ----- ----- ----- <S> <C> <C> <C> <C> <C> <C> <C> <C> ($ in Millions) Interest rate swaps Variable to fixed ($US) $ -- $ -- $ -- $17.4 $ -- $ -- $17.4 $17.2 Average pay rate 6.19% 6.19% 6.19% 6.19% 6.19% Average receive rate 5.48% 5.62% 5.77% 5.92% 5.70% Variable to fixed ($US) $ 0.2 $ 0.2 $ 0.3 $ 0.3 $ 0.3 $ 1.4 $ 2.7 $ 2.7 Average pay rate 4.88% 4.88% 4.88% 4.88% 4.88% 4.88% 4.88% Average receive rate 4.82% 4.95% 5.08% 5.21% 5.35% 6.01% 5.65% Variable to fixed ($US) $ -- $ -- $ -- $ 4.2 $ -- $ -- $ 4.2 $ 4.3 Average pay rate 7.13% 7.13% 7.13% 7.13% 7.13% Average receive rate 5.92% 6.07% 6.23% 6.39% 6.15% </TABLE> FOREIGN CURRENCY EXPOSURES The Company uses forward exchange contracts to minimize the effect of foreign currency fluctuations on its long-term debt obligations denominated in Great Britain Pounds ("GBP"), incurred to fund a portion of the Company's acquisition of Aspect Vision Care Ltd. (see caption "Aspect Acquisition" in Note 2 "Acquisitions" in the 1999 Annual Report, which is incorporated here by reference). The following table provides information on the Company's foreign currency forward exchange contracts. The information is provided in U.S. Dollar equivalent amounts, which is the way it is presented in the Company's financial statements. The table shows the notional amounts at the contract exchange rates and the weighted average contractual foreign currency exchange rates by expected maturity dates. 9
<TABLE> <CAPTION> Notional Amounts Maturing in Fiscal Year ------------------------------------------------------------------- There- Fair 2000 2001 2002 2003 2004 after Total Value ---- ---- ---- ---- ---- ----- ----- ----- <S> <C> <C> <C> <C> <C> <C> <C> <C> Foreign Contracts to Buy GBP: Notional amount (in millions) $ 1.8 $ 3.5 $ 8.4 $23.4 $ -- $ -- $37.1 $37.0 Average contractual exchange rate $1.61 $1.62 $1.63 $1.63 $ -- $ -- $1.63 Foreign contracts to sell GBP: Notional amount (in millions) $ 1.8 $ -- $ -- $ -- $ -- $ -- $ 1.8 $ 1.8 Average contractual exchange rates $1.64 $ -- $ -- $ -- $ -- $ -- $1.64 Foreign contracts to sell Canadian $: Notional amount (in millions) $ 0.9 $ -- $ -- $ -- $ -- $ -- $ 0.9 $ 0.9 Average contractual exchange rate: $0.68 $ -- $ -- $ -- $ -- $ -- $0.68 </TABLE> ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The information required for this item is incorporated here by reference to the captions "Consolidated Balance Sheets," "Consolidated Statements of Income," "Consolidated Statements of Cash Flows," "Consolidated Statements of Comprehensive Income," "Notes to Consolidated Financial Statements," "Independent Auditors' Report" and "Two Year Quarterly Financial Data" in the 1999 Annual Report. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. Not applicable. 10
PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. The information included under the heading "Election of Directors" and "Executive Officers of the Company" in the Company's Proxy Statement for the Annual Meeting of Stockholders to be held on March 28, 2000 (the "2000 Proxy Statement") is incorporated by reference with respect to each of the Company's directors and the executive officers who are not also directors of the Company. ITEM 11. EXECUTIVE COMPENSATION. The information included under the subheadings "Executive Compensation" and "Compensation of Directors" of the "Election of Directors" section of the 2000 Proxy Statement is incorporated by reference with respect to the Company's chief executive officer, the four other most highly compensated executive officers of the Company and the Company's directors. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. The information included under the subheadings "Securities Held by Management" and "Principal Security Holders" of the "Election of Directors" section of the 2000 Proxy Statement is incorporated by reference with respect to certain beneficial owners, the directors and management. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. The information required for this item is incorporated here by reference to the heading "Aspect Acquisition" in Note 2 "Acquisitions" in the 1999 Annual Report. 11
PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K. (a) Documents filed as part of this report: 1. Accountants' Consent and Report on Schedule. 2. Financial Statement Schedule of the Company. SCHEDULE NUMBER DESCRIPTION -------- ----------- Schedule II Valuation and Qualifying Accounts 3. Exhibits The exhibits listed on the accompanying Exhibit Index are filed as part of this report. All other schedules which are included in the applicable accounting regulations of the Securities and Exchange Commission are not required here because they are not applicable. (b) Reports filed on form 8-K at end of Exhibit List: Cooper filed the following reports on Form 8-K during the period August 1, 1999 through October 31, 1999. August 9, 1999--Item 5. Other Events. August 26, 1999--Item 5. Other Events. October 4, 1999--Item 5. Other Events. 12
ACCOUNTANTS' CONSENT AND REPORT ON SCHEDULE The Board of Directors THE COOPER COMPANIES, INC. The audits of the consolidated financial statements of The Cooper Companies, Inc. and subsidiaries referred to in our report dated December 9, 1999, which is incorporated herein by reference, included the related financial statement schedule for each of the years in the three-year period ended October 31, 1999 as listed in Item 14 of the Annual Report on Form 10-K. This financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement schedule based on our audits. In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein. We consent to incorporation by reference in Registration Statement Nos. 33-50016, 33-11298, 333-22417, 333-25051, 333-27639 and 333-80795 on Forms S-3 and Registration Statement Nos. 333-10997, 33-27938, 33-36325, 33-36326 and 333-58839 on Forms S-8 of The Cooper Companies, Inc. of our reports dated December 9, 1999, relating to the consolidated balance sheets of The Cooper Companies, Inc. and subsidiaries as of October 31, 1999 and 1998 and the related consolidated statements of income, comprehensive income and cash flows for each of the years in the three-year period ended October 31, 1999, and related schedule, which reports appear in or are incorporated by reference to the October 31, 1999 Annual Report on Form 10-K of The Cooper Companies, Inc. KPMG LLP San Francisco, California January 27, 2000 13
SCHEDULE II THE COOPER COMPANIES, INC. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS THREE YEARS ENDED OCTOBER 31, 1999 <TABLE> <CAPTION> ADDITIONS BALANCE AT CHARGED TO (DEDUCTIONS)/ BALANCE BEGINNING COSTS AND RECOVERIES/ AT END OF YEAR EXPENSES OTHER (1) OF YEAR ------- -------- --------- ------- (IN THOUSANDS) <S> <C> <C> <C> <C> Allowance for doubtful accounts: Year ended October 31, 1999......................$ 1,087 $ 321 $ (272) $ 1,136 ======== ======== ======= ======== Year ended October 31, 1998......................$ 721 $ 283 $ 83 $ 1,087 ======== ======== ======= ======== Year ended October 31, 1997......................$ 716 $ 155 $ (150) $ 72 ======== ======== ======= ======== </TABLE> (1) Principally uncollectible accounts written off, net of amounts recovered that were previously written off. 14
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on January 28, 2000. THE COOPER COMPANIES, INC. By: /s/ A. THOMAS BENDER -------------------------- A. THOMAS BENDER PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on the dates set forth opposite their respective names. <TABLE> <CAPTION> SIGNATURE CAPACITY DATE --------- -------- ---- <S> <C> <C> /s/ ALLAN E. RUBENSTEIN Chairman of the Board of Directors January 28, 2000 - ----------------------------------- (ALLAN E. RUBENSTEIN) /s/ A. THOMAS BENDER President, Chief Executive Officer January 28, 2000 - ----------------------------------- and Director (A. THOMAS BENDER) /s/ ROBERT S. WEISS Executive Vice President, Treasurer, January 28, 2000 - ----------------------------------- Chief Financial Officer and Director (ROBERT S. WEISS) /s/ STEPHEN C. WHITEFORD Vice President and Corporate January 28, 2000 - ----------------------------------- Controller (STEPHEN C. WHITEFORD) /s/ MICHAEL H. KALKSTEIN Director January 28, 2000 - ----------------------------------- (MICHAEL H. KALKSTEIN) /s/ MOSES MARX Director January 28, 2000 - ----------------------------------- (MOSES MARX) /s/ DONALD PRESS Director January 28, 2000 - ----------------------------------- (DONALD PRESS) /s/ STEVEN ROSENBERG Director January 28, 2000 - ----------------------------------- (STEVEN ROSENBERG) /s/ STANLEY ZINBERG Director January 28, 2000 - ----------------------------------- (STANLEY ZINBERG) </TABLE> 15
EXHIBIT INDEX LOCATION OF EXHIBIT IN EXHIBIT SEQUENTIAL NUMBER DESCRIPTION OF DOCUMENT NUMBER SYSTEM - ------ ----------------------- ------------- 3.1 -- Restated Certificate of Incorporation, as partially amended, incorporated by reference to Exhibit 4(a) to the Company's Registration Statement on Form S-3 (No. 33-17330) and Exhibits 19(a) and 19(c) to the Company's Quarterly Report on Form 10-Q for the Fiscal Quarter ended April 30, 1988.................................... 3.2 -- Certificate of Amendment of Restated Certificate of Incorporation dated September 21, 1995 incorporated by reference to Exhibit 3.2 to the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 1995.................................................... 3.3 -- Amended and Restated By-Laws dated December 16, 1999.... 4.1 -- Certificate of Elimination of Series A Junior Participating Preferred Stock of The Cooper Companies, Inc. filed with the Delaware Secretary of State on October 30, 1997, incorporated by reference to Exhibit 4.1 on Form 10-K for fiscal year ended October 31, 1997. 4.2 -- Rights Agreement, dated as of October 29, 1997, between the Company and American Stock Transfer & Trust Company, incorporated by reference to Exhibit 4.0 to the Company's Current Report on Form 8-K dated October 29, 1997.................................................... 4.3 -- Amendment No. 1 to Rights Agreement dated September 26, 1998, incorporated by reference to Exhibit 99.1 of the Company's Current Report on Form 8-K dated September 25, 1998.................................................... 4.4 -- Certificate of Designations of Series A Junior Participating Preferred Stock of The Cooper Companies, Inc., incorporated by reference to Exhibit 4.0 of the Company's Current Report on Form 8-K dated October 29, 1997.................................................... 10.1 -- 1998 Long-term Incentive Plan, incorporated by reference to Exhibit A of the Company's Proxy Statement for its 1998 Annual Meeting of Shareholders held on April 2, 1998.................................................... 10.2 -- Amendment No. 1 to 1998 Long-term Incentive Plan of The Cooper Companies, Inc. dated April 2, 1998, incorporated by reference to Exhibit 4.7 to the Company's post-effective Amendment No. 1 to Form S-8 Registration Statement filed on January 20, 1999..................... 10.3 -- Severance Agreement entered into as of June 10, 1991, by and between CooperVision, Inc. and A. Thomas Bender, incorporated by reference to Exhibit 10.26 to Amendment No. 1 to the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 1992.................. 10.4 -- Letter dated March 25, 1994, to A. Thomas Bender from the Chairman of the Compensation Committee of the Company's Board of Directors, incorporated by reference to Exhibit 10.4 to the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 1994......... 10.5 -- Severance Agreement entered into as of April 26, 1990, by and between Nicholas J. Pichotta and the Company incorporated by reference to Exhibit 10.8 to the Company's Annual Report on Form 10-K for fiscal year ended October 31, 1995.................................. 10.6 -- Letter Agreement dated November 1, 1992, by and between Nicholas J. Pichotta and the Company incorporated by reference to Exhibit 10.9 to the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 1995. 10.7 -- Severance Agreement entered into as of August 21, 1989, by and between Robert S. Weiss and the Company, incorporated by reference to Exhibit 10.28 to Amendment No. 1 to the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 1992.................. 16
LOCATION OF EXHIBIT IN EXHIBIT SEQUENTIAL NUMBER DESCRIPTION OF DOCUMENT NUMBER SYSTEM - ------ ----------------------- ------------- 10.8 -- 1996 Long-term Incentive Plan for Non-Employee Directors of The Cooper Companies, Inc., incorporated by reference to the Company's Proxy Statement for its 1996 Annual Meeting of Stockholders................................. 10.9 -- Amendment No. 1 to 1996 Long-term Incentive Plan for Non-Employee Directors of The Cooper Companies, Inc., dated October 10, 1996, incorporated by reference to Exhibit 10.14 to the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 1996......... 10.10 -- Amendment No. 2 to 1996 Long-term Incentive Plan for Non-Employee Directors of The Cooper Companies, Inc., dated October 29, 1997, incorporated by reference to Exhibit 10.15 to the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 1997......... 10.11 -- Agreement dated as of September 28, 1993, among Medical Engineering Corporation, Bristol-Myers Squibb Company and the Company, incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated October 1, 1993......................................... 10.12 -- Amendment No. 3 to 1996 Long-term Incentive Plan for Non-Employee Directors of The Cooper Companies, Inc., dated October 29, 1999.................................. 10.13 -- Change in Control Agreement dated as of October 14, 1999 between The Cooper Companies, Inc., and Carol R. Kaufman 11* -- Calculation of Earnings per share....................... 13 -- 1999 Annual Report to Stockholders. The following portions of such report are incorporated by reference in this document and are deemed "filed." Letter to Shareholders, the additional "CooperVision" section and Financial Section which includes: Five Year Financial Highlights, Two Year Quarterly Information, Quarterly Common Stock Price Range, Management's Discussion and Analysis of Financial Condition and Results of Operations, the Consolidated Financial Statements and the Notes thereto, and the Independent Auditors' Report. 21 -- Subsidiaries............................................ 27 -- Financial Data Schedule................................. * The information required in this exhibit is incorporated here by reference to Note 4, "Earnings Per Share," in the 1999 Annual Report. 17