1.0.0.3falseStock-Based Compensationfalse1$falsefalseUSDStandardhttp://www.xbrl.org/2003/iso4217USDiso42170USDEPSDividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli020us-gaap_ShareBasedCompensationAbstractus-gaaptruenadurationstringNo definition available.falsefalsefalsefalsefalsetruefalsefalsefalse1falsefalse00falsefalseNo definition available.false31us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlockus-gaaptruenadurationstringNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalse00<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 11: STOCK-BASED COMPENSATION</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Cooper has a share-based compensation plan known as the Amended and Restated Stock Incentive
Plan (the “Plan”). The Plan provides for the granting of stock options, performance-based share
awards and restricted stock units. The Plan was updated in April 2008 to increase the number of
authorized shares available under the Plan by 7 million, to extend the term of the Plan from
November 7, 2010 to November 7, 2015 and for certain other matters. The Plan was updated in
September 2009 to replace Cooper Industries, Ltd. with Cooper Industries plc in connection with the
Reorganization transaction described in Note 1. Since the original Plan’s inception in 1996, the
aggregate number of shares authorized under the Plan is 41 million. As of December 31, 2009,
6,012,942 shares were available for future grants under the Plan. Of the total shares available
for future grants, 2,820,193 are available for grants of performance-based shares and restricted
stock units. Activity for each of these stock-incentive awards is discussed in more detail below.
Total compensation expense for all share-based compensation arrangements under the Plan was $26.3
million, $23.1 million and $39.0 million during the years ended December 31, 2009, 2008 and 2007,
respectively. The total income tax benefit recognized in the income statement for all share-based
compensation arrangements under the Plan was $9.5 million, $7.8 million and $13.6 million during
the years ended December 31, 2009, 2008 and 2007, respectively.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Stock Options</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Stock option awards are granted with an exercise price no less than the market price of
Cooper’s stock at the date of grant. Stock option awards generally vest over a three-year period
with one-third vesting in each successive year so that the option is fully exercisable after three
years and generally have seven-year contractual terms (ten-year contractual terms for awards
granted 2000-2002). Stock option awards provide
that, upon a change in control in Cooper (as defined in the Plan), all options will be
cancelled and Cooper will make a cash payment to the employee equal to the difference in the fair
market value of Cooper common shares (or the highest price actually paid for the stock in
connection with the change in control, if higher) and the option price.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The fair value of each stock option award is estimated on the date of grant using the
Black-Scholes-Merton option valuation model using the assumptions noted in the following table.
Expected volatility is based on implied volatilities from traded options on Cooper stock,
historical volatility of Cooper stock, and other factors. Cooper believes that the resulting
blended volatility represents a more accurate estimate of potential fluctuations in Cooper stock.
Cooper uses historical data to estimate employee termination experience. The expected term of
options granted is determined based on historical exercise behavior. The risk-free interest rate
for periods within the contractual life of the option is based on the U.S. Treasury yield curve in
effect at the time of grant.
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2009</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2008</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2007</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected volatility
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">35.79</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">23.75</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">19.0</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected dividends
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">3.46</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">2.26</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">1.8</td>
<td nowrap="nowrap">%</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Expected term (in years)
</div></td>
<td> </td>
<td> </td>
<td align="right">4.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.5</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Risk-free interest rate
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">2.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">2.6</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">4.6</td>
<td nowrap="nowrap">%</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     A summary of option activity under the Plan as of December 31, 2009, and changes during the
year then ended is presented below:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Weighted-</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Weighted-</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Average</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Aggregate</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Average</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Remaining</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Intrinsic</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Exercise</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Contractual</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Value</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000">Options</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Shares</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Price</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">Term</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000">(in millions)</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding at January 1, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">7,649,340</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">37.41</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Granted
</div></td>
<td> </td>
<td> </td>
<td align="right">2,425,725</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">28.95</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Exercised
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(856,940</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">23.80</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Forfeited or expired
</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(455,531</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">40.70</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Outstanding at December 31, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">8,762,594</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">36.23</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.2</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">65.4</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Vested or expected to vest at
December 31, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">8,475,645</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">36.54</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.3</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">61.4</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Exercisable at December 31, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">4,790,176</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">37.00</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.0</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">32.4</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The weighted-average grant date fair values of options granted during the years ended
December 31, 2009, 2008 and 2007 were $6.75, $8.19 and $9.50, respectively. The total intrinsic
value of options exercised during the years ended December 31, 2009, 2008 and 2007 was $13.2
million, $12.7 million and $75.8 million, respectively. Total stock options granted were 2,425,725
shares in 2009, 1,973,850 shares in 2008 and 1,745,700 shares in 2007.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     As of December 31, 2009, total unrecognized compensation expense related to nonvested stock
options was $15.6 million. This expense is expected to be recognized over a weighted-average
period of 1.7 years. The total fair value of stock options vested during the years ended December
31, 2009, 2008 and 2007 was $13.0 million, $13.1 million and $12.5 million, respectively.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Performance-Based Shares and Restricted Stock Units</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Under the Plan, Cooper grants certain executives and other key employees performance-based
share awards with vesting contingent upon meeting Company-wide performance goals generally over a
multi-year performance period. In order to earn the performance shares, participants also are
required to remain actively employed by Cooper for the performance period. For performance-based
awards granted during 2007 and 2008, performance goals are tied to cumulative compound growth in
earnings per share over a defined three-year performance period. Awards under the
performance-based component of the Plan are typically arranged in levels, with increasing numbers
of shares earned as higher levels of growth are achieved. For performance-based awards granted
during 2009, performance goals are tied to achieving a net debt to EBITDA (earnings before
interest, taxes, depreciation and amortization) ratio in 2009 with vesting occurring over a
three-year period. Under the Plan, Cooper also awards grants of restricted stock units to certain
executives and other key employees in order to provide financial incentive to remain in the employ
of Cooper, thereby enhancing management continuity. Cooper may also utilize restricted stock units
for new executives and other key employees to replace equity compensation forfeited upon
resignation from their former employer. Restricted stock units vest pursuant to time-based service
conditions.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The fair value of each performance-based share and restricted stock unit was calculated at the
market price on the date of grant. If goal-level assumptions are not met, compensation expense is
adjusted and previously recognized compensation expense is reversed. During 2007 and through the
third quarter of 2008, performance goals for performance awards granted in 2007 and 2008 were
assumed to be achieved at the maximum level. In the fourth quarter of 2008, Cooper revised its
assumption to lower the performance goals assumed to be achieved to below the maximum level for
these awards. The revised achievement levels assumed for the 2007 and 2008 performance award
grants considers the past performance and current expectations of future performance in the
respective three year performance period. As a result of lowering the performance goals assumed to
be achieved, Cooper adjusted previously recognized stock compensation expense by reducing expense
in the fourth quarter of 2008 by $11.3 million. Performance goals for performance awards granted
in 2009 are assumed to be achieved at the maximum level. Upon distribution of performance-based
shares, Cooper also pays the recipient cash equal to the aggregate amount of cash dividends that
the recipient would have received had they been the owner of record from the date of grant.
Dividends on restricted stock units are payable on the dividend payment date or on the date when
restrictions lapse, depending upon the specific award. For performance-based share and restricted
stock unit awards, upon a change in control in Cooper (as defined in the Plan), all restrictions on
those awards will lapse and shares shall be issued as otherwise provided in the Plan.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     A summary of the status of Cooper’s nonvested performance-based shares as of December 31, 2009
and changes during the year then ended is presented below:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Weighted-Average</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Grant-Date</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000">Nonvested Performance-Based Shares</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Shares</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Fair Value</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Nonvested at January 1, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">1,460,400</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">43.84</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Granted
</div></td>
<td> </td>
<td> </td>
<td align="right">370,560</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">28.89</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Vested
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(423,440</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">41.49</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Forfeited
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(66,710</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">42.71</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Nonvested at December 31, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">1,340,810</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">40.48</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The weighted-average grant-date fair value of performance-based shares granted during the
years ended December 31, 2009, 2008 and 2007 was $28.89, $43.87 and $46.01, respectively. The
total intrinsic value of performance-based shares granted during the years ended December 31, 2009,
2008 and 2007 was $15.8 million, $17.5 million and $29.4 million, respectively. Total
performance-based shares vested in 2009 were 423,440 compared to 472,734 performance-based shares
that vested in 2008.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     As of December 31, 2009, total unrecognized compensation expense related to nonvested
performance-based shares was $7.1 million. This expense is expected to be recognized over a
weighted-average period of 2.0 years. The total fair value of performance-based shares vested during
the year ended December 31, 2009 and 2008 was $17.6 million and $16.5 million, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     A summary of the status of Cooper’s nonvested restricted stock units as of December 31, 2009,
and changes during the year then ended is presented below:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Weighted-Average</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3">Grant-Date</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000">Nonvested Restricted Stock Units</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Shares</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">Fair Value</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Nonvested at January 1, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">506,100</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">42.86</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Granted
</div></td>
<td> </td>
<td> </td>
<td align="right">75,200</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">30.53</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Vested
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(54,574</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">42.68</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Forfeited
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(48,975</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="right">$</td>
<td align="right">43.43</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Nonvested at December 31, 2009
</div></td>
<td> </td>
<td> </td>
<td align="right">477,751</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">40.88</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The weighted-average grant-date fair value of restricted stock units granted during the
years ended December 31, 2009, 2008 and 2007 was $30.53, $41.74 and $46.78, respectively. Total
restricted stock units granted were 75,200 in 2009, 146,650 in 2008 and 282,900 in 2007. The total
intrinsic value of restricted stock units granted during the years ended December 31, 2009, 2008
and 2007 was $3.2 million, $4.3 million and $15.0 million, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     As of December 31, 2009, total unrecognized compensation expense related to nonvested
restricted stock unit compensation arrangements was $8.7 million. This expense is expected to be
recognized over a weighted-average period of 2.9 years. The total fair value of restricted stock
units vested during the years ended December 31, 2009, 2008 and 2007 was $2.3 million, $2.3 million
and $1.9 million, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Cash received from stock option exercises during the years ended December 31, 2009, 2008 and
2007 was $20.1 million, $17.1 million and $68.3 million, respectively. The actual tax benefit
realized for the tax deductions from option exercises totaled $9.7 million, $12.8 million and $36.4
million during the years ended December 31, 2009, 2008 and 2007, respectively. Cash used to settle
equity instruments granted under all share-based payment arrangements during the years ended
December 31, 2009, 2008 and 2007 was immaterial in all periods.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Under Board of Director authorization, Cooper has a practice of repurchasing shares on the
open market to satisfy shares issued for option exercises and share awards and expects to
repurchase approximately 2.5 million shares during 2010, based on estimates of option exercises and
share awards vesting for the year.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="center" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
</div>
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