UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

SCHEDULE 14A

(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

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

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Commission File No. 0-20572

PATTERSON COMPANIES, INC.
(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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PATTERSON COMPANIES, INC.
1031 MENDOTA HEIGHTS ROAD
ST. PAUL, MINNESOTA 55120

August 6, 2018

Dear Shareholder:

You are cordially invited to attend the annual meeting of shareholders of Patterson Companies, Inc. to be held at 1031 Mendota Heights Road, St. Paul, Minnesota 55120, on Monday, September 17, 2018, at 4:30 p.m. local time.

At the meeting you will be asked (1) to vote for the election of nine directors, (2) to vote upon an amendment to our 2015 Omnibus Incentive Plan, (3) to vote upon an advisory proposal concerning our executive compensation program, and (4) to ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending April 27, 2019. I encourage you to vote for the nominees for director, for approval of the plan amendment, for advisory approval of our executive compensation program, and for ratification of the appointment of Ernst & Young LLP.

Whether or not you are able to attend the meeting in person, it is important that your shares be represented and voted at the meeting. After reading this proxy statement, please promptly vote and submit your proxy. You may vote through the Internet, by telephone or by requesting, signing and returning a proxy card. Your vote is important.

Very truly yours,

PATTERSON COMPANIES, INC.
 

Mark S. Walchirk
President and Chief Executive Officer

PATTERSON COMPANIES, INC.
1031 MENDOTA HEIGHTS ROAD
ST. PAUL, MINNESOTA 55120

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 17, 2018

NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of Patterson Companies, Inc., a Minnesota corporation, will be held at 1031 Mendota Heights Road, St. Paul, Minnesota 55120, on Monday, September 17, 2018, at 4:30 p.m. central time, or any adjournment or postponement thereof, for the following purposes, as more fully described in the accompanying proxy statement:

1. To elect nine directors to have terms expiring in 2019, and until their successors shall be elected and duly qualified;

2. To consider and vote upon a proposal to amend our 2015 Omnibus Incentive Plan to increase the number of shares reserved for issuance thereunder from 4,000,000 to 11,500,000;

3. To consider and vote upon an advisory proposal concerning our executive compensation program;

4. To ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending April 27, 2019; and

5. To consider such other business as may properly come before the meeting or any adjournment or postponement thereof.

Only shareholders of record at the close of business on July 20, 2018 are entitled to notice of, and to vote at, the meeting. In an effort to facilitate the voting process for substantially all of our shareholders, we are using the Securities and Exchange Commission rules that allow proxy materials to be furnished to shareholders over the Internet. You can vote by proxy over the Internet by following the instructions provided in the Notice Regarding the Availability of Proxy Materials that was mailed to you on or about August 6, 2018, or, if you request printed copies of the proxy materials by mail, you can also vote by mail or by telephone. Whether or not you plan to attend the meeting, your vote is important and your promptness in voting by proxy will assist in its expeditious and orderly processing and will assure that you are represented at the meeting. Proxies may be revoked at any time before they are exercised and, if you attend the meeting in person, you may withdraw your proxy and vote personally on any matter brought properly before the meeting.

BY ORDER OF THE BOARD OF DIRECTORS

 

Les B. Korsh
Vice President, General Counsel and Secretary

St. Paul, Minnesota
August 6, 2018

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on September 17, 2018

In accordance with rules and regulations adopted by the Securities and Exchange Commission, we are furnishing our proxy materials on the Internet. “Proxy materials” means this proxy statement, our 2018 Annual Report and any amendments or updates to these documents. Our proxy materials are available on the Internet to the general public at http://materials.proxyvote.com/703395.

TABLE OF CONTENTS

	Page
INFORMATION CONCERNING SOLICITATION AND VOTING		1
PROPOSAL NO. 1 ELECTION OF DIRECTORS		6
Nominees for Election as Director		7
Vote Required		8
OUR BOARD OF DIRECTORS AND COMMITTEES		9
Overview		9
Leadership Structure and Risk Oversight		10
Role of Chairman		11
Committee Overview		11
Committee Responsibilities		13
Our Audit Committee and Its Report		13
Our Compensation Committee and Its Report		14
Our Governance and Nominating Committee and Its Procedures for Nominations		16
Our Finance and Corporate Development Committee		18
Our Search Committee		19
Communications with Board Members		19
Board Member Attendance at Annual Meetings		19
NON-EMPLOYEE DIRECTOR COMPENSATION		20
Compensation of Directors		21
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		23
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE		26
EXECUTIVE COMPENSATION		27
Compensation Discussion and Analysis		27
Executive Summary		27
Compensation Philosophy, Practices and Components		30
Other Executive Compensation Arrangements, Policies and Practices		36
Employment and Other Severance, Change-in-Control and Related Agreements		37
Determining Executive Compensation		39
Other Related Considerations		41
Summary Compensation Table		42
Grants of Plan-Based Awards		44
Outstanding Equity Awards at Fiscal Year-End		46
Option Exercises and Stock Vested		48
Potential Payments upon Termination or Change-in-Control		49
Compensation Policies and Practices as They Relate to Risk Management		52
CEO Pay Ratio		52
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS		54
PROPOSAL NO. 2 AMENDMENT TO 2015 OMNIBUS INCENTIVE PLAN		55
Proposed Amendment to the Plan		55
Shares Outstanding and Available for Grant and Historical Burn Rate Under Equity-Based Long-Term Incentive Plans		56
Sound Governance Features of the Plan		57
Description of the Plan		59
New Plan Benefits		69
Federal Income Tax Information		70
Vote Required		72
EQUITY COMPENSATION PLAN INFORMATION		73

	Page
PROPOSAL NO. 3 ADVISORY VOTE ON EXECUTIVE COMPENSATION		74
Introduction		74
Vote Required		74
PROPOSAL NO. 4 RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		74
Principal Accountant Fees and Services		75
Recommendation		75
ANNUAL REPORT TO SHAREHOLDERS		76
HOUSEHOLDING OF PROXY MATERIALS		76
SHAREHOLDER PROPOSALS FOR THE 2019 ANNUAL MEETING		76
OTHER MATTERS		77
ANNEX A PATTERSON COMPANIES, INC. AMENDED AND RESTATED 2015 OMNIBUS INCENTIVE PLAN		A-1

PATTERSON COMPANIES, INC.
1031 MENDOTA HEIGHTS ROAD
ST. PAUL, MINNESOTA 55120

PROXY STATEMENT FOR ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD SEPTEMBER 17, 2018

INFORMATION CONCERNING SOLICITATION AND VOTING

This proxy statement is furnished by the Board of Directors of Patterson Companies, Inc. and contains information relating to the annual meeting of shareholders to be held on Monday, September 17, 2018, beginning at 4:30 p.m. central time, at 1031 Mendota Heights Road, St. Paul, Minnesota 55120.

In accordance with rules and regulations adopted by the Securities and Exchange Commission, we have elected to provide substantially all of our shareholders access to our proxy materials over the Internet, instead of mailing printed copies of those materials to each shareholder. Accordingly, a Notice Regarding the Availability of Proxy Materials will be mailed on or about August 6, 2018 to shareholders who owned our common stock at the close of business on July 20, 2018. Shareholders will have the ability to access the proxy materials on a website referred to in the Notice Regarding the Availability of Proxy Materials or request that a printed set of the proxy materials be sent to them by following the instructions therein.

The Notice Regarding the Availability of Proxy Materials will also provide instructions on how you can elect to receive future proxy materials electronically or in printed form by mail. If you choose to receive future proxy materials electronically, you will receive an email next year with instructions containing a link to the proxy materials and a link to the proxy voting site. Your election to receive proxy materials electronically or in printed form by mail will remain in effect until you terminate such election.

Choosing to receive future proxy materials electronically will allow us to provide you with the information you need in a timely manner, will save us the cost of printing and mailing documents to you and will conserve natural resources.

Why did I receive a notice in the mail regarding the Internet availability of the proxy materials this year instead of a paper copy of the proxy materials?

The Securities and Exchange Commission rules allow companies to furnish their proxy materials over the Internet. As a result, we are mailing to most of our shareholders a Notice Regarding the Availability of Proxy Materials instead of a paper copy of the proxy materials. All shareholders receiving the notice will have the ability to access the proxy materials over the Internet and request to receive a paper copy of the proxy materials by mail. Instructions on how to access the proxy materials over the Internet or to request a paper copy may be found on the notice. In addition, the notice contains instructions on how shareholders may request to receive proxy materials in printed form by mail or electronically by e-mail on an ongoing basis.

How can I access the proxy materials over the Internet?

The Notice Regarding the Availability of Proxy Materials, proxy card or voting instruction card provided by your broker, trustee or nominee, will contain instructions on how to view our proxy materials for the annual meeting of shareholders on the Internet and how to instruct us to send our future proxy materials to you electronically by e-mail.

How may I obtain a paper copy of the proxy materials?

Shareholders receiving a Notice Regarding the Availability of Proxy Materials will find instructions about how to obtain a paper copy of the proxy materials on their notice.

What is the purpose of the annual meeting?

At our annual meeting, shareholders will vote on the following items of business:

■ The election of nine directors to have terms expiring in 2019, and until their successors shall be elected and duly qualified;

■ Approval of an amendment to our 2015 Omnibus Incentive Plan to increase the number of shares reserved for issuance thereunder from 4,000,000 to 11,500,000;

■ Advisory approval of our executive compensation program; and

■ Ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending April 27, 2019.

Shareholders will also vote on such other matters as may properly come before the meeting or any adjournment or postponement thereof.

What are the Board’s recommendations?

Our Board of Directors recommends that you vote:

■ FOR election of each of the nominees for director (see Proposal No. 1);

■ FOR approval of the amendment to our 2015 Omnibus Incentive Plan (See Proposal No. 2);

■ FOR advisory approval of our executive compensation program (see Proposal No. 3); and

■ FOR ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending April 27, 2019 (see Proposal No. 4).

With respect to any other matter that properly comes before the meeting, the proxy holders will vote as recommended by our Board of Directors or, if no recommendation is given, in their own discretion.

What shares are entitled to vote?

As of July 20, 2018, the record date for the meeting, we had 95,062,744 shares of common stock outstanding and approximately 2,100 shareholders of record. Each share of our common stock outstanding on the record date is entitled to one vote on each item being voted on at the meeting. You can vote all the shares that you owned on the record date. These shares include (1) shares held directly in your name as the shareholder of record, and (2) shares held for you as the beneficial owner through a broker, bank or other nominee. Shareholders do not have the right to cumulate votes in the election of directors. Shares are counted as present at the annual meeting if either the shareholder is present and votes in person at the annual meeting, or has properly submitted a proxy by Internet, by telephone, or by mail.

How do I vote?

Whether you hold shares directly as the shareholder of record or through a broker, trustee or other nominee as the beneficial owner, you may direct how your shares are voted without attending the annual meeting. There are three ways to vote by proxy:

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By Internet - Shareholders who receive a Notice Regarding the Availability of Proxy Materials may submit proxies over the Internet by following the instructions on the notice. Shareholders who receive a paper copy of a proxy card or voting instruction card provided by their broker, trustee or nominee by mail may submit proxies over the Internet by following the instructions on the proxy card or voting instruction card.

By Telephone - Shareholders of record may submit proxies by telephone by following the instructions set forth on the website listed on the Notice Regarding the Availability of Proxy Materials or the proxy card. You will need to have the control number that appears on your Notice Regarding the Availability of Proxy Materials or proxy card available when voting by telephone.

By Mail - Shareholders who request and receive a paper copy of the proxy card or the voting instruction card by mail may submit proxies by completing, signing and dating their proxy card or voting instruction card and mailing it in the accompanying pre-addressed envelope.

How do I vote my Patterson Companies, Inc. Employee Stock Ownership Plan and Trust (“ESOP”) or Patterson Dental Canada, Inc. Deferred Profit Sharing Plan (“DPSP”) shares?

If you participate in the ESOP or the DPSP, follow the directions on your proxy card to vote shares held for you in your ESOP or DPSP account, and such shares will be voted in accordance with your instructions. If you do not provide instructions on or before Wednesday, September 12, 2018, our Board of Directors will direct Delaware Charter Guarantee & Trust Company dba Principal Trust Company, the trustee of the ESOP, to vote your ESOP shares in accordance with the Board’s recommendations. If you do not provide instructions on or before Wednesday, September 12, 2018, our Board will direct Standard Life Trust Company, the trustee of the DPSP, to vote your DPSP shares in accordance with the Board’s recommendations.

Who can attend the annual meeting?

All shareholders as of the record date, or their duly appointed proxies, may attend the meeting. Shareholders of record should bring a form of photo identification so their share ownership can be verified. If you are not a shareholder of record but hold shares through a broker or nominee (i.e., in street name), you should provide proof of beneficial ownership on the record date, such as your most recent account statement prior to July 20, 2018, a copy of the voting instruction card provided by your broker, trustee or nominee, or other similar evidence of ownership. Registration and seating will begin at 4:15 p.m. central time. Cameras, recording devices and other similar electronic devices will not be permitted at the meeting.

How can I vote my shares in person at the annual meeting?

Shares held in your name as the shareholder of record may be voted in person at the meeting. Shares held beneficially in street name may be voted in person only if you obtain a legal proxy from the broker, trustee or nominee that holds your shares giving you the right to vote the shares. Even if you plan to attend the meeting, we recommend that you also submit your proxy or voting instructions as described below so that your vote will be counted if you later decide not to attend the meeting.

Can I change my vote or revoke my proxy after I submit my vote?

Yes. Even after you have voted, you may change your vote or revoke your proxy at any time before the votes are cast at the meeting by (1) delivering a written notice of your revocation to our Corporate Secretary at our principal executive office, (2) executing and delivering a later dated proxy, or (3) appearing in person at the meeting, filing a written notice of revocation with our Corporate Secretary and voting in person the shares to which the proxy relates. Any written notice or later dated proxy should be delivered to Patterson Companies, Inc., 1031 Mendota Heights Road, St. Paul, Minnesota 55120, Attention: Les B. Korsh, Vice President, General Counsel and Secretary, or hand-delivered to Mr. Korsh before the vote at the meeting.

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What constitutes a quorum?

The presence at the meeting, in person or by proxy, of the holders of at least a majority of the shares of our common stock outstanding as of the record date will constitute a quorum. There must be a quorum for any action to be taken at the meeting (other than an adjournment or postponement of the meeting). If you submit a properly executed proxy card, even if you abstain from voting, then your shares will be counted for purposes of determining the presence of a quorum. Because brokers cannot vote shares on their customers’ behalf on “non-routine” proposals, such as Proposal Nos. 1, 2 and 3 in this proxy statement, without receiving voting instructions from a customer, if a broker does not receive voting instructions from its customer with respect to a non-routine proposal and is precluded from voting on that proposal, then a “broker non-vote” occurs. If a broker returns a proxy indicating a lack of authority to vote on non-routine proposals, the shares represented by the proxy will be deemed present at the meeting for purposes of determining a quorum, but not present for purposes of calculating the vote on such proposals.

What vote is required to approve each item?

Proposal No. 1. Assuming the presence of a quorum, election as a director requires the affirmative vote of the holders of a majority of the shares represented in person or by proxy and entitled to vote at the meeting. For additional information, please see “How does the director resignation policy work?” below.

Proposal Nos. 2, 3 and 4. Assuming the presence of a quorum, the affirmative vote of the greater of (1) a majority of the outstanding shares of our common stock present in person or by proxy and entitled to vote on the item at the meeting and (2) a majority of the minimum number of shares entitled to vote that would constitute a quorum for the transaction of business at the meeting, will be required for approval of each of these proposals.

What is the effect of an abstention or broker non-vote on each proposal?

With respect to the election of directors, the proposal to amend the 2015 Omnibus Plan, the advisory proposal on executive compensation, and the proposal to ratify the selection of Ernst & Young LLP:

■ If you abstain from voting on a nominee or a proposal, your shares will be considered present at the annual meeting for purposes of determining a quorum and for purposes of calculating the shares present and entitled to vote on the nominee or the proposal and, accordingly, will have the same effect as a vote against the nominee or proposal.

■ If you do not vote (or a broker non-vote occurs) on a nominee or a proposal, your shares will not be deemed present for the purposes of calculating the vote on that nominee or proposal and will generally have no impact on determining whether the nominee is elected or the proposal is approved.

What does it mean if I receive more than one proxy card?

If you receive more than one proxy card, it means that you hold shares registered in more than one name or brokerage account. You should sign and return each proxy card that you receive in order to ensure that all of your shares are voted.

How can I vote on each of the proposals?

With respect to the first proposal, you may vote FOR or AGAINST the nominees, or you may indicate that you wish to ABSTAIN from voting on the nominees. With respect to each of the second, third and fourth proposals, you may vote FOR or AGAINST the proposal, or you may indicate that you wish to ABSTAIN from voting on the proposal.

If you vote by proxy, your shares will be voted at the annual meeting in the manner you indicate on your proxy. If you sign a paper proxy card but do not specify how you want your shares to be voted (and you do not hold your shares through a broker, bank or other financial institution), they will be voted (1) FOR election of the nominees named below under the caption “Proposal No. 1 – Election of Directors;” (2) FOR approval of the amendment to our 2015 Omnibus

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Incentive Plan; (3) FOR advisory approval of our executive compensation program; (4) FOR ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending April 27, 2019; and (5) in the discretion of the proxies named on the proxy card with respect to all other appropriate matters properly brought before the annual meeting.

How does the director resignation policy work?

Pursuant to our Corporate Governance Guidelines, any nominee for director in an uncontested election (i.e., an election where the number of nominees is not greater than the number of directors to be elected) who fails to receive the affirmative vote of the holders of a majority of shares represented in person or by proxy and entitled to vote at the meeting shall, promptly following certification of the shareholder vote, offer his or her resignation to our Governance and Nominating Committee. The resignation offer shall be in writing and shall be an irrevocable resignation offer pending acceptance or rejection by our Board of Directors following its receipt of the recommendation of our Governance and Nominating Committee. We will promptly disclose to the public each such resignation and decision by our Board.

Who will count the proxy votes?

All votes will be tabulated by Broadridge Financial Services as the inspector of election for the meeting. Such firm will separately tabulate affirmative and negative votes, abstentions and broker non-votes.

How will voting on any other business be conducted?

We do not expect any matters to be presented for a vote at the meeting other than the matters described in this proxy statement. If you grant a proxy, either of the proxy holders, Mark S. Walchirk or Les B. Korsh, or his nominee(s) or substitute(s), will have the discretion to vote your shares on any additional matters that are properly presented for a vote at the meeting. If a nominee is not available as a candidate for director, the persons named as proxy holders may vote your proxy for another candidate nominated by our Board of Directors.

Who is paying for this proxy solicitation?

We will pay the expenses incurred in connection with the solicitation of proxies. We are soliciting proxies principally by mail. In addition, our directors, officers and other employees may solicit proxies personally, by telephone, by facsimile or by e-mail, for which they will receive no consideration other than their regular compensation. We will also request brokerage houses, nominees, custodians and fiduciaries to forward soliciting material to the beneficial owners of shares held as of the record date and will reimburse such persons for their reasonable expenses so incurred.

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PROPOSAL NO. 1
ELECTION OF DIRECTORS

Nine persons have been nominated for election as directors at the annual meeting, all of whom currently serve as directors. Our directors are elected annually, by a majority of the shares represented in person or by proxy and entitled to vote at the meeting, to serve until the next annual meeting of shareholders and until their respective successors are elected and duly qualified. There are no family relationships between or among any of our directors or executive officers.

Our Bylaws provide for a Board of Directors consisting of one or more members, and further provide that the shareholders at each annual meeting shall determine the number of directors. The Board recommends that the number of directors be set at nine and it is intended that the proxies accompanying this proxy statement will be voted at the annual meeting to establish a Board consisting of nine members.

It is intended that votes will be cast pursuant to the enclosed proxy for the election of the nominees, except for those proxies that vote against the nominees or abstain from voting on the nominees. As noted above, shareholders do not have cumulative voting rights with respect to the election of directors, and proxies cannot be voted for a greater number of directors than the number of nominees. If any nominee shall be unable or unwilling to serve as a director, it is intended that the proxy will be voted for the election of such other person as the proxies shall, in their discretion, determine. We have no reason to believe that any nominee will not be a candidate or will be unable to serve.

Set forth below is certain information concerning the nominees for election:

Name	Age	Principal Occupation	Position(s) with Patterson	Director Since
John D. Buck	68	Chief Executive Officer of Whitefish Ventures, LLC	Chairman of the Board	2006
Alex N. Blanco	57	Executive Vice President and Chief Supply Chain Officer of Ecolab Inc.	Director	2017
Jody H. Feragen	62	Former Executive Vice President and Chief Financial Officer of Hormel Foods Corp.	Director	2011
Robert C. Frenzel	47	Executive Vice President and Chief Financial Officer of Xcel Energy Inc.	Director	2018
Francis (Fran) J. Malecha	54	President and Chief Executive Officer of Compass Minerals International, Inc.	Director	2018
Ellen A. Rudnick	67	Senior Advisor on Entrepreneurship, University of Chicago Booth School of Business	Director	2003
Neil A. Schrimsher	54	President and Chief Executive Officer of Applied Industrial Technologies, Inc.	Director	2014
Mark S. Walchirk	52	President and Chief Executive Officer of Patterson Companies, Inc.	President, Chief Executive Officer, Director	2017
James W. Wiltz	73	Former President and Chief Executive Officer of Patterson Companies, Inc.	Director	2001

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Nominees for Election as Director

John D. Buck serves as our non-executive Chairman of the Board. Mr. Buck is the principal owner of Whitefish Ventures, LLC, a family investment fund. He has been its Chief Executive Officer since 2000. Mr. Buck was Chief Executive Officer of Medica, the second largest health benefits plan in Minnesota, from February 2002 to May 2003. From 1996 to 2000, he worked for Fingerhut Companies, Inc. with his last assignment as President and Chief Operating Officer, and played an integral role in developing the business services area of the company. Prior to Fingerhut, Mr. Buck was Vice President of Administration at Alliant Techsystems, a leading supplier of aerospace and defense technologies. Prior to that, Mr. Buck spent 21 years at Honeywell, Inc., including a four-year international posting, and most recently serving as Vice President of Administration. Mr. Buck is Chairman of the Board of Directors of Medica, and served as a director of Evine Live, Inc. from 2004 to 2015. He has been one of our directors since December 2006. Mr. Buck brings financial, strategic and leadership experience, including health benefit plan experience, to our Board.

Alex N. Blanco has served as Executive Vice President and Chief Supply Chain Officer for Ecolab Inc., a global leader in water, hygiene and energy technologies and services that protect people and vital resources, since January 2013. From 1982 to 2012, Mr. Blanco held senior management positions at Procter & Gamble Co. (“P&G”), with his last position as Vice President Product Supply Global Beauty Sector. In his previous roles, he led the supply chain in other key P&G divisions and also had international assignments, in which Mr. Blanco was based outside of the United States from 1990 to 2004, having spent ten years in South America and four years in Europe, and during which time he had responsibility for Central and Eastern Europe, the Middle East and Africa. He has been a director of YMCA of the Greater Twin Cities since June 2015. He has been one of our directors since April 2017. Mr. Blanco brings extensive supply chain and international experience to our Board.

Jody H. Feragen served as Executive Vice President and Chief Financial Officer of Hormel Foods Corp., a multinational marketer and manufacturer of brand name food and meat products, from November 2010 to October 2016. Ms. Feragen served as Hormel’s Senior Vice President and Chief Financial Officer from January 2007 to October 2010 and Hormel’s Vice President (Finance) and Treasurer from October 2005 to December 2006. She also served on Hormel’s board of directors from 2007 to 2016. Ms. Feragen has served as a director, including a member of the audit and management organization and compensation committees, of Graco Inc., a supplier of technology and expertise for the management of fluids in both industrial and commercial applications, since September 2015. She has been one of our directors since September 2011. Ms. Feragen brings extensive experience in public company financial management to our Board.

Robert C. Frenzel has served as Executive Vice President and Chief Financial Officer of Xcel Energy Inc. (“Xcel”) since May 2016, and leads the finance functions of Xcel and its subsidiary companies. From February 2012 to April 2016, Mr. Frenzel served as Senior Vice President and Chief Financial Officer of Luminant, a subsidiary of Energy Future Holdings Corp. (“EFHC”). From February 2009 to February 2012, he served as Senior Vice President for Corporate Development, Strategy and Mergers and Acquisitions for EFHC. In April 2014, EFHC, the majority of its subsidiaries, including Texas Competitive Energy Holdings (“TCEH”), the parent company of Luminant, filed a voluntary bankruptcy petition under Chapter 11 of the United States Bankruptcy Code. TCEH emerged from Chapter 11 in October 2016. Earlier in his career, Mr. Frenzel advised corporate clients on strategic and financial transactions as a Vice President in the Investment Banking Division at Goldman Sachs, and consulted in the strategy, finance, and economics practice at Arthur Andersen. Mr. Frenzel also served in the United States Navy for six years as a nuclear engineering officer and weapons officer, and was promoted to lieutenant commander in the Navy Reserve following active duty. He has been one of our directors since March 2018. Mr. Frenzel brings public company financial management, supply chain, strategic merger and acquisition, system implementation and risk management experience to our Board.

Francis (Fran) J. Malecha has served as President and Chief Executive Officer of Compass Minerals International, Inc. (“Compass”), a leading provider of essential minerals, since January 2013. Before joining Compass, Mr. Malecha was Head of Agricultural Products, North America at Glencore International plc. From 2000 to 2013, Mr. Malecha held a series of increasingly senior roles at global agribusiness company Vittera, Inc, culminating in his tenure Chief Operating Officer of the company’s grain division before Viterra was acquired by Glencore. Earlier in his career, Malecha spent 15 years in the grain division of General Mills, Inc. Mr. Malecha has served as a director of Compass since January 2013. He has been one of our directors since June 2018. Mr. Malecha brings merchandising, transportation, operations, risk management and international merger and acquisition experience to our Board.

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Ellen A. Rudnick has served as Senior Advisor on Entrepreneurship at the University of Chicago Booth School of Business since July 2016. Ms. Rudnick was previously the Executive Director and Clinical Professor of the Polsky Center for Entrepreneurship and Innovation at the University of Chicago Booth School of Business since March 1999. She served as Chairman of Pacific Biometrics, a medical diagnostics company which she co-founded, from 1993 to 1999; President of HCIA and CEO of Healthcare Knowledge Resources, both healthcare information service companies, from 1990 to 1992; and in a variety of capacities at Baxter Healthcare from 1975 to 1990, including Corporate Vice President of Baxter Healthcare and President and Founder of Baxter Management Services Division. Ms. Rudnick served as Founder and Chairman of CEO Advisors, a consulting firm established in 1992. Ms. Rudnick serves as director of First Midwest Bancorp, Inc., HMS Holdings Corporation and Liberty Mutual Insurance Company. She has been one of our directors since December 2003. Ms. Rudnick brings experience with small businesses (our customer base), the medical products industry, academia and entrepreneurship to our Board.

Neil A. Schrimsher has served as Chief Executive Officer of Applied Industrial Technologies, Inc., one of North America’s largest industrial parts distributors, since October 2011 and was also elected its President in August 2013. From January 2010 to August 2011, Mr. Schrimsher was Executive Vice President of Cooper Industries, a global electrical products manufacturer, where he led multiple businesses in Cooper’s Electrical Products Group and headed numerous domestic and international growth initiatives. Mr. Schrimsher joined Cooper Industries in May 2006 as the President of Cooper Lighting. Mr. Schrimsher’s other experience includes senior leadership positions for Siemens Energy & Automation, part of Siemens AG, the global electronics and electrical engineering company. He began his career at General Electric Company and rose through a succession of positions in GE Lighting. He has served as a director of Applied Industrial Technologies, Inc. since October 2011. He has been one of our directors since March 2014. Mr. Schrimsher brings wholesale distribution and executive leadership experience to our Board.

Mark S. Walchirk became our President and Chief Executive Officer in November 2017. Mr. Walchirk previously served as President of U.S. Pharmaceutical at McKesson Corporation from October 2012 to October 2017, where he held responsibility for McKesson’s U.S. Pharmaceutical sales, distribution and customer service operations. Mr. Walchirk joined McKesson in April 2001 and held various leadership positions including President of McKesson Specialty Care Solutions and Chief Operating Officer of McKesson U.S. Pharmaceutical. Before joining McKesson, he spent 13 years in medical-surgical distribution and manufacturing with Baxter Healthcare, Allegiance Healthcare and Encompass Group, holding various leadership positions in sales, marketing, operations and business development. Mr. Walchirk became one of our directors in November 2017. Mr. Walchirk brings strategic and leadership experience, including healthcare services and distribution experience, to our Board.

James W. Wiltz served as our Interim President and Chief Executive Officer from June 2017 to November 2017. Mr. Wiltz previously served as our President and Chief Executive Officer from May 2005 until his retirement in April 2010. Mr. Wiltz served as our President and Chief Operating Officer from April 2003 through May 2005. He began working with us in September 1969. From 1996 to 2003, Mr. Wiltz served as President of our subsidiary, Patterson Dental Supply, Inc. From 2010 through 2017, Mr. Wiltz served as a director of HealthEast Care System, a non-profit healthcare provider, and on its audit and finance committees. He has been one of our directors since March 2001. Mr. Wiltz brings over 40 years of leadership, strategic and industry experience working for Patterson to our Board.

Vote Required

Election as a director requires the affirmative vote of the holders of a majority of the shares represented in person or by proxy and entitled to vote at the meeting. Our Board of Directors recommends that you vote FOR the election of the nominees listed above.

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OUR BOARD OF DIRECTORS AND COMMITTEES

Overview

Our Board of Directors represents the interests of our shareholders as a whole and is responsible for directing the management of the business and affairs of our company, as provided by Minnesota law. Our Board held ten meetings and took action by written consent twice during fiscal 2018. In addition to meetings of the full Board, directors also attended committee meetings. Each director then in office attended at least 75% of all of the meetings of the Board and of those committees on which he or she served.

Our Board is comprised of a majority of independent directors as defined in Rule 5605(a)(2) of the Marketplace Rules of the NASDAQ Stock Market. Our Board has affirmatively determined the independence under the applicable Marketplace Rule as to each of our directors who are identified as independent directors in the chart that appears below within the subsection captioned “Committee Overview.”

As part of our Board’s evaluation of director independence, they considered our company’s ongoing transactions with Cargill Feed and Nutrition, where former director Sarena S. Lin was previously employed as President, our company’s ongoing transactions with Ecolab Inc., where director Alex N. Blanco is employed as Executive Vice President and Chief Supply Chain Officer, and our company’s engagement of Spencer Stuart in connection with various executive officer searches, where director Ellen A. Rudnick’s husband had served as a partner through December 31, 2009, and subsequently performed certain part-time consulting through May 1, 2018 on mentoring/training new hires for the company unrelated to any client work. Our Board reviewed such transactions and determined that they were entered into and provided in the ordinary course of business and were immaterial to either company’s revenues or operations. However, when Ms. Lin accepted the position of Senior Vice President, North America Operations and Global Strategy of Elanco Animal Health, she offered to resign from our Board as required by our Corporate Governance Guidelines. Our Governance and Nominating Committee considered Ms. Lin’s resignation offer, determined that she would no longer be an independent director based on such employment, and recommended to the Board that it accept her offer to resign. The Board, acting on such recommendation, accepted such resignation offer.

The independent members of our Board meet in executive session at each regular meeting of our Board, with no members of management present.

Our company and our Board are members of the National Association of Corporate Directors (“NACD”). Our Board authorizes, recommends and encourages each Board member and our company’s senior management to attend educational courses offered by the NACD or similar accredited educational organization. We reimburse reasonable expenses incurred by our directors and senior management in attending such courses.

Our company has adopted and published Principles of Business Conduct and Code of Ethics. Our Principles of Business Conduct and Code of Ethics satisfy the requirements of Item 406(b) of Regulation S-K and applicable NASDAQ Marketplace Rules. Our Principles of Business Conduct and Code of Ethics are available on our website at www.pattersoncompanies.com or in print upon written request to Patterson Companies, Inc., 1031 Mendota Heights Road, St. Paul, Minnesota 55120, Attention: Investor Relations. We intend to disclose any amendment to or waiver from a provision of our Principles of Business Conduct and Code of Ethics that requires disclosure on our website at www.pattersoncompanies.com.

Our company also has adopted and published Corporate Governance Guidelines. Our Corporate Governance Guidelines address various governance topics, including the role of our Board of Directors, the composition of our Board and selection of directors, functioning of our Board and its committees, compensation of directors, and conduct and ethics standards for directors. Our Corporate Governance Guidelines are available on our website at www.pattersoncompanies.com or in print upon written request to Patterson Companies, Inc., 1031 Mendota Heights Road, St. Paul, MN 55120, Attention: Investor Relations.

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Leadership Structure and Risk Oversight

Our Board of Directors, which elects its Chairman annually by a majority vote, does not have a fixed policy regarding whether the same person should serve as both the Chief Executive Officer and Chairman of the Board, and our Board believes that flexibility on this point best serves our company by allowing us to employ a leadership structure that is most appropriate under the circumstances at any given time.

Upon the June 2017 resignation of our former Chairman of the Board, President and Chief Executive Officer, the unified leadership structure we had formerly utilized with one individual acting as Chief Executive Officer and Chairman of the Board along with a separate Lead Director ended. At that time, John D. Buck, who had served as our Lead Director since March 2014, was appointed non-executive Chairman of the Board and James W. Wiltz, one of our directors, was named Interim President and Chief Executive Officer. Mr. Wiltz was succeeded by Mark S. Walchirk, who became our President and Chief Executive Officer in November 2017.

We currently believe that bifurcating the roles of Chief Executive Officer and Chairman of the Board, as well as the oversight exercised by the independent members of our Board through the work of the committees of our Board discussed below, enables strong and dynamic Board leadership, and effectively allocates authority, responsibility and oversight between management and the independent members of our Board. Our Board has the discretion to combine the roles of Chief Executive Officer and Chairman of the Board in the future if it deems it advisable and in the best interest of our company to do so.

The separation of the Chairman and Chief Executive Officer positions allows our Chairman to focus on governance of our Board, Board meeting agenda planning, Board committee succession planning, the recruitment of new directors, Board committee responsibilities, and other governance matters as further described below under the caption “Role of Non-Executive Chairman,” and our Chief Executive Officer to focus his attention on our business and execution of our company’s strategy. The Chairman also has an important role in the performance evaluation of the Chief Executive Officer, which helps the Governance and Nominating Committee evaluate the most effective Board leadership structure for our company. Our Board believes that these and other activities of the Chairman serve to enhance the independent leadership of the Board in order to provide robust oversight and promote overall Board effectiveness. Mr. Buck has an extensive leadership background, is actively engaged as Chairman on Board matters, and works closely with Mr. Walchirk. Mr. Buck frequently interacts with Mr. Walchirk and other members of management to provide his perspective on important issues facing our company and the informational needs of our Board. In addition to the Governance and Nominating Committee, which he chairs, and the Audit Committee, where he currently serves as a member, Mr. Buck attends the meetings of our Board’s other committees and frequently communicates with the chairs of those committees and with other independent directors both inside and outside of our Board’s normal meeting schedule to discuss Board and company issues as they arise. In addition, our Board has a significant majority of independent directors and all Board committees are comprised of independent directors.

Our management is primarily responsible for assessing and managing risk, while our Board oversees and reviews certain aspects of our company’s risk management efforts, including the oversight of risks related to data protection and cybersecurity. As part of its oversight, our Board meets regularly to discuss the strategic direction and the issues and opportunities facing our company. Throughout the year, our Board provides guidance to management regarding strategy and critically reviews operating plans that are intended to implement that strategy. Our Board periodically holds meetings with senior management dedicated to discussing and reviewing operating plans and overall corporate strategy. A discussion of key risks to the plans and strategy as well as risk mitigation plans and activities is conducted during that meeting. The involvement of our Board in setting business strategy is critical to the determination of the types and appropriate levels of risk undertaken by our company. Our Board’s oversight includes its receipt and review of reports on data protection and cybersecurity matters from our information technology department. Also, more particularly, and as discussed below, our Audit Committee focuses on oversight of financial risks relating to our company; our Compensation Committee focuses primarily on risks relating to remuneration of officers and other employees; our Governance and Nominating Committee focuses on reputational and corporate governance risks relating to our company; and our Finance and Corporate Development Committee focuses on risks associated with our capital structure, capital budget, capital expenditures, issuance and repurchase of securities, acquisitions and divestitures, and corporate investment and treasury policy.

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Role of Chairman

The role of Chairman is designed to provide leadership to our Board and to provide support and advice to our Chief Executive Officer. The role is intended to foster an environment conducive to effective communication by and among our Directors and senior management. The Chairman performs such duties and responsibilities as our Board may determine appropriate, including the following:

■ Calling meetings of the Board and meetings of our independent directors;

■ Presiding over Board meetings, including executive sessions of our independent directors;

■ Briefing the Chief Executive Officer on issues and concerns arising in the executive sessions of the Board;

■ Being available, when requested and appropriate, for consultation and direct communication with shareholders;

■ Reviewing and approving all information sent to our Board, including the quality, quantity, appropriateness and timeliness of such information;

■ Establishing meeting agendas for our Board in consultation with members of senior management;

■ Reviewing and approving the scheduling of Board meetings, assuring there is sufficient time for discussion of all agenda items;

■ Coordinating Board input and review of management’s strategic plan for the company;

■ Working with the Governance and Nominating Committee with respect to the recruitment, selection and orientation of new Board members as well as committee composition;

■ Overseeing the Compensation Committee’s development of appropriate objectives for the Chief Executive Officer and monitoring performance against those objectives;

■ Coordinating and chairing the annual Board performance review of the Chief Executive Officer and communicating results to the Chief Executive Officer;

■ Leading the Board’s review of the succession plan for the Chief Executive Officer and other executive officers;

■ Coordinating the Board’s self-assessment and evaluation processes;

■ Attending all committee meetings ex officio and serving as a member of Governance and Nominating Committee and such other committees as assigned by the Board; and

■ Reviewing, on an annual basis and in consultation with our independent directors, this list of responsibilities and recommending to our Board for approval any modifications or changes.

Committee Overview

The current standing committees of our Board of Directors are the Audit Committee, the Compensation Committee, the Governance and Nominating Committee and the Finance and Corporate Development Committee. Each committee consists solely of members who are independent as defined in Rule 5605(a)(2) of the Marketplace Rules of the NASDAQ Stock Market. In addition, each member of our Audit Committee is independent as defined in Exchange Act Rule 10A-3 and each member of our Compensation Committee is a non-employee director and is an outside director under the rules of the Securities and Exchange Commission and the Internal Revenue Service, respectively.

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Each standing committee has a charter, all of which are available on our website at http://investor.pattersoncompanies.com/governance.cfm or in print upon written request to Patterson Companies, Inc., 1031 Mendota Heights Road, St. Paul, Minnesota 55120, Attention: Investor Relations. Such committees review and reassess the adequacy of their respective charters and recommend any changes to them at least annually. These charters were last reviewed and revised in June 2018. Our committees also engage in an annual review of committee performance.

In June 2017, upon the resignation of our former Chief Executive Officer, the Board formed a Search Committee tasked with identifying and evaluating potential candidates for the position. The Search Committee completed its work in October 2017 upon our company’s entry into an employment agreement with Mark S. Walchirk, whose employment began in November 2017.

The following table shows the current membership of our committees and identifies our independent directors:

Name

Audit

Compensation

Governance and Nominating

Finance and Corporate Development

Search

Independent Director

John D. Buck(a)

X

X*

X

X

Alex N. Blanco

X

X

X

Jody H. Feragen

X*

X

X

X

X

Robert C. Frenzel

X

X

X

Francis (Fran) J. Malecha

X

X

X

Ellen A. Rudnick

X*

X

X

X*

X

Neil A. Schrimsher

X

X

X*

X

X

Les C. Vinney(b)

X

X

Mark S. Walchirk

James W. Wiltz(c)

X

* Denotes committee chairperson.

(a) As non-executive Chairman of the Board, Mr. Buck attends all committee meetings ex officio.

(b) Mr. Vinney will not stand for re-election at the 2018 annual meeting of shareholders.

(c) Mr. Wiltz, whose service as Interim President and Chief Executive Officer did not last longer than one year, is once again regarded as an independent director.

The Board sets the annual schedule of standing committee meetings, with regularly scheduled meetings held adjacent to our Board’s regularly scheduled meetings. In addition to meetings set by the Board, each standing committee shall meet, either by phone or in person, when and as often as the chairperson of each committee deems appropriate. The chairperson of each standing committee, with the advice and consultation of management and the committees’ outside advisors, if any, sets the agenda for each meeting. Committee members receive detailed materials related to the topics on the agenda prior to each meeting.

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Committee Responsibilities

Our Audit Committee and Its Report

Responsibilities and Composition. Our Audit Committee, chaired by Ms. Feragen, is empowered by our Board of Directors to review our financial books and records in consultation with our accounting and auditing staff and our independent registered public accounting firm, Ernst & Young LLP (“EY”), and to review with our accounting staff and EY the scope of the audit, the audit plan and any questions raised with respect to accounting and auditing policy and procedure. EY reports directly to the committee, which is responsible for the appointment, compensation, retention and oversight of the work of the independent registered public accountants in regards to audit and attest services for our company. The committee’s charter, which discusses the full responsibilities of the committee, is available on our website at https://investor.pattersoncompanies.com/investor-relations/governance/default.aspx or in print upon written request to Patterson Companies, Inc., 1031 Mendota Heights Road, St. Paul, Minnesota 55120, Attention: Investor Relations.

Our Audit Committee was established in accordance with Section 3(a)(58)(A) of the Exchange Act. As noted above, each member of the committee is an independent director as defined in Rule 5605(a)(2) of the Marketplace Rules of the NASDAQ Stock Market. Each member of the committee meets the criteria for independence set forth in Exchange Act Rule 10A-3(b)(1). No member of the committee participated in the preparation of the financial statements of our company or any current subsidiary of our company at any time during the past three years. Each member of the committee is able to read and understand fundamental financial statements, including a company’s balance sheet, income statement, and cash flow statement.

Pursuant to Rule 5605(c)(2) of the Marketplace Rules of the NASDAQ Stock Market, at least one member of the Audit Committee has past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background which results in the individual’s financial sophistication. In addition, our Board of Directors has determined that Jody H. Feragen is an “audit committee financial expert” as such term is defined by Item 407(d)(5) of Regulation S-K.

Audit Committee Report. As noted above, our Audit Committee oversees our accounting and financial reporting process on behalf of our Board of Directors. Management has primary responsibility for the consolidated financial statements and the reporting process, including the system of internal control. In fulfilling its oversight responsibilities, the committee reviewed and discussed the audited consolidated financial statements included in our company’s Annual Report on Form 10-K for the fiscal year ended April 28, 2018 with management, including a discussion of the quality, not just the acceptability, of the accounting principles; the reasonableness of significant estimates and judgments; and the clarity of disclosures in the financial statements.

After each fiscal quarter but prior to the filing of the related periodic report, our Audit Committee reviews and discusses with management and our independent registered public accounting firm the results of the most recently completed fiscal quarter. The committee held 12 meetings during fiscal 2018.

Our Audit Committee has established procedures for the receipt, retention and treatment of complaints received by our company regarding accounting, internal accounting controls, or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters. To report such matters, please call 877-888-0040.

EY has been our company’s independent registered public accounting firm since 1985. When, in accordance with Securities and Exchange Commission rules and EY policies, the lead audit partner is required to rotate after a maximum of five consecutive years of service in that capacity or due to other circumstances, the process for selection of our company’s lead audit partner pursuant to this rotation policy involves a meeting between the chair of our Audit Committee and the candidate for the role, as well as discussion by the full committee and with management. Our company’s lead audit partner was most recently changed in 2015.

Our Audit Committee reviewed with EY, the independent registered public accounting firm that is responsible for expressing an opinion on the conformity of those audited consolidated financial statements with generally accepted accounting principles, its judgments as to the quality, not just the acceptability, of our company’s accounting principles and such other matters as are required to be discussed with the committee by Auditing Standard No. 1301

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(Communications with Audit Committees), as adopted by the Public Company Accounting Oversight Board in Rule 3200T. In addition, the committee has discussed with EY the firm’s independence from management and our company, including the matters in the written disclosures and the letter the committee received from EY as required by Rule 3526 of the Public Company Accounting Oversight Board, Communication with Audit Committees Concerning Independence, and considered the compatibility of non-audit services performed by EY during the year on such firm’s independence prior to the commencement of the non-audit services.

Our Audit Committee is committed to ensuring the independence of our company’s independent registered public accountants and directs significant attention toward the appropriateness of the outside auditor to perform services other than the audit. The committee has adopted pre-approval policies and procedures in this regard.

As a matter of policy, the independent registered public accountants will only be engaged for non-audit related work if those services enhance and support the attest function of the audit, are an extension to the audit or audit related services, or relate to tax matters. Annually, the lead audit partner reviews with the Audit Committee the services the outside auditor expects to provide in the coming year, and the related fees. In addition, management provides the committee with a quarterly status for the committee’s approval of any non-audit services that the outside auditor has been asked to provide or may be asked to provide in the next quarter. The committee pre-approves all audit and non-audit services provided by the company’s outside auditor.

Our Chief Financial Officer is responsible for the implementation of the Audit Committee’s pre-approval policies and procedures. The committee pre-approved all of the services we received from EY during fiscal 2018.

The Audit Committee discussed with our company’s internal auditors and EY the overall scope and plans for their respective audits. The committee meets with the internal auditors and EY, with and without management present, to discuss the results of their examinations, their evaluations of our company’s internal controls, and the overall quality of our company’s financial reporting.

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to our Board (and our Board approved) that our audited consolidated financial statements be included in our Annual Report on Form 10-K for the fiscal year ended April 28, 2018, for filing with the Securities and Exchange Commission.

The Audit Committee and our Board have recommended and seek shareholder ratification of the selection of EY as our company’s independent registered public accounting firm for the year ending April 27, 2019. In making this recommendation, the committee evaluated the independence of EY, their knowledge and experience with our company, the quality of their past work for our company, their industry knowledge, data relating to their audit quality and performance and the level of fees to be charged for the audit services. The committee and our Board believe that the appointment of EY as our company’s independent registered public accounting firm is in the best interests of our shareholders and our company.

Respectfully submitted,
/s/ Jody H. Feragen, Chairman
/s/ Alex N. Blanco
/s/ John D. Buck
/s/ Robert C. Frenzel
The Audit Committee

Our Compensation Committee and Its Report

Responsibilities and Composition. Our Compensation Committee, chaired by Ellen A. Rudnick, is authorized by our Board to set the annual compensation of each of our executive officers, to grant stock options, restricted stock and other awards to employees under our 2015 Omnibus Incentive Plan, and to review and approve our compensation and benefit plans. Our Compensation Committee held ten meetings during fiscal 2018.

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Our Board has determined that each member of our Compensation Committee is independent of management and our company. Further, as noted above, each member of the committee is an independent director, is a non-employee director, and is an outside director under the applicable rules of NASDAQ, the Securities and Exchange Commission and the Internal Revenue Service, respectively.

The Compensation Committee has the dual responsibility of serving the interests of our shareholders and serving as an advisor to management. The committee assists our Board in fulfilling its responsibility to our shareholders so that our executive officers and certain other officers and managers are compensated in accordance with our company’s total compensation objectives and executive compensation policy. Management assists the committee by advising and recommending compensation policies, strategies and pay levels necessary to establish appropriate incentives for management and employees that are aligned with business strategies and goals that the committee believes will drive competitive advantage and deliver sustainable returns to shareholders. Other than as permitted under the 2015 Omnibus Incentive Plan, the committee does not delegate any of its duties or responsibilities to any subcommittee or other person. The committee’s specific responsibilities include:

■ Evaluate annually our Chief Executive Officer’s and other executive officers’ compensation levels and payouts;

■ Determine for our executive officers, and recommend to our Board for approval with respect to the Chief Executive Officer, all components of compensation, including annual base salary levels, annual incentive opportunity levels, long-term incentive opportunity levels, executive perquisites, employment agreements, change-in-control provisions or agreements, severance agreements, benefits, supplemental benefits and any special financial compensation programs;

■ Review and recommend to our Board for approval any equity compensation program involving the use of our company’s securities, including stock options and restricted stock;

■ When appropriate, select, retain and terminate independent compensation consultants, independent legal counsel or other advisors to advise the committee;

■ Ensure that the compensation for our Chief Executive Officer and other executive officers is consistent with our company’s executive compensation policy;

■ Advise and assist our company in defining its total compensation policy;

■ Review and comment on the compensation program to ensure that it supports our company’s strategic and financial plans;

■ Review and recommend to our Board for approval new incentive plans that are consistent with the total compensation policy, and monitor the appropriateness of payouts under alternative business scenarios;

■ Review retirement plans to ensure they are meeting company objectives and are in compliance with relevant laws and regulations;

■ Review the establishment, amendment and termination of employee benefits plans, including equity plans, and oversee the operation and administration of such plans;

■ Review our company’s compensation policies for regulatory and tax compliance, including structuring compensation programs to preserve tax deductibility and, as required and to the extent applicable under relevant transition relief rules, establishing performance goals and certifying that performance goals have been attained for purposes of Section 162(m) of the Internal Revenue Code (the “Code”);

■ Considering the results of the most recent shareholder advisory vote on executive compensation in making determinations and recommendations regarding our company’s executive compensation policy and decisions;

■ Include a report on executive compensation in our company’s proxy statement as required by Securities and Exchange Commission rules;

■ Review annually our company’s risk assessment to determine whether compensation policies and practices are reasonably likely to have a material adverse effect on our company;

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■ Review and discuss with management the “Compensation Discussion and Analysis” required by Securities and Exchange Commission Regulation S-K, Item 402, and determine whether to recommend to our Board that the “Compensation Discussion and Analysis” be included in our company’s annual proxy statement for the annual meeting of shareholders; and

■ Fulfill such other duties and responsibilities as may be assigned to the committee by our Board or Chairman of the Board.

In fulfilling its duties and responsibilities, the Compensation Committee may hire independent consultants, confer with our internal human resource professionals and consult with our Chief Executive Officer and other members of management. In the most recently completed fiscal year, the committee engaged and worked with Willis Towers Watson and subsequently Pearl Meyer, independent compensation consultants that have no other ties to our company or its management, to review compensation philosophy, competitiveness, pay for performance, and short term and long term compensation design. The committee believes that Willis Towers Watson and Pearl Meyer are independent of our management. Our management has not engaged Willis Towers Watson or Pearl Meyer to provide any other services to our company.

During the Compensation Committee meetings held in fiscal 2018, certain members of management were present to address specific topics within the scope of their responsibilities. In addition, our Chief Executive Officer, our Chief Financial Officer, and our Vice President, General Counsel and Secretary attended several of the meetings to provide certain recommendations to the committee regarding the compensation of other executive officers and to discuss the financial implications of various compensatory awards and benefit programs. No such executive officer was present during the committee’s discussion and determination of his or her respective compensation.

Compensation Committee Interlocks and Insider Participation. The members of our Compensation Committee are identified by name in the “Compensation” column of the chart that appears above within the subsection captioned “Committee Overview.” None of the members of the committee was an officer or employee of Patterson Companies, Inc. during fiscal 2018 or in any prior year, and none of the members of the committee had any relationship requiring disclosure under Item 404 of Regulation S-K. There were no Compensation Committee interlocks as described in Item 407(e)(4) of Regulation S-K.

Compensation Committee Report. Our Compensation Committee has reviewed and discussed the “Compensation Discussion and Analysis” that appears herein with management. Based on such review and discussions, the committee recommended to our Board that the “Compensation Discussion and Analysis” be included in this proxy statement and, thereby, in our Annual Report on Form 10-K for the fiscal year ended April 28, 2018.

Respectfully submitted,
/s/ Ellen A. Rudnick, Chairman
/s/ Alex N. Blanco
/s/ Francis (Fran) J. Malecha
/s/ Neil A. Schrimsher
The Compensation Committee

Our Governance and Nominating Committee and Its Procedures for Nominations

Responsibilities and Composition. Our Governance and Nominating Committee, chaired by John D. Buck, performs the core function of providing the overall protocol for Board operation. It also serves as the nominating committee, making recommendations as to nominees to serve as members of our Board and regarding the composition of the committees of our Board. The committee’s responsibilities include establishing criteria for Board and committee membership, considering rotation of committee members, reviewing candidates’ qualifications and any potential conflicts with our interests, assessing the contributions of current directors in connection with their re-nomination, and making recommendations to the full Board on how to improve the effectiveness of our Board. The committee believes that diversity of viewpoints, backgrounds, skills, experience and expertise is a key attribute for directors. As a result, the

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committee seeks to have a diverse Board that is representative of our company’s customer, employee and shareholder base. The committee carefully considers diversity when considering nominees for director and periodically reviews its recruitment and selection protocols to ensure that diversity remains a component of each director search.

Our Governance and Nominating Committee has identified nominees based upon suggestions by non-management directors, executive officers, shareholders and third-party search firms. Our director selection criteria includes: integrity; high level of education; business experience; broad-based business acumen; understanding of our business and industry; strategic thinking and willingness to share ideas; network of contacts; and diversity of experiences, expertise and backgrounds among members; balanced representation of the best interests of the company’s shareholders as a whole rather than special constituencies; and any potential conflicts with the company’s interests. The committee has used these criteria to evaluate potential nominees. The committee does not evaluate proposed nominees differently depending upon who has made the recommendation.

Our Governance and Nominating Committee has from time to time engaged third-party search firms to provide assistance in the identification and evaluation of potential nominees, whose qualifications and independence are then thoroughly evaluated by the committee. The committee has paid fees to third-party search firms for such assistance, including most recently the identification and evaluation of Robert C. Frenzel and Francis (Fran) J. Malecha, who joined our Board in March 2018 and June 2018, respectively.

It is our Governance and Nominating Committee’s policy to consider director candidates recommended by shareholders who appear to be qualified to serve on our Board. The committee may choose not to consider an unsolicited recommendation if no vacancy exists on our Board and the committee does not perceive a need to increase the size of our Board. The committee will consider only those director candidates recommended in accordance with the procedures set forth below.

Nomination Procedures. To submit a recommendation of a director candidate to our Governance and Nominating Committee, a shareholder must submit the following information in writing, addressed to our Chairman of the Board, care of our Corporate Secretary, at the main office of Patterson Companies, Inc.:

■ The name of the person recommended as a director candidate;

■ All information relating to such person that is required to be disclosed in solicitations of proxies for election of directors pursuant to Exchange Act Regulation 14A;

■ The written consent of the person being recommended as a director candidate to being named in the proxy statement as a nominee and to serving as a director if elected;

■ As to the shareholder making the recommendation, the name and address, as they appear on the books of Patterson Companies, Inc., of such shareholder; provided, however, that if the shareholder is not a registered holder of common stock, the shareholder must submit his or her name and address along with a current written statement from the record holder of the shares that reflects ownership of our common stock; and

■ A statement disclosing whether such shareholder is acting with or on behalf of any other person and, if applicable, the identity of such person.

Our Bylaws provide that in order for a person nominated by a shareholder to be eligible for election as a director at any regular or special meeting of shareholders, a written request that his or her name be placed in nomination must be received from a shareholder of record by our Corporate Secretary not less than 90 days prior to the date fixed for the meeting, together with the written consent of such person to serve as a director. A copy of our Bylaws may be obtained by written request to Patterson Companies, Inc., 1031 Mendota Heights Road, St. Paul, Minnesota 55120, Attn: Les B. Korsh, Vice President, General Counsel and Secretary.

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Minimum Qualifications. In carrying out its responsibility to find the best-qualified persons to serve as directors, our Governance and Nominating Committee will consider appropriate data with respect to each suggested candidate, consisting of business experience, educational background, current directorships, involvement in legal proceedings during the last ten years which are material to the evaluation of the integrity of the candidate, and an indication of the willingness of the candidate to serve as a director.

In addition, prior to nominating an existing director for re-election to our Board, our Governance and Nominating Committee will consider and review an existing director’s Board and committee attendance and performance; length of Board service; experience, skills and contributions that the existing director brings to our Board; and his or her independence. Pursuant to our Corporate Governance Guidelines, independent directors generally may not stand for election following their attaining the age of 75, or 20 years of service as a director on our Board.

Our Governance and Nominating Committee is also responsible for overseeing and reviewing our processes for providing information to our Board. The committee completes an annual review of the performance of our Chief Executive Officer. In addition, the committee recommends a succession plan to our Board for our Chief Executive Officer and reviews programs created and maintained by management for the development and succession of other executive officers and other individuals identified by management or the committee. The committee develops and oversees a company orientation program for new directors and a continuing education program for current directors. The committee also sets director compensation. The committee held four meetings during fiscal 2018.

Our Finance and Corporate Development Committee

Purpose. The purpose of our Finance and Corporate Development Committee is to oversee our company’s capital structure, capital budget and capital expenditures, issuance and repurchase of equity and debt, and acquisitions and divestitures, and corporate investment and treasury policy and their consistency with our company’s overall financial and strategic plans.

Responsibilities and Organization. The responsibilities of our Finance and Corporate Development Committee, which is chaired by Neil A. Schrimsher, include:

■ Review and make recommendations to our Board regarding our company’s capital structure;

■ Review our financing requirements, evaluate management’s proposals to support such financing requirements and recommend specific financing arrangements, such as credit arrangements and equity and long-term debt issuances, to our Board;

■ Review our company’s treasury policy as it relates to management of customer credit, commodity risks, exposures relating to insurance and risk management, and other financial risks that the Board may delegate to the committee for review;

■ Review tax strategies and restructuring projects;

■ Review and recommend to our Board our cash dividend policy;

■ Review and recommend to our Board authorization for the repurchase of equity or long-term debt;

■ Review our company’s use of derivative, hedging and other instruments to manage financial, currency and interest rate exposure;

■ Evaluate the financial impact of proposed merger, acquisition, divestiture, joint venture and other business combination transactions and recommend to the Board with respect to the financial aspects of such acquisitions and divestitures in the amount of $5 million or more (“principal portfolio transactions”);

■ Review the proposed annual capital budget and capital expenditures in the amount of $10 million or more;

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■ Evaluate the post-acquisition financial integration and return on investment for principal portfolio transactions;

■ Review our company’s D&O and liability insurance coverage; and

■ Monitor our company’s investor relations program.

Our Finance and Corporate Development Committee reports to our Board on the principal matters reviewed or approved at each meeting and provides recommendations as to actions to be taken by our Board. The committee has the sole authority to retain and terminate any outside financial or other consultants to assist in carrying out its duties, including the authority to approve consultant fees and other retention terms. The committee has the authority to obtain advice and assistance from internal or external legal, financial or other advisors. In addition, the committee has the authority to delegate any of its responsibilities to subcommittees, as it deems appropriate, subject to the requirements of applicable laws and regulations. The committee held six meetings during fiscal 2018.

Our Search Committee

Our Search Committee was formed in June 2017 and disbanded in October 2017 upon our company’s entry into an employment agreement with Mr. Walchirk. This committee’s functions included identifying and evaluating potential candidates for Chief Executive Officer, and ultimately advising the Board on its recommendations for hiring a Chief Executive Officer. This committee, which was chaired by Ms. Rudnick, retained Spencer Stuart to conduct the executive search.

Communications with Board Members

Our Board of Directors has provided the following process for interested persons to send communications to our Board or individual directors. All communications from shareholders should be addressed to Patterson Companies, Inc., 1031 Mendota Heights Road, St. Paul, Minnesota 55120, Attention: Les B. Korsh, Vice President, General Counsel and Secretary. Communications to individual directors may also be made to such director at our company’s address. All communications sent to the chair of our Audit Committee or to any individual director will be received directly by such individuals and will not be screened or reviewed by any company personnel. Any communications sent to our Board in the care of our Corporate Secretary will be reviewed by him to ensure that such communications relate to the business of our company or its subsidiaries before being reviewed by our Board.

Board Member Attendance at Annual Meetings

Under our Corporate Governance Guidelines, it is our policy that all directors should be present at the annual meeting of shareholders. We generally hold a Board of Directors meeting coincident with the shareholders’ meeting to minimize director travel obligations and facilitate their attendance at the shareholders’ meeting. All directors then in office attended the 2017 annual meeting of shareholders.

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NON-EMPLOYEE DIRECTOR COMPENSATION

Non-employee directors receive cash compensation and equity-based compensation for their service on our Board of Directors. For fiscal 2018, non-employee director compensation included an overall retainer of $206,000, with $90,000 representing an annual cash retainer and $116,000 issued in the form of restricted stock awards vesting one year from date of grant. Committee member and committee chair cash retainers were as follows: $10,000 for each member of the Audit Committee and $20,000 for the chair of the Audit Committee; $5,000 for each member of the Compensation Committee and $15,000 for the chair of the Compensation Committee; no additional cash retainer for each member of the Governance and Nominating Committee but a $10,000 cash retainer for the chair of the Governance and Nominating Committee; and $5,000 for each member of the Finance and Corporate Development Committee and $15,000 for the chair of the Finance and Corporate Development Committee. The cash retainer for the former Lead Director was $30,000; however, in June 2017, such retainer was replaced with a $100,000 cash retainer for the non-executive Chairman of the Board. In addition, each member of the Search Committee received a fixed cash retainer of $10,000 and the chair of the Search Committee received a fixed cash retainer of $15,000, which amounts were paid upon conclusion of the Chief Executive Officer search. Non-employee directors may elect to receive shares of common stock in lieu of their director fees otherwise payable in cash. Directors are also reimbursed for all reasonable out-of-pocket expenses incurred in connection with their service on our Board.

The value of the above-referenced restricted stock awards is reviewed annually. For fiscal 2019, we collected and analyzed market data that we used as a benchmark for what we would expect to pay non-employee directors to remain competitive. Based on that review, no changes were made to non-employee director compensation.

Under our 2015 Omnibus Incentive Plan, annual restricted stock awards vest in full on the first anniversary of the date of grant. Non-employee directors who have a term expiring not more than 29 days prior to the natural vesting date of their restricted stock award, are deemed to remain in service as a non-employee director until such natural vesting date, but only for purposes of satisfying the vesting restrictions. Otherwise, unvested restricted stock awards are forfeited on the effective date of termination of service as a director. Prior to fiscal 2016, restricted stock awards granted to non-employee directors under our Amended and Restated Equity Incentive Plan vested to the extent of one-third per year, commencing upon the first anniversary of the date of grant. Unvested restricted stock awards granted under such plan are forfeited on the 30th day after termination of service as a director.

Because Messrs. Walchirk, Wiltz and Anderson each served as a director and an executive officer of our company for a portion of fiscal 2018, information regarding their compensation is set forth within the section captioned “Executive Compensation.”

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Compensation of Directors

The following table sets forth the compensation of our non-employee directors for fiscal 2018:

Name	Fees Earned or Paid in Cash ($)		Stock Awards ($)(e)		Option Awards ($)(f)		Non-Equity Incentive Plan Compensation ($)		Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
John D. Buck		214,167		116,021		-		-		-		-		330,189
Alex N. Blanco		104,583		116,021		-		-		-		-		220,604
Jody H. Feragen		134,583		116,021		-		-		-		-		250,604
Robert C. Frenzel(a)		13,125		-		-		-		-		-		13,125
Sarena S. Lin(b)		75,833		116,021		-		-		-		-		191,854
Francis (Fran) J. Malecha(c)		-		-		-		-		-		-		-
Ellen A. Rudnick		130,000		116,021		-		-		-		-		246,021
Neil A. Schrimsher		123,750		116,021		-		-		-		-		239,771
Les C. Vinney(d)		96,250		116,021		-		-		-		-		212,271

(a) Mr. Frenzel began serving on our Board of Directors in March 2018.

(b) Ms. Lin resigned from our Board of Directors in March 2018.

(c) Because Mr. Malecha began serving on our Board of Directors in June 2018, he did not receive compensation during fiscal year 2018.

(d) Mr. Vinney does not intend to stand for re-election at our 2018 annual meeting of shareholders.

(e) Represents the aggregate grant date fair value of the 3,058 shares of restricted stock awarded to each non-employee director on September 18, 2017, the date of our 2017 annual meeting of shareholders, computed in accordance with FASB ASC Topic 718. Information on the assumptions used to calculate the value of awards is set forth in Note 14 to the consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended April 28, 2018. The aggregate number of unvested shares of restricted stock outstanding at fiscal year-end 2018 held by our non-employee directors was as follows:

Name	Number of Shares of Restricted Stock
John D. Buck		3,058
Alex N. Blanco		3,058
Jody H. Feragen		3,058
Robert C. Frenzel		-
Sarena S. Lin		-
Francis (Fran) J. Malecha		-
Ellen A. Rudnick		3,058
Neil A. Schrimsher		3,058
Les C. Vinney		3,058
Total		18,348

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(f) The aggregate number of unexercised stock options outstanding at fiscal year-end 2018 held by our non-employee directors was as follows:

Name	Number of Stock Options
John D. Buck		-
Alex N. Blanco		-
Jody H. Feragen		12,000
Robert C. Frenzel		-
Sarena S. Lin		7,000
Francis (Fran) J. Malecha		-
Ellen A. Rudnick		-
Neil A. Schrimsher		12,000
Les C. Vinney		-
Total		31,000

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding beneficial ownership of our common stock as of July 20, 2018, unless otherwise noted, by (a) each person who is known to us to own beneficially more than 5% of our common stock, (b) each director and nominee for director, (c) each executive officer named in the Summary Compensation Table below, and (d) the current directors and executive officers as a group. The table lists voting securities, including restricted stock held by our directors and executive officers over which they have sole voting power but no investment power. Otherwise, except to the extent noted below, each person identified below has sole voting and investment power over the shares reported. Except as otherwise noted below, we know of no agreements among our shareholders which relate to voting or investment power with respect to our common stock and none of the stated shares has been pledged as security.

Name and Address of Beneficial Owner(a)	Amount and Nature of Beneficial Ownership(a)			Percent of Class(b)
Delaware Charter Guarantee & Trust Company dba Principal Trust Company as Trustee for the Patterson Companies, Inc. Employee Stock Ownership Plan		11,724,423	(c)		12.3	%
T. Rowe Price Associates, Inc.		10,651,120	(d)		11.2	%
The Vanguard Group		8,207,547	(e)		8.6	%
Parnassus Investments		7,436,901	(f)		7.8	%
Barrow, Hanley, Mewhinney & Strauss, LLC		5,182,834	(g)		5.5	%
BlackRock, Inc.		5,122,331	(h)		5.4	%
Scott P. Anderson		216,742	(i)(j)		*
Mark S. Walchirk		101,232			*
Les B. Korsh		90,395	(i)(j)		*
James W. Wiltz		74,692	(i)(k)		*
Kevin M. Pohlman		73,075	(i)		*
John D. Buck		54,627			*
Ellen A. Rudnick		45,293			*
Les C. Vinney		33,619			*
Jody H. Feragen		28,955	(l)(m)		*
Ann B. Gugino		25,204	(i)(j)		*
Neil A. Schrimsher		22,546	(l)		*
David G. Misiak		18,778	(i)		*
Dennis W. Goedken		5,466	(i)		*
Alex N. Blanco		3,058			*
Robert C. Frenzel		-			-
Francis (Fran) J. Malecha		-			-
All current directors and executive officers as a group (14 persons)		584,139	(n)		*

* Represents less than 1%.

(a) Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and includes voting or investment power with respect to securities. Securities “beneficially owned” by a person may include securities owned by or for, among others, the spouse, children or certain other relatives of such person as well as other securities as to which the person has or shares voting or investment power or has the option or right to acquire within 60 days. The same shares may be beneficially owned by more than one person. Includes shares of common stock held by our ESOP. Shares reported as owned by the ESOP trustee are also reported as beneficially owned by our executive officers to the extent that shares have been allocated to the ESOP accounts of the named persons. Allocated shares are voted by the ESOP trustee in accordance with the direction of ESOP participants.

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Generally, unallocated shares and allocated shares as to which no direction is made by the participants are voted by the ESOP trustee in the same percentage as the allocated shares as to which directions are received by the ESOP trustee. Unless otherwise indicated, the address of each shareholder is c/o Patterson Companies, Inc., 1031 Mendota Heights Road, St. Paul, Minnesota 55120.

(b) Percentage of beneficial ownership is based on 95,062,744 shares outstanding as of July 20, 2018. Shares issuable pursuant to options are deemed outstanding for computing the percentage of the person holding such options but are not deemed outstanding for computing the percentage of any other person.

(c) As set forth in Schedule 13G/A filed with the Securities and Exchange Commission by Delaware Charter Guarantee & Trust Company dba Principal Trust Company as Trustee for the Patterson Companies, Inc. Employee Stock Ownership Plan on February 7, 2018, represents shares over which shared voting power and shared dispositive power is claimed. The ESOP is subject to the Employee Retirement Income Security Act of 1974 (“ERISA”). The securities reported include all shares held of record by the trustee. The trustee follows the directions of our company, or other parties designated in the trust agreement between our company and the trustee, with respect to voting and disposition of the shares. The trustee, however, is subject to fiduciary duties under ERISA. The trustee disclaims beneficial ownership of the reported shares. As of July 20, 2018, the number of shares reported as beneficially owned included approximately 1,692,780 shares held in the unallocated account of the ESOP and approximately 9,575,297 shares held in the allocated account of the ESOP. The reporting person’s address is 1013 Centre Road, Suite 300, Wilmington, DE 19805-1265.

(d) As set forth in Schedule 13G jointly filed with the Securities and Exchange Commission by T. Rowe Price Associates, Inc. (“Price Associates”) and T. Rowe Price Mid-Cap Value Fund, Inc. (“Mid-Cap Value Fund”) on June 11, 2018. The Schedule 13G reports that Price Associates is an investment adviser with sole voting power over 2,836,456 shares and sole dispositive power over 10,651,120 shares. The Schedule 13G reports that Mid-Cap Value Fund is a registered investment company sponsored by Price Associates, which it also serves as investment adviser, with sole voting power over 7,737,800 shares, representing 8.1% of the class of such securities. The Schedule 13G further reports that the individual and institutional clients which Price Associates serves as investment adviser have the power to direct the receipt of dividends paid with respect to, and the proceeds from the sale of, the reported shares, and that any discretionary authority that has been delegated to Price Associates may be revoked in whole or in part at any time. The Schedule 13G further reports that, with the exception of Mid-Cap Value Fund, not more than 5% of the class of such securities is owned by any one client subject to the investment advice of Price Associates. With respect to securities owned by Mid-Cap Value Fund, the Schedule 13G reports that only the custodian for such fund has the right to receive dividends paid with respect to, and proceeds from the sale of, the reported securities, and that no other person is known to have such right, except that the shareholders of the Mid-Cap Value Fund participate proportionately in any dividends and distributions so paid. The reporting persons’ address is 100 E. Platt Street, Baltimore, MD 21202.

(e) As set forth in Schedule 13G/A filed with the Securities and Exchange Commission by The Vanguard Group (“Vanguard”) on February 9, 2018. The Schedule 13G/A reports that Vanguard is an investment adviser with sole voting power over 97,416 shares, shared voting power over 10,200 shares, sole dispositive power over 8,106,992 shares, and shared dispositive power over 100,555 shares. The Schedule 13G/A further reports that Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of Vanguard, is the beneficial owner of 89,581 shares as a result of its serving as investment manager of collective trust accounts and that Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of Vanguard, is the beneficial owner of 18,035 shares as a result of its serving as investment manager of Australian investment offerings. The reporting person’s address is 100 Vanguard Blvd., Malvern, PA 19355.

(f) As set forth in Schedule 13G/A filed with the Securities and Exchange Commission by Parnassus Investments (“Parnassus”) on February 12, 2018. The Schedule 13G/A reports that Parnassus is an investment adviser with sole voting power and sole dispositive power over the reported shares. The Schedule 13G/A further reports that these securities are beneficially owned by clients of Parnassus, which include registered investment companies. The reporting person’s address is 1 Market Street, Suite 1600, San Francisco, CA 94105.

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(g) As set forth in Schedule 13G filed with the Securities and Exchange Commission by Barrow, Hanley, Mewhinney & Strauss, LLC (“BHMS”) on February 13, 2018. The Schedule 13G reports that BHMS is an investment adviser with sole voting power over 837,035 shares, shared voting power over 4,345,799 shares, and sole dispositive power over 5,182,834 shares. The Schedule 13G further reports that certain clients of the reporting person have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the reported shares, but no one person’s interest in the reported shares is more than 5% of the total outstanding shares. The reporting person’s address is 2200 Ross Avenue, 31^st Floor, Dallas, TX 75201-2761.

(h) As set forth in Schedule 13G/A filed with the Securities and Exchange Commission by BlackRock, Inc. (“BlackRock”) on January 23, 2018. The Schedule 13G/A reports that BlackRock is a parent holding company/control person for BlackRock Life Limited, BlackRock Advisors, LLC, BlackRock (Netherlands) B.V., BlackRock Institutional Trust Company, National Association, BlackRock Asset Management Ireland Limited, BlackRock Financial Management, Inc., BlackRock Asset Management Schweiz AG, BlackRock Investment Management, LLC, BlackRock Investment Management (UK) Limited, BlackRock Asset Management Canada Limited, BlackRock Investment Management (Australia) Limited, BlackRock Advisors (UK) Limited, BlackRock Fund Advisors, BlackRock Asset Management North Asia Limited, and BlackRock Fund Managers Ltd. The Schedule 13G/A reports that BlackRock has sole voting power over 4,550,804 shares and sole dispositive power over 5,112,331 shares. The Schedule 13G/A further reports that various persons have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the reported shares, but no one person’s interest in the reported shares is more than 5% of the total outstanding shares. The reporting person’s address is 55 East 52^nd Street, New York, NY 10055.

(i) Includes the following shares allocated to the ESOP account of the following persons: Scott P. Anderson (19,032 shares); Les B. Korsh (663 shares); James W. Wiltz (334); Kevin M. Pohlman (388 shares); Ann B. Gugino (9,759 shares); David G. Misiak (15,661 shares); and Dennis W. Goedken (1,069 shares). The ESOP trustee has the right to receive, and the power to direct the receipt of, dividends from such shares.

(j) Includes shares purchasable by the named person upon the exercise of options granted under our Amended and Restated Equity Incentive Plan or our 2015 Omnibus Incentive Plan: Scott P. Anderson (115,883 shares); Les B. Korsh (6,250 shares); and Ann B. Gugino (7,400 shares).

(k) Of the shares reported as beneficially owned, 6,748 shares are held in trust for members of Mr. Wiltz’s family and 12,817 shares are held in a revocable trust of which Mr. Wiltz is a trustee.

(l) Includes shares purchasable by the named person upon the exercise of options granted under our 2001 Non-Employee Directors’ Stock Option Plan or our Amended and Restated Equity Incentive Plan: Jody H. Feragen (12,000 shares); and Neil A. Schrimsher (12,000 shares).

(m) Of the shares reported as beneficially owned, 1,000 shares are held in a revocable trust of which Ms. Feragen is a trustee.

(n) Includes 1,385 shares allocated to ESOP accounts, 30,250 shares purchasable upon the exercise of options, and 270,383 shares over which there is sole voting power but no investment power.

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our officers and directors, and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission and provide us with copies of such reports. Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons that no Forms 5 were required for those persons, we believe that, during the past fiscal year, our officers, directors and greater than 10% shareholders complied with applicable filing requirements.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Our Compensation Committee (throughout this Compensation Discussion and Analysis, the “committee”) oversees and makes decisions regarding our executive compensation and benefit programs. The following discussion should be read in conjunction with the Summary Compensation Table, and related tables and footnote disclosures setting forth the compensation of the following named executive officers:

Named Executive Officer(a)	Position
Mark S. Walchirk	President and Chief Executive Officer of Patterson Companies
James W. Wiltz	Former Interim President and Chief Executive Officer of Patterson Companies
Scott P. Anderson	Special Advisor to Patterson Companies (Former President and Chief Executive Officer of Patterson Companies)
Dennis W. Goedken	Controller of Patterson Companies (Former Interim Chief Financial Officer and Treasurer of Patterson Companies)
Ann B. Gugino	Former Executive Vice President, Chief Financial Officer and Treasurer of Patterson Companies
Kevin M. Pohlman	President of Patterson Animal Health
David G. Misiak	Former President of Patterson Dental North America
Les B. Korsh	Vice President, General Counsel and Secretary of Patterson Companies

(a) Mr. Walchirk, who also serves as one of our directors, became our President and Chief Executive Officer on November 20, 2017. Mr. Wiltz, one of our non-employee directors, served as our Interim President and Chief Executive Officer from June 1, 2017 until November 20, 2017, while a search was undertaken for a new Chief Executive Officer. Mr. Anderson, who is currently employed as a non-executive officer Special Advisor, ceased serving as our President and Chief Executive Officer on June 1, 2017. Mr. Goedken, our Controller, served as our Interim Chief Financial Officer and Treasurer from March 1, 2018 until June 29, 2018, when Donald J. Zurbay became our Chief Financial Officer and Treasurer. Ms. Gugino ceased serving as our Executive Vice President, Chief Financial Officer and Treasurer on March 1, 2018 and resigned as a non-executive officer Special Advisor on May 25, 2018. Mr. Pohlman became President of Patterson Animal Health on July 11, 2017. In August 2001, Mr. Pohlman joined Animal Health International, Inc., which was acquired by Patterson in June 2015. Mr. Misiak became President of Patterson Dental North America on November 1, 2016. Mr. Misiak resigned from our company on May 11, 2018, subsequent to the end of fiscal 2018. Mr. Korsh, who started with Patterson Companies in June 2014, became our Vice President, General Counsel and Secretary effective July 1, 2015.

The discussion that follows addresses the “active” named executive officers, namely those who were serving as executive officers as of the end of fiscal 2018 and who remain employed as executive officers as of the date of this proxy statement.

Executive Summary

Fiscal 2018 marked a year of challenges and change for Patterson. In addition to experiencing the above-referenced executive leadership changes, Patterson continued to experience the effects of changes in our sales force, disruptions resulting from our ERP system initiatives, our decision to broaden our dental digital technology equipment portfolio, and lower gross margins. As a result of these and other factors, 2018 financial performance did not meet our expectations. Therefore, we have taken steps to reflect this performance in our executive compensation.

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Financial Results. Below is a summary of our fiscal 2018 financial results from continuing operations that we believe is helpful in understanding our compensation decisions and philosophy:

■ Net Sales: Consolidated net sales in fiscal 2018 were $5,465.7 million, a decrease of 2.3% from the prior fiscal-year period.

■ Gross Profit: Consolidated gross profit margin decreased 140 basis points from the prior year to 21.9%. Gross profit margin rates decreased in both the Dental and Animal Health segment. Unfavorable sales mix, lower rebates and a change in estimate related to year-end inventory valuations in both our Dental and Animal Health segment were the primary drivers of the decline in the gross profit margin rate. In addition, a greater percentage of sales came from our lower margin Animal Health segment during fiscal 2018, resulting in a lower consolidated gross profit margin rate.

■ Operating Income: Operating income from continuing operations, a key driver of incentive compensation, was $219.9 million, or 4.0% of net sales, in fiscal 2018, compared to $287.9 million, or 5.1% of sales, in fiscal 2017. The decrease in operating income from continuing operations was driven by lower net sales and lower gross margins, partially offset by the intangible asset impairment charge recorded in fiscal 2017 and cost containment efforts. The decrease in operating income from continuing operations as a percent of net sales was driven by these same factors. In addition, a greater percentage of sales came from our lower margin Animal Health segment during fiscal 2018, which reduced operating income from continuing operations as a percent of net sales.

■ Net Income and Earnings Per Share from Continuing Operations: Net income from continuing operations increased 15.6% to $201.0 million in fiscal 2018, compared to $173.8 million in the prior year. Earnings per diluted share from continuing operations were $2.16 in fiscal 2018, compared to $1.82 in the prior year. This comparison includes the recognition of a provisional net tax benefit of $76.6 million, reflecting the revaluation of tax-deferred assets and liabilities, net of a one-time transitional tax on unremitted foreign earnings as a result of the Tax Reform and Jobs Act. Fiscal 2017 results contained a pre-tax non-cash impairment charge of approximately $36 million, or approximately $23 million after taxes, or $0.24 per diluted share, related to the distribution fee associated with the CEREC product component of the previously exclusive agreement with Sirona Dental Systems.

For fiscal 2018, we also returned approximately $186.7 million to shareholders in the form of share repurchases and dividends.

The following table provides a summary of our Total Shareholder Return (“TSR”) performance over the past three years, both on an absolute basis and relative to the S&P 400 constituent companies:

Historical TSR Measurement Period	Patterson TSR	Percentile Rank of Patterson’s TSR Relative to S&P 400 Constituents
3 Years (FY16 – FY18)	-48.0%	21st percentile

While we experienced many positive developments in fiscal 2018, at the end of the year the overall value of our fiscal 2018 executive compensation package was below the targeted level, reflecting our performance orientation and challenging goals.

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The charts below show fiscal 2018 direct compensation – both target and actual – for Mark S. Walchirk, who we hired as our new Chief Executive Officer during fiscal 2018, and our other active named executive officers. The actual direct compensation presented below is indicative of our fiscal 2018 performance.

Fiscal 2018 Direct Compensation – Value Reflecting Fiscal 2018 Performance

 

(a) Excludes one-time sign-on bonus and inducement equity grant.

Actual Management Incentive Compensation Plan (“MICP”) payout was zero based on fiscal 2018 performance. Long-term incentives (“LTI”) consist of stock options, restricted stock units and performance units, and for purposes of these charts are valued based on the stock price at the end of the fiscal 2018 and relative TSR performance through the end of fiscal 2018. As a result, the actual LTI values presented in these charts might not be paid. Furthermore, the actual LTI values presented include zero value for stock options because all stock options were underwater at the end of fiscal 2018, and zero value for performance units due to relative TSR performance for the performance period of fiscal years 2016 through 2018.

CEO Onboarding. In developing our compensatory arrangement with Mr. Walchirk, the committee considered Mr. Walchirk’s then current compensation, including his current equity, the compensation of our former Chief Executive Officer, the compensation of chief executive officers of other distribution companies, and competitive market data supplied by Willis Towers Watson based on the company’s compensation peer group for total direct compensation. The committee determined that 90% of the mid-point of that compensation peer group would yield approximately $5,000,000 of total annual compensation, which the committee regarded as appropriate given Mr. Walchirk’s skills, experience and opportunity to grow in the position. In designing a compensation package for Mr. Walchirk, cognizant of its focus on pay-for-performance, the committee determined to provide him the following:

■ $850,000 annual base salary,

■ $1,050,000 annual MICP target, and

■ $3,100,000 of annual LTI, for an annual total of $5,000,000.

To partially offset the forfeiture of certain equity from Mr. Walchirk’s former employer, the committee also determined to provide a restricted stock unit award with a grant date value of $2,000,000 (valued at $1,341,989 as of fiscal year-end) and a lump-sum sign-on cash bonus of $100,000 as inducements to his employment with our company, thereby bringing Mr. Walchirk’s total first-year target compensation to $6,500,000. The committee determined that a one-for-one offset of equity at his former employer was not required given that the new position carries with it significant earning potential and

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the potential for down-range increases. The committee determined that the overall compensation package and its components would be sufficient to encourage Mr. Walchirk to join the company yet would help support the creation of shareholder value and be in the best interests of shareholders.

Other NEOs. With respect to the other active named executive officers, the committee made the following decisions regarding fiscal 2018 compensation:

■ Set base salary percentage increases for fiscal 2018 in the low single-digits with the exception of Mr. Pohlman, who was promoted during the fiscal year to President of Animal Health.

■ Awarded no cash compensation under our MICP.

■ Provided slight increases in LTI grant values; however, as of the end of the fiscal year, realizable LTI values were zero for stock options because all stock options were underwater and zero for performance units due to relative TSR performance for fiscal years 2016 through 2018.

Compensation Consultant. During fiscal 2018, the committee transitioned from working with Willis Towers Watson to working with Pearl Meyer as its independent compensation consultant. The committee reviewed and confirmed the independence of both firms.

Fiscal 2019. In connection with our recent business challenges and changes in our executive leadership ranks, the committee increased base salaries for our other active named executive officers and modified the MICP and the performance unit element of the long-term incentive plan to emphasize the importance of fiscal 2019 operational results to our company’s long-term success.

Compensation Philosophy, Practices and Components

Compensation Philosophy

The committee is guided by the following objectives that are believed to be key to the successful execution of our strategic business imperatives, enhancing growth opportunities and providing benefits to our shareholders:

 

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Compensation Practices

The committee leverages the following best practices in designing, administering and governing our executive compensation programs:

What We Do

What We Do Not Do

■   Generally target executive compensation to be          competitive at the median       ■   Emphasize the majority of our program in variable          pay       ■   Use equity to drive a long-term perspective aligned          with shareholders       ■   Promote stock ownership with stock ownership          guidelines       ■   Reflect shareholder preferences in our program plans          and designs, including clawback and double trigger          protections       ■   Cap payouts in our annual short-term incentive awards       ■   Annually review our pay for performance relationship          and conduct a compensation risk assessment

■   Provide single trigger change-in-control          cash severance payments, or          change-in-control cash severance          payments exceeding three times base          salary and target annual incentives       ■   Allow stock option repricing or discounted          stock option granting       ■   Offer change-in-control tax gross-ups to          our named executive officers       ■   Pay dividends or dividend equivalents on          unearned or unvested performance          shares       ■   Allow our executives or directors to          hedge or pledge company stock       ■   Use employment or golden parachute          agreements for executives, except in          specific circumstances that provide a          commensurate benefit to the company

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Compensation Components

To assist in understanding the intended goals of the committee, we have described, at a high level, each of our primary compensation elements for fiscal 2018 in the following table:

Element	Purpose	Key Features
Base Salary	■   Provide a fixed level of          compensation       ■   Reflect competitive practices	Salary levels set based on an assessment of:         ■   Level of responsibility         ■   Experience and time in position         ■   Individual performance         ■   Future potential         ■   Competitiveness         ■   Internal pay equity considerations         ■   Salary levels are reviewed annually            by the committee and adjusted as            appropriate
Annual MICP	■   Provide formulaic incentives to          achieve or exceed annual          budgeted Adjusted Operating          Income (“AOI”)       ■   Include individual performance          objectives for each          executive       ■   Link pay to performance	■   Incentive payouts range from threshold            to maximum levels, depending on level            of performance         ■   Performance below the threshold level            will result in zero payout
Performance Units	■   Provide executive officers with          incentives to achieve          long-term success       ■   Align executive officers’          interests with the interests of          our shareholders	■   Performance measure represents           relative TSR versus the S&P 400        ■   TSR results at or above the 50th           percentile are required for a target (or           higher) payout        ■   3-year performance period
Stock Options	■   Encourage sustained          shareholder value creation via          stock price increases	■   10-year term        ■   3-year vesting
Restricted Stock Units	■   Provide opportunities for          equity ownership       ■   Support leadership retention          objectives	■   Multi-year ratable vesting

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Base Salary

The committee annually reviews base salaries for the executive officers to determine an appropriate amount considering the factors identified in the above table.

The committee set our Chief Executive Officer’s annual base salary for fiscal 2018 at $850,000. As a result of his July 2017 promotion to President of Patterson Animal Health and the related increase in the scope of his responsibilities, Mr. Pohlman’s fiscal 2018 base salary increased by 45% over his base salary for fiscal 2017. Mr. Korsh received a low single-digit percentage increase in his base salary for fiscal 2018.

For fiscal 2019, Messrs. Pohlman and Korsh received base salary percentage increases in the mid-teens in recognition of their fiscal 2018 performance through various executive officer transitions and in consideration of the competitive market for comparable executives.

MICP

The named executive officers are eligible to earn annual cash incentive compensation under the MICP. A cash incentive is payable if a threshold level of performance is achieved, and the ultimate payout varies with performance. In consideration of the overall performance results for fiscal 2018, the minimum financial objectives were not met, and, in their discretion, the committee determined that no payments would be made to executive team members for individual performance objectives.

The fiscal 2018 MICP was structured in a manner similar to that in place for fiscal 2017. The primary performance metric selected by the committee was Adjusted Operating Income. The committee selected this measure for the following reasons:

■ It is a well-understood financial measure that is communicated in Patterson’s Annual Report on Form 10-K

■ It is a balanced metric that encourages top line revenue growth, profit margins and cost containment

■ The committee believes that this financial measure influences Patterson’s stock price performance and its use effectively aligns the interests of executive officers and shareholders

Similar to the prior fiscal MICP, incentive payouts are designed to vary according to performance outcomes as follows:

	FY 2018 MICP Performance Goals:
	Adjusted Operating Income ($mils)
Level of Achievement	Total Company			Dental			Animal Health			Payout Potential
Threshold	$	386,045		$	237,940		$	48,385			35	%
Target	$	386,045		$	237,940		$	48,385			35	%
Maximum	$	443,952		$	273,631		$	55,643			175	%
Actual Outcome	$	281,813		$	149,902		$	39,676
% of Target		73	%		63	%		82	%

Distinct from prior years, for fiscal 2018, the committee determined to align threshold and target performance, both in terms of Adjusted Operating Income and payout potentials, in anticipation of low or no Adjusted Operating Income growth for fiscal 2018. The actual Adjusted Operating Income results presented above were adjusted for incentive expense and our previously announced change in LIFO method of accounting for certain inventories.

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In addition to these financial performance objectives, the committee included individual strategic objectives for each named executive officer. Objectives for this element considered items such as net sales, revenue goals, Next Generation System (SAP) implementation success, succession planning and team development and integration synergies. This individual element accounts for 15% of the target annual incentive opportunity (for corporate officers the remaining 85% is based on Adjusted Operating Income; for business unit leadership, the remaining 85% is split 15% corporate and 70% business unit performance).

In connection with our recent business challenges and changes in executive leadership, the committee modified the performance metrics under the MICP for fiscal 2019. In particular, the committee determined that adjusted operating income, free cash flow and individual performance objectives will be the performance metrics on which annual cash incentive compensation, if any, will be earned for fiscal 2019. Such changes were made to emphasize the importance of fiscal 2019 operational results to our company’s long-term success.

Long-Term Incentives

The long-term incentive program emphasizes performance via stock options and performance units, but also provides retention incentives via restricted stock units. Performance units generally account for 50% of the grant date value of executive officer LTI with stock options and restricted stock units each generally accounting for 25% of the grant date value of executive officer LTI. The table below highlights the value and number of awards granted to each of our active named executive officers (a thorough description of each vehicle follows).

Executive	Performance Units ($ / #)		Stock Options ($ / #)		Restricted Stock or Restricted Stock Units ($ / #) (a)		Total ($) (a)
Mark S. Walchirk	$	645,833	$	322,917	$	322,917	$	1,291,667
		30,147		52,764		9,119
Kevin M. Pohlman	$	325,000	$	162,500	$	162,500	$	650,000
		6,562		19,474		3,586
Les B. Korsh	$	212,500	$	106,250	$	106,250	$	425,000
		3,727		11,845		2,236

* Note: the values in this table may not exactly equal the Summary Compensation Table due to rounding.

(a) The amounts shown for Mr. Walchirk exclude the $2,000,000 restricted stock unit award for 56,481 shares he received as an inducement to his employment on December 1, 2017.

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Performance Units

Effective in fiscal 2016, the committee redesigned the performance unit element of the executive compensation program to emphasize shareholder value creation in a direct way. The committee decided to reference relative TSR versus the S&P 400 as its performance measure rather than internal financial objectives, which the company had used previously. The program has the following pay for performance relationship, and other features:

 

Similar to fiscal 2017, for the performance units granted as part of the fiscal 2018 compensation program, TSR of Patterson and the S&P 400 will be measured over a three-year period to promote longer-term perspectives, with payouts achieved based on such relative performance.

The committee modified the performance unit element of the long-term incentive plan for fiscal 2019 to parallel the changes made to the performance metrics under the MICP for fiscal 2019. In lieu of measuring 3-year TSR versus the S&P 400, our performance units for fiscal 2019 will be earned based on a one-year adjusted operating income metric and a free cash flow metric. Any shares issued as a result of the performance unit metrics being achieved will then vest 100% two years after the end of fiscal 2019. We view operational excellence as paramount to our commitment to create long-term value for our shareholders and this modified approach for fiscal 2019 reflects that. During the remainder of fiscal 2019, the committee and management are evaluating the performance unit element of the long-term incentive plan to ensure it is consistent with our compensation philosophy and supports our commitment to create value for all shareholders.

Stock Options

In fiscal 2015 the committee reintroduced stock options into the long-term incentive mix. We have maintained this approach, as we believe that there is direct alignment between management and shareholder interests. Our 2015 Omnibus Incentive Plan, as described herein and originally approved by an overwhelming majority of our shareholders, has several positive features that reinforce the performance and retention objectives in our compensation philosophy including:

■ 10-year term provides a long-term perspective

■ Flexible vesting criteria can be utilized

We believe that the design of this element of long-term incentive compensation inspires a long-term perspective, encourages shareholder value creation and aligns the interests of management and shareholders.

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Restricted Stock Units

While the committee adheres to an overall executive compensation program that is heavily performance-based, we also recognize our objectives of leadership retention and stock ownership. Therefore, 25% of the long-term incentive value is denominated in time-based restricted stock units. This element accomplishes these objectives via the multi-year vesting period (generally 20% per year over five years with the exception of certain inducement and one-time awards described herein) and highlights our preferences for an ownership mentality.

Other Executive Compensation Arrangements, Policies and Practices

Capital Accumulation Plan

To encourage employee ownership and as a further means for retention, Patterson has a deferred compensation, restricted stock purchase plan that is available to certain employees, including executive officers (the “Capital Accumulation Plan”). Under our Capital Accumulation Plan, participants may defer annually up to 25% of their pre-tax compensation to be used to purchase shares of restricted stock. The stock purchased with the corresponding salary deferral is bought at a 25% discount from the market price of our common stock at the beginning of the calendar year or the end of the calendar year, whichever is lower. Participants elect the initial deferral period between three and five years. Participants may elect to defer the compensation beyond the initial deferral period, with the restrictions also continuing for the additional deferral period, with the minimum additional deferral period being five years. If the participant voluntarily leaves employment during the initial deferral period, 100% of the purchased restricted stock and any salary deferred are forfeited.

Health, Welfare and Retirement Benefits

Patterson provides a full range of benefits to its executives, including the standard medical, dental and disability benefits generally available to our employees. We also sponsor a qualified 401(k) plan which allows participants to make plan contributions on a pre-tax basis.

Perquisites and Other Personal Benefits

Patterson provides the named executive officers with perquisites and other personal benefits that the committee believes are reasonable and consistent with our overall compensation philosophy.

■ Automobile Reimbursement: Each executive is provided the use of a car under the fleet program maintained by our company.

■ Executive Physicals: The executives are encouraged to participate in an executive health program at the Mayo Clinic. A comprehensive evaluation emphasizing all aspects of preventative care is conducted by physicians who are specialists in Internal Medicine and Preventative Medicine. The cost of the physical is reimbursed by our company.

■ Executive Life Insurance Premiums: The executives participate in a company-sponsored executive life insurance program. This program provides our named executive officers with a life insurance benefit equal to three times their base salary plus the targeted annual incentive under the MICP. The life insurance benefit is capped at $1,300,000. Premiums, which are set each June, are paid by our company through a payroll gross-up.

■ Amounts Reimbursed for the Payment of Taxes: Patterson pays an amount necessary to cover executives’ tax obligations for certain perquisites and other personal benefits. In fiscal 2018, Patterson reimbursed executives for the payment of taxes on automobile reimbursement and executive life insurance premiums.

■ Company Contributions to the ESOP: In general, our company makes an annual contribution to the leveraged Employee Stock Ownership Plan (“ESOP”) based on company performance and other considerations equal to a

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certain percentage of an executive’s eligible compensation, subject to certain statutory limitations. This contribution is available generally to all our U.S. employees, subject to plan requirements. However, due to overall company performance being below expectations, there was a nominal contribution for fiscal 2018 resulting from a minimum payment on the ESOP note.

■ Incentive Trips: Expenses incurred by the executive and family members while attending special events or trips scheduled as rewards for incentivizing sales or other business achievements and for family members traveling with the executive for any purpose, are reported as imputed income to the executive.

Stock Ownership Guidelines

We believe that promoting share ownership aligns the interests of our executives and directors with those of our shareholders and provides strong motivation to build shareholder value. Under our stock ownership guidelines, key executives are expected to own shares of a value equal to a multiple of their annual base pay as follows:

■ Chief Executive Officer – 5x

■ Subsidiary Presidents, Chief Financial Officer– 3x

■ Corporate and Subsidiary Vice Presidents – 2x

■ Non-employee directors – 5x annual cash retainer

Executives and directors are expected to achieve target levels over a period of five years. If an executive or director is below the guideline, he or she is expected to retain 75% of the net shares (after satisfying tax obligations) received upon exercise of a stock option or lapsing of restrictions on restricted stock. If the executive or director has met the minimum ownership guideline, he or she is expected to retain 25% of the net shares received. As of July 20, 2018, our executives and directors were in compliance with applicable stock ownership guidelines.

Employment and Other Severance, Change-in-Control and Related Agreements

Patterson has recently entered into agreements with its active named executive officers providing them with certain severance and change-in-control benefits in exchange for their agreement to certain restrictive covenants. When establishing those benefits and the level of those benefits, the committee considered the competitive market for comparable executives and the benefits provided by comparable companies. The committee believes that competition for executive talent primarily affects the aggregate level of the target total direct compensation opportunity. However, the committee also believes it is critical to our company’s long-term performance to offer other compensation opportunities, including severance and change-in-control benefits, that are broadly commensurate with competitive alternatives. The committee also believes that the issuance of inducement equity awards and other one-time equity awards as consideration for the restrictive covenants contained in such agreements serves to align named executive officer and shareholder interests and, as to the inducement awards, were necessary to attract and retain senior executive talent. In the context of Chief Executive Officer transition, the committee further considered the importance of having such agreements in place with the broader executive leadership team given that, prior to entry into Mr. Walchirk’s employment agreement, the company did not previously have such agreements with its leaders.

In particular, we have entered into individual agreements with Messrs. Walchirk, Pohlman and Korsh that provide for severance benefits upon involuntary termination without cause. Such benefits, receipt of which is conditioned upon executive’s execution and delivery of a release of all potential claims against us, consist of:

■ 18 months of base salary (24 months in the case of our President and Chief Executive Officer);

■ Cash incentive compensation equal to an average of the last three years of actual MICP incentives;

■ Proration of the current year MICP incentive based on actual performance; and

■ 18 months of COBRA.

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Our individual agreements with Messrs. Walchirk, Pohlman and Korsh also provide certain change-in-control benefits, in lieu of the above-referenced severance benefits, that are triggered if either of the following occurs within 24 months after a change in control (as defined in each agreement):

■ We terminate the executive’s employment with us for a reason other than cause (as defined in the agreement), or

■ The executive terminates his employment with us for good reason (as defined in the agreement).

Such change-in-control benefits, receipt of which is also conditioned upon executive’s execution and delivery of a release of potential claims against us, consist of:

■ 24 months of base salary (36 months in the case of our President and Chief Executive Officer);

■ cash incentive compensation equal to the then current target MICP incentive;

■ proration of the current year MICP incentive based on target performance; and

■ 18 months of COBRA.

The committee designed these agreements to help ensure that our executive team is able to evaluate objectively whether a potential change in control transaction is in the best interests of Patterson and its shareholders, without having to be concerned about their future employment. We believe that retaining the services of our key executives during a change-in-control scenario is critical to maximizing shareholder value. These agreements help ensure the continued services of our executive officers throughout the change in control transaction by giving them incentives to remain with us rather than seeking alternative employment or being recruited to a competitor during a highly uncertain time. Our agreements providing for change-in-control benefits do not contain excess parachute payment tax gross-up provisions.

The committee reviewed prevalent market practices in determining the severance amounts and the events that trigger payments under the agreements. The committee determined that the amounts and triggering events were appropriate and designed to encourage decision-making that is in the best interest of Patterson. The committee considered competitive market data and governance best practices information provided by Pearl Meyer. The committee also evaluated the cost to us of these arrangements and the potential payout levels to each affected executive officer under various scenarios. In approving these agreements, the committee determined that their cost to us and our shareholders was reasonable and not excessive, given the benefit conferred on us. See “Potential Payments upon Termination or Change-in-Control” for further information regarding such agreements.

Certain of our equity plans also provide change-in-control benefits. As described below, our 2015 Omnibus Incentive Plan only provides such benefits in connection with a change in control and a subsequent event (a “double trigger”), which we believe enables us to better balance the employee’s need for certainty with the interests of our shareholders.

■ Our Amended and Restated Equity Incentive Plan provides that awards issued under that plan are fully vested and all restrictions on the awards lapse in the event of a change in control, as defined in such plan.

■ Under our 2015 Omnibus Incentive Plan, if the surviving or acquiring company in a change in control assumes our company’s outstanding incentive awards or provides for their equivalent substitutes, such plan provides for accelerated vesting of incentive awards following a change in control only upon the termination of the employee’s service, a material reduction in an employee’s base salary, a discontinuation of participation in certain long-term cash or equity benefits provided to comparable employees, a significant change in job responsibilities or the need to relocate, provided these events occur within two years of a change in control.

■ Additionally, our Capital Accumulation Plan provides that on an event of acceleration, as defined in the plan, the restrictions on shares of restricted stock lapse and such stock becomes fully vested.

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Determining Executive Compensation

The committee is responsible for the review and approval of all aspects of the executive compensation program. The committee meets regularly each year to (among other items):

■ Establish the annual base salary and MICP target opportunity for each of the executives for the current fiscal year

■ Determine the actual annual incentive compensation to be paid to each executive for services provided during the prior year

■ Establish plan targets and performance measures for the performance period for performance units

■ Determine the number of performance units earned, if any, under the long-term incentive program for the performance period ending with the prior fiscal year

■ Determine restricted stock units and stock option awards and any other equity-based awards to be granted to executive officers

When making individual compensation decisions for the executives, the committee takes many factors into account. These factors include subjective and objective considerations of each individual’s skills, performance and level of contribution towards desired business objectives, our company’s overall performance, retention concerns, the individual’s tenure and experience with our company and in his or her current position, the recommendations of management and the independent compensation consultant, the individual’s current and historical compensation, the committee’s compensation philosophy, and comparisons to other comparably situated executives (both those of our company and those of peer companies). The committee’s process utilizes input, analysis and review from a number of sources, including our company’s management, other independent directors of the Board, the committee’s independent compensation consultant, and market studies and other comparative compensation information as discussed below.

The committee uses this information in conjunction with its own review of the various components of our executive compensation program to determine the base salary and annual short-term and long-term incentive targets and opportunities of the executive officers as a group and individually.

Role of Executive Officers in Determining Compensation

The committee meets with the Chief Executive Officer annually to review the performance of the other executives. The meeting includes an in-depth review of each executive officer, achievement of individual performance objectives established at the beginning of the year and individual contributions towards achievement of our business goals. A summary of the performance review is presented to the full Board each year.

The committee considers input from the Chief Executive Officer and other select executives when developing and selecting metrics and performance objectives that may be referenced in the annual short-term or long-term incentive program, and evaluating performance against such pre-established metrics and objectives. The committee also receives recommendations from the Chief Executive Officer regarding base salary amounts, annual short-term and long-term incentive award amounts for the other executive officers. In determining the Chief Executive Officer’s compensation, the committee considers comparative compensation information and input from its independent compensation consultant.

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Role of the Compensation Consultant

During fiscal 2018, the committee transitioned from working with Willis Towers Watson to working with Pearl Meyer as its independent compensation consultant. The committee reviewed and confirmed the independence of both firms. The compensation consultant provides the committee with an annual compensation market analysis for the executives; makes recommendations on the executive pay programs; reviews, participates and comments on executive compensation matters; and provides updates on regulatory changes in compensation related issues and other developments and trends in executive compensation.

Market Competitiveness Review

The committee reviews recommendations from the independent compensation consultant on a peer group of companies about which competitive compensation data is obtained. For purposes of setting fiscal 2018 compensation, we reanalyzed our peer group in light of the company’s evolving business situation. By comparison to the 2017 compensation peer group, we removed four acquired companies that were no longer relevant comparators and added four indirect industry comparison companies (distributors) to the peer group. The resulting peer group had annual revenue ranging from $2.6 billion to $12.5 billion and market capitalization ranging from $340 million to $15.8 billion. Both management and the committee believe that the resulting peer group of 16 companies provided a robust statistical set of compensation data to serve as a basis for fiscal 2018 compensation decisions.

The companies comprising the peer group used to establish fiscal 2018 compensation opportunities of the executive officers are listed below:

Anixter International Inc.	Hill-Rom Holdings, Inc.
Applied Industrial Technologies, Inc.	MRC Global Inc.
Beacon Roofing Supply, Inc.	MSC Industrial Direct Co. Inc.
DENTSPLY SIRONA Inc.	Owens & Minor Inc.
Essendant Inc.	Pool Corp.
Fastenal Company	W.W. Grainger, Inc.
HD Supply Holdings, Inc.	Watsco, Inc.
Henry Schein, Inc.	WESCO International Inc.

In connection with compensation decisions the committee made for fiscal 2018, the committee worked with Willis Towers Watson in peer group development process.

The reports furnished by compensation consultants provided the committee with market information at the 25^th, 50^th, and 75^th percentiles for each executive position and pay component, and for total direct compensation, and compared the market compensation data to current pay for each executive. This market information is an important element reviewed by the committee, and provides a basis for adjusting a component of pay, or total direct compensation generally, above or below these ranges to recognize the specific circumstances of individual executive officers in a manner consistent with the stated objectives of the compensation program.

Shareholder Approval of our Executive Compensation Program

In deciding on the structure of the executive compensation program for fiscal 2018, the committee took into account the perspectives of our shareholders. Historically, Patterson’s shareholders have strongly supported our executive compensation programs with the overwhelming majority of shares voted at our annual meetings approving, on an advisory

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basis, the compensation of our named executive officers. At last year’s annual meeting, our proposal regarding advisory approval of executive compensation was approved by 86.78% of the shares voted on such proposal. We continue to consider the perspectives of our shareholders in the design and administration of our executive compensation programs.

Other Related Considerations

Compensation Risk Assessment

The committee annually considers the designs of our executive compensation programs relative to risk. This assessment includes an analysis of our overall compensation philosophy, the program value and plan design, and our governance processes to ensure that we are promoting superior performance in a responsible way relative to risk. In addition, in July 2018, the committee worked with Pearl Meyer in the assessment of the potential for risk stemming from our compensation programs. Following its assessment, including its review of the report of its compensation consultant, the committee concluded that our executive compensation programs are unlikely to create a material adverse effect on Patterson.

Impact of Tax and Accounting Treatment on Compensation Decisions

Section 162(m) of the Code disallows a deduction to any publicly-held corporation and its affiliates for certain compensation paid to “covered employees” in a taxable year to the extent that compensation exceeds $1 million per covered employee. Prior to the enactment of the Tax Cuts and Jobs Act in December 2017, Section 162(m)-qualified “performance-based compensation” was not subject to this deduction limitation. Pursuant to the Tax Cuts and Jobs Act, the Section 162(m) performance-based compensation exception was repealed with respect to taxable years beginning after December 31, 2017, except that certain transition relief is provided for remuneration provided pursuant to a written binding contract which was in effect on November 2, 2017 and which was not modified in any material respect on or after such date. As a result, compensation paid to any of our covered employees in excess of $1 million per taxable year generally will not be deductible unless, among other requirements, it is intended to qualify, and is eligible to qualify, as Section 162(m) performance-based compensation pursuant to the transition relief provided by the Tax Cuts and Jobs Act. Because of certain ambiguities and uncertainties as to the application and interpretation of Section 162(m) and the regulations issued thereunder, including the uncertain scope of the transition relief provided by the Tax Cuts and Jobs Act, no assurance can be given that any compensation paid by Patterson will be eligible for such transition relief and, therefore, eligible for the Section 162(m) performance-based compensation exception. The committee will continue to monitor the applicability of Section 162(m) to our ongoing compensation arrangements and intends to continue to compensate our named executive officers in a manner consistent with the best interests of Patterson and its shareholders.

The committee also considers the impact of Section 409A of the Code, and in general, our executive plans and programs are designed to comply with the requirements of that section to avoid the possible adverse tax consequences that may arise from non-compliance.

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Summary Compensation Table

The following table sets forth information concerning the compensation of our named executive officers for fiscal 2016, 2017 and 2018. Information for our active named executive officers, as defined in “Compensation Discussion and Analysis,” appears above the line, and information for all other named executive officers appears below the line. The terms and conditions of our agreements with our named executive officers are described below in “Potential Payments upon Termination or Change-in-Control.”

Name and Principal Position (a)	Fiscal Year		Salary ($) (b)		Bonus ($)		Stock Awards ($) (c)		Option Awards ($)		Non-Equity Incentive Plan Compen- sation ($) (d)		Change in Pension Value and Non- qualified Deferred Compen- sation Earnings ($)		All Other Compen- sation ($) (e)		Total ($)
Mark S. Walchirk		2018		383,591		100,000		2,968,750		322,917		-		-		258,748		4,034,006
President and Chief Executive
Officer of Patterson Companies
Kevin M. Pohlman		2018		272,920		-		507,664		162,500		-		-		49,483		992,568
President of Patterson Animal		2017		188,341		-		225,017		-		90,000		-		26,930		530,288
Health		2016		173,331		100,000		141,592		-		-		-		4,352		419,275
Les B. Korsh		2018		340,002		-		335,744		106,250		-		-		52,796		834,792
Vice President, General Counsel		2017		333,365		-		265,667		85,004		-		-		27,964		712,000
and Secretary of Patterson		2016		280,833		-		249,993		238,000		132,000		-		25,167		925,993
Companies
James W. Wiltz		2018		544,774		-		116,021		-		-		-		9,040		669,805
Director and Former Interim
President and Chief Executive