CYNO Cynosure - Class A (MM)

PROPOSAL 1—ELECTION OF TWO CLASS II CLASSIFIED DIRECTORS

Our board of directors currently consists of six members who are elected by the holders of our class A common stock. Our directors are divided into three classes, with one class being elected each year and members of each class holding office for a three-year term. We have two class II classified directors whose terms expire at the Annual Meeting, two class III classified directors whose terms expire at the 2017 annual meeting of stockholders and two class I classified directors whose terms expire at the 2018 annual meeting of stockholders.

At the Annual Meeting, our stockholders will have an opportunity to vote for two class II classified director nominees: Marina Hatsopoulos and William O. Flannery. Each of Ms. Hatsopoulos and Mr. Flannery is currently serving as a class II classified director.

You can find more information about each of Ms. Hatsopoulos and Mr. Flannery in the section of this proxy statement entitled “Our Board of Directors—Classified Directors—Nominees Whose Terms Expire in 2016 (Class II Classified Directors).”

If elected, each of Ms. Hatsopoulos and Mr. Flannery will hold office until the 2019 annual meeting of stockholders and until her or his successor is elected and qualified. Each of Ms. Hatsopoulos and Mr. Flannery has indicated her or his willingness to serve if elected. However, if either of them should be unable to serve, proxies may be voted for a substitute nominee nominated by our board of directors, or our board of directors may reduce the number of directors.

Our Board of Directors

Set forth below is information about each member of our board of directors, including the nominees for election as our class II classified directors. This information includes each director’s age as of March 17, 2016 and length of service as a director of our company, his or her principal occupation and business experience for at least the past five years and the names of other publicly held companies of which he or she serves as a director. There are no family relationships among any of our directors, nominees for director and executive officers.

Classified Directors

Nominees Whose Terms Expire in 2016 (Class II Classified Directors)

Marina Hatsopoulos . Age 50. Ms. Hatsopoulos has been a director since 2008. Ms. Hatsopoulos has been a private investor since 2007. Since 2012, Ms. Hatsopoulos has been the chair of the board of Levitronix Technologies LLC, a supplier of magnetically-levitated pumps, where she is an investor. From 2012 to 2015, Ms. Hatsopoulos was a director of Dear Kate, Inc., a supplier of women’s performance apparel. From 2005 to 2007, she was a director of Contex Holdings, a leading manufacturer of large-format scanners. From 1994 to 2005, she served as chief executive officer and director of Z Corporation, a leader in the 3D printing market, which was sold to Contex Scanning Technology in 2005. From 2005 through 2010, Ms. Hatsopoulos served as a director of the GSI Group, a supplier of precision technology to the global medical, electronics and industrial markets and semiconductor systems. From 2007 through its sale to Sara Lee in 2011, Ms. Hatsopoulos was a director of and investor in Tea Forte, a supplier of luxury tea products. Ms. Hatsopoulos is an advisor at MIT’s Deshpande Center for Technological Innovation, MIT Enterprise Forum Greece and The EGG startup accelerator program in Greece. Ms. Hatsopoulos’ qualifications to serve on our board of directors include her experience serving as a director and advisor for both public and private companies and her leadership skills and experience gained while serving as an executive.

William O. Flannery . Age 70. Mr. Flannery has been a director since 2013 and lead director since December 2014. Prior to joining our board of directors, Mr. Flannery had served as our corporate secretary since 2004. Since 1993, Mr. Flannery has maintained his own legal practice focusing on the representation of technology-based companies. From 1993 to 2013, he also served as of counsel to Goulston & Storrs P.C., a Boston-based

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law firm, of which he was a partner from 1992 to 1993. From 1985 to 1992, Mr. Flannery served as the general counsel of Thermo Electron Corporation, and as its vice president—administration from 1990 to 1992. He was appointed by then Governor William Weld to serve on the board of directors of the Massachusetts Municipal Wholesale Electric Company, a state charted association of municipal utilities, including as chairman from 1997 to 1998. Mr. Flannery’s qualifications to serve on our board of directors include his decades of experience as a corporate and securities lawyer representing technology-based companies, his several years serving as a senior executive at a Fortune 500 company, and his years of experience both advising and serving on the boards of publicly-held and private companies.

Directors Whose Terms Expire in 2017 (Class III Classified Directors)

Michael R. Davin . Age 58. Mr. Davin has been our chief executive officer and a director since September 2003, and became the chairman of our board of directors in October 2004. From 2003 to 2014, he also served as our president. Mr. Davin has over 25 years of experience in the light-based technology field. From 1998 to 2003, Mr. Davin served as co-founder and vice president of worldwide sales and strategic development of Cutera, Inc., a provider of laser and other light-based aesthetic treatment systems. Prior to co-founding Cutera, Mr. Davin spent 11 years at Coherent Medical, a manufacturer of laser, optics and related equipment, in senior management positions in sales, marketing and clinical development. Mr. Davin’s qualifications to serve on our board of directors include his more than two decades of experience in the light-based technology industry, including more than 10 years as our chief executive officer.

Ettore V. Biagioni . Age 57. Mr. Biagioni has been a director since 2005. Since 2004, Mr. Biagioni has been a managing partner of Alothon Group LLC, a private equity firm which he co-founded. From 1998 to 2004, Mr. Biagioni served as head of the Latin America Private Equity Group of Deutsche Bank/Bankers Trust Company. Mr. Biagioni serves on the boards of directors of several private companies and as trustee of Babson College. Mr. Biagioni’s qualifications to serve on our board of directors include his experience serving as a director for other companies, which enhances his contributions to our board. In addition, his leadership skills and financial experience enable him to be an effective board member.

Directors Whose Terms Expire in 2018 (Class I Classified Directors)

Thomas H. Robinson . Age 57. Mr. Robinson has been a director since 2005. Since 2011, Mr. Robinson has served as a partner with RobinsonButler, an executive search firm. During 2010, Mr. Robinson served as managing director at Russell Reynolds Associates. From 1998 to 2010, Mr. Robinson served as managing partner of the North American medical technology practice, which includes the medical device, hospital supply/distribution and medical software areas, of Spencer Stuart, Inc., a global executive search firm. From 2002 to 2010, Mr. Robinson was a member of Spencer Stuart’s board services practice, which assists corporations to identify and recruit outside directors. From 1998 to 2000, Mr. Robinson headed Spencer Stuart’s North American biotechnology specialty practice. From 1993 to 1997, Mr. Robinson served as president of the emerging markets business at Boston Scientific Corporation, a global medical devices manufacturer. From 1991 to 1993, Mr. Robinson also served as president and chief operating officer of Brunswick Biomedical, a cardiology medical device company. Mr. Robinson is a director of Harvard Apparatus Regenerative Technology, Inc., a publicly-traded regenerative medicine company, where he is chair of the compensation committee. Mr. Robinson’s qualifications to serve on our board of directors include his experience in and knowledge of the medical technology industry, combined with his operational and corporate governance experience.

Brian M. Barefoot . Age 72. Mr. Barefoot has been a director since 2011. From 2001 to 2008, when he retired, Mr. Barefoot served as Babson College president. From 1996 to 2001, Mr. Barefoot served as chairman of the board of trustees of Babson College. Mr. Barefoot serves as a director of Array Health Solutions, a health care technology and services company, and he is a senior advisor to Carl Marks Advisory Group LLC, a New York-based middle market merchant bank. Mr. Barefoot also serves as a director of BigBelly Solar, a Newton, Massachusetts solar energy company, and he serves as vice chairman and chair of the audit committee

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of the Indian River Medical Center Foundation. Since February 2016, Mr. Barefoot has served as a director of The Greeley Company, a healthcare and hospital consulting company. Mr. Barefoot also serves as trustee of the Burr and Burton Academy in Vermont and as trustee of Little Harbor Multi-Strategy Composite fund. From 2005 to March 2016, Mr. Barefoot served on the board of directors of Blue Cross Blue Shield of Massachusetts, where he most recently was chair of the finance and business performance committee and a member of the audit committee. Mr. Barefoot continues to serve on that company’s investment committee. Mr. Barefoot also served as trustee of Saint Edwards School in Florida from 2009 to 2015. Mr. Barefoot’s qualifications to serve on our board of directors include his corporate governance experience combined with his leadership skills and experience derived from more than three decades in financial services.

Our board of directors recommends that stockholders vote “FOR” each of the class II classified director nominees named in this proxy statement (Proposal 1).

CORPORATE GOVERNANCE

Our board of directors believes that good corporate governance is important to ensure that our company is managed for the long-term benefit of our stockholders. We periodically review our corporate governance policies and practices and compare them to those suggested by various authorities in corporate governance and the practices of other public companies. In the fall of 2015, we continued our stockholder outreach effort to our largest 35 institutional investors representing approximately 80% of our total outstanding shares. Our lead director and compensation and nominating and corporate governance committee chairpersons, along with our general counsel, spoke with seven institutional investors, representing approximately 38% of our outstanding shares.

This section describes our key corporate governance guidelines and practices. Complete copies of our corporate governance guidelines, committee charters and code of business conduct and ethics described below are available in the “Corporate Governance” section of the “Investors” page of our website, www.cynosure.com. Alternatively, you can request a copy of any of these documents by writing to Cynosure, Inc., 5 Carlisle Road, Westford, Massachusetts 01886, Attention: Investor Relations.

Corporate Governance Guidelines

Our board has adopted corporate governance guidelines to assist the board in the exercise of its duties and responsibilities and to serve the best interests of our company and our stockholders. These guidelines, which provide a framework for the conduct of the board’s business, provide that:

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Board Leadership Structure

Our corporate governance guidelines provide that our nominating and corporate governance committee shall periodically assess our board leadership structure, including whether the offices of chairman of the board of directors and chief executive officer should be separate, whether we should have an independent “lead director” in the event that the chairman of the board is not an independent director, and why the board’s leadership structure is appropriate given our company’s specific characteristics or circumstances. The board believes that our chief executive officer is best situated to serve as chairman, as he is the director most familiar with our business and industry, and most capable of effectively identifying strategic priorities and leading the discussion and execution of strategy. Independent directors and management have different perspectives and roles in strategy development. Our independent directors bring experience, oversight and expertise from outside the company and industry, while the chief executive officer brings company-specific experience and expertise. The board believes that the combined role of chairman and chief executive officer promotes strategy development and execution and facilitates information flow between management and the board, both of which are essential to effective governance.

Because, however, Mr. Davin, our chairman, is not an independent director under applicable NASDAQ rules, our nominating and corporate governance committee in December 2014 designated, and a majority of our independent directors approved the appointment of, William O. Flannery as our independent lead director. As lead director, Mr. Flannery:

Executive Sessions

At each regular meeting, our board of directors holds an executive session of our independent directors. Since December 2014, our lead director, Mr. Flannery, has presided at these executive sessions. In addition, the committees of our board of directors also regularly hold executive sessions with their advisors without management present.

Majority Vote Standard

In response to stockholder feedback, in February 2016, we amended our bylaws to implement a majority vote standard for the election of directors in uncontested director elections (with a plurality vote standard applying to contested director elections), coupled with a director resignation policy for those directors who do not receive a majority vote. Prior to this amendment, election of our directors was subject in all cases to a plurality vote standard and we did not have a related resignation policy.

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In an election of directors which is not a contested election (as defined below), when a quorum is present, each nominee to be elected by stockholders shall be elected if the votes cast “for” such nominee exceed the votes cast “against” such nominee. In cases where as of the 10th day preceding the date on which we first mail our notice of meeting, for the meeting at which directors are being elected, the number of nominees for director exceeds the number of directors to be elected (referred to as a “contested election”), when a quorum is present, each nominee to be elected by stockholders shall be elected by a plurality of the votes cast.

In order for an incumbent director to become a nominee for re-election to the board, such person must submit an irrevocable resignation, contingent on both (i) that person not receiving a “for” vote that exceeds the “against” vote cast in an election that is not a contested election and (ii) acceptance of that resignation by the board in accordance with the policies and procedures of the board adopted for such purpose. In the event an incumbent director fails to receive a “for” vote that exceeds the “against” vote in an election that is not a contested election, our nominating and corporate governance committee shall make a recommendation to the board as to whether to accept or reject the resignation of such incumbent director.

The board shall act on the resignation, taking into account the recommendation of nominating and corporate governance committee, and publicly disclose (by filing an appropriate disclosure with the Securities and Exchange Commission) its decision regarding the resignation and, if such resignation is rejected, the rationale for that decision, within 90 days following the final certification of the vote at which the election was held. The nominating and corporate governance committee in making its recommendation, and the board in making its decision, may each consider all factors and information that they consider relevant and appropriate. Both the nominating and corporate governance committee, in making its recommendation, and the board in making its decision, with respect to any given nominee who has not received the requisite vote in an election that is not a contested election, will act without the participation of the nominee in question.

Stock Ownership Guidelines

In February 2016, our board adopted stock ownership guidelines pursuant to which our chief executive officer will be required to acquire shares equal in value to five times annual base salary, other executive officers will be required to acquire shares equal in value to two times annual base salary, and non-employee directors will be required to acquire shares equal in value to three times the annual cash retainer, in each case within five years from adoption. If an executive officer or director fails to meet the ownership guidelines under the review procedures set forth in the guidelines as of the end of a five-year qualification period, he or she will not be permitted to sell shares of our stock until such time as he or she has exceeded the required ownership level.

No Hedging Policy

We prohibit all short sales and purchases or sales of puts, calls or other derivative securities based on our company’s securities by our directors and employees, including our executive officers. Since February 2015, we now also prohibit directors and employees from purchasing of financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds) that are designed to hedge or offset any decrease in the market value of our company’s securities.

No Pledging Policy

We prohibit our directors and employees, including our executive officers, from holding any of our securities in a margin account and from any pledging of our securities as collateral for a loan.

Equity Award Grant Dates

Historically, we have granted options and restricted stock units to our executive officers in the first quarter of our fiscal year following the release of our fourth quarter earnings and to our directors on the date of our

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annual meeting of stockholders. We do not otherwise time or select the grant dates of any stock options or stock-based awards in coordination with our release of material non-public information, nor do we have any program, plan or practice to do so. The grant date of any award to a newly-hired executive officers or employee is the date on which the individual commences employment with us (or the next succeeding business day that NASDAQ is open for trading).

Elimination of Dual-Class Common Stock Capital Structure

From our initial public offering in 2006 until 2012, we had a dual-class common stock capital structure that allowed a single stockholder, which owned less than 25% of our outstanding common stock, to control the election of a majority of the members of our board of directors. In 2012, this dual-class common stock capital structure ceased to be effective, and since that time, all holders of our class A common stock are entitled to elect all of our directors.

Board Determination of Independence

Under applicable NASDAQ rules, a director of our company will only qualify as an “independent director” if, in the opinion of our board of directors, that person does not have a relationship which would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Our board of directors has determined that none of Messrs. Barefoot, Biagioni, Flannery nor Robinson, nor Ms. Hatsopoulos, has a relationship which would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is an “independent director” as defined under NASDAQ Listing Rule 5605(a)(2).

Director Nomination Process

The process followed by the nominating and corporate governance committee to identify and evaluate director candidates includes requests to board members and others for recommendations, meetings from time to time to evaluate biographical information and background material relating to potential candidates and interviews of selected candidates by members of the nominating and corporate governance committee and the board.

In considering whether to recommend any particular candidate for inclusion in the board’s slate of recommended director nominees, the nominating and corporate governance committee applies the criteria set forth in our corporate governance guidelines. These criteria include the candidate’s integrity, business acumen, knowledge of our business and industry, experience, diligence, conflicts of interest and the ability to act in the interests of all stockholders. In addition to these criteria, the nominating and corporate governance committee also considers diversity in its evaluation of candidates for board membership. The board believes that diversity with respect to viewpoint, skills and experience should be an important factor in board composition. The committee does not assign specific weights to particular criteria and no particular criterion is a prerequisite for each prospective nominee. We believe that the backgrounds and qualifications of our directors, considered as a group, should provide a composite mix of experience, knowledge and abilities that will allow the board to fulfill its responsibilities.

Stockholders may recommend individuals to the nominating and corporate governance committee for consideration as potential director candidates by submitting their names, together with appropriate biographical information and background materials and a statement as to whether the stockholder or group of stockholders making the recommendation has beneficially owned more than 5% of our common stock for at least a year as of the date such recommendation is made, to Nominating and Corporate Governance Committee, c/o Cynosure, Inc., 5 Carlisle Road, Westford, Massachusetts 01886, Attention: Corporate Secretary. Assuming that appropriate biographical and background material has been provided on a timely basis, the committee will evaluate stockholder-recommended candidates by following substantially the same process, and applying substantially the same criteria, as it follows for candidates submitted by others. If our board determines to nominate a stockholder-recommended candidate and recommends his or her election, then his or her name will be included in our proxy card for the next annual meeting.

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Stockholders also have the right under our bylaws to directly nominate director candidates, without any action or recommendation on the part of the nominating and corporate governance committee or the board of directors, by following the procedures set forth above under “How and when may I submit a stockholder proposal for the 2017 annual meeting?” If the board determines to nominate a stockholder-recommended candidate and recommends his or her election, then his or her name will be included in our proxy statement and proxy card for the next annual meeting. Otherwise, candidates nominated by stockholders in accordance with the procedures set forth in our bylaws will not be included in our proxy card for the next annual meeting.

Board Meetings and Attendance

The board met seven times during 2015, either in person or by teleconference, and took one action by unanimous written consent. During 2015, each director attended at least 75% of the aggregate of the number of board meetings and the number of meetings held by all committees on which he or she then served.

Director Attendance at Annual Meeting of Stockholders

Our corporate governance guidelines provide that directors are encouraged to attend our annual meeting of stockholders. Five of our six directors attended the 2015 annual meeting of stockholders. We expect that all of our directors will attend the Annual Meeting.

Risk Management

The board has an active role, as a whole and also at the committee level, in overseeing management of our risks. Our board receives regular reports from members of senior management on areas of material risk to Cynosure, including operational, financial, cash and other asset management, legal, regulatory and strategic risks. Our board (or the appropriate committee in the case of risks that are under the purview of a particular committee) receives these reports from the appropriate “risk owner” within the organization to enable it to understand our risk identification, risk management and risk mitigation strategies. When a committee receives the report, the chairman of the relevant committee reports on the discussion to the full board during the committee reports portion of the next board meeting. This enables our board and its committees to coordinate the risk oversight role, particularly with respect to risk interrelationships. In general, our board oversees risk management activities relating to business strategy, acquisitions, capital allocation, organizational structure and certain operational risks; our audit committee oversees risk management activities related to financial controls and legal and compliance risks; our compensation committee oversees risk management activities relating to our compensation policies and practices; and our nominating and corporate governance committee oversees risk management activities relating to board composition and independence and potential conflicts of interest.

Board Committees

Our board of directors has established three standing committees—audit, compensation, and nominating and corporate governance—each of which operates under a charter that has been approved by our board. Current copies of each committee’s charter are posted on the “Corporate Governance” section of the “Investors” page of our website, www.cynosure.com. From time to time, our board may also create various ad hoc committees for special purposes.

Our board of directors has determined that all of the members of each of the board’s three standing committees are independent as defined under the applicable NASDAQ rules, including, in the case of all members of the audit committee, the independence requirements contemplated by Rule 10A-3 under the Exchange Act and, in the case of all members of the compensation committee, the independence requirements contemplated by Rule 10C-1 under the Exchange Act.

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Audit Committee

Our audit committee’s responsibilities include:

The full responsibilities of our audit committee are set forth in its charter, a copy of which is posted on the “Corporate Governance” section of the “Investors” page of our website at www.cynosure.com.

The members of our audit committee in 2015 were Messrs. Barefoot (Chairman) and Biagioni and Ms. Hatsopoulos. Our board of directors has determined that Mr. Barefoot and Ms. Hatsopoulos are “audit committee financial experts” as defined by applicable SEC rules. The audit committee met eight times during 2015.

Compensation Committee

Our compensation committee’s responsibilities include:

The full responsibilities of our compensation committee are set forth in its charter, a copy of which is posted on the “Corporate Governance” section of the “Investors” page of our website at www.cynosure.com. The processes and procedures followed by our compensation committee in considering and determining executive and director compensation are described under the headings “Determining Executive Compensation” and “Director Compensation.” Our compensation committee has the authority to retain compensation consultants and other outside advisors to assist in the evaluation of executive officer compensation.

The members of our compensation committee in 2015 were Messrs. Robinson (Chairman), Flannery and Barefoot. The compensation committee met six times during 2015 and took one action by unanimous written consent.

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Nominating and Corporate Governance Committee

Our nominating and corporate governance committee’s responsibilities include:

The full responsibilities of our nominating and corporate governance committee are set forth in its charter, a copy of which is posted on the “Corporate Governance” section of the “Investors” page of our website at www.cynosure.com. In addition, our corporate governance guidelines adopted by our board are also posted on the “Corporate Governance” section of the “Investors” page of our website at www.cynosure.com. The processes and procedures followed by the nominating and corporate governance committee in identifying and evaluating director candidates are described above under the heading “Director Nomination Process.”

The members of our nominating and corporate governance committee in 2015 were Messrs. Biagioni (Chairman) and Flannery, and Ms. Hatsopoulos. The nominating and corporate governance committee met three times during 2015.

Communicating with the Directors

Our board will give appropriate attention to written communications that are submitted by stockholders and interested parties, and will respond if and as appropriate. Absent unusual circumstances or as contemplated by the committee charters, our lead director, or otherwise the chairman of our nominating and corporate governance committee, with the assistance of our general counsel and corporate secretary, is primarily responsible for monitoring communications from stockholders and other parties and for providing copies or summaries to the other directors as he or she considers appropriate.

Communications are forwarded to all directors if they relate to important substantive matters and include suggestions or comments that our lead director considers to be important for the directors to know. In general, communications relating to corporate governance and corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs, personal grievances and matters as to which we tend to receive repetitive or duplicative communications.

Stockholders who wish to send communications on any topic to the board of directors should address such communications to Board of Directors, c/o Cynosure, Inc., 5 Carlisle Road, Westford, Massachusetts 01886, Attention: General Counsel and Corporate Secretary.

Code of Business Conduct and Ethics

We have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. We have posted a current copy of the code on the “Corporate Governance” section of the “Investors” page of our website, www.cynosure.com. In addition, we intend to post on our website all disclosures that are required by law or NASDAQ listing requirements concerning any amendments to, or waivers from, any provision of the code.

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