SYNERGETICS USA, INC.

3845 Corporate Centre Drive

O’Fallon, Missouri 63368

November 12, 2013

Dear Stockholder:

You are cordially invited to attend our Company’s 2013 Annual Meeting of Stockholders, which will be held on December 12, 2013, at 6:00 p.m., Central Time, at The Doubletree Hotel and Conference Center located at 16625 Swingley Ridge Road, Chesterfield, Missouri 63017. The formal Notice of Annual Meeting of Stockholders and Proxy Statement accompanying this letter describe the business to be acted upon at the meeting.

Your vote is important to us and your shares should be represented at the meeting whether or not you are personally able to attend. Accordingly, I encourage you to mark, sign, date and return the accompanying proxy promptly.

On behalf of the Board of Directors, thank you for your continued support of Synergetics USA, Inc.

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SYNERGETICS USA, INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held on December 12, 2013

NOTICE IS HEREBY GIVEN that the 2013 Annual Meeting of Stockholders of Synergetics USA, Inc., a Delaware corporation (the “Company”), will be held on December 12, 2013, at 6:00 p.m., Central Time, at The Doubletree Hotel and Conference Center located at 16625 Swingley Ridge Road, Chesterfield, Missouri 63017 for the following purposes, which are described more fully in the accompanying Proxy Statement:

1.

To elect three directors nominated by the Company’s Nominating and Corporate Governance Committee to serve three-year terms following approval by the stockholders at the Annual Meeting;

2.

To approve the Second Amended and Restated Synergetics USA, Inc. 2001 Stock and Performance Incentive Plan (the “Second Amended 2001 Stock and Performance Incentive Plan”);

3.

To hold a non-binding advisory vote on executive compensation;

4.

To ratify the appointment of UHY LLP (“UHY”) as the Company’s independent registered public accounting firm for fiscal 2014; and

5.

To transact such other business as may properly come before the meeting and/or any adjournment thereof.

All holders of common stock of record at the close of business on November 5, 2013 are entitled to notice of, and to vote at, the Annual Meeting or any adjournment thereof.

The Board of Directors of the Company has authorized the solicitation of proxies. Unless otherwise directed, the proxies will be voted FOR the election of the nominees listed in the attached Proxy Statement to be members of the Board of Directors of the Company; FOR the approval of the Second Amended 2001 Stock and Performance Incentive Plan; FOR the Company’s executive compensation program as described in the Compensation Discussion and Analysis, the compensation tables and otherwise in the attached Proxy Statement; and FOR ratification of UHY’s appointment and on other business that may properly come before the Annual Meeting, as the named proxies in their best judgment shall decide.

If you submit a proxy, you may revoke such proxy at any time prior to its exercise by notifying the Secretary of the Company in writing at 3845 Corporate Centre Drive, O’Fallon, Missouri 63368 prior to the Annual Meeting, and, if you attend the Annual Meeting, you may revoke your proxy if previously submitted and vote in person by notifying the Secretary of the Company at the Annual Meeting.

Your vote is very important. Whether or not you plan to attend the Annual Meeting, we encourage you to read the Proxy Statement and submit your proxy as soon as possible. You may submit your proxy for the Annual Meeting by completing, signing, dating and returning your proxy in the pre-addressed envelope provided.

O’Fallon, Missouri

November 12, 2013

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SYNERGETICS USA, INC.

PROXY STATEMENT

FOR THE 2013 ANNUAL MEETING OF STOCKHOLDERS

Important Notice Regarding the Availability of Proxy Materials for the Annual Stockholders

Meeting To Be Held on December 12, 2013

The proxy statement and annual report to stockholders for the fiscal year ended July 31, 2013 are available at http://www.astproxyportal.com/ast/06536.

GENERAL INFORMATION

This Proxy Statement is being furnished in connection with the solicitation of proxies by the Board of Directors of Synergetics USA, Inc., a Delaware corporation (the “Company”), 3845 Corporate Centre Drive, O’Fallon, Missouri 63368, for use at the 2013 Annual Meeting of Stockholders to be held on December 12, 2013, at 6:00 p.m. Central Time at The Doubletree Hotel and Conference Center located at 16625 Swingley Ridge Road, Chesterfield, Missouri 63017. The Board of Directors of the Company urges you to promptly execute and return your proxy in the enclosed envelope, even if you plan to attend the Annual Meeting. This is designed to authenticate stockholders’ identities, to allow stockholders to give their voting instructions and to confirm that stockholders’ instructions have been recorded properly. This Proxy Statement and the enclosed proxy card are being mailed to the stockholders of the Company on or about November 12, 2013.

Any stockholder submitting a proxy may revoke such proxy at any time prior to its exercise by notifying the Secretary of the Company, in writing, prior to the Annual Meeting. Any stockholder attending the Annual Meeting may revoke his or her proxy and vote personally by notifying the Secretary of the Company at the Annual Meeting. For additional information on how to obtain directions to be able to attend the Annual Meeting and vote in person, please write to the Company’s Secretary at Synergetics USA, Inc., 3845 Corporate Centre Drive, O’Fallon, Missouri 63368 or call (636) 939-5100. Only stockholders of record at the close of business on November 5, 2013 (the “Record Date”), will be entitled to notice of, and to vote at, the Annual Meeting or any adjournment thereof. At the close of business on the Record Date, the Company had 25,296,106 outstanding shares of common stock, $0.001 par value per share (the “Common Stock”). Each share of Common Stock entitles the holder thereof to one vote for each share of Common Stock held of record on the Record Date on each matter that may properly come before the Annual Meeting. If you are a beneficial holder and do not provide specific voting instructions to your broker, under a recent rule change, the organization that holds your shares will not be authorized to vote on the election of directors. Accordingly, we encourage you to vote promptly, even if you plan to attend the Annual Meeting.

If the accompanying proxy card is signed and returned, the shares represented thereby will be voted in accordance with the directions on the proxy card. Unless a stockholder specifies otherwise therein, the proxy will be voted in accordance with the recommendations of the Board of Directors on all proposals. The presence in person or by proxy of a majority of the voting power represented by outstanding shares of Common Stock will constitute a quorum for the transaction of business at the Annual Meeting.

If a quorum is present, the affirmative vote of a majority of the shares entitled to vote which are present in person or represented by proxy at the Annual Meeting is required to elect directors and to approve each other proposal to be voted upon at the Annual Meeting. Shares represented by proxies which are marked or voted (i) ‘‘abstain’’ with respect to the election of the director nominees and remaining proposals to be voted upon at the Annual Meeting, or (ii) to deny discretionary authority on other matters will be counted for the purpose of determining the number of shares represented by proxy at the meeting. Such proxies will thus have the same effect as if the shares represented thereby were voted against such nominee or nominees and against the remaining proposals. Shares held by brokers that do not have discretionary authority to vote on a proposal and have not received voting instructions from their clients are considered “broker non-votes.” Broker non-votes are considered present or represented for purposes of determining a quorum but will not be considered in determining the number of votes necessary for approval and will have no effect on the outcome of the vote for directors or the remaining proposals. As such, for your vote to be counted if you are the beneficial owner of shares held by your broker, you must submit your voting instruction form to your broker.

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PROPOSAL 1 — ELECTION OF DIRECTORS

The Company’s Amended and Restated Bylaws provide that the Board shall consist of not less than five nor more than 11 members, the exact number of which shall be determined by the Board. The number of directors on the Company’s Board of Directors is currently set at seven directors, divided into three classes—Class A, Class B and Class C—with each class serving three-year staggered terms.

On September 23, 2013, the Board, upon the recommendation of the Nominating and Corporate Governance Committee, elected Mr. Robert H. Blankemeyer as a member of the Board to fill the vacancy created by the resignation of Patricia S. Williams, a former member of the Board. Ms. Williams resigned, effective June 5, 2013, to accept employment as an officer of a company which does not allow its officers to participate on any public company boards. Ms. Williams’ resignation was not based upon any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

Mr. Blankemeyer and Juanita H. Hinshaw serve as the Class A directors, with terms expiring at the 2015 Annual Meeting. Lawrence C. Cardinale, Guy R. Guarch and D. Graeme Thomas serve as the Class B directors, with terms expiring at the 2013 Annual Meeting. Robert H. Dick and David M. Hable serve as the Class C directors, with terms expiring at the 2014 Annual Meeting. Six of these seven directors, including Messrs. Blankemeyer, Cardinale, Dick, Guarch and Thomas and Ms. Hinshaw, satisfy the definition of an independent director set forth in the listing standards of the Nasdaq Stock Market Inc. (“Nasdaq”) and the Company’s Corporate Governance Guidelines (each, an “Independent Director” and collectively the “Independent Directors”).

The Company’s Nominating and Corporate Governance Committee has appointed and the Board of Directors of the Company recommends a vote FOR, Messrs. Cardinale, Guarch and Thomas to serve as directors of the Company. If elected, Messrs. Cardinale, Guarch and Thomas will serve until the annual election of directors in the year 2016 or until their successors are duly elected and qualified, or their earlier death, resignation or removal. If any of these nominees is unavailable for election, an event which the Board of Directors of the Company does not presently anticipate, the persons named in the enclosed proxy intend to vote the proxies solicited hereby FOR the election of such other nominee or nominees as may be nominated by the Board of Directors. For information regarding revocation of a proxy, see “General Information” on Page 1.

Based on the recommendation of the Nominating and Corporate Governance Committee, the nominees have been approved unanimously by the Board of Directors of the Company for re-election. Below is biographical and other information about the nominees for election as director and each current director whose term continues after the Annual Meeting. Following the nominee’s or director’s biographical information is information concerning the particular experience, qualifications, attributes and/or skills that led the Nominating and Corporate Governance Committee and the Board to determine that the nominee should serve as a director, or each director should continue to serve as a director, as the case may be.

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Nominees for Director to be Re-Elected at the 2013 Annual Meeting for Terms Expiring in 2016

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Directors with Terms Extending Beyond the 2013 Annual Meeting

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CORPORATE GOVERNANCE

The Board recognizes that one of its key responsibilities is to evaluate and determine the optimal leadership structure of the Board. The Independent Directors ensure such structure provides independent oversight of Company’s management. The Board also recognizes no single leadership structure is right for all companies at all times. Accordingly, the Board periodically reviews its leadership structure as necessary to accomplish its management oversight responsibilities.

On behalf of the stockholders, the Board oversees and guides the Company’s management and its business affairs. Board committees, staffed by Independent Directors, assist the Board in discharging its responsibilities. The Independent Directors recommend the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee structures to the Board for ratification. In its oversight of the Company, the Board sets the tone for the ethical standards and performance of management, staff and the Company as a whole. The Independent Directors constituting the Nominating and Corporate Governance Committee recommended to the Board, and the Board has adopted Corporate Governance Guidelines and best corporate practices that guide the practices of the Company. The Corporate Governance Guidelines are available on the Company’s website at www.synergeticsusa.com.

Consistent with the Company’s Bylaws and Corporate Governance Guidelines, the roles of Chairman of the Board and Chief Executive Officer may be separated. The Board has determined that it is appropriate to separate the roles of Chairman and Chief Executive Officer in recognition of the differences between the two roles, and to better serve the interests of the stockholders. The Chief Executive Officer, in conjunction with senior management, is responsible for developing and recommending to the Board the strategic direction for the Company, and for the day-to-day leadership of the Company, and he is responsible, together with senior management, for the overall performance of the Company, with such performance measurement based on operating and strategic plans ratified at various times by the Board. The duties of the Chairman include, but are not limited to:

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Presiding over all meetings of the Board,

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Preparing the agenda for Board meetings in consultation with other Independent Directors, the Chief Executive Officer and members of senior management,

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Providing the Chief Executive Officer ongoing direction regarding Independent Director, Board Committee and Board needs, interests, opinions and decisions,

●

Calling and presiding over meetings of the Independent Directors,

●

Serving on any Special Committees as may be appointed by the Nominating and Corporate Governance Committee,

●

Managing the Board’s process for annual evaluation of the Chief Executive Officer, and

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Such other activities as may from time-to-time be determined by the Board to be in the best interests of the stockholders.

In carrying out his responsibilities, the Chairman preserves the distinction between management and Board oversight by maintaining management’s responsibility for: (i) developing and frequently updating corporate strategy, and recommending such strategy to the Board for critique and ratification, (ii) taking such actions as necessary to minimize risks to the Company and the stockholders and (iii) the overall performance of the Company, with such performance measurement based on operating and strategic plans ratified at various times by the Board.

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The Board believes that there are advantages to the separate Chairman and Chief Executive Officer positions, including:

●

Enhanced communications and relations between the Board, the Chief Executive Officer and other members of senior management,

●

Assisting the Board in reaching consensus on particular strategies and policies, and

●

Facilitating robust director, Board and Chief Executive Officer evaluation processes.

The Company’s Corporate Governance Guidelines provide that Independent Directors should meet privately in executive session after each Board meeting, after each Board committee meeting and otherwise as needed. During fiscal 2013, the Independent Directors held 6 meetings in conjunction with regularly scheduled Board meetings and 15 special meetings for a total of 21 meetings. Each of our directors attended at least 75% of all the meetings of the Board and those committees on which he or she served during fiscal year 2013, either in person or telephonically. The Board of Directors encourages all members to attend stockholder meetings, but has not adopted a formal policy regarding attendance. All of the Company’s directors attended last year’s annual stockholders meeting.

Risk Management Oversight

The Board is actively involved in the oversight of risks that could affect the Company. This oversight is conducted primarily through committees of the Board, but the full Board has retained responsibility for general oversight of risks. The Audit Committee oversees management of financial and information technology risks. The Compensation Committee is responsible for overseeing the management of risks relating to the Company’s executive compensation plans and arrangements. The Nominating and Corporate Governance Committee manages risks associated with the independence of the Board and potential conflicts of interest. The Board satisfies its responsibility for general oversight of risks through reports by each committee chair regarding the committee’s deliberations and actions, as well as minutes from the meetings and through regular reports directly from officers responsible for oversight of particular risks within the Company.

Director Independence

The Board of Directors has determined that each of Messrs. Blankemeyer, Cardinale, Guarch, Dick and Thomas and Ms. Hinshaw is an Independent Director. In addition, the Board of Directors has determined that each of the members of the Audit Committee and Compensation Committee satisfies the additional conditions for independence for Audit Committee and Compensation Committee members required by Nasdaq.

Board Committees

The Board of Directors maintains the following three standing committees: an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee, and from time to time, the Nominating and Corporate Governance Committee may appoint a Special Committee of Independent Directors to deal with such matters as described in the charter. Each of these committees operates pursuant to a written charter setting forth the functions and responsibilities of the committee. The standing committee charters may be reviewed on our website at www.synergeticsusa.com and are also available to stockholders in print upon request.

Audit Committee

The Audit Committee is composed entirely of Independent Directors and is responsible for the appointment, evaluation, compensation and oversight of the work of the independent registered public accounting firm and, where appropriate, the replacement of the independent registered public accounting firm. Furthermore, the Audit Committee is responsible for meeting with the independent registered public accounting firm and other corporate officers to review matters relating to financial reporting and accounting procedures and policies. Among other responsibilities, the Audit Committee also reviews financial information provided to stockholders and others, assesses the adequacy of financial, accounting, operating and disclosure controls, evaluates the scope of the audits of the independent registered public accounting firm and internal auditors, and reports on the results of such audits to the Board of Directors. The current members of the Audit Committee are Ms. Hinshaw (Chairperson), Mr. Cardinale, Mr. Dick and Mr. Guarch, each of whom meet all applicable standards for Audit Committee membership under the Nasdaq listing standards and Securities and Exchange Commission (“SEC”) rules. The Audit Committee held five meetings during the last fiscal year.

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Compensation Committee

The Compensation Committee is composed entirely of Independent Directors and is responsible for administering the Company’s compensation programs and recommending to the Board of Directors other compensation and benefits of the Chief Executive Officer and all named executive officers. The current members of the Compensation Committee are Mr. Thomas (Chairperson), Mr. Dick and Ms. Hinshaw, each of whom meet all applicable standards for Compensation Committee membership under the Nasdaq listing standards. The Compensation Committee held five meetings during the last fiscal year.

The Compensation Committee meets after the end of each fiscal year to determine and recommend to the Board for approval the compensation packages for executive officers in light of the Company’s compensation philosophy and objectives. The Compensation Committee considers recommendations from the Chief Executive Officer as to compensation for each executive officer based upon their performance against Company and personal objectives, other than himself. The Compensation Committee has full responsibility to recommend to the Independent Directors of the Board the compensation package of the Chief Executive Officer and the named executive officers. The Compensation Committee may not delegate its authority regarding executive compensation.

Nominating and Corporate Governance Committee

The members of the Company’s Nominating and Corporate Governance Committee are Mr. Guarch (Chairperson), Mr. Cardinale and Mr. Thomas, each of whom is an Independent Director. The Nominating and Corporate Governance Committee is responsible for identifying individuals qualified to become members of the Board of Directors, recommending to the Board of Directors the director nominees to be proposed for election by the stockholders and recommending to the Board of Directors corporate governance guidelines and procedures applicable to the Company. The Nominating and Corporate Governance Committee held four meetings during the last fiscal year.

From time to time, the Nominating and Corporate Governance Committee may appoint a Special Committee of Independent Directors to deal with such matters as described in the committee charter.

The Nominating and Corporate Governance Committee will consider director nominees recommended by stockholders of the Company. Each stockholder must comply with applicable requirements of the Company’s Amended and Restated Bylaws and the Exchange Act with respect to the nomination of, or proposal of, nominees for election as directors of the Company. Stockholders should submit any such nominations, together with appropriate biographical information and a description of the nominee’s qualifications to serve as director, to the Chairperson of the Nominating and Corporate Governance Committee, c/o Pamela G. Boone, Secretary, Synergetics USA, Inc., 3845 Corporate Centre Drive, O’Fallon, Missouri 63368. The Company’s Corporate Governance Guidelines do not require that qualified director candidates should be limited by specific selection criteria. Candidates are selected for, among other things, their independence, integrity, diverse experience, leadership ability, ability to exercise sound judgment, scientific expertise, experience at policy-making levels involving issues affecting business, government, education and technology, and experience relevant to the Company’s global medical device business. While there is no formal policy with respect to diversity, the Nominating and Corporate Governance Committee does consider such issues as diversity of education, professional experience, differences of viewpoints and skills when assessing individual director nominees. Final approval of a candidate is determined by the full Board of Directors. Nominees to be evaluated by the Nominating and Corporate Governance Committee for future vacancies on the Board of Directors will be selected by the Nominating and Corporate Governance Committee from candidates recommended by multiple sources, including members of the Board of Directors, senior management, independent search firms, stockholders and other sources, all of whom will be evaluated based on the same criteria.

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Code of Business Conduct and Ethics

The Company has established a Code of Business Conduct and Ethics, which is applicable to all of its employees, officers and directors. The Code is available on the Company’s website at www.synergeticsusa.com and also available to stockholders in print upon request. We intend to post any future amendments and revisions to the Code of Business Conduct and Ethics on our website.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

No member of the Compensation Committee is, or was during the fiscal year ended July 31, 2013, an officer, former officer or employee of the Company or any of its subsidiaries, or a person having a relationship requiring disclosure by the Company pursuant to Item 404 of Regulation S-K. No executive officer of the Company served as a member of (i) the compensation committee of another entity of which one of the executive officers of such entity served on the Company’s Compensation Committee or (ii) the board of directors of another entity of which one of the executive officers of such entity served on the Company’s Board, during the fiscal year ended July 31, 2013.

COMMUNICATIONS WITH THE BOARD OF DIRECTORS

Stockholders may communicate directly with the Board of Directors, as a group, or any individual director by submitting written correspondence addressed to the Board or an individual director at Synergetics USA, Inc., 3845 Corporate Centre Drive, O’Fallon, Missouri 63368. All communications are relayed to the appropriate Board member or members.

DIRECTOR COMPENSATION

Directors who are neither employees of the Company nor an immediate family member of an officer of the Company receive the following compensation:

Directors who are also employees of the Company do not receive compensation for their services as members of the Board of Directors. In addition, the Independent Directors receive compensation at their standard Board meeting rate per day for each day spent at the Company and each day spent away from personal business on Company business.

Compensation for members of the Board has been established and will be reviewed annually by the Compensation Committee. The Compensation Committee may not delegate its authority regarding director compensation, and, except as described above, no executive officer plays a role in determining the amount of director compensation. The Compensation Committee considers the amount of time directors dedicate to Company matters and the need to attract and retain qualified directors when determining Board compensation.

To align the interests of directors with those of the Company’s stockholders, each Independent Director also receives an option to purchase 10,000 shares of the Company’s Common Stock each year in which he or she is elected, appointed, or continues to serve as a director pursuant to the Amended and Restated Synergetics USA, Inc. 2005 Non-Employee Directors’ Stock Option Plan, as amended. These options vest pro-ratably on a quarterly basis over the Independent Director’s next year of service on the Board.

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The following table discloses compensation paid for the fiscal year ended July 31, 2013 to the directors for serving as members of the Board. Because he is a management director, there is no director compensation to report for Mr. Hable during the fiscal year ended July 31, 2013. Compensation for Ms. Williams is through June 5, 2013, the date of her effective resignation. Upon her resignation, Ms. Williams forfeited all of her unvested options. There is no compensation presented for Mr. Blankemeyer, as he was elected to the Board after the fiscal year ended July 31, 2013.

2013 Director Compensation Table

(1)

Represents the aggregate grant date fair value for all restricted stock or stock options, as applicable, made to the directors with respect to the fiscal year indicated, computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 718, Compensation — Stock Compensation. For information about the assumptions made in this valuation, refer to Note 13 “Stock-Based Compensation Plans” to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2013.

(2)	At July 31, 2013, the directors included in this table had the following number of stock options outstanding: Mr. Cardinale — 80,000 options, Mr. Dick — 100,000 options, Mr. Guarch — 80,000 options, Ms. Hinshaw — 80,000 options, Mr. Thomas – 20,000 options and Ms. Williams – 15,000 options.

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PRINCIPAL STOCKHOLDERS

The following table sets forth as of November 5, 2013 certain information with respect to the beneficial ownership of the Company’s Common Stock by (i) each of the named executive officers and directors, (ii) all executive officers and directors as a group, and (iii) each person known by the Company to beneficially own more than 5% of the Company’s Common Stock based on certain filings made under Section 13 of the Exchange Act. All such information provided by the stockholders who are not executive officers or directors reflects their beneficial ownership as of the dates specified in the relevant footnotes to the table. The percent of shares beneficially owned is based on 25,296,106 shares issued and outstanding as of November 5, 2013.

*	Less than 1%.

(1)

Except as indicated in the footnotes to this table, the persons named in the table have sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by them. The address for all directors and executive officers is c/o Synergetics USA, Inc., 3845 Corporate Centre Drive, O’Fallon, Missouri 63368.

(2)

Includes 40,646 shares owned by Mr. Hable, 66,292 shares issued to Mr. Hable subject to restrictions, including an annual vesting period of four or five years from the respective dates of the grant, and 85,629 shares issuable to Mr. Hable subject to options exercisable currently or within 60 days of November 5, 2013.

(3)	Mr. Blankemeyer was appointed to the Board of Directors on September 23, 2013.

(4)	Includes 24,244 shares owned by Mr. Cardinale and 80,000 shares issuable to Mr. Cardinale subject to options exercisable currently or within 60 days of November 5, 2013.

(5)	Includes 33,000 shares owned by Mr. Dick and 100,000 shares issuable to Mr. Dick subject to options exercisable currently or within 60 days of November 5, 2013.

(6)	Includes 6,000 shares owned by Mr. Guarch and 80,000 shares issuable to Mr. Guarch subject to options exercisable currently or within 60 days of November 5, 2013.

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(7)

Includes 326,710 shares held in the Hinshaw-Harrison Joint Revocable Living Trust. Ms. Hinshaw, in her capacity as trustee, possesses joint voting and investment power with respect to these shares. Also includes 80,000 shares issuable to Ms. Hinshaw subject to options exercisable currently or within 60 days of November 5, 2013.

(8)

Includes 320,805 shares owned by Dr. Malis, 23,395 shares issued to Dr. Malis subject to restrictions, including an annual vesting period of four or five years from the respective dates of the grant, and 36,713 shares issuable to Dr. Malis subject to options exercisable currently or within 60 days of November 5, 2013.

(9)	Includes 20,000 shares issuable to Mr. Thomas subject to options exercisable currently or within 60 days of November 5, 2013.

(10)

Includes the following: 157,310 shares jointly owned by Ms. Boone and her spouse, 62,820 shares issued to Ms. Boone subject to restrictions, including an annual and a cliff vesting period of four or five years from the respective dates of the grant, and 32,340 shares issuable to Ms. Boone subject to options exercisable currently or within 60 days of November 5, 2013.

(11)

Includes the following: 30,357 shares owned solely and 1,750 shares owned jointly by Mr. Fanning and his spouse, 47,161 shares issued to Mr. Fanning subject to restrictions, including an annual and a cliff vesting period of four or five years from the respective dates of the grant, and 11,912 shares issuable to Mr. Fanning subject to options exercisable currently or within 60 days of November 5, 2013.

(12)

Includes the following: 11,657 shares owned by Mr. Stroisch, 49,787 shares issued to Mr. Stroisch subject to restrictions, including an annual and a cliff vesting period of four or five years from the respective dates of the grant, and 12,156 shares issuable to Mr. Stroisch subject to options exercisable currently or within 60 days of November 5, 2013.

(13)	Includes 538,750 shares issuable to named executive officers and directors subject to options exercisable currently or within 60 days of November 5, 2013.

(14)	Pursuant to Ms. Slutsky’s Schedule 13G filed with the SEC on March 19, 2013, Ms. Slutsky has shared voting and dispositive power over these shares. Ms. Slutsky’s address is 1208 Tockington Court, Rydal, Pennsylvania 19046.

(15)

On January 11, 2013, Kopp Investment Advisors, LLC filed a Schedule 13G with the SEC on behalf of Kopp Investment Advisors, LLC, Kopp Holding Company, LLC and LeRoy C. Kopp pursuant to Rule 13d-1(k) under the Exchange Act. Kopp Investment Advisors, LLC is an investment adviser registered under the Investment Advisers Act of 1940, as amended. It is wholly-owned by Kopp Holding Company, LLC, which is controlled by Mr. Kopp. Kopp Investment Advisors, LLC and Kopp Holding Company, LLC have shared voting power over 1,324,723 shares and shared dispositive power over 1,398,868 shares, for a total shared ownership of 5.5%. Mr. Kopp has shared voting power over 1,324,723 shares, sole dispositive power over 40,000 shares and shared dispositive power over 1,398,868 shares, for a total ownership of 5.7%. The address for all of these beneficial owners is 8400 Normandale Lake Boulevard, Suite 1450, Bloomington, Minnesota 55437.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires the Company’s directors and executive officers, and persons who own more than 10% of a registered class of the Company’s equity securities, to file reports of ownership of, and transactions in, the Company’s securities with the SEC and Nasdaq. Such directors, executive officers and 10% stockholders are also required to furnish the Company with copies of all Section 16(a) forms they file.

Based solely upon a review of reports furnished to the Company, and on written representations from certain reporting persons, the Company believes that, with respect to the fiscal year ended July 31, 2013, each director, executive officer and 10% stockholder of the Company’s securities made timely filings of all reports required by Section 16 of the Exchange Act.

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EXECUTIVE COMPENSATION

Compensation Discussion & Analysis

The following Compensation Discussion and Analysis describes the material elements of compensation for our named executive officers.

Executive Compensation Philosophy and Objectives

The Compensation Committee believes that compensation paid to our named executive officers should accomplish the following objectives:

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Reflect the accomplishment of corporate and individual objectives, and

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Assist the Company in attracting, motivating and retaining superior talent.

Our compensation program is intended to motivate our named executive officers to achieve our business objectives and to align their financial interests with those of our stockholders. These objectives are furthered by a compensation philosophy that is based on the following:

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Accountability and Recognition for Individual and Corporate Performance: Compensation should depend, in part, on the Company’s overall performance and on each executive officer’s performance in order to motivate and reward success. The Compensation Committee has provided for a portion of the overall compensation packages to be tied to performance through the payments of annual incentive awards in the form of cash bonuses and the grant of long-term incentive awards in the form of stock options and restricted stock.

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Competition with the Market: Base salaries should generally be competitive with officers with similar positions at companies within our industry and market, subject to individual adjustments as discussed below when applicable.

Compensation Determination Process

Our Compensation Committee is responsible for establishing, implementing and monitoring our executive compensation program. The Compensation Committee consists of Messrs. Thomas and Dick and Ms. Hinshaw, each of whom is an Independent Director and satisfies all applicable standards for Compensation Committee membership under the Nasdaq listing standards. The Compensation Committee typically meets following each fiscal year end to (i) consider and approve salary changes and annual incentive bonuses, if any; (ii) determine and approve long-term incentive awards, if any; and (iii) approve goals recommended by management for the annual incentive program.

In making its determinations regarding compensation, the Compensation Committee evaluates corporate performance and each executive officer’s individual performance. The Compensation Committee through its compensation consultants, utilizes multiple survey sources to determine market-competitive compensation levels for each of the named executives considering the Company’s overall revenue size, the duties performed by each executive and the overall performance of the Company relative to similar companies, as defined immediately below. In addition, the Compensation Committee does review compensation and relative performance data from the following companies (collectively, the “Peer Group”):

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Bovie Medical Corporation (“Bovie”) is actively engaged in the business of developing, manufacturing and marketing medical products and devices with a strong emphasis in electrosurgical generators and electrosurgical disposables. Bovie has approximately $28 million in annual revenue as reported in its Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

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Endologix, Inc. (“Endologix”) develops, manufactures and sells innovative medical devices for the treatment of aortic disorders with its principal products being a stent graft and delivery system, for the treatment of abdominal aortic aneurysms through minimally invasive endovascular repair. Endologix has approximately $106 million in annual revenue as reported in its Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

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Iridex Corporation (“Iridex”) is a leading worldwide provider of therapeutic based laser systems, delivery devices and consumable instrumentation used to treat sight-threatening eye diseases in ophthalmology. Iridex has approximately $34 million in annual revenue as reported in its Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

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STAAR Surgical Company (“STAAR”) designs, develops, manufactures and sells implantable lenses for the eye. STAAR has approximately $64 million in its Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

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Vascular Solutions, Inc. (“Vascular Solutions”) is a medical device company focused on bringing clinically advanced solutions to interventional cardiologists and interventional radiologists worldwide. Vascular Solutions has approximately $98 million in annual revenue as reported in its Annual Report on Form 10-K for December 31, 2012.

The Compensation Committee reviews the executive officer compensation packages of the Peer Group in connection with its executive officer compensation determinations. The Compensation Committee does target the 50th percentile for the executive officer compensation packages in utilizing the Peer Group’s compensation data for purposes of setting executive officer compensation.

The Compensation Committee did not retain a compensation consultant to advise it with respect to fiscal 2013 executive compensation. However, in fiscal 2012, the Compensation Committee hired CBIZ Human Capital Services (“CBIZ”) to provide compensation consulting services with respect to the fiscal 2012 compensation program. When determining fiscal 2013 executive compensation, however, the Committee used the market compensation data provided by CBIZ in its review of fiscal 2012 compensation as a reference point, making adjustments as described herein.

When the Committee retained CBIZ, it did not direct CBIZ to perform its services in any particular manner or under any particular method, and all decisions with respect to the named executive officers’ compensation were made by the Committee. The Company has no relationship with CBIZ or its employees other than the relationship undertaken by the Committee for compensation consulting services. Furthermore, the Committee evaluated CBIZ and its employees under the criteria for evaluating the independence of compensation consultants as set forth in the Nasdaq listing rules and has determined that CBIZ and its employees were, and are, independent.

Following its review of the Company’s compensation program in fiscal 2012, CBIZ concluded that the 2012 base salaries (considering the 50th percentile of the market-competitive compensation data) among the executive positions were above the 2011 market median. However, CBIZ also concluded that the total compensation for the named executive officers was below the 2011 market-competitive compensation data’s 50th percentile due to below-market long-term incentive values.

The mix of the Company’s cash and non-cash compensation and short- and long-term compensation is not subject to a specific policy. Instead, the Compensation Committee considers the Peer Group’s compensation data in light of the Company’s compensation philosophies and objectives outlined above, as well as corporate and individual performance, and makes gradual changes over time as necessary to further these compensation goals. The methodology provides for the Chief Executive Officer to make recommendations to the Compensation Committee regarding proposed salary changes, bonuses and equity compensation awards, if any, for each executive officer other than himself. The Chief Executive Officer also recommends the Company-wide performance goals on which part of each officer’s total compensation is based, as well as the individual performance goals for all executive officers. The Compensation Committee considers these recommendations from the Chief Executive Officer, as well as other factors it believes are relevant, and determines the compensation packages of the executive officers.

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Elements of Compensation

Base Salary. As noted above, the Compensation Committee bases salary decisions on a combination of Company and individual performance and Peer Group salary ranges. Company performance is based on the achievement of the Company’s goals as set forth in its annual financial plan, which is discussed in further detail below. The Compensation Committee establishes specific individual performance objectives for purposes of determining salary increases, but bases its decisions on its evaluation of (i) each named executive officer’s general performance over the prior fiscal year, taking into consideration the accomplishment scores each receive, as more fully described below; (ii) the scope of each officer’s duties and responsibilities; (iii) each officer’s experience and expertise; and (iv) the Peer Group range data for similar positions. The Compensation Committee seeks input from Mr. Hable in evaluating the named executive officers other than himself.

When evaluating competitiveness, the Compensation Committee evaluates the salaries of officers with similar positions at the Peer Group companies. As noted above, in reviewing comparative data, the Compensation Committee does benchmark to the 50th percentile for the purpose of establishing salary levels, but will make adjustments depending on the factors listed above. In the Compensation Committee’s view, this external data provides insight into competitiveness, but is not an appropriate single factor in determining base salaries. Rather, the Compensation Committee, as noted above, generally considers overall performance of the Company and the named executive officers’ accomplishment scores on the functional and personal objectives (described below) when making compensation decisions for base salary adjustments.

The base salaries of each of Messrs. Hable, Malis, Fanning and Stroisch and Ms. Boone in fiscal 2013 are reflected in the Summary Compensation Table and were determined according to the methodology discussed above, based in part on the Peer Group data provided by CBIZ for fiscal 2012 compensation. Because the Peer Group data provided by CBIZ is based on the compensation paid by our Peer Group in fiscal 2011, the fiscal 2013 salaries of the Company’s named executive officers fall above the 50^th percentile in the Peer Group range.

Bonus Compensation. The Compensation Committee and Company management believe the establishment of clear objectives with periodic measurement of results is an effective method for focusing resources, communicating mission and strategy for the period, and in determining the individual named executive officer’s contribution to the achievement of Company goals. Accordingly, the Company implemented a method for establishing clear, measurable objectives for the named executive officers, divided into two categories:

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Company-wide objectives, and

·

Functional and personal development objectives.

Bonuses earned in fiscal 2013 were not calculable as of the latest practicable date prior to the filing and mailing of this Proxy Statement. However, in determining the fiscal 2013 bonuses, the Committee intends to consider both Company-wide objectives and each named executive officer’s functional and personal development objectives. Company-wide objectives will be weighted as 60% of the cash bonus opportunity, and the functional and personal development objectives will be weighted as 40% of the cash bonus opportunity. Each year, the Compensation Committee establishes the Company-wide objectives and the functional and personal objectives for the executive officers with input from the Chief Executive Officer.

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Company-wide goals are recommended to the Board of Directors by management at reasonable levels each year to motivate the named executive officers to succeed and focus on both short- and long-term Company objectives. Target goals are designed to be reasonable and as such, the Committee believes that bonuses are deserved if an executive achieves greater than 90% of their cumulative Company-wide and functional and personal objectives.

Company-wide objectives established for fiscal 2013 were:

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Sales of approximately $66 million;

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Gross Profit of approximately $40 million;

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Gross Margin of approximately 60%;

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Operating Income of approximately $12 million; and

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Earnings per Share of $0.30.

In 2013, each of these four Company-wide objectives was equally weighted at 25% of the overall Company-wide goals. In 2013, the Company-wide goals were 61% achieved. Based upon this performance relative to Company-wide objectives, fiscal 2013 bonuses will be minimal.

Pursuant to the bonus program in place for fiscal 2013, the total score for the Company-wide goals will be weight-averaged (at 60% weight) with the functional and personal goals (at 40% weight). The functional and personal developmental goals for each named executive officer include projects within each of their functional areas of the Company and individual growth goals.

Accomplishments at the end of the period are compared to objectives set at the beginning of the period with “scoring” of each objective relative to 100% accomplishment of the objective. The scores for each category are then averaged, and the average score is translated to a percentage of base salary in accordance with the following scale. The Committee has discretion to adjust the final payouts for percentages which fall within the table:

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As noted above, the final bonus amounts for each of the named executive officers are not calculable as of the latest practicable date prior to the filing and mailing of this Proxy Statement. The Compensation Committee is in the process of evaluating each named executive officer’s accomplishment scores in light of the Company-wide achievements and intends to make its final determinations no later than November 30. Given the achievement level of the Company-wide objectives, the Compensation Committee expects to award minimal bonuses. Per the instructions to Item 402 of Regulation S-K, the Company will file a Form 8-K reporting the bonuses awarded to each named executive officer.

The Compensation Committee retains full discretion in awarding bonuses to the named executive officers, including by adjustment of the amounts to be received as calculated under this methodology.

Equity Awards. The Compensation Committee grants equity-based compensation as part of the executive officers compensation. The Committee targets the value of annual equity awards to fall within the 50th percentile of the Company’s market competitive compensation data and has the discretion to award both options and restricted stock.

Pursuant to the Company’s Amended and Restated 2001 Stock and Performance Incentive Plan (the “2001 Stock and Performance Incentive Plan”), employees, including our executive officers, of, and consultants and advisors to, our Company and its subsidiaries are eligible to receive awards of incentive and non-statutory stock options, restricted stock and unrestricted Common Stock. While the Compensation Committee considers the recommendations of management, the Compensation Committee has the exclusive authority and sole discretion to administer the 2001 Stock and Performance Incentive Plan, including the power to determine eligibility, the types and sizes of awards, the price and timing of awards and the acceleration or waiver of any vesting restriction, subject to the limitations set forth in the 2001 Stock and Performance Incentive Plan.

Pursuant to the terms of the 2001 Stock and Performance Incentive Plan, stock options with respect to no more than 100,000 shares of Common Stock may be granted to any individual participant during any one calendar year period. Options granted pursuant to the 2001 Stock and Performance Incentive Plan are subject to the terms of the option agreement related to the specific grant; provided, however, that (i) the term of any incentive stock option granted to a non-10% stockholder of the Company pursuant to the 2001 Stock and Performance Incentive Plan may be no more than 10 years from the date of grant, and (ii) the term of any incentive stock option granted to a 10% stockholder of the Company pursuant to the 2001 Stock and Performance Incentive Plan may be no more than five years from the date of grant.

Incentive stock options must be granted at no less than the fair market value of the Company’s Common Stock on the grant date; provided, however, that incentive stock options granted to 10% stockholders must be granted at no less than 110% of such fair market value. Non-statutory stock options must be granted at no less than 85% of the fair market value of the Company’s Common Stock on the date of grant.

Generally, to the extent that an optionee’s employment with the Company is terminated other than for cause, the optionee may, but only within 90 days (or such other period of time as determined by the Board of Directors) after such date of termination, but in no event later than the expiration date of the option as set forth in the respective option agreement, exercise his or her options to the extent the optionee was entitled to exercise the option at the date of termination.

Pursuant to the terms of the 2001 Stock and Performance Incentive Plan, restricted stock awards may also be granted. Restricted stock awards are subject to such restrictions and conditions as the Compensation Committee determines. Such conditions may be based on continuing employment and/or achievement of pre-established performance goals and objectives. If the recipient violates any of the restrictions during the period specified by the Committee or the performance standards fail to be satisfied, the restricted stock is forfeited.

Other Employment Benefits. The named executive officers are provided with a limited number of de minimus perquisites and are eligible to participate in the Company’s health, 401(k) and other benefit plans available generally to all Company employees on the same terms as all Company employees.

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Severance and Other Post-Termination Benefits. Each of Messrs. Hable, Malis, Fanning and Stroisch and Ms. Boone have change in control agreements with the Company. The change in control agreements provide that if employment is terminated within one year for cause or disability following a change in control (as each term is defined in the change in control agreements), as a result of the officers’ death, or by the officer other than as an involuntary termination (as defined in the change in control agreements), the Company shall pay the officer all compensation earned or accrued through his or her employment termination date, including (i) base salary; (ii) reimbursement for reasonable and necessary expenses; (iii) vacation pay; (iv) bonuses and incentive compensation; and (v) all other amounts to which they are entitled under any compensation or benefit plan of the Company (“Standard Compensation Due”).

If the officer’s employment is terminated within one year following a change in control without cause and for any reason other than death or disability, including an involuntary termination, and provided the officer enters into a separation agreement within 30 days of his or her employment termination, he or she shall receive the following: (i) all Standard Compensation Due and any amount payable as of the termination date under the Company’s objectives-based incentive plan, the sum of which shall be paid in a lump sum immediately upon such termination; and (ii) an amount equal to one times his or her annual base salary at the rate in effect immediately prior to the change in control, to be paid in 12 equal monthly installments beginning in the month following his or her employment termination. Furthermore, all of the officer’s awards of shares or options shall immediately vest and be exercisable for one year after the date of his or her employment termination.

Impact of Tax Treatments of Executive Compensation

Section 162(m) of the Internal Revenue Code of 1986, as amended, provides that compensation in excess of $1,000,000 paid to the Chief Executive Officer or to any of the other four most highly compensated executive officers of a publicly held corporation will not be deductible for federal income tax purposes unless such compensation is paid pursuant to one of the enumerated exceptions set forth in Section 162(m). In general, stock options and restricted stock granted under our 2001 Stock and Performance Incentive Plan are intended to qualify under and comply with the “performance based compensation” exemption provided under Section 162(m), thus excluding from the Section 162(m) compensation limitation any income recognized by executives pursuant to such stock options. The Compensation Committee intends to review periodically the potential impacts of Section 162(m) in structuring and administering our compensation programs.

Report of the Compensation Committee

In the performance of its oversight function for the year ended July 31, 2013, the Compensation Committee reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K. Based upon such review and discussions, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

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2013 Summary Compensation Table

(1)

Represents the aggregate grant date fair value for all restricted stock or stock options, as applicable, granted to the named executive officers in the fiscal year indicated, computed in accordance with FASB Accounting Standards Codification Topic 718, Compensation — Stock Compensation. For information about the assumptions made in this valuation, refer to Note 13 “Stock-Based Compensation Plans” to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2013.

(2)

Bonus amounts earned in fiscal 2013 were not calculable as of the latest practicable date prior to the filing and mailing of this Proxy Statement. As disclosed in the Compensation Discussion & Analysis, the Compensation Committee intends to make final determinations with respect to the fiscal 2013 bonuses no later than November 30. Per the instructions to Item 402 of Regulation S-K, the Company will file a Form 8-K when the bonus amounts have been determined, disclosing both the fiscal 2013 bonuses and new fiscal 2013 total compensation amounts for each named executive officer. For details on how the bonuses will be determined, see the Compensation Discussion & Analysis section of this Proxy Statement.

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2013 Grants of Plan-Based Awards Table

The following table sets forth additional information about plan-based awards granted in the fiscal year ended July 31, 2013:

(1)	All awards disclosed were made pursuant to the 2001 Stock and Performance Incentive Plan.

(2)	These shares of restricted stock vest proratably over four years from the date of the grant.

(3)	These options vest in equal monthly installments over four years from the date of grant and expire on December 14, 2022.

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2013 Outstanding Equity Awards at Fiscal Year-End

The following table sets forth information on outstanding options and stock awards held by the named executive officers as of July 31, 2013.

(1)	Represents an option to purchase 48,000 shares of Common Stock granted on January 28, 2009. The option vests in 12 equal quarterly installments, beginning in the quarter during which the option was granted. Mr. Hable has exercised 32,000 of these options.

(2)	Represents an option to purchase 35,000 shares of Common Stock granted on December 18, 2009 that vests proratably over 60 months from the date of the grant. Mr. Hable has exercised 6,417 of these options.

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(3)	Represents an option to purchase 10,164 shares of Common Stock granted on December 16, 2010 that vests proratably over 60 months from the date of the grant.

(4)	Represents an option to purchase 86,043 shares of Common Stock granted on December 14, 2011 that vests proratably over 60 months from the date of the grant.

(5)	Represents an option to purchase 30,125 shares of Common Stock granted on December 14, 2012 that vests proratably over 48 months from the date of the grant.

(6)	Represents an option to purchase 5,000 shares of Common Stock granted on December 12, 2008 that vests proratably at the end of each quarter over a 12-month period beginning on December 12, 2008.

(7)	Represents an option to purchase 17,500 shares of Common Stock granted on December 18, 2009 that vests proratably over 60 months from the date of the grant.

(8)	Represents an option to purchase 12,125 shares of Common Stock granted on December 16, 2010 that vests proratably over 60 months from the date of the grant.

(9)	Represents an option to purchase 19,590 shares of Common Stock granted on December 14, 2011 that vests proratably over 60 months from the date of the grant.

(10)	Represents an option to purchase 10,407 shares of Common Stock granted on December 14, 2012 that vests proratably over 48 months from the date of the grant.

(11)	Represents an option to purchase 21,227 shares of Common Stock granted on December 14, 2011 that vests proratably over 60 months from the date of the grant.

(12)	Represents an option to purchase 10,295 shares of Common Stock granted on December 14, 2012 that vests proratably over 48 months from the date of the grant.

(13)	Represent an option to purchase 7,852 shares of Common Stock granted on December 16, 2010 that vests proratably over 60 months from the date of the grant.

(14)	Represents an option to purchase 14,437 shares of Common Stock granted on December 14, 2011 that vests proratably over 60 months from the date of the grant.

(15)	Represents an option to purchase 5,710 shares of Common Stock granted on December 14, 2012 that vests proratably over 48 months from the date of the grant.

(16)	Represents an option to purchase 6,673 shares of Common Stock granted on December 14, 2012 that vests proratably over 48 months from the date of the grant.

(17)	These shares vest proratably over 5 years from December 12, 2011.

(18)	These shares vest proratably over 4 years from December 12, 2012.

(19)	These shares vest on August 1, 2013.

(20)	These shares vest on August 1, 2014.

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2013 Option Exercises and Stock Vested Table

The following table sets forth the exercise of options and vesting of restricted stock during the fiscal year ended July 31, 2013 for the named executive officers:

CHANGE IN CONTROL AGREEMENTS

Each of Messrs. Hable, Malis, Fanning and Stroisch and Ms. Boone have entered into change in control agreements with the Company. The change in control agreements have rolling one-year terms and expire 30 days after the executive’s employment is terminated. Payments to which the executive is due under the change in control agreement are not subject to reduction in the event he or she receives other compensation for services rendered after termination of employment, and the executive is under no duty to mitigate any payments.

The change in control agreements provide that if the executive’s employment is terminated within one year following a change in control for cause or disability (as both are defined in the change in control agreement), as a result of his or her death or by the executive other than as Involuntary Termination (as defined in the change in control agreement), the Company shall pay to the executive all compensation earned or accrued through the employment termination date, including (i) base salary; (ii) reimbursement for reasonable and necessary expenses; (iii) vacation pay; (iv) bonuses and incentive compensation; and (v) all other amounts to which he or she is entitled under any compensation or benefit plan of the Company (“Standard Compensation Due”).

If Messrs. Hable, Malis, Fanning or Stroisch or Ms. Boone is terminated within one year following a change in control without cause and for any reason other than death or disability, including involuntary termination, and provided the executive enters into a separation agreement within 30 days of the employment termination, the executive shall receive an amount equal to the sum of the following: (i) all Standard Compensation Due; (ii) an amount equal to one times the annual base salary at the rate in effect immediately prior to the change in control; and (iii) any amount payable as of the termination date under the Company’s objectives-based incentive plan. Such amount shall be paid in 12 equal monthly installments beginning in the month after such termination. Furthermore, all awards of shares or options shall immediately vest and be exercisable for one year after the date of involuntary employment termination.

As defined in the change in control agreement, a “change in control” means: (i) the acquisition by any person (as defined in the change in control agreement) of securities of the Company representing 51% or more of the combined voting power of the Company’s outstanding voting securities; (ii) a change in the composition of the Board of Directors of the Company such that during any period of up to two consecutive years, individuals who constitute members of the Board of Directors at the beginning of the period cease to constitute the majority thereof; and (iii) the closing of certain mergers or consolidations of the Company with any other corporation.

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The table below presents potential payments to each of our named executive officers as if the officer’s employment had been terminated as of July 31, 2013, the last day of fiscal 2013, within one year following a change in control without cause and for any reason other than death or disability, including involuntary termination, and provided the executive enters into a separation agreement within 30 days of the employment termination.

If any named executive officer was terminated within one year following a change in control for cause, disability, death or by the executive other than as involuntary termination, the executive officer would be entitled to their Standard Compensation Due, all of which would have been accrued as of July 31, 2013 except for bonuses. Bonuses due to the named executive officers as of July 31, 2013 were not calculable as of the latest practicable date prior to the filing and mailing of this Proxy Statement. Pursuant to the instructions to Item 402 of Regulation S-K, a reasonable estimate of the bonuses that each named executive officer would have been due if the triggering termination event had occurred on July 31, 2013 would be as follows: Mr. Hable -- $35,550, Dr. Malis -- $23,653, Ms. Boone -- $18,176, Mr. Fanning -- $11,178 and Mr. Stroisch -- $18,750 as determined by the Compensation Committee. These amounts were estimated based upon fiscal year 2012 actual bonus amounts paid in fiscal 2013.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Nominating and Corporate Governance Committee reviews and approves all transactions between the Company and any related person that are required to be disclosed pursuant to Item 404 of Regulation S-K. “Related person” and “transaction” shall have the meanings given to such terms in Item 404 of Regulation S-K, as amended from time to time. In determining whether to approve or ratify a particular transaction, the Nominating and Corporate Governance Committee will take into account any factors it deems relevant.

PROPOSAL 2 — APPROVAL OF SECOND AMENDED AND RESTATED

SYNERGETICS USA, INC. 2001 STOCK AND PERFORMANCE INCENTIVE PLAN

On October 17, 2013, the Board of Directors adopted, subject to stockholder approval, an amendment to the 2001 Stock Plan in the form of the Second Amended 2001 Stock and Performance Incentive Plan. If adopted by the stockholders, the Second Amended 2001 Stock and Performance Incentive Plan would increase the number of shares authorized for issuance under the 2001 Stock Plan from 1,345,000 to 2,000,000.

The purpose of the Second Amended 2001 Stock and Performance Incentive Plan is to attract, retain and motivate officers, directors, key employees and consultants of the Company, to compensate these individuals for their contributions to the Company, and to align the interests of these individuals with those of holders of the Company’s Common Stock.

A copy of the Second Amended 2001 Stock and Performance Incentive Plan is attached as Appendix A to this proxy statement. The following summary of the material terms of the Second Amended 2001 Stock and Performance Incentive Plan, is qualified in its entirety by reference to the full text of the Second Amended 2001 Stock and Performance Incentive Plan.

Administration

The Second Amended 2001 Stock and Performance Incentive Plan is administered by the Compensation Committee. While the Compensation Committee considers the recommendations of management, the Compensation Committee has the exclusive authority and sole discretion to administer the Second Amended 2001 Stock and Performance Incentive Plan, including the power to determine eligibility, the types and sizes of awards, the price and timing of awards and the acceleration or waiver of any vesting restriction, subject to the limitations set forth in the Second Amended 2001 Stock and Performance Incentive Plan.

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Eligibility

Persons eligible to participate in the Second Amended 2001 Stock and Performance Incentive Plan include all employees, officers, directors and consultants of the Company or any of its subsidiaries who, in the opinion of the Compensation Committee, are primarily responsible for the continued growth and development and future financial success of the Company. The number of employees, including officers, and consultants who are eligible to receive awards under the Second Amended 2001 Stock and Performance Incentive Plan is approximately 15. The Company’s directors are also eligible to receive awards under the Second Amended 2001 Stock and Performance Incentive Plan. Excluding Mr. Hable, the Company has six directors.

Number of Shares Subject to the Second Amended 2001 Stock and Performance Incentive Plan

The maximum number of shares of the Company’s Common Stock that may be issued under the 2001 Stock Plan is currently 1,345,000. If the Second Amended 2001 Stock and Performance Incentive Plan is approved by the stockholders, the maximum number of shares authorized for issuance under the Second Amended 2001 Stock and Performance Incentive Plan will be increased by 655,000 to 2,000,000. As of November 5, 2013, the market value of a share of the Company’s Common Stock was $4.25.

Awards under the Second Amended 2001 Stock and Performance Incentive Plan

Stock Options

Options granted pursuant to the Second Amended 2001 Stock and Performance Incentive Plan may be either incentive stock options or nonstatutory stock options as determined by the Compensation Committee, provided that incentive stock options may be granted only to employees of the Company or any subsidiary; and (ii) no incentive stock option may be granted following the 10^th anniversary of the effective date of the Second Amended 2001 Stock and Performance Incentive Plan. The term, vesting and other conditions of option awards shall be determined by the Compensation Committee, except that in the case of an incentive stock option, the term shall be no more than 10 years from the date of grant or five years from the date of grant in the case of a participant holding more than 10% of the voting power of the Company’s Common Stock. The exercise price of each option award shall be not less than 85% of the fair market value of the Company’s Common Stock on the date of grant. The exercise price of incentive stock options awarded to a participant holding more than 10% of the voting power of the Company’s Common Stock shall be not less than 110% of the fair market value of the Company’s Common Stock on the date of grant.

Vested and unvested options held by a participant who is terminated for cause shall terminate immediately. In the event a participant is otherwise terminated, the participant may, within 90 days of termination, exercise his or her options to the extent he or she was entitled to exercise such options at the date of termination. In the event of termination due to disability or death during a participant’s employment with the Company, a participant, or his or her estate or representative in the case of a participant’s death, may exercise the option within 12 months of the termination date to the extent the participant was otherwise entitled to exercise it at the date of such termination. In the event of the death of a participant within 30 days of the participant’s termination without cause, the option may be exercised, at any time within six months following the date of to the extent the participant was entitled to exercise the option at the date of death.

Restricted Stock

The Compensation Committee may grant shares of restricted stock to any officer, employee or consultant of the Company or its subsidiaries, subject to such restrictions and conditions as the Compensation Committee may determine at the time of grant. Conditions may be based on continuing employment (or other business relationship) and/or achievement of pre-established performance goals and objectives. Participants receiving restricted stock shall have the rights of a stockholder with respect to the Common Stock subject to the restricted stock award, including, but not limited to, the right to vote and receive dividends with respect to the award. If a participant is terminated before the restricted stock award vests, the award shall be forfeited.

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Stock Awards

The Compensation Committee may, in its sole discretion, grant (or sell at a purchase price determined by the Compensation Committee) a stock award to any officer, employee or consultant of the Company or its subsidiaries, pursuant to which such participant may receive shares of Common Stock free of any vesting restrictions with respect to past services or other valid consideration, or in lieu of any cash compensation due to such participant.

Performance Awards

The Compensation Committee may, in its sole discretion, grant a performance award to one or more officers or employees of the Company payable in cash or in shares of Common Stock, including restricted stock, which may be conditioned on the achievement of one or more of the following objective performance criteria with respect to the Company as a whole or any subsidiary or individual business unit: sales, revenue, costs, expenses, earnings (including one or more of net profit after tax, gross profit, operating profit, earnings before interest and taxes, earnings before interest, taxes, depreciation and amortization and net earnings), earnings per share, earnings per share from continuing operations, operating income, pre-tax income, operating income margin, net income, margins (including one or more of gross, operating and net income margins), returns (including one or more of return on actual or pro forma assets, net assets, equity, investment, capital and net capital employed), shareholder return (including total shareholder return relative to an index or peer group), stock price, economic value added, cash generation, cash flow, unit volume, working capital, market share, cost reductions, strategic plan development and implementation and objective business criteria that apply to an individual, business unit or Company as a whole.

Transferability

Awards granted pursuant to the Second Amended 2001 Stock and Performance Incentive Plan are transferable by will or the laws of descent and distribution, or pursuant to a qualified domestic relations order. The Compensation Committee may, in its discretion, provide that stock options granted to a participant may be transferred, in whole or in part, to one or more transferees provided that (i) any such transfer must be without consideration; (ii) each transferee must be a member of the participant’s immediate family or a trust, family limited partnership or other estate planning vehicle established for the exclusive benefit of one or more members of the participant’s family; and (iii) such transfer must be specifically approved by the Compensation Committee.

Amendment and Termination

The Board of Directors may terminate, amend or modify the Second Amended 2001 Stock and Performance Incentive Plan at any time. However, stockholder approval is required for any amendment to the extent necessary or desirable to comply with any applicable law, regulation or stock exchange rule.

Federal Income Tax Consequences

Options

The grant of a stock option (either an incentive stock option or a non-qualified/nonstatutory stock option) is not expected to result in any taxable income for the recipient or optionee.

No taxable income is realized by the optionee upon the exercise of an incentive stock option. If stock is issued to the optionee pursuant to the exercise of an incentive stock option, and if no disqualifying disposition of such shares is made by such optionee within two years after the date of grant or within one year after the transfer of such shares to such optionee, then (1) upon the sale of such shares, any amount realized in excess of the option price will be taxed to such optionee as a long-term capital gain and any loss sustained will be a long-term capital loss, and (2) the Company will not be entitled to a deduction for federal income tax purposes.

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If the stock acquired upon the exercise of an incentive stock option is disposed of prior to the expiration of either holding period described above, generally (1) the optionee will realize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of such shares at exercise (or, if less, the amount realized on the disposition of such shares) over the option price paid for such shares, and (2) the Company will be entitled to deduct such amount for federal income tax purposes if the amount represents an ordinary and necessary business expense. Any further gain (or loss) realized by the optionee will be taxed as short-term or long-term capital gain (or loss), as the case may be, and will not result in any deduction by the Company.

Upon exercising a non-qualified stock option, the optionee must recognize ordinary income equal to the excess of the fair market value of the shares of the Company’s Common Stock acquired on the date of exercise over the exercise price, and the Company generally will be entitled at that time to an income tax deduction for the same amount included in the optionee’s income.

The tax consequence upon a disposition of shares acquired through the exercise of a non-qualified stock option will depend on how long the shares have been held. Generally, there will be no tax consequence to the Company in connection with the disposition of shares acquired under a non-qualified stock option.

Restricted Stock

Recipients of grants of restricted stock generally will be required to include as ordinary income the fair market value of the restricted stock at the time it is no longer subject to a substantial risk of forfeiture. However, an owner of restricted stock who makes a Section 83(b) election pursuant to Section 83(b) of the Internal Revenue Code (“83(b) Election”) within 30 days of the date of grant of the restricted stock will incur taxable ordinary income on the date of grant equal to the fair market value of such shares of restricted stock (determined without regard to forfeiture restrictions). With respect to the sale of shares after the forfeiture restrictions have expired, the holding period to determine whether the award recipient has long-term or short-term capital gain or loss generally begins when the restrictions expire, and the tax basis for such shares will generally be based on the fair market value of the shares on that date. However, if the owner made an 83(b) Election as described above, the holding period commences on the date of such election, and the tax basis will be equal to the fair market value of the shares on the date of the election (determined without regard to the forfeiture restrictions on the shares). Dividends, if any, that are paid or accrued while the restricted stock is subject to a substantial risk of forfeiture will also be taxed as ordinary income. The Company will be entitled to an income tax deduction equal to amounts the award holder includes in ordinary income at the time of such income inclusion.

Other Stock Grants

As to other grants of shares of the Company’s Common Stock made under the Second Amended 2001 Stock and Performance Incentive Plan not subject to a substantial risk of forfeiture, the holder of the award must recognize ordinary income equal to the excess of (1) the fair market value of the shares received (determined as of the date of receipt) over (2) the amount (if any) paid for the shares by the holder of the award. The Company generally will be entitled at that time to an income tax deduction for the same amount.

Performance Awards

Recipients of grants of performance awards will generally not incur any federal income tax liability at the time the awards are granted. Award holders will recognize ordinary income equal to (1) the amount of cash received under the terms of the award or, as applicable, (2) the fair market value of the shares received (determined as of the date of receipt) under the terms of the award. Cash or shares to be received pursuant to a performance award generally become payable when applicable forfeiture restrictions lapse; provided, however, that, if the terms of the award so provide, payment may be delayed until a later date to the extent permitted under applicable tax laws. The Company will be entitled to an income tax deduction for any amounts included by the award holder as ordinary income. For awards that are payable in shares, a participant’s tax basis is equal to the fair market value of the shares at the time the shares become payable. Upon the sale of the shares, appreciation (or depreciation) after the shares are paid is treated as either short-term or long-term capital gain (or loss) depending on how long the shares have been held.

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Income Tax Deduction

Subject to the usual rules concerning reasonable compensation, including the Company’s obligation to withhold or otherwise collect certain income and payroll taxes, and assuming that, as expected, stock options and certain other awards paid under the Second Amended 2001 Stock and Performance Incentive Plan are “qualified performance-based compensation” within the meaning of Section 162(m) of the Internal Revenue Code and Treasury Regulations promulgated thereunder, the Company generally will be entitled to a corresponding income tax deduction at the time a participant recognizes ordinary income from awards made under the Second Amended 2001 Stock and Performance Incentive Plan.

Special Rules for Executive Officers and Directors Subject to Section 16 of the Exchange Act

Special rules may apply to individuals subject to Section 16 of the Exchange Act. In particular, shares received through exercise of a non-qualified option or an incentive stock option, and any shares of restricted stock that vest, may be treated as restricted property for purposes of Section 83 of the Internal Revenue Code if the recipient has had a non-exempt acquisition of shares of the Company’s Common Stock within the six months prior to the exercise or vesting. Accordingly, the amount of any ordinary income recognized and the amount of the Company’s income tax deduction will be determined as of the end of that period (unless an 83(b) Election is made by the recipient to recognize income as of the date the shares are received).

Section 409A of the Internal Revenue Code

The Second Amended 2001 Stock and Performance Incentive Plan contains provisions intended to prevent adverse tax consequences under Section 409A of the Internal Revenue Code to holders of awards granted under the Second Amended 2001 Stock and Performance Incentive Plan.

New Plan Benefits

No awards made under the 2001 Stock and Performance Incentive Plan prior to the date of the 2013 Annual Meeting have been made subject to stockholder approval of the Second Amended 2001 Stock and Performance Incentive Plan. The number and types of awards that will be granted under the Second Amended 2001 Stock and Performance Incentive Plan in the future are not determinable, as the Compensation Committee will make these determinations in its sole discretion.

Equity Compensation Plan Information

The following table summarizes information regarding our equity compensation plans in effect as of July 31, 2013:

32

33

34

35

36

37

38

39

40

41

42

43

44

45