Edgar Filing: BRIGHT HORIZONS FAMILY SOLUTIONS INC.

Notice & Proxy

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

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BRIGHT HORIZONS FAMILY SOLUTIONS INC.

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LOGO

200 Talcott Avenue South

Watertown, Massachusetts 02472

March 31, 2015

Dear Shareholder:

We cordially invite you to attend our 2015 Annual Meeting of Shareholders on Monday, May 11, 2015, at 8:30 a.m. (local time), to be held at our offices at 200 Talcott Avenue South, Watertown, Massachusetts 02472.

The proxy statement accompanying this letter describes the business we will consider at the meeting. Your vote is important regardless of the number of shares you own. Whether or not you plan to attend the Annual Meeting, we encourage you to consider the matters presented in the proxy statement and vote as soon as possible. Instructions for Internet and telephone voting are attached to your proxy card. If you prefer, you can vote by mail by completing and signing your proxy card and returning it in the enclosed envelope.

We hope that you will be able to join us on May 11th.

Sincerely,

David Lissy

Chief Executive Officer

Bright Horizons Family Solutions Inc.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

May 11, 2015

The Annual Meeting of Shareholders of Bright Horizons Family Solutions Inc. (the “Company”) will be held at our offices at 200 Talcott Avenue South, Watertown, Massachusetts 02472 on Monday, May 11, 2015, at 8:30 a.m. (local time) for the following purposes as further described in the proxy statement accompanying this notice:

•

To elect the four directors specifically named in the proxy statement, each for a term of three years.

•

To approve, on an advisory basis, the compensation paid by the Company to its named executive officers (the “say-on-pay proposal”).

•

To approve, on an advisory basis, the frequency of the say-on-pay proposal in the future.

•

To ratify the appointment of Deloitte & Touche LLP as the independent registered public accounting firm of the Company for the current fiscal year.

•

To consider any other business properly brought before the meeting.

Shareholders of record at the close of business on March 25, 2015 are entitled to notice of, and entitled to vote at, the Annual Meeting and any adjournments or postponements thereof.

To attend the Annual Meeting, you must demonstrate that you were a Bright Horizons shareholder as of the close of business on March 25, 2015, or hold a valid proxy for the Annual Meeting from such a shareholder. The proxy card includes an admission ticket for one shareholder to attend the Annual Meeting of Shareholders. You may alternatively present a brokerage statement showing proof of your ownership of Bright Horizons stock as of March 25, 2015. All shareholders must also present a valid form of government-issued picture identification in order to attend. Please allow additional time for these procedures.


By Order of the Board of Directors


		Stephen Dreier Secretary

Watertown, Massachusetts

March 31, 2015

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting To Be Held on May 11, 2015: Financial and other information concerning Bright Horizons is contained in our annual report to shareholders for the fiscal year ended December 31, 2014. The proxy statement and our fiscal 2014 annual report to shareholders are available on the Investor Relations section of our website at www.brighthorizons.com. Additionally, you may access our proxy materials directly at

http://investors.brighthorizons.com/ , a site that does not have “cookies” that identify visitors to the site.

TABLE OF CONTENTS


Proxy Statement			1
Board of Directors and Committees of the Board			2
Proposal 1—Election of Directors			7
Corporate Governance			11
Transactions with Related Persons			13
Stock Ownership Information			14
Section 16(a) Beneficial Ownership Reporting Compliance			16
Executive Compensation			17
Compensation Discussion and Analysis			17
2014 Summary Compensation Table			22
Grants of Plan-Based Awards Table			23
Outstanding Equity Awards at Fiscal Year End			25
Options Exercises and Stock Vested			26
Non-Qualified Deferred Compensation			26
Potential Payments Upon Termination or Change in Control			26
Report of the Compensation Committee			28
Proposal 2—Advisory Vote on Named Executive Officer Compensation			29
Proposal 3—Advisory Vote on Frequency of Named Executive Officer Compensation Advisory Votes			30
Audit Committee Matters			31
Audit Committee Report			31
Proposal 4—Ratification of Appointment of Independent Registered Public Accounting Firm			33
Voting Requirements and Proxies			34
Shareholder Proposals and Director Nominations			34
Other Matters			34
Directions to Annual Meeting			35

Bright Horizons Family Solutions Inc.

ANNUAL MEETING OF SHAREHOLDERS

May 11, 2015

PROXY STATEMENT

The Board of Directors (the “Board”) of Bright Horizons Family Solutions Inc., or Bright Horizons, is soliciting your proxy for the 2015 Annual Meeting. Attendance in person or by proxy of a majority of the shares outstanding and entitled to vote at the meeting is required for a quorum for the meeting.

You may vote on the Internet, using the procedures and instructions described on the proxy card and other enclosures. You may vote by telephone using the toll-free telephone number on the proxy card. Both Internet and telephone voting provide easy-to-follow instructions and have procedures designed to authenticate your identity and permit you to confirm that your voting instructions are accurately reflected. Street name holders may vote by Internet or telephone if their banks or brokers make those methods available, in which case the banks or brokers will enclose the instructions with the proxy statement. All stockholders may vote by signing and returning the enclosed proxy card.

You may revoke your proxy at any time before it is voted by voting later by telephone or Internet, returning a later-dated proxy card, or delivering a written revocation to the Secretary of Bright Horizons.

Shareholders of record at the close of business on March 25, 2015 are entitled to vote at the meeting. As of February 27, 2015 there were 61,653,183 shares of common stock outstanding and each is entitled to one vote.

This proxy statement, the proxy card and the Annual Report on Form 10-K for our fiscal year ended December 31, 2014 (fiscal 2014) are being first mailed to shareholders on or about the date of the notice of meeting. Our address is 200 Talcott Avenue South, Watertown, Massachusetts 02472.

BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD

Board structure and committee composition

We have an Audit Committee, Compensation Committee and a Nominating and Corporate Governance Committee with the composition and responsibilities described below. Each committee operates under a charter that has been approved by our Board. A copy of each charter can be found by clicking on “Corporate Governance” in the Investor Relations section of our website, www.brighthorizons.com. The members of each committee are appointed by the Board and each member serves until his or her successor is elected and qualified, unless he or she is earlier removed or resigns. In addition, from time to time, special committees may be established under the direction of the Board when necessary to address specific issues.

Until December 16, 2014, we qualified as a “controlled company” under the New York Stock Exchange (the “NYSE”) listing rules, and we took advantage of several exceptions applicable to “controlled companies”. As of December 16, 2014, we had a majority of independent directors, we formed our Nominating and Corporate Governance committee, and our Compensation Committee became composed entirely of independent directors as defined under such rules.

Our Board held four meetings in fiscal 2014. During fiscal 2014, each director attended at least 75% of the Board meetings and the total meetings held by all of the committees on which he or she served during the periods that he or she served.

During fiscal 2014, the Board had two standing committees: the Audit Committee and the Compensation Committee. In December 2014, the Board activated the Nominating and Corporate Governance Committee in connection with our loss of “controlled company” status under the NYSE listing rules. The table below provides information about the membership of these committees during fiscal 2014:


Name	Audit	Compensation	Nominating and Corporate Governance
Lawrence M. Alleva	X*
Joshua Bekenstein		X*
Roger H. Brown
E. Townes Duncan	X
Jordan Hitch		X	X
David Humphrey		X
Marguerite Kondracke	X		X*
Dr. Sara Lawrence-Lightfoot			X
David Lissy
Linda Mason			X
Mary Ann Tocio

Number of meetings during fiscal 2014	9	4	1

Chair

Audit Committee

The purpose of the Audit Committee is set forth in the Audit Committee charter. The Audit Committee’s primary duties and responsibilities are to:

•

Appoint or replace, compensate and oversee the outside auditors for the purpose of preparing or issuing an audit report or related work or performing other audit, review or attest services for us. The outside auditors report directly to the Audit Committee.

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Pre-approve all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for us by our outside auditors, subject to de minimis exceptions which are approved by the Audit Committee prior to the completion of the audit.

•

Review and discuss with management and the outside auditors the annual audited and quarterly unaudited financial statements, our disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, and the selection, application and disclosure of critical accounting policies and practices used in such financial statements.

•

Review and approve all related party transactions.

•

Discuss with management and the outside auditors significant financial reporting issues and judgments made in connection with the preparation of our financial statements, including any significant changes in our selection or application of accounting principles, any major issues as to the adequacy of our internal controls and any special steps adopted in light of material control deficiencies.

The Audit Committee consists of Lawrence Alleva, E. Townes Duncan and Marguerite Kondracke. Our Board has determined that Mr. Alleva, Mr. Duncan and Ms. Kondracke are independent directors pursuant Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 303A.02 of the New York Stock Exchange Listed Company Manual. Mr. Alleva is also an “audit committee financial expert” within the meaning of Item 407 of Regulation S-K, and serves as chair of the Audit Committee. Our Board has adopted a written charter under which the audit committee operates. A copy of the charter is available on our website.

Compensation Committee

The purpose of the Compensation Committee is to assist the Board in fulfilling its responsibilities relating to oversight of the compensation of our directors, executive officers and other employees and the administration of our benefits and equity-based compensation programs. The Compensation Committee reviews and recommends to our Board of Directors compensation plans, policies and programs and approves specific compensation levels for all executive officers. The Compensation Committee consists of Joshua Bekenstein, Jordan Hitch and David Humphrey. Our Board has adopted a written charter under which the Compensation Committee operates. A copy of the charter is available on our website.

Pursuant to its charter, the Compensation Committee may delegate to subcommittees of the Compensation Committee any of the responsibilities of the full committee.

Compensation Committee Interlocks and Insider Participation

All compensation and related matters are reviewed by the Compensation Committee. No member of our Compensation Committee serves as a member of the board of directors or the compensation committee of any entity that has one or more of our executive officers serving as members of its board or compensation committee. Each of Messrs. Bekenstein, Hitch and Humphrey is affiliated with Bain Capital Partners, LLC. For additional information regarding transactions between Bain Capital Partners, LLC and us, please see “Transactions with Related Persons” below.

Nominating and Corporate Governance Committee

The purpose of the Nominating and Corporate Governance Committee is to identify individuals qualified to become members of the Board and to recommend to the Board director nominees for the next shareholders’ meeting. The Nominating and Corporate Governance Committee consists of Jordan Hitch, Marguerite Kondracke, Sara Lawrence-Lightfoot and Linda Mason. A copy of the charter, which satisfies the applicable standards of the Securities and Exchange Commission (the “SEC”) and the NYSE is available on our website. Pursuant to its charter, the Nominating and Corporate Governance Committee may delegate to subcommittees of the Nominating and Corporate Governance Committee any of the responsibilities of the full committee.

Our Board’s Role in Risk Oversight

It is management’s responsibility to manage risk and bring to the Board’s attention risks that are material to Bright Horizons. The Board has oversight responsibility for the systems established to report and monitor the most significant risks applicable to Bright Horizons. The Board administers its risk oversight role directly and through its committee structure and the committees’ regular reports to the Board at Board meetings. The Board reviews strategic, financial and execution risks and exposures associated with the annual plan and multi-year plans, major litigation and other matters that may present material risk to the Company’s operations, plans, prospects or the Company’s reputation, acquisitions and divestitures and senior management succession planning. The Audit Committee oversees the Company’s internal audit function and reviews risks associated with financial and accounting matters, including financial reporting, accounting, disclosure, internal controls over financial reporting, ethics and compliance programs, regulatory compliance, compliance with orders and data security. The Compensation Committee reviews risks related to executive compensation and the design of compensation programs, plans and arrangements.

2014 Director Compensation

The following table sets forth information concerning the compensation earned by our directors during fiscal 2014. Compensation for Mr. Lissy and Ms. Tocio is included with that of our other named executive officers.


Name	Fees paid in cash ($)			Option awards ($)(1)(2)		Stock awards ($) (3)(4)		Total ($)
Lawrence Alleva		54,500			—		40,015		94,515
Joshua Bekenstein		—			—		—		—
Roger Brown		29,500			—		40,015		69,515
E. Townes Duncan		33,000			19,102		40,015		92,117
Jordan Hitch		500			—		—		500
David Humphrey		—			—		—		—
Marguerite Kondracke		33,000			—		40,015		73,015
Sara Lawrence-Lightfoot		23,500			—		40,015		63,515
Linda Mason		121,500	(5)		—		40,015		161,515

(1)

For fiscal 2014, amounts shown reflect the fair value of options awarded in 2014 determined in accordance with ASC Topic 718. Assumptions used in the calculation of these amounts are included in note 12 to our audited consolidated financial statements included in our 2014 Annual Report on Form 10-K.

(2)

As of December 31, 2014, our directors held the following options to purchase shares of our common stock: Lawrence Alleva – 5,272 options, Roger Brown – 22,482 options, E. Townes Duncan – 2,000 options, Marguerite Kondracke – 13,336 options, Sara Lawrence-Lightfoot – 3,000 options, and Linda Mason – 69,941 options. Messrs. Bekenstein, Hitch, and Humphrey did not hold any options to purchase shares of our common stock as of December 31, 2014.

(3)

For fiscal 2014, amounts shown reflect the fair value of restricted stock units awarded in 2014, determined in accordance with ASC Topic 718. Assumptions used in the calculation of these amounts are included in note 12 to our audited consolidated financial statements included in our 2014 Annual Report on Form 10-K.

(4)	As of December 31, 2014, Lawrence Alleva, Roger Brown, E. Townes Duncan, Marguerite Kondracke, Sara Lawrence-Lightfoot and Linda Mason each held 1,011 restricted stock units. Messrs. Bekenstein, Hitch, and Humphrey did not hold any restricted stock units as of December 31, 2014.

(5)	Amount shown reflects compensation earned by Ms. Mason in her capacity as Chairman, a non-employee position.

The following policy for the compensation for all independent directors was effective for all director compensation payments in 2014. Under this policy, for so long as the Sponsor controlled a majority of our outstanding common stock, none of the directors affiliated with the Sponsor were compensated for their Board service. As such, Messrs. Bekenstein and Humphrey did not receive any compensation for their Board service in 2014 and Mr. Hitch only received compensation for one committee meeting attended after the Sponsor ceased to maintain this level of ownership.

Annual Retainer. Each independent director receives an annual board retainer of $10,000 in cash, payable at the quarterly rate of $2,500, and an annual equity grant valued at $40,000.

Meeting Fees. Each independent director receives $4,000 for each Board meeting attended in person or $1,000 for each Board meeting attended by conference call.

Each independent director who attends a special committee meeting of the Board also receives $1,500 for each committee meeting attended in person or $500 for each committee meeting attended by conference call.

Each independent member of the Compensation Committee also receives $1,500 for each committee meeting attended in person or $500 for each committee meeting attended by conference call. Additionally, the independent chair of the Compensation Committee receives an annual retainer of $20,000.

Each independent member of the Audit Committee also receives $1,500 for each committee meeting attended in person or $500 for each committee meeting attended by conference call. Additionally, the independent chair of the Audit Committee receives an annual retainer of $20,000.

Each independent member of the Nominating and Corporate Governance Committee, which was formed as of December 10, 2014, also receives $1,500 for each committee meeting attended in person or $500 for each committee meeting attended by conference call. Additionally, the independent chair of the Nominating and Corporate Governance Committee receives an annual retainer of $5,000.

Effective January 1, 2014, the board compensation program was amended to provide an annual retainer of $95,000 for the Chair of the Board payable at the quarterly rate of $23,750. Effective January 1, 2015, the board compensation program was further amended to replace the annual equity grant valued at $40,000 with an annual equity grant of 1,000 restricted stock units. These restricted stock units are fully vested on grant and are settled on the earliest of (a) the director’s termination of service as a member of the Board, (b) the fifth anniversary of the date of grant, and (c) a change of control of the Company.

PROPOSAL 1

ELECTION OF DIRECTORS

Bright Horizons has a classified Board currently consisting of four Directors with terms expiring in 2015 (Class II), four Directors with terms expiring in 2016 (Class III) and three Directors with terms expiring in 2017 (Class I). At each Annual Meeting of Shareholders, Directors in one class are elected for a full term of three years to succeed those Directors whose terms are expiring. This year, the four Class II Director nominees will stand for election to a three-year term expiring at the 2018 Annual Meeting. The persons named in the enclosed proxy will vote to elect E. Townes Duncan, Jordan Hitch, Linda Mason and Mary Ann Tocio as Directors unless the Proxy is marked otherwise. Each of the nominees has indicated his or her willingness to serve, if elected. However, if a nominee should be unable to serve, the shares of common stock represented by proxies may be voted for a substitute nominee designated by the Board. Management has no reason to believe that either of the above-mentioned persons will not serve his or her term as a Director.

We seek nominees with established strong professional reputations, sophistication, business acumen and experience in multi-site operations and/or contracted business services in the employee benefits arena. We also seek nominees with experience in substantive areas that are important to our business such as international operations; accounting, finance and capital structure; strategic planning and leadership of complex organizations; human resources and development practices; and strategy and innovation. Our nominees hold or have held senior executive positions in large, complex organizations or in businesses related to important substantive areas, and in these positions have also gained experience in core management skills and substantive areas relevant to our business. Our nominees also have experience serving on boards of directors and board committees of other organizations, and each of our nominees has an understanding of public company corporate governance practices and trends.

In addition, all of our nominees have prior service on our Board, which has provided them with significant exposure to both our business and the industry in which we compete. We believe that all our nominees possess the professional and personal qualifications necessary for board service, and we have highlighted particularly noteworthy attributes for each director in the individual biographies below.

Nominees for Election for Terms Expiring in 2018 (Class II Directors)

The individuals listed below have been nominated and are standing for election at this year’s Annual Meeting. If elected, they will hold office until our 2018 Annual Meeting of Shareholders and until their successors are duly elected and qualified. All of these directors were previously elected to the Board by shareholders.

Your Board of Directors unanimously recommends that you vote FOR the election of each of the nominees as director.

E. Townes Duncan, 61

Director since 2014

Mr. Duncan is the Managing Partner of Solidus Company LP, a private investment firm, and has served in that capacity since its inception in 1997. From 1993 to 1997, Mr. Duncan was the Chairman of the Board of Directors and Chief Executive Officer of Comptronix Corporation, a provider of electronics contract manufacturing services. Mr. Duncan also served as a Vice President and principal of Massey Burch Investment Group, Inc., a venture capital firm and the predecessor of Massey Burch Capital Corp., from 1985 to 1993. In addition, Mr. Duncan is a director of numerous private companies and previously served on the board of directors of several private and public companies, including J. Alexander’s Corporation, an owner and operator of casual dining restaurants. Mr. Duncan was also a member of our Board from 1998 until May 2008. Mr. Duncan’s many years of experience both as a senior executive of an investment firm and as a director of companies in various business sectors, including the child care sector in connection with his previous service on our Board, make him highly qualified to serve on our Board.

Jordan Hitch, 48

Director since 2008

Mr. Hitch has been a managing director at Bain Capital Partners, LLC since 1997. Prior to joining Bain Capital in 1997, Mr. Hitch was a consultant at Bain & Company where he worked in the financial services, healthcare and utility industries. Mr. Hitch serves on the board of directors of The Gymboree Corporation and Burlington Coat Factory Warehouse Corporation. As a result of these and other professional experiences, Mr. Hitch brings to our board significant experience in and knowledge of corporate finance and strategy development, which strengthen the collective qualifications, skills and experience of our Board.

Linda Mason, 60

Director since 1986

Ms. Mason has served as Leader in Residence at the Harvard Kennedy School since September 2014. She co-founded Bright Horizons in 1986, and served as director and its president from 1986 to 1998. She has served as a director and Chairman of the Board of the Company since 1998. Prior to co-founding Bright Horizons, Ms. Mason was a co-director of the Save the Children relief and development effort in the Sudan and worked as a program officer with CARE in Thailand. In addition to her duties as Chairman of our Board of Directors, from 1998 through 2013 Ms. Mason served as a part-time employee of the Company, with responsibilities that included participation in Company trainings, conferences and culture-building and representing the Company from time to time on industry matters and in public policy discussions. Ms. Mason is the wife of Roger H. Brown, who is also a director of the Company. From 1993 to 2007, Ms. Mason served as director of Whole Foods Market. Ms. Mason currently serves on the boards of Horizons for Homeless Children, the Advisory Board of the Yale University School of Management, Carnegie Endowment for International Peace, Mercy Corps and the Packard Foundation. Ms. Mason has extensive experience with the Company and her child advocacy work brings valuable perspective to the Board.

Mary Ann Tocio, 66

Director since 2001

Ms. Tocio has served as Chief Operating Officer of the Company since 1998. She was appointed President in June 2000. Ms. Tocio joined Bright Horizons in 1992 as Vice President and General Manager of Child Care Operations, and served as Chief Operating Officer from November 1993 until the merger with CorporateFamily Solutions, Inc. in July 1998. Ms. Tocio has more than thirty years of experience managing multi-site service organizations, more than twenty years of which were with the Company. She was previously the Senior Vice President of Operations for Health Stop Medical Management, Inc., a national provider of ambulatory care and occupational health services. Ms. Tocio currently serves as a member of the board of directors of Harvard Pilgrim Health Care, a health benefits and insurance organization. Additionally, Ms. Tocio serves on the boards of Horizons for Homeless Children, a non-profit organization that provides support for homeless children and their families and of the privately-held Ella Health, a 3-D mammography and women’s health services provider and Carewell, a provider of urgent care centers. Ms. Tocio served as a member of the board of directors of Mac-Gray Corporation, a provider of laundry facilities management services from 2006 to 2013. Her public company board experience and expertise with managing growing organizations render her an invaluable resource as a director.

Directors with Terms Expiring in 2016 (Class III Directors)

Lawrence Alleva, 65

Director since 2012

Mr. Alleva is a Certified Public Accountant (inactive) and spent his professional career with PricewaterhouseCoopers LLP (PwC), including 28 years as a partner, from 1971 until his retirement in 2010. At PwC he served clients ranging from Fortune 500 and multi-national companies to rapid-growth companies

pursuing initial public offerings. Mr. Alleva also served in a senior national leadership role for PwC’s Ethics and Compliance Group to manage the design and implementation of best practice procedures, internal controls and monitoring activities, including PwC’s response to inspection reports issued by the Public Company Accounting Oversight Board (PCAOB). Mr. Alleva currently serves as a director and chair of the audit committee of Tesaro, Inc. and Mirna Therapeutics Inc., and, through December 2013, served in a similar capacity for GlobalLogic, Inc. He has served as a trustee of Ithaca College for over 20 years, including in the vice chair role for ten years. Mr. Alleva brings valuable experience to our Board through his financial and Sarbanes-Oxley Act expertise, and his professional focus on areas such as corporate governance, control and financial reporting best practices.

Joshua Bekenstein, 56

Director since 1986

Mr. Bekenstein has been a managing director at Bain Capital Partners, LLC (“Bain Capital”) since 1986. Prior to joining Bain Capital in 1984, Mr. Bekenstein spent several years at Bain & Company, where he was involved with companies in a variety of industries. Mr. Bekenstein serves as a director of The Michaels Companies, Inc., Bombardier Recreational Products Inc., Dollarama Inc., Toys “R” Us, Inc., Burlington Stores, Inc., The Gymboree Corporation, Canada Goose, Bob’s Discount Furniture, TOMS and Waters Corporation. Mr. Bekenstein’s many years of experience both as a senior executive of a large investment firm and as a director of companies in various business sectors, including ours, make him highly qualified to serve on our Board.

Roger Brown, 58

Director since 1986

Mr. Brown has served as President of Berklee College of Music since June 2004. Mr. Brown was Chief Executive Officer of the Company from June 1999 until December 2001, President of the Company from July 1998 until May 2000 and Executive Chairman of the Company from June 2000 until June 2004. Mr. Brown co-founded Bright Horizons and served as Chairman and Chief Executive Officer of Bright Horizons from its inception in 1986 until the merger with CorporateFamily Solutions in July 1998. Mr. Brown is the husband of Linda A. Mason, who is Chairman of the Board of Directors. Prior to 1986, he worked as a management consultant for Bain & Company, Inc. Mr. Brown is a co-founder of Horizons for Homeless Children, a non-profit that provides support for children and their families. He serves on the board of Wheaton College in Norton, Massachusetts. Mr. Brown’s management expertise, combined with his longstanding ties to and intimate knowledge of the Company will continue to serve the Company well throughout his tenure as director.

Marguerite Kondracke, 69

Director since 2004

Ms. Kondracke served as founder and CEO of CorporateFamily Solutions, Inc. from 1987 to 1998. She served as CEO of the Company for one year and then as Co-Chair of the Board of Directors of the Company from 1999 until 2001 and served as a director until 2003. She began serving as a director of the Company in 1998, and from 2003 to 2004 she served as Staff Director for the U.S. Senate Subcommittee on Children and Families. Ms. Kondracke returned to the Company’s Board in 2004, and from 2004 until May 2012, also served as President and CEO of America’s Promise Alliance, a nonprofit organization founded by Colin Powell that advocates for the strength and well-being of America’s children and youth. Ms. Kondracke serves on the boards of LifePoint Hospitals, Rosetta Stone and Teachscape. Ms. Kondracke served as a member of the board of directors of Saks, Inc. from 1997 to 2013. Ms. Kondracke brings knowledge of developmental child care and education as well as extensive leadership experience to the Board.

Directors with Terms Expiring in 2017 (Class I Directors)

David Humphrey, 37

Director since 2008

Mr. Humphrey is currently a Managing Director in the Private Equity group of Bain Capital, having joined the firm in 2001. Prior to joining Bain Capital, Mr. Humphrey was an investment banker in the mergers and acquisitions group at Lehman Brothers from 1999 to 2001. Mr. Humphrey received an M.B.A. from Harvard Business School and a B.A. from Harvard University. Mr. Humphrey serves on the board of directors of Genpact Limited, BMC Software, Viewpoint Construction Software and Bloomin’ Brands, Inc. Mr. Humphrey previously served on the board of directors of both Burlington Coat Factory Warehouse Corporation and Skillsoft plc. Mr. Humphrey has substantial knowledge of the capital markets from his experience as an investment banker and is valuable to the Board of Directors’ discussions of capital and liquidity needs.

Dr. Sara Lawrence-Lightfoot, 70

Director since 1993

Dr. Lawrence-Lightfoot is the Emily Hargroves Fisher Professor of Education at Harvard University and has been on the faculty since 1972. Dr. Lawrence-Lightfoot served as a director of the John D. and Catherine T. MacArthur Foundation from 1991 to 2007 and as Chairman from 2001 to 2007. She is currently Deputy Chair of the board of directors of Atlantic Philanthropies, where she has served since 2007, and previously served as Chair of the Academic Affairs Committee of the Board of Trustees of Berklee College of Music from September 2007 until March 2012. She was re-elected to the Berklee Board of Trustees in March 2014 and is a Trustee of the WGBH Educational Foundation where she has served since 2001. Dr. Lawrence-Lightfoot’s expertise in child development, teacher training, classroom structures and processes, curriculum development, parent/teacher relationships, educational policies and organizational matters will continue to provide an invaluable resource to the Board.

David H. Lissy, 49

Director since 2001

Mr. Lissy has served as Chief Executive Officer of the Company since January 2002. Mr. Lissy served as Chief Development Officer of the Company from 1998 until January 2002. He also served as Executive Vice President from June 2000 to January 2002. He joined Bright Horizons in August 1997 and served as Vice President of Development until the merger with CorporateFamily Solutions, Inc. in July 1998. Prior to joining Bright Horizons, Mr. Lissy served as Senior Vice President/General Manager at Aetna U.S. Healthcare, the employee benefits division of Aetna, Inc., in the New England region. His experience prior to joining the Company, his leadership at the Company and at many charitable, business services, and educational organizations, including his current service on the boards of the March of Dimes, Altegra Health, Jumpstart and Ithaca College, provides him with the experience and management skills necessary to serve as a director of the Company.

CORPORATE GOVERNANCE

Board Independence. Our Corporate Governance Guidelines provide that our Board shall consist of such number of directors who are independent as is required and determined in accordance with applicable laws and regulations and requirements of the NYSE. The Board evaluates any relationships of each director and nominee with Bright Horizons and makes an affirmative determination whether or not such director or nominee is independent. Under our Corporate Governance Guidelines, an “independent” director is one who meets the qualification requirements for being an independent director under applicable laws and the corporate governance listing standards of the NYSE. Our Board reviews any transactions and relationships between each non-management director or any member of his or her immediate family and Bright Horizons. The purpose of this review is to determine whether there were any such relationships or transactions and, if so, whether they were inconsistent with a determination that the director was independent. As a result of this review, our Board has affirmatively determined that Mr. Alleva, Mr. Bekenstein, Mr. Duncan, Mr. Hitch, Mr. Humphrey, Ms. Kondracke and Ms. Lawrence-Lightfoot are independent under the governance and listing standards of the NYSE.

Diversity and Board Expertise. We seek to have a Board that represents diversity as to experience, gender and ethnicity/race, but we do not have a formal policy with respect to diversity. We also seek a Board that reflects a range of talents, ages, skills, character and expertise, particularly in the areas of accounting and finance, management, domestic and international markets, leadership and corporate governance and the child care, education and related industries in which we operate sufficient to provide sound and prudent guidance with respect to our operations and interests. All of our directors are financially literate, and one member of our Audit Committee is an audit committee financial expert.

Board Annual Performance Reviews. Our Corporate Governance Guidelines provide that the Board shall be responsible for annually conducting a self-evaluation of the Board as a whole. In addition, the written charter of the Audit Committee provides that it shall evaluate its performance on an annual basis.

Board Nominees. Under its charter, our Nominating and Corporate Governance Committee is responsible for recommending to the Board candidates to stand for election to the Board at the Company’s annual meeting of shareholders and for recommending candidates to fill vacancies on the Board that may occur between annual meetings of shareholders. The Corporate Governance Guidelines provide that the Board shall review the appropriate skills and characteristics required of board members in the context of its current make-up. It is the policy of the Board that directors should possess the highest personal and professional ethics, integrity and values. Board members are expected to become and remain informed about the Company, its business and its industry and rigorously prepare for, attend and participate in all Board and applicable committee meetings. The Nominating and Corporate Governance Committee evaluates each individual in the context of the skills, character, diversity and expertise of the Board as a whole, with the objective of recommending a group that can best perpetuate the success of our business and represent shareholder interests through the exercise of sound judgment using its diversity of experience. In addition, the Nominating and Corporate Governance Committee considers, in light of our business, each director nominee’s experience, qualifications, attributes and skills that are identified in the biographical information contained under “Proposal 1—Election of Directors.”

The Nominating and Corporate Governance Committee considers properly submitted recommendations for candidates to the Board from shareholders. Any shareholder may submit in writing one candidate for consideration for each shareholder meeting at which directors are to be elected by not later than the 120th calendar day before the first anniversary of the date that we released our proxy statement to shareholders in connection with the previous year’s annual meeting. Any shareholder recommendations for consideration by the Nominating and Corporate Governance Committee should include the candidate’s name, biographical information, information regarding any relationships between the candidate and Bright Horizons within the last three years, a statement of recommendation of the candidate from the shareholder, a description of our shares beneficially owned by the shareholder, a description of all arrangements between the candidate and the recommending shareholder and any other person pursuant to which the candidate is being recommended, a written indication of the candidate’s willingness to serve on the Board, any other information required to be provided under securities laws and regulations, and a written indication to provide such other information as the Nominating and Corporate Governance Committee may reasonably request. Recommendations should be sent to

Stephen Dreier, Corporate Secretary, Bright Horizons Family Solutions Inc., 200 Talcott Avenue South, Watertown, MA 02472. The Nominating and Corporate Governance Committee evaluates candidates for the position of director recommended by shareholders or others in the same manner as candidates from other sources. The Nominating and Corporate Governance Committee will determine whether to interview any candidates and may seek additional information about candidates from third-party sources.

Board Leadership Structure. Under our Corporate Governance Guidelines, our Board may select a Chairman of the Board at any time, who may also be an executive officer of the Company. The Board has currently chosen to separate the roles of Chairman and Chief Executive Officer. Linda Mason, our current non-executive Chairman of the Board, co-founded Bright Horizons in 1986 and served as director and president from 1986 to 1998 and as director and Chairman of the Board since 1998. The Board believes that the separate roles of Ms. Mason and Mr. Lissy, our Chief Executive Officer, are in the best interest of Bright Horizons and its stockholders. Ms. Mason has wide-ranging, in-depth knowledge of our business arising from her many years of service to Bright Horizons and, as a result, provides effective leadership for the Board and support for Mr. Lissy and other management. The structure permits Mr. Lissy to devote his attention to leading Bright Horizons and focusing on our business strategy.

Policies Relating to Directors. It is our policy that directors, other than the Chief Executive Officer, who are also employees of the Company should volunteer to retire from the Board at the same time they retire from employment with the Company. In addition, it is our policy that directors who retire or otherwise change from the principal occupation or background association they held when they were originally invited to the Board should volunteer to resign from the Board. The Board does not believe that such directors should necessarily leave the Board, but it is our policy that there should be an opportunity for the Board to review the continued appropriateness of that director’s membership under the circumstances. We encourage each of our directors to attend the Annual Meeting of Shareholders, and in 2014, four of our directors did attend.

Code of Business Ethics and Conduct. We have adopted a written Code of Business Conduct and Ethics Applicable to all Directors, Officers and Employees and a written Code of Ethics for Senior Managers and Financial Officers, which are designed to ensure that our business is conducted with integrity. These codes cover, among other things, professional conduct, conflicts of interest, accurate recordkeeping and reporting, public communications and the protection of confidential information, as well as adherence to laws and regulations applicable to the conduct of our business. Copies of these codes can be found by clicking on “Corporate Governance” in the Investor Relations section of our website, www.brighthorizons.com. We intend to disclose any future amendments to, or waivers from, these codes of ethics for Bright Horizons executive officers within four business days of the waiver or amendment through a website posting or by filing a Current Report on Form 8-K with the SEC.

Executive Sessions. From time to time, the non-employee Directors meet in executive session without members of management present. These meetings allow non-employee Directors to discuss issues of importance to the Company, including the business and affairs of the Company as well as matters concerning management, without any member of management present. In addition, the non-management Directors regularly meet in executive session without members of management present. Executive sessions of non-management directors are chaired by Ms. Mason. In addition, the independent members of the board meet in executive session at least once per year.

Communications with Directors. Security holders and other interested parties may communicate directly with the Board, the non-management directors or the independent directors as a group, or specified individual directors by writing to such individual or group c/o Office of the Corporate Secretary, Bright Horizons Family Solutions Inc., 200 Talcott Avenue South, Watertown, Massachusetts 02472. The Secretary will forward such communications to the relevant group or individual at or prior to the next meeting of the Board.

Online Availability of Information. The current versions of our Corporate Governance Guidelines, Code of Business Conduct and Ethics Applicable to all Directors, Officers and Employees, Code of Ethics for Senior Managers and Financial Officers and charters for our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are available on our website at www.brighthorizons.com.

TRANSACTIONS WITH RELATED PERSONS

December 2014 Share Repurchase

On December 10, 2014, the Company, in connection with its secondary offering of common stock, entered into an Underwriting Agreement with Barclays Capital Inc. and, among others, certain investment funds affiliated with Bain Capital Partners, LLC, relating to the underwritten offering of 8,000,000 shares of the Company’s common stock. Pursuant to the Underwriting Agreement, the Company agreed to purchase from the Underwriter 4,500,000 shares of Common Stock being sold by certain investment funds affiliated with Bain Capital Partners, LLC to the Underwriter, at a price per share equal to the price being paid by the Underwriter to the Selling Stockholders, resulting in an aggregate purchase price of $201,645,000.

Stockholders Agreement

In connection with the consummation of our initial public offering in January 2013, we entered into an amended and restated stockholders agreement with the Sponsor and certain other investors. Our amended and restated stockholders agreement obligates the stockholders parties thereto, subject to the limited exceptions described in the amended and restated stockholders agreement, to enter into customary lock-up agreements with the underwriters in the event of underwritten public offerings of our shares of common stock.

Registration Rights Agreement

In connection with the consummation of our initial public offering, our registration rights agreement with the Sponsor and certain other stockholders was amended. The registration rights agreement, as amended, provides the Sponsor with certain demand registration rights following the expiration of any applicable lockup period in respect of the shares of our common stock held by them. In addition, if we from time to time register additional shares of common stock for sale to the public, we are required to give notice of such registration to the Sponsor and the other stockholders party to the agreement of our intention to effect such a registration, and, subject to certain limitations, the Sponsor and such holders have piggyback registration rights providing them with the right to require us to include shares of common stock held by them in such registration. We are required to bear the registration expenses, other than underwriting discounts and commissions and transfer taxes, associated with any registration of shares by the Sponsor or other holders described above.

The registration rights agreement includes customary indemnification provisions in favor of any person who is or might be deemed a controlling person within the meaning of Section 15 of the Securities Act of 1933, as amended (the “Securities Act”), or Section 20 of the Exchange Act and related parties against liabilities under the Securities Act incurred in connection with the registration of any of our debt or equity securities. These provisions provide indemnification against certain liabilities arising under the Securities Act and certain liabilities resulting from violations of other applicable laws in connection with any filing or other disclosure made by us under the securities laws relating to any such registrations. We have agreed to reimburse such persons for any legal or other expenses incurred in connection with investigating or defending any such liability, action or proceeding, except that we will not be required to indemnify any such person or reimburse related legal or other expenses if such loss or expense arises out of or is based on any untrue statement or omission made in reliance upon and in conformity with written information provided by such person.

Policies and procedures for related party transactions

We believe that we executed all of the transactions set forth above on terms no less favorable to us than we could have obtained from unaffiliated third parties. It is our intention to ensure that all future transactions between us and our officers, directors and principal stockholders and their affiliates, are approved by the Audit Committee, and are on terms no less favorable to us than those that we could obtain from unaffiliated third parties. In addition, the Company’s Code of Ethics for Senior Managers and Financial Officers states that such employees may not (i) own an interest in a company that competes or does business with the Company or (ii) participate in a joint venture, partnership or other business arrangement with the Company, in each case without the prior written approval of the Company’s Compliance Officer.

Stock Ownership Information

The following table sets forth information regarding the beneficial ownership of our common stock as of, February 27, 2015 by

•

each person or group of affiliated persons known by us to be the beneficial owner of more than 5% of our common stock;

•

each of our named executive officers and directors; and

•

all of our directors and executive officers as a group.

The percentage ownership information shown in the table below is based upon 61,653,183 shares of common stock outstanding as of February 27, 2015.

Information with respect to beneficial ownership has been furnished by each director, officer or beneficial owner of more than 5% of our common stock. We have determined beneficial ownership in accordance with the rules of the Securities and Exchange Commission. These rules generally attribute beneficial ownership of shares to persons who possess sole or shared voting or investment power with respect to such shares. The information does not necessarily indicate beneficial ownership for any other purpose. Under these rules, the number of shares of common stock deemed outstanding includes shares issuable upon exercise of options or settlement of vested restricted stock units and held by the respective person or group which may be exercised or converted within 60 days after February 27, 2015 These shares are deemed to be outstanding and beneficially owned by the person holding those options for the purpose of computing the percentage ownership of that person or entity, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person or entity.

Unless otherwise indicated below, the address for each listed director, officer and stockholder is c/o Bright Horizons Family Solutions Inc., 200 Talcott Avenue South, Watertown, Massachusetts 02472. The inclusion in the following table of those shares, however, does not constitute an admission that the named stockholder is a direct or indirect beneficial owner. Unless otherwise indicated and subject to applicable community property laws, to our knowledge, each stockholder named in the following table possesses sole voting and investment power over the shares listed, except for those jointly owned with that person’s spouse.


Name	Number of Shares (1)		Percentage
Beneficial holders of 5% or more of our outstanding coming stock:
Bain Capital Fund X, L.P. and related funds(1)		26,044,008		42.2	%
Baron Capital Group, Inc. and related funds(2)		5,524,729		9.0	%
Pennant Capital Management, LLC(3)		3,234,198		5.2	%

Directors and executive officers:
Lawrence Alleva(4)		3,411		*
Joshua Bekenstein(5)		—		*
Elizabeth J. Boland(6)		314,427		*
Roger H. Brown(7)		280,429		*
E. Townes Duncan(8)		3,111		*
Danroy T. Henry, Sr.(9)		28,628		*
Jordan Hitch(10)		—		*
David Humphrey(10)		—		*
Marguerite W. Kondracke(11)		21,347		*
Stephen H. Kramer(12)		100,336		*
Sara Lawrence-Lightfoot(13)		1,011		*
David H. Lissy(14)		955,790		1.5	%
Linda A. Mason(15)		280,429		*
Mary Ann Tocio(16)		511,052		*
All Directors, Nominees and Executive Officers as a Group (15 persons)(17)		2,340,067		3.7	%

*	Indicates less than one percent.

(1)

The shares included in the table consist of: (i) 25,743,172 shares of common stock owned by Bain Capital Fund X, L.P., whose managing partner is Bain Capital Partners X, L.P., whose managing partner is Bain Capital Investors, LLC (“BCI”), (ii) 3,415 shares of common stock owned by BCIP Associates-G, whose managing partner is BCI, (iii) 180,712 shares of common stock owned by BCIP Associates III, LLC, whose manager is BCIP Associates III, (iv) 32,808 shares of common stock owned by BCIP Associates III-B LLC, whose manager is BCIP Associates III-B, (v) 78,468 shares of common stock owned by BCIP T Associates III, LLC, whose manager is BCIP Trust Associates III and (vi) 5,433 shares of common stock owned by BCIP T Associates III-B, LLC whose managing partner is BCIP Trust Associates III-B. BCI is the managing partner of BCIP Associates III, BCIP Associates, III-B, BCIP Trust Associates III and BCIP Trust Associates III-B. As a result of the relationships described above, BCI may be deemed to share beneficial ownership of the shares held by each of Bain Capital Fund X, L.P., BCIP Associates-G, BCIP Associates III, LLC, BCIP Associates III-B, LLC, BCIP T Associates III, LLC and BCIP T Associates III-B, LLC (collectively, the “Bain Capital Entities”). The governance, investment strategy and decision-making process with respect to investments held by the Bain Capital Entities is directed by BCI’s Global Private Equity Board (“GPEB”), which is comprised of the following individuals: Steven Barnes, Joshua Bekenstein, John Connaughton, Paul Edgerley, Stephen Pagliuca, Michel Plantevin, Dwight Poler, Jonathan Zhu and Stephen Zide. By virtue of the relationships described in this footnote, GPEB may be deemed to exercise voting and dispositive power with respect to the shares held by the Bain Capital Entities. Each of the members of GPEB disclaims beneficial ownership of such shares to the extent attributed to such member solely by virtue of serving on GPEB. Each of the Bain Capital Entities has an address c/o Bain Capital Partners, LLC, 200 Clarendon Street, Boston, MA 02116.

(2)

The information regarding the Baron Entities (as defined below) is based solely on information included in the Schedule 13G filed by them with the SEC on February 17, 2015. The Baron Entities reported that BAMCO Inc. (“BAMCO”) beneficially owns 5,367,863 shares of common stock and Baron Capital Management, Inc. (“BCM”) beneficially owns 156,866 shares of common stock. BAMCO and BCM are subsidiaries of Baron Capital Group, Inc. (“BCG”). Ronald Baron owns a controlling interest in BCG. The address for BAMCO, BCM, BCG and Mr. Baron (collectively, the “Baron Entities”) is 767 Fifth Avenue, 49th Floor, New York, NY 10153.

(3)	The information regarding Pennant Capital Management, LLC is based solely on information included in the Schedule 13G filed by them with the SEC on March 16, 2015. The address for Pennant Capital Management, LLC is 1 DeForest Avenue, Suite 200, Summit, NJ 07901.

(4)	Includes 1,011 shares that can be acquired upon the settlement of vested restricted stock units.

(5)

Does not include shares of common stock held by the Bain Capital Entities. Mr. Bekenstein is a Managing Director of BCI and a member of GPEB and as a result, and by virtue of the relationships described in footnote 1 above, may be deemed to share beneficial ownership of the shares held by the Bain Capital Entities. The address for Mr. Bekenstein is c/o Bain Capital Partners, LLC, John Hancock Tower, 200 Clarendon Street, Boston, Massachusetts 02116.

(6)	Includes 170,664 shares of common stock that can be acquired upon the exercise of outstanding options.

(7)

Includes (i) 1,226 shares held by the Roger H. Brown, Jr. Trust dated August 7, 1996, (ii) 2,385 shares held by Mr. Brown, (iii) 177,103 shares held by the Linda A. Mason Trust dated August 7, 1996, (iv) 8,270 shares held by Ms. Mason, Mr. Brown’s spouse, (v) 19,482 shares that may be acquired by Mr. Brown upon the exercise of outstanding options, (vi) 69,941 shares that may be acquired by Ms. Mason, Mr. Brown’s spouse, upon the exercise of outstanding options, (vii) 1,011 shares that can be acquired upon the settlement of vested restricted stock units for Mr. Brown, and (viii) 1,011 shares that can be acquired upon the settlement of vested restricted stock units for Ms. Mason, Mr. Brown’s spouse.

(8)	Includes 2,000 shares of common stock that can be acquired upon the exercise of outstanding options and 1,011 shares that can be acquired upon the settlement of vested restricted stock units.

(9)	Includes 28,628 shares of common stock that can be acquired upon the exercise of outstanding options.

(10)	Does not include shares of common stock held by the Bain Capital Entities. Each of Messrs. Hitch and Humphrey is a Managing Director of BCI and as a result may be deemed to share beneficial ownership of

the shares held by the Bain Capital Entities. The address for Messrs. Hitch and Humphrey is c/o Bain Capital Partners, LLC, John Hancock Tower, 200 Clarendon Street, Boston, Massachusetts 02116.

(11)	Includes 10,336 shares of common stock that can be acquired upon the exercise of outstanding options and 1,011 shares that can be acquired upon the settlement of vested restricted stock units.

(12)	Includes 100,336 shares held by the Charles River View Trust dated 12/13/07.

(13)	Includes 1,011 shares that can be acquired upon the settlement of vested restricted stock units.

(14)	Includes 735,930 shares of common stock that can be acquired upon the exercise of outstanding options.

(15)

Includes (i) 177,103 shares held by the Linda A. Mason Trust dated August 7, 1996, (ii) 8,270 shares held by Ms. Mason, (iii) 1,226 shares held by the Roger H. Brown, Jr. Trust dated August 7, 1996, (iv) 2,385 shares held by Mr. Brown, Ms. Mason’s spouse, (v) 69,941 shares that may be acquired by Ms. Mason upon the exercise of outstanding options, (vi) 19,482 shares that may be acquired by Mr. Brown, Ms. Mason’s spouse, upon the exercise of outstanding options, (vii) 1,011 shares that can be acquired upon the settlement of vested restricted stock units for Ms. Mason, and (viii) 1,011 shares that can be acquired upon the settlement of vested restricted stock units for Mr. Brown, Ms. Mason’s spouse.

(16)	Includes 305,486 shares of common stock that can be acquired upon the exercise of outstanding options.

(17)	Includes 1,392,404 shares of common stock that can be acquired upon the exercise of outstanding options and 6,066 shares that can be acquired upon the settlement of vested restricted stock units.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our directors, executive officers and holders of 10% or more of our common stock to file reports of holdings and transactions in our common stock with the SEC. To facilitate compliance, we have undertaken the responsibility to prepare and file these reports on behalf of our officers and directors. Based on our records and other information, all reports were timely filed during 2014, except for a delay in reporting a sale of shares indirectly beneficially owned by Linda Mason. The failure to report this transaction on time was inadvertent and was corrected promptly upon discovery.

EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

This discussion describes our compensation philosophy, principles and practices with respect to the compensation of the below listed executive officers (referred to as our named executive officers):


David H. Lissy		Chief Executive Officer
Mary Ann Tocio		President and Chief Operating Officer
Elizabeth J. Boland		Chief Financial Officer
Danroy T. Henry		Chief Human Resources Officer
Stephen H. Kramer		Chief Development Officer

Overview of Compensation

Our named executive officers’ compensation is determined by our Compensation Committee and is reviewed annually. Our executive compensation program is designed to attract and retain high- quality leadership and incentivize our executive officers and other key employees to achieve company performance goals and strong individual performance over the short- and long-term. Our pay-for- performance approach to executive compensation places a greater emphasis on long-term equity incentive grants than on other forms of compensation, reflecting our focus on long-term value creation and serving to align the interests of our executive officers with those of our shareholders.

Fiscal 2014 Performance and Company Highlights

The Company achieved strong financial results in fiscal 2014 and successfully completed a number of operational and strategic activities during the year, and we believe that our named executive officers were instrumental in helping us achieve these results. Key aspects of our overall financial, operating and strategic performance include:

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Financial performance: For fiscal 2014, revenue grew 11%, or $134 million to $1.35 billion which was in line with our targeted revenue, and we achieved EBITDA of $238 million, which was approximately 95% of our targeted EBITDA. Adjusted EPS for 2014 was $1.45, which was approximately 95% of our targeted Adjusted EPS .

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Share repurchase program: We acquired a total of 5.0 million shares for a total of $222 million under our share repurchase program, including a 4.5 million share block trade in conjunction with the December 2014 secondary offering of shares by the Sponsor. The repurchases were financed with a combination of cash generated from operations and additional term loans incurred in December 2014 under the terms of our existing Credit Agreement, and on terms deemed favorable by our Board, including an interest rate that is proximate to the existing borrowing rate.

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New business growth and integration of 2013 multi-site acquisitions: In 2014, we added 33 new child care and early education centers, successfully integrated two multi-site acquisitions totaling 113 centers that were completed in 2013, and expanded our Back-Up and Educational Advisory services to $163 million in revenue and $33 million in revenue, respectively.

Effect of Fiscal 2014 Performance on 2014 Compensation

The primary performance considerations in evaluating the 2014 annual cash bonuses of our named executive officers were the achievement of targeted EBITDA, which for this purpose means earnings before interest, taxes, depreciation, amortization, straight line rent expense, stock compensation expense, transaction and integration costs, and targeted Adjusted EPS, which for this purpose means tax effected earnings before amortization, stock compensation expense, transaction and integration costs, divided by pro forma diluted

weighted average common shares outstanding. In addition, the strategic and tactical decisions employed by our named executive officers to achieve the EBITDA and Adjusted EPS targets were considered, along with the financial results described above and the other factors described below in our discussion of annual cash bonuses, in deciding the individual portion of each executive’s bonus. EBITDA and Adjusted EPS are non-GAAP financial measures.

Compensation Philosophy, Objectives, and Process

Our compensation philosophy centers on:

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Pay for Performance: Compensation should be tied to the achievement of financial targets and operating and strategic goals.

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Equity Ownership: A significant part of our compensation program is in the form of equity- based awards. These awards serve to align the interests of our executive officers with those of our shareholders, encourage long-term retention and incentivize long-term value creation.

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Individual Performance: Compensation should take into account and reward individual performance and contributions to our success.

Role of the Compensation Committee, Chief Executive Officer, and President. Our Compensation Committee oversees our executive compensation program and is responsible for approving the compensation paid to, and the agreements entered into with, our executive officers, including our named executive officers. This committee’s roles and responsibilities are set forth in a written charter adopted by our Board, which can be found online at http://investors.brighthorizons.com under “Corporate Governance”. Our Compensation Committee determines the base salary, cash incentive compensation, and equity compensation of our executive officers, including our named executive officers.

Our Compensation Committee applies the same general principles to the compensation-related decisions regarding all of our named executive officers. Our Chief Executive Officer, Mr. Lissy, and our President and Chief Operating Officer, Ms. Tocio, provide recommendations to our Compensation Committee with respect to compensation-related decisions for Ms. Boland and Messrs. Henry and Kramer, including base salary adjustments, target annual cash bonus awards and equity-awards, and also provide their assessment of each officer’s individual performance. Our Compensation Committee considers their recommendations as one factor when making decisions regarding the compensation of these named executive officers. Although we may decide to do so in the future, neither the Company nor our Compensation Committee currently uses a compensation consultant or benchmarking comparison data to assist in the determination in the compensation of our named executive officers or directors.

Our Board has responsibility for approving, after receiving the recommendation or approval of our Compensation Committee, equity awards granted to our executive officers in order to qualify these awards as exempt awards under Section 16 of the Securities Exchange Act of 1934, as amended.

Elements of Executive Compensation

The compensation of our named executive officers consists of a base salary, an annual cash bonus, equity awards, employee benefits that are generally made available to all salaried employees and certain other benefits, as described below. Our named executive officers are also entitled to certain compensation and benefits upon a qualifying termination of employment pursuant to severance agreements.

Base Salary. Base salaries for our named executive officers are determined based on the scope of each officer’s responsibilities along with his or her respective experience and contributions to the Company. It is our philosophy to maintain a conservative level of base cash compensation, with greater emphasis over time placed on long-term incentive compensation. Base salaries for our named executive officers are reviewed annually by

our Compensation Committee. When reviewing base salaries for increase, our Compensation Committee takes into account such factors as each officer’s experience and individual performance, the Company’s performance as a whole and general industry conditions, but does not assign any specific weighting to any factor. Consistent with the philosophy of maintaining a conservative level of base compensation, we have generally awarded limited base salary increases on an annual basis. For 2014, after we prepared the Company’s annual budget, our Compensation Committee decided to approve an increase of 3% in the base salaries for Mr. Lissy and Ms. Tocio, in line with the company-wide targeted salary increase of 3% proposed by management in our operating budget. Our Compensation Committee decided to approve increases to base salaries of 13% for Ms. Boland and 11% for Mr. Henry in recognition of their contributions to the Company. Our Compensation Committee decided to approve a base salary of $275,000 for Mr. Kramer in connection with his promotion to Chief Development Officer in January 2014, which was in increase of 22% from his prior salary.

Annual Cash Bonus. Our annual cash bonus program was established to promote and reward the achievement of key strategic and business goals as well as individual performance and is designed to motivate our executive officers to meet or exceed annual performance goals. Each named executive officer receives a target award opportunity under this program that is expressed as a percentage of the executive’s base salary. Each executive’s target is established by our Compensation Committee based on the individual’s scope of responsibilities and his or her potential contributions to the achievement of the Company’s strategic goals.

For fiscal 2014, Mr. Lissy and Ms. Tocio each had a target cash incentive award of 120% of base salary, Ms. Boland had a target cash incentive award of 60% of base salary, Mr. Henry had a target cash incentive award of 50% of base salary, and Mr. Kramer had a target cash incentive award of 100% of salary. For fiscal 2014, 50% of the cash incentive awards granted to our named executive officers was based on the achievement of pre-established corporate goals and 50% was based on a qualitative assessment of each individual’s performance with primary emphasis on the achievement of individual goals communicated to the executive at the beginning of the fiscal year. These individual goals varied across our named executive officers but generally encompassed:

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Leadership skills and strategic vision

•

Strategic planning and execution

•

Culture/brand building and integration of acquisitions

•

Employee, parent and client satisfaction

•

Innovation and change management

•

Succession planning and employee development

•

External relations, including awards and recognition, and civic involvement

•

Board and committee relations

•

Capital markets management and shareholder relations

•

Demonstrated ethics and values in line with those of our company

The portion of each named executive officer’s bonus that is based on corporate performance is subject to an adjustment that could increase or decrease the amount earned proportionately based on whether or not the Company’s performance for the year was above or below the target and by how much. The maximum amount of the increase or decrease resulting from the adjustment is not capped. Our Compensation Committee retains further discretion to adjust the amount that each named executive officer earns with respect to his or her bonus based on such factors as it deems appropriate.

Consistent with previous years, our Compensation Committee chose EBITDA as one of the corporate performance metrics for our annual cash bonus program, and added Adjusted EPS as an additional metric for fiscal 2014. Our Compensation Committee selected EBITDA because it believes that it reflects the Company’s

cash flow generation on a consistent basis and as such is also a strong overall indicator of the Company’s operational performance. Our Compensation Committee added Adjusted EPS as a corporate performance metric because it believes that it reflects the Company’s overall operating and financial achievement, as adjusted for the impact of non-recurring transactions. At the beginning of our fiscal year, our Compensation Committee established target corporate performance goals that provide our named executive officers with a bonus incentive based upon their achievement. The actual EBITDA of $238 million represented an achievement of 95% of the EBITDA goal and the actual Adjusted EPS of $1.45 represented an achievement of 95% of the Adjusted EPS goal.

During the first quarter of 2015, our Compensation Committee evaluated the performance of each of our named executive officers during the 2015 fiscal year and determined that each named executive officer earned 100% of the portion of his or her annual bonus based on individual performance. In this evaluation, our Compensation Committee considered the various individual and business factors outlined above, including strategic planning and execution, strategic vision and leadership skills, customer satisfaction, diversity and stability of growth, culture and employee satisfaction, innovation, communication skills, board of directors relations and presentations, capital markets management and shareholder relations, ethics and values and succession planning. In addition, our Compensation Committee also considered the Company’s overall financial performance in 2014, as measured by EBITDA and Adjusted EPS, and the other financial performance metrics highlighted above under Fiscal 2014 Performance and Company Highlights, together with feedback from internal employee and external client surveys. After considering these factors, our Compensation Committee determined that each named executive officer earned 83% of the portion of his or her annual bonus based on the corporate performance achieved. As a result, our Compensation Committee determined, taking into account the achievement of individual and Company performance goals, that each of the named executive officers would receive 91% of their total target annual bonus for 2014 under our annual cash bonus plan.

Equity Awards. The largest single component of our executive compensation program is the periodic granting of equity-based awards, historically in the form of stock options with multi-year vesting conditions. We consider stock options to be performance-based because no value is created unless the value of our common stock appreciates after grant and the same value is created for our shareholders. These equity-based awards have served both to align the interests of our named executive officers with those of our shareholders and to encourage retention and promote a longer-term, strategic view.

In January 2014, our Compensation Committee approved an equity compensation program for our named executive officers, which permits our named executive officers to choose to receive their annual equity award under our 2012 Omnibus Long-Term Incentive Plan in the form of non-qualified stock options, purchased restricted stock, or a combination of the two. Under the program, the number of shares of our common stock subject to each stock option award will be determined by the Compensation Committee based on the target incentive compensation value for each executive and the Black-Scholes value of an option at the time of the grant. The number of shares of purchased restricted stock to be issued will equal 120% of the executive’s target incentive compensation value divided by 50% of the fair market value of a share of Company common stock, as measured by the closing price of our common stock on the grant date. An executive who elects to receive purchased restricted stock will be required to pay a purchase price on the date of grant equal to 50% of the fair market value of the shares of our common stock under the award. In the event the executive’s employment with the Company terminates prior to the vesting date, in certain circumstances, the Company may, but is not obligated to, repurchase the shares subject to the award at a price equal to the lesser of cost or fair market value. Stock options granted under this program will vest 60% on the third anniversary of the grant date, an additional 20% on the fourth anniversary of the grant date and the final 20% on the fifth anniversary of the grant date. Purchased restricted stock awards will vest 100% on the earliest of the third anniversary of the grant date, a change of control of the Company, and the termination of the participant’s employment by reason of death or disability.

In January 2014, our Compensation Committee granted equity awards under this equity compensation program with aggregate targeted values of 200% of annual salary for Mr. Lissy and Ms. Tocio, 150% of annual

salary for Ms. Boland, and 125% of annual salary for Mr. Henry. In connection with his promotion to Chief Development Officer, Mr. Kramer was granted an equity award in January 2014 with a targeted value of 135% of annual salary, and with an additional targeted value of 265% of annual salary associated with his promotion. Consistent with our general approach to executive compensation, the award to Mr. Kramer was reflective of his position and seniority within the Company, including his expanded responsibilities overseeing the Company’s organic growth and acquisitions teams. Information about the number of stock options and/or restricted shares granted to our named executive officers in 2014 is included in the “Grant of Plan-Based Awards” table below.

Benefits and Perquisites. We provide modest benefits and perquisites for our named executive officers. Most of these benefits, such as matching contributions under our tax-qualified retirement plan (the “401(k) Plan”) and basic health and welfare benefit coverage, are available to all eligible employees. Employees’ elective deferrals are immediately vested and non-forfeitable in the 401(k) Plan. Each plan year, we may, but are not required to, make discretionary matching contributions and other employer contributions on behalf of eligible employees. For 2014, we matched 25% of each participant’s contributions, up to 8% of the participant’s compensation, provided that the participant had at least one year of service with us. Employer matching contributions and other employer contributions begin to vest 20% per year after two years of vesting service with us and fully vest after six years of vesting service with us.

Effective October 2014, we adopted a nonqualified deferred compensation plan for our executive officers and other key employees that allows participants to defer certain elements of their compensation and receive earnings in these deferred amounts. We provide for discretionary matching contributions under this plan, which are currently made at the same rate as our matching contribution under the 401(k) Plan, up to $2,500 per year. Matching contributions vest on the same schedule as under the 401(k) Plan. In addition to these benefits, we provide supplemental benefits and programs to certain named executive officers as described below. The costs associated with these benefits are included in the Summary Compensation Table.

•

An annual car allowance—provided to Mr. Lissy and Ms. Tocio.

•

Company-paid supplemental disability insurance—provided to Mr. Lissy, Ms. Tocio and Ms. Boland.

•

Matching contribution under our deferred compensation plan—provided to Ms. Boland, and Mr. Kramer in connection with their election to participate

Severance Agreements. All our named executive officers have severance agreements with the Company, which include severance, change of control, and restrictive covenant provisions. We believe that change of control arrangements provide our executives with security that will likely reduce any reluctance they may have to pursue a change of control transaction that could be in the best interests of our stockholders. We also believe that reasonable severance and change of control benefits are necessary in order to attract and retain high-quality executive officers.

Risk Assessment. The Company does not believe that the risks arising from our compensation practices are reasonably likely to have a material adverse effect on the Company.

Tax and Accounting Considerations

Section 162(m) of the Internal Revenue Code of 1986, as amended (“Section 162(m)”) disallows a tax deduction for any publicly held corporation for individual compensation exceeding $1 million in any taxable year for a company’s chief executive officer and the three other most highly compensated executive officers, other than its chief financial officer, excluding qualifying performance-based compensation and certain compensation paid under plans that were adopted prior to our initial public offering in 2013. Our Compensation Committee may consider the impact of Section 162(m), to the extent it is expected to apply, as one of the factors to be considered when establishing and administering our executive compensation programs. Our Compensation Committee may, in its judgment, authorize compensation payments that do not comply with the performance-based exemption, in whole or in part, under Section 162(m) or that may otherwise be limited as to tax deductibility.

Our Compensation Committee regularly considers the accounting implications of significant compensation decisions, especially in connection with decisions that relate to our equity incentive award plans and programs. As accounting standards change, we may revise certain programs to appropriately align accounting expenses of our equity awards with our overall executive compensation philosophy and objectives.

2014 Summary Compensation Table

The following table sets forth information about certain compensation awarded or paid to our named executive officers for the fiscal years specified below.


Name and Principal Position	Year		Salary ($)(1)		Bonus ($)(2)		Stock Awards ($)(3)		Option Awards ($)(4)		Non-Equity Incentive Plan Compensation ($)(5)		All Other ($)(6)		Total ($)
David H. Lissy		2014		362,547		217,772		870,960		—		180,277		13,888		1,645,444
Chief Executive Officer		2013		352,382		211,429		—		875,900		211,429		13,888		1,665,028
		2012		342,118		205,271		—		4,529,409		205,271		13,763		5,295,832

Mary Ann Tocio		2014		362,547		217,772		870,960		—		180,277		15,164		1,646,720
President and Chief Operating Officer		2013		352,382		211,429		—		875,900		211,429		14,233		1,665,373
President and Chief Operating Officer		2012		342,118		205,271		—		4,861,590		205,271		16,979		5,631,229

Elizabeth J. Boland		2014		293,711		88,500		372,154		99,139		73,262		7,761		934,526
Chief Financial Officer		2013		261,480		78,444		—		437,950		78,444		5,293		861,611
		2012		253,864		76,159		—		2,125,790		76,159		4,536		2,536,508

Danroy T. Henry, Sr.		2014		273,919		68,750		—		256,595		56,913		3,727		659,904
Chief Human Resources Officer		2013		246,891		49,378		—		306,565		49,378		2,466		656,691
Chief Human Resources Officer		2012		239,700		47,940		—		1,470,479		47,940		1,548		1,809,619

Stephen H. Kramer		2014		272,694		137,500		1,320,956		—		113,826		4,582		1,849,558
Chief Development Officer

(1)	Salary amounts are not reduced to reflect amounts contributed by the named executive officer to the 401(k) Plan or to our nonqualified deferred compensation plan (as defined below).

(2)

For fiscal 2014 and 2013, amounts shown reflect the amount earned by the named executive officer that was earned based on individual performance as described in “—Elements of Executive Compensation—Annual Cash Bonuses” above. For fiscal 2012, amounts shown reflect the amount paid to the named executive officer in respect of the portion of his or her annual bonus for fiscal year 2012 that was earned based on individual performance.

(3)	Amounts reflect the grant date fair value of stock awarded determined in accordance with ASC Topic 718.

(4)

For fiscal 2014 and 2013, amounts shown reflect the grant date fair value of options awarded in January 2014 and January 2013 determined in accordance with ASC Topic 718. For fiscal 2012, amounts shown reflect (a) the incremental fair value of options awarded in connection with an option exchange program implemented during fiscal 2012, determined as of the modification date of such options in accordance with ASC Topic 718 (Mr. Lissy, $3,346,280, Ms. Tocio, $3,143,742, Ms. Boland, $1,610,617, and Mr. Henry, $851,981) and (b) the fair value of other options awarded determined in accordance with ASC Topic 718 consisting of (i) fully vested option awards granted on April 4, 2012 in connection with the expiration of certain fully-vested continuation option awards granted at the time of our going private transaction and held by our named executive officers (Mr. Lissy, $760,489, Ms. Tocio, $1,295,208, Ms. Boland, $174,999, and Mr. Henry, $0) and (ii) an additional grant made on May 2, 2012 in connection with our determination to make additional grants of available awards under our then existing equity incentive plan (Mr. Lissy, $422,640, Ms. Tocio, $422,640, Ms. Boland, $340,174, and Mr. Henry, $618,498). Assumptions used in the

calculation of these amounts are included in note 12 to our audited consolidated financial statements included in our 2014 Annual Report on Form 10-K. These amounts do not reflect actual amounts that may be paid to or realized by our named executive officers and exclude the effect of estimated forfeitures.

(5)

Amounts shown reflect the cash amount paid to the named executive officer in respect of the portion of his or her annual bonus for each fiscal year that was earned based on Company performance, which for fiscal 2014 and 2013 is described in “—Elements of Executive Compensation—Annual Cash Bonuses” above.

(6)

Amounts shown include the following: matching contributions made to the 401(k) Plan on behalf of each named executive officer; matching contributions made to our nonqualified deferred compensation plan made on behalf of Ms. Boland and Mr. Kramer; a car allowance payment made to Mr. Lissy and Ms. Tocio; and supplemental disability insurance premiums paid by the Company on behalf of Mr. Lissy, Ms. Tocio and Ms. Boland.


Name	Year		401(k) Match ($)		Deferred Compensation Plan Match ($)		Car Allowance ($)		Supplemental Medical and Disability Insurance ($)		Total ($)
David H. Lissy		2014		4,375		—		7,200		2,313		13,888
		2013		4,375		—		7,200		2,313		13,888
		2012		4,250		—		7,200		2,313		13,763

Mary Ann Tocio		2014		5,750		—		7,200		2,214		15,164
		2013		4,400		—		7,200		2,633		14,233
		2012		5,625		—		7,200		4,154		16,979

Elizabeth J. Boland		2014		3,801		2,500		—		1,460		7,761
		2013		3,833		—		—		1,460		5,923
		2012		3,076		—		—		1,460		4,536

Danroy T. Henry, Sr.		2014		3,727		—		—		—		3,727
		2013		2,468		—		—		—		2,468
		2012		1,548		—		—		—		1,548

Stephen H. Kramer		2014		2,082		2,500		—		—		4,582

Grants of Plan-Based Awards

The following table sets forth information regarding grants of plan-based awards in 2014.


			Estimated future payouts under non-equity incentive plan awards						All other stock awards: Number of Shares of Stock (#)(1)		All other option awards: Number of securities underlying options (#)(2)		Exercise or base price of option awards ($/Sh)(3)		Grant date fair value of stock and option awards ($)(4)
Name	Grant date		Threshold ($)		Target ($)		Maximum ($)						Exercise or base price of option awards ($/Sh)(3)
David H. Lissy		1/1/2014		—	$	435,544		—
		1/6/2014								48,000		—		—	$	870,960

Mary Ann Tocio		1/1/2014		—	$	435,544		—
		1/6/2014								48,000		—		—	$	870,960

Elizabeth J. Boland		1/1/2014		—	$	177,000		—
		1/6/2014								20,510		8,925	$	36.29	$	471,293

Danroy T. Henry		1/1/2014		—	$	137,500		—
		1/6/2014								—		23,100	$	36.29	$	256,595

Stephen H. Kramer		1/1/2014		—	$	275,000		—
		1/6/2014								72,800		—		—	$	1,320,956

(1)

The amounts in the table reflect restricted stock awards. Restricted stock awards were granted under our 2012 Omnibus Long-Term Incentive Plan and vest on the third anniversary of the date of grant. The purchase price of each restricted stock award is equal to 50% of the fair market value of a share of our common stock on the grant date. Executives who elected to receive purchased restricted stock paid the purchase price on the grant date, which was $870,960 in the case of Mr. Lissy and Ms. Tocio, $372,154 in the case of Ms. Boland, and $1,320,956 in the case of Mr. Kramer.

(2)

The amounts in the table reflect options to purchase shares of our common stock. Stock options were granted under our 2012 Omnibus Long-Term Incentive Plan, vest 60% on the third anniversary of the date of grant, and 20% on each of the fourth and fifth anniversary of the date of grant, and have a term of seven years.

(3)	The exercise price of each stock option is equal to the fair market value of a share of our common stock on the grant date.

(4)

Amounts shown reflect the total dollar value of the stock and option awards as valued under ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note 12, “Stockholders’ Equity and Stock-Based Compensation”, to our audited Consolidated Financial Statements included in our 2014 Annual Report on Form 10-K. These amounts do not reflect actual amounts that may be paid to or realized by our named executive officers and exclude the effect of estimated forfeitures.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth information regarding equity awards held by our named executive officers as of December 31, 2014.


	Option Awards								Stock Awards
Name	Number of Securities Underlying Unexercised Options # Exercisable		Number of Securities Underlying Unexercised Options # Unexercisable		Option Exercise Price (1)		Option Expiration Date (2)		Number of Shares or Units of Stock that Have Not Vested (#) (3)		Market Value of Shares or Units of Stock that Have Not Vested ($) (4)
David H. Lissy		69,426		—	$	12.00		9/2/2018
		534,970		—	$	14.54		9/2/2018
		12,862		—	$	12.00		4/4/2022
		99,110		—	$	14.54		4/4/2022
		2,246		3,372	$	12.00		5/2/2022
		17,316		25,974	$	14.54		5/2/2022
		—		100,000	$	22.00		1/25/2020
										48,000		2,256,480

Mary Ann Tocio		65,222		—	$	12.00		9/2/2018
		106,455		—	$	14.54		9/2/2018
		21,905		—	$	12.00		4/4/2022
		168,797		—	$	14.54		4/4/2022
		2,246		3,372	$	12.00		5/2/2022
		17,316		25,974	$	14.54		5/2/2022
		—		100,000	$	22.00		1/25/2020
										48,000		2,256,480

Elizabeth J. Boland		4,000		—	$	12.00		9/2/2018
		108,490		—	$	14.54		9/2/2018
		4,412		—	$	12.00		4/1/2021
		33,998		—	$	14.54		4/1/2021
		2,959		—	$	12.00		4/4/2022
		22,806		—	$	14.54		4/4/2022
		1,808		2,712	$	12.00		5/2/2022
		13,936		20,906	$	14.54		5/2/2022
				50,000	$	22.00		1/25/2020
				8,925	$	36.29		1/6/2021
										20,510		964,175

Danroy T. Henry		3,288		4,932	$	12.00		5/2/2022
		25,340		38,010	$	14.54		5/2/2022
		—		35,000	$	22.00		1/25/2020
		—		23,100	$	36.29		1/6/2021
										—		—

Stephen H. Kramer		—		5,426	$	12.00		4/1/2021
		—		41,812	$	14.54		4/1/2021
		—		40,000	$	22.00		1/25/2020
										72,800		3,422,328

(1)

The exercise price of each stock option awarded prior to our initial public offering on January 25, 2013 is set at or above the fair market value of a share of our common stock on the grant date as determined by our Board, based in part on an independent third-party valuation report. The exercise price of stock options awarded on January 25, 2013 was the per share offering price in our initial public offering. The exercise price of stock options awarded subsequent to January 25, 2013 is the fair market value of our common stock on the date of award.

(2)	Stock options awarded prior to January 25, 2013 have a ten-year term and stock options awarded on or after January 25, 2013 have a seven-year term.

(3)	The purchase price of restricted stock awards is equal to 50% of the fair market value of our common stock on the date of award, or $18.15 per share for restricted stock awards granted on January 6, 2014.

(4)	The market value of stock awards that have not vested is equal to the closing price of our common stock on December 31, 2014, or $47.01 per share.

Option Exercises and Stock Vested

The following table sets forth information regarding stock options that were exercised by our named executive officers during fiscal 2014. There were no amounts to be reported by any of our named executive officers related to stock awards vesting in 2014.


	Option awards
Name	Number of securities acquired on exercise (#) (1)		Value realized on exercise ($)(2)
David H. Lissy		—		—
Mary Ann Tocio		371,135		10,029,633
Elizabeth J. Boland		115,002		3,100,880
Danroy T. Henry, Sr		45,402		1,087,832
Stephen H. Kramer		95,230		2,516,553

(1)	Each stock option was exercisable for one share of our common stock.

(2)	Represents the difference between the aggregate exercise price of the stock options and the fair market value of these shares at the time of exercise.

Nonqualified Deferred Compensation

Commencing October 1, 2014, we also offer a non-qualified supplemental retirement plan (the “NQDC Plan”) to a select group of management or highly compensated employees as defined by the Employee Retirement Income and Security Act of 1974, as amended, including our named executive officers. Participants can defer up to 50% of their eligible compensation (including base salary, bonus, and performance-based compensation) under the NQDC Plan. The Company also makes matching contributions, which for 2014 was 25% of a participant’s elective deferral, up to $2,500. Participants are fully vested in their elective deferrals, and Company matching contributions begin to vest 20% per year after two years of vesting service with us and fully vest after six years of vesting service with us. Aggregate earnings are determined based on the performance of the underlying investments selected by the individual participant. Participants can elect to receive distributions of their elective deferrals during or following employment and in a lump sum or in installment payments and may only take distributions of Company contributions following a separation from service with the form of payment selected by the participant. The following table sets forth certain information with respect to the NQDC Plan as of December 31, 2014 for our named executive officers who elected to participate in the plan:


Name	Executive Contributions in 2014 ($) (1)		Company Contributions in 2014 ($) (1)		Aggregate Earnings in last FY ($)		Aggregate Withdrawals/ Distributions ($)		Aggregate Balance at 12/31/2014 ($)
Elizabeth J. Boland		14,183		2,500		243		—		16,926

Stephen Kramer		15,865		2,500		230		—		18,596

(1)

Contributions are reported as compensation in the Summary Compensation Table consisting of (i) deferral of eligible compensation included in “Salary” (Ms. Boland, $14,183 and Mr. Kramer, $15,865) and (ii) matching contribution from the Company included in “All Other Compensation” (Ms. Boland, $2,500 and Mr. Kramer, $2,500).

Potential Payments Upon Termination or Change-in-Control

The following summaries and tables describe and quantify the potential payments and benefits that would be provided to each of our named executive officers if a termination of employment or a change in control of the Company had occurred at the end of fiscal 2013 under our compensation plans and agreements.

Severance Agreements

The Company has entered into a severance agreements with each of Mr. Lissy, Ms. Tocio, Ms. Boland, Mr. Henry, and Mr. Kramer that provide for certain payments and benefits upon a qualifying termination of the executive’s employment and/or a change of control.

Termination of Employment Without Cause or for Good Reason Within 24 Months Following a Change of Control (the “Protection Period”). If within 24 months after a change of control the executive’s employment is terminated by the Company for any reason other than for cause or death or disability or the executive terminates his or her employment for good reason (as such terms are defined in the respective agreements), the executive will be entitled to receive, in each case, (a) any accrued but unpaid base salary as of termination and a prorated portion of any bonus payable for the fiscal year in which the termination occurs, and (b) subject to the executive not breaching the non- competition, non-solicitation and non-hire provisions contained in the executive’s agreement, monthly severance pay for 24 months (or until such earlier date as the executive secures other employment) equal to 1/24th of the executive’s total base salary and cash bonus compensation for the prior two years of the executive’s employment. If the executive elects, in accordance with applicable federal law, to continue his or her participation in the Company’s health plans following termination of employment, the Company will pay the premiums for such participation for 24 months (or until such earlier date as the executive secures other employment). If the executive’s continued participation in the Company’s group health plans is not possible under the terms of those plans, the Company will instead arrange to provide the executive and his or her dependents substantially similar benefits upon comparable terms or pay the executive an amount in cash equal to the full cash value of such continued benefits. The executive’s right to receive severance pay and benefits is subject to his or her execution of an effective release of claims in favor of the Company.

Termination of Employment Without Cause or for Good Reason Outside of the Protection Period. If the Company terminates the executive’s employment without cause or the executive resigns for good reason, in either case outside of the 24-month period following a change of control, in addition to any accrued but unpaid base salary and other accrued benefits then due to the executive as of termination, the executive will be entitled to receive bi-weekly severance payments for 18 months in the case of Mr. Lissy and Ms. Tocio and for one year in the case of Ms. Boland, Mr. Henry, and Mr. Kramer at his or her then-base salary rate and a prorated portion of any bonus payable for the fiscal year in which the termination occurs. The executive’s right to receive severance pay and benefits is subject to his or her execution of an effective release of claims in favor of the Company.

Termination of Employment Due to Death or Disability. If the executive’s employment terminates due to death or due to the executive becoming disabled, the executive will be entitled to receive accrued but unpaid base salary and other accrued benefits then due to the executive as of termination and a prorated portion of any bonus payable for the fiscal year in which the termination occurs. The executive’s right to receive severance pay and benefits is subject to his or her execution of an effective release of claims in favor of the Company.

Other Termination of Employment. If the executive’s employment is terminated by the Company for cause or the executive voluntarily resigns without good reason, the executive will only be entitled to receive accrued but unpaid base salary and any other accrued benefits then due to the executive as of termination.

Change of Control. Pursuant to the severance agreements, immediately prior to a change of control, all unvested options then held by the executive will vest in full.

Restrictive Covenants. Under the terms of their respective severance agreements, each of our named executive officers has agreed to confidentiality obligations during and after employment and to non-competition, non-solicitation, and non-hire obligations for up to twenty-four (24) months following a termination of his or her employment by the Company without cause or a good reason resignation by the executive.

The following tables summarize the payments that would have been made to our named executive officers upon the occurrence of a qualifying termination of employment or change of control, assuming that each named executive officer’s termination of employment with our Company or a change of control of the Company occurred on December 31, 2014 (the last business day of our fiscal year). In the case of a termination of employment by the Company without cause or by the executive for good reason, severance amounts and benefits have been calculated assuming that the termination occurred within and outside the 24-month Protection Period described above. If a termination of employment had occurred on this date, severance payments and benefits would have been determined under the executive officer’s severance agreement, as in effect on such date and as described above. Amounts shown do not include (i) accrued but unpaid salary or bonus and vested benefits and (ii) other benefits earned or accrued by the named executive officer during his or her employment that are available to all salaried employees and that do not discriminate in scope, terms or operations in favor of executive officers.


	Termination of Employment Without Cause/ for Good Reason and Change of Control								Termination of Employment Without Cause/for Good Reason and No Change of Control				Termination of Employment Due to Death or Disability		Change of Control
Name	Pro- Rata Bonus ($)		Salary and Bonus Continuation ($)		Medical Benefits Continuation ($)		Accelerated Vesting of Equity Awards ($)(1)		Pro- Rata Bonus ($)		Salary Continuation ($)		Pro-Rata Bonus ($)		Accelerated Vesting of Equity Awards ($)(1)
David H. Lissy		398,049		1,521,191		63,381		4,847,950		398,049		543,820		398,049		4,847,950
Mary Ann Tocio		398,049		1,521,191		63,381		4,847,950		398,049		543,820		398,049		4,847,950
Elizabeth J. Boland		161,762		910,945		29,747		2,711,962		161,762		293,711		161,762		2,711,962
Danroy T. Henry		125,663		799,164		42,672		2,357,167		125,663		273,919		125,663		2,357,167
Stephen H. Kramer		251,326		1,048,040		63,381		4,649,372		251,326		272,694		251,326		4,649,372

(1)

Calculated by multiplying the number of unvested stock option awards and restricted stock awards subject to acceleration upon termination without cause or resignation for good reason or upon a change of control by the difference between the exercise price of the stock options and $47.01, which was the closing stock price on December 31, 2014.

Report of the Compensation Committee

The Compensation Committee has reviewed and discussed with management the foregoing Compensation Discussion and Analysis. Based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement.

Compensation Committee

Joshua Bekenstein, Chair

Jordan Hitch

David Humphrey

PROPOSAL 2

ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION

The Compensation Discussion and Analysis beginning on page 17 of this Proxy Statement describes our executive compensation program and the compensation of our named executive officers for fiscal 2014. The Board is asking shareholders to cast a non-binding, advisory vote indicating their approval of that compensation by voting FOR the following resolution:

“RESOLVED, that the shareholders of Bright Horizons Family Solutions Inc. APPROVE, on an advisory basis, the compensation paid to its named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and narrative discussion.”

As described in detail in the Compensation Discussion and Analysis, we have a total compensation approach focused on performance-based incentive compensation that seeks to:

•

tie compensation to the achievement of company performance goals;

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reward individual performance and contribution to our success over the short and long term; and

•

align the interests of our executive officers with those of our shareholders through delivering a significant part of our compensation program in the form of equity-based awards.

We believe Bright Horizons’ performance demonstrates the effectiveness of our compensation program.

The Board is asking shareholders to support this proposal. Although the vote we are asking you to cast is non-binding, the Compensation Committee and the Board value the views of our shareholders as expressed in their votes. The Board and Compensation Committee will consider the outcome of the vote when determining future compensation arrangements for our named executive officers.

Your Board of Directors recommends a vote FOR Proposal 2, Advisory Vote on Named Executive Officer Compensation.

PROPOSAL 3

ADVISORY VOTE ON FREQUENCY OF NAMED EXECUTIVE OFFICER COMPENSATION ADVISORY VOTES

In Proposal 2, we are asking shareholders to cast an advisory vote on the compensation paid to Bright Horizons’ named executive officers. That advisory vote is referred to as a “say-on-pay” vote. In this Proposal 3, we are asking shareholders to cast a non-binding advisory vote on how frequently we should have say-on-pay votes in the future. Shareholders may vote whether to hold say-on-pay votes every one, two or three years; shareholders also have the option to abstain from voting on this matter. We will consider the interval selected by the highest number of votes cast to be the recommendation of the shareholders.

The Board believes at this time that say-on-pay votes should be held annually. Although this advisory vote on frequency is not binding on Bright Horizons’ Board, the Board values shareholder views as to what is an appropriate frequency for advisory votes on executive compensation, and welcomes the shareholders’ recommendation on this question.

Your Board of Directors recommends that shareholders vote FOR the one-year option in Proposal 3 as the frequency for the Advisory Vote on Named Executive Officer Compensation.

AUDIT COMMITTEE MATTERS

Audit Committee Report

We operate in accordance with a written charter adopted by the Board and reviewed annually by the Audit Committee, a copy of which is available on our website, www.brighthorizons.com, under the investor relations section. We are responsible for overseeing the quality and integrity of Bright Horizons’ accounting, auditing and financial reporting practices. In accordance with the rules of the Securities and Exchange Commission (“SEC”) and the New York Stock Exchange (the “NYSE”), the Audit Committee is composed entirely of members who are independent, as defined by the listing standards of the NYSE. Further, the Board has determined that one of our members (Mr. Alleva) is an audit committee financial expert as defined by the rules of the SEC.

The Audit Committee met nine times during fiscal 2014 with Bright Horizons’ management and Deloitte & Touche LLP (“Deloitte”), Bright Horizons’ independent registered public accounting firm, including, but not limited to, meetings held to review and discuss the annual audited and quarterly financial statements and the Company’s earnings press releases.

We believe that we fully discharged our oversight responsibilities as described in our audit charter, including with respect to the audit process. We received the written disclosures and the letter from Deloitte pursuant to Rule 3526, Communication with Audit Committees Concerning Independence, of the Public Company Accounting Oversight Board (“PCAOB”) concerning any relationships between Deloitte and Bright Horizons and the potential effects of any disclosed relationships on Deloitte’s independence and discussed with Deloitte its independence. We discussed with management, the internal auditors and Deloitte, Bright Horizons’ matters including internal control over financial reporting and the internal audit function’s organization, responsibilities, budget and staffing. We reviewed with both Deloitte and our internal auditors their audit plans, audit scope, identification of audit risks and the results of their audit efforts.

We discussed and reviewed with Deloitte their communications required by the Standards of the PCAOB (United States), as described in PCAOB AU Section 380, “Communication with Audit Committees,” and, with and without management present, discussed and reviewed the results of Deloitte’s examination of Bright Horizons’ financial statements. We also discussed the results of the internal audit examinations with and without management present.

Audit and Other Fees

The aggregate fees that Bright Horizons paid for professional services rendered by Deloitte for the fiscal year ended December 31, 2014 (fiscal 2014) and the fiscal year ended December 31, 2013 (fiscal 2013) were:


	2014		2013
Audit	$	2,141,555	$	1,759,845
Audit Related		—		235,876
Tax		98,660		202,404

Total	$	2,240,215	$	2,198,125

•

Audit fees were for professional services rendered for the audits of Bright Horizons’ consolidated financial statements including reviews of all associated quarterly financial statements and assistance with review of documents filed with the SEC with respect to fiscal 2014 and fiscal 2013.

•

Audit related fees were for services related to due diligence associated with business combinations the Company completed in 2013.

•

Tax fees were for services related to tax planning and responses to audit inquiries.

We pre-approve all audit services and all permitted non-audit services by Deloitte, including engagement fees and terms.

Our policies prohibit Bright Horizons from engaging Deloitte to provide any services relating to bookkeeping or other services related to accounting records or financial statements, financial information system design and implementation, appraisal or valuation services, fairness opinions or contribution-in-kind reports, actuarial services, internal audit outsourcing, any management function, legal services or expert services not related to the audit, broker-dealer, investment adviser, or investment banking services or human resource consulting. In addition, we evaluate whether Bright Horizons’ use of Deloitte for permitted non-audit services is compatible with maintaining Deloitte’s independence. We concluded that Deloitte’s provision of non-audit services, all of which we approved in advance, was compatible with its independence.

We reviewed the audited consolidated financial statements of Bright Horizons as of December 31, 2014 and for fiscal 2014 with management and Deloitte. Management has the responsibility for the preparation of Bright Horizons’ financial statements, and Deloitte has the responsibility for the audit of those statements.

Based on these reviews and discussions with management and Deloitte, we recommended to the Board that Bright Horizons’ audited financial statements be included in its Annual Report on Form 10-K for fiscal 2014 for filing with the SEC. We have also reviewed and evaluated the performance of Deloitte in 2014, and as a result have selected Deloitte as the independent registered public accounting firm for fiscal 2015, subject to ratification by Bright Horizons’ shareholders.

Audit Committee

Lawrence M. Alleva, Chair

E. Townes Duncan

Marguerite Kondracke

PROPOSAL 4

RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of our Board has appointed Deloitte & Touche LLP (“Deloitte”) as our independent registered public accounting firm for the fiscal year ending December 31, 2015. We are asking shareholders to ratify this appointment. Representatives of Deloitte will attend the Annual Meeting, where they will have the opportunity to make a statement if they wish to do so and will be available to answer questions from the shareholders.

Your Board of Directors unanimously recommends a vote FOR Proposal 4, Ratification of Appointment of Independent Registered Public Accounting Firm.

VOTING REQUIREMENTS AND PROXIES

The affirmative vote of the holders of a plurality of votes properly cast by the shareholders entitled to vote at the Annual Meeting is required for the election of directors. All other proposals require the approval by holders of a majority of votes properly cast by the shareholders entitled to vote at the Annual Meeting.

If you vote your shares by mail, telephone or Internet, your shares will be voted in accordance with your directions. If you do not indicate specific choices when you vote by mail, telephone or Internet, your shares will be voted for the election of the director nominees and for the ratification of the appointment of the independent registered public accounting firm. The persons named as proxies will also be able to vote your shares at postponed or adjourned meetings. If any nominee should become unavailable, your shares will be voted for another nominee selected by the Board or for only the remaining nominees. Brokers are not permitted to vote your shares on any matter other than Proposal 4 (Ratification of the Independent Registered Public Accounting Firm). If your shares are held in the name of a broker or nominee and you do not instruct the broker or nominee how to vote with respect to the election of directors or if you abstain or withhold authority to vote on any matter, your shares will not be counted as having been voted on that matter, but will be counted as in attendance at the meeting for purposes of a quorum.

SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS

A shareholder who intends to present a proposal at the 2016 Annual Meeting of Shareholders and who wishes the proposal to be included in the proxy materials for that meeting must submit the proposal in writing to us so that it is received by our Corporate Secretary no later than December 14, 2015. Written proposals may be mailed to us at Bright Horizons Family Solutions Inc., 200 Talcott Avenue South, Watertown, MA 02472 Attn: Stephen Dreier, Corporate Secretary. A shareholder who intends to nominate a director or present any other proposal at the 2016 Annual Meeting of Shareholders but does not wish the proposal to be included in the proxy materials for that meeting must provide written notice of the nomination or proposal to us no earlier than January 12, 2016 and no later than February 11, 2015. We reserve the right to reject, rule out of order, or take other appropriate action with respect to any proposal that does not comply with these and other applicable requirements. Our by-laws describe the requirements for submitting proposals at the Annual Meeting. The notice must be given in the manner and must include the information and representations required by our by-laws.

OTHER MATTERS

At the time of mailing of this proxy, we do not know of any other matter that may come before the Annual Meeting and do not intend to present any other matter. However, if any other matters properly come before the meeting or any adjournment, the persons named as proxies will have discretionary authority to vote the shares represented by the proxies in accordance with their own judgment, including the authority to vote to adjourn the meeting.

We will bear the cost of solicitation of proxies. Our officers, directors and other associates may assist in soliciting proxies by mail, telephone and personal interview.

DIRECTIONS TO THE ANNUAL MEETING

Bright Horizons Family Solutions Inc.

200 Talcott Avenue South

Watertown, MA 02472

From Logan Airport:

Start out going Northeast on Lower Terminal Road toward Terminals C D E. Stay straight to go onto Airport Exit. Take I-90 W/Mass Pike/Massachusetts Turnpike (Portions toll). Take Exit 17 toward Watertown. Turn slight Right onto Centre Street. Center Street becomes Galen Street. Turn slight Right onto US-20 East (North Beacon Street). Continue for 100 yards, and then stay left at fork onto Arsenal Street and drive about 1 mile. The Arsenal on the Charles is on the right; the Talcott Avenue entrance is located across the street from Roma Tile and Grainger’s. Drive up past 100 Talcott Avenue to the 200 Talcott Avenue building and turn right to the South Entrance of Bright Horizons Family Solutions. Our entrance is the South entrance to the building.

From Route 128/95 South or North:

Take Waltham/Rt. 20 exit and continue straight on Rt. 20 towards Waltham. Rt. 20 is also named Main Street in both Waltham and Watertown. Once you have arrived in Watertown, continue past the intersection of Rt. 16 (Mt. Auburn Street) until you reach the fork in the road. Bear to the left, following the green sign that reads “Central Square/Cambridge”. This road is Arsenal Street. Continue along Arsenal Street, past the VFW post. The Arsenal on the Charles is on the right; the Talcott Avenue entrance is located across the street from Roma Tile and Grainger’s. Drive up past 100 Talcott Avenue to the 200 Talcott Avenue building and turn right to the South Entrance of Bright Horizons Family Solutions. Our entrance is the South entrance to the building.

From the Mass Pike traveling westward:

Take exit 17 Newton/Watertown. Bear left onto Galen Street (at Watertown Square). Continue on Galen Street for 1/2 mile. At the five-way intersection, bear right onto North Beacon Street (do not take hard right onto Charles River Road). Continue for 100 yards, and then stay left at fork onto Arsenal Street and drive about 1 mile. The Arsenal on the Charles is on the right; the Talcott Avenue entrance is located across the street from Roma Tile and Grainger’s. Drive up past 100 Talcott Avenue to the 200 Talcott Avenue building and turn right to the South Entrance of Bright Horizons Family Solutions. Our entrance is the South entrance to the building.

Parking

There is parking either in front of the building or at the parking garage at the end of Kingsbury Avenue.

Building Entrance

Enter the building through the main lobby at the South entrance to the building.


Shareowner Services P.O. Box 64945 St. Paul, MN 55164-0945

	Vote by Internet, Telephone or Mail 24 Hours a Day, 7 Days a Week
	Your phone or Internet vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card.
		INTERNET/MOBILE – www.proxypush.com/bfam Use the Internet to vote your proxy until 11:59 p.m. (CT) on May 10, 2015.
		PHONE – 1-866-883-3382 Use a touch-tone telephone to vote your proxy until 11:59 p.m. (CT) on May 10, 2015.
		MAIL – Mark, sign and date your proxy card and return it in the postage-paid envelope provided.
	If you vote your proxy by Internet or by Telephone, you do NOT need to mail back your Proxy Card.

LOGO Please detach here LOGO

The Board of Directors Recommends a Vote FOR Items 1, 2 and 4 and a Vote FOR 1 YEAR in Item 3.

1. Election of four Class II directors
to serve until the Company’s 2018
Annual Meeting of Stockholders:

01 E. Townes Duncan

02 Jordan Hitch

03 Linda Mason

04 Mary Ann Tocio

¨ Vote FOR

all nominees

(except as marked)

¨ Vote WITHHELD

from all nominees

(Instructions: To withhold authority to vote for any indicated nominee,

write the number(s) of the nominee(s) in the box provided to the right.)

2. To approve, on an advisory basis, the compensation paid by the Company

to its named executive officers (the “say-on-pay proposal”).

¨ For

¨ Against

¨ Abstain

3. To approve, on an advisory basis, the frequency of the

say-on-pay proposal in the future.

¨ 1 Years

¨ 2 Years

¨ 3 Years

¨ Abstain

4. Ratify the appointment of Deloitte & Touche LLP as the Company’s

independent registered public accounting firm for the fiscal year

ending December 31, 2015.

¨ For

¨ Against

¨ Abstain

5. To consider any other business properly brought before the meeting.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED AS THE BOARD RECOMMENDS.

Address Change? Mark box, sign, and indicate changes below: ¨

Date

Signature(s) in Box

Please sign exactly as your name(s) appears on Proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy.

BRIGHT HORIZONS FAMILY SOLUTIONS INC.

ANNUAL MEETING OF STOCKHOLDERS

Monday, May 11, 2015

8:30 a.m. local time

COMPANY’S CORPORATE OFFICE

200 Talcott Avenue South

Watertown, Massachusetts 02472

LOGO

Bright Horizons Family Solutions Inc.

200 Talcott Avenue South

Watertown, MA 02471-9177

proxy

This proxy is solicited by the Board of Directors for use at the Annual Meeting on May 11, 2015.

By signing the proxy, you revoke all prior proxies and appoint Stephen I. Dreier and Elizabeth J. Boland, and each of them with full power of substitution, to vote your shares on the matters shown on the reverse side and any other matters which may come before the Annual Meeting and all adjournments.

See reverse for voting instructions.