Exhibit 10.1

Execution Copy

 

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II-VI INCORPORATED, 375 Saxonburg Boulevard, Saxonburg, PA 16056

General Offices: 724-352-4455

AMENDED & RESTATED

EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made
effective as of this 26th day of January, 2020, by and between II-VI
INCORPORATED, a Pennsylvania corporation (the “Employer”), and Vincent D.
Mattera, Jr. (the “Employee”).

PREAMBLE

Employer has employed Employee as its Chief Executive Officer under the terms of
an employment agreement between Employer and Employee dated August 1, 2016 (the
“Prior Agreement”). The initial term under the Prior Agreement ended on
August 1, 2019, and the Prior Agreement is currently in a one-year renewal term
scheduled to expire on August 1, 2020. Employer desires to continue to employ
Employee as its Chief Executive Officer beyond August 1, 2020. This Agreement
extends the employment term and updates certain provisions regarding Employee’s
compensation opportunities, especially in light of the acquisition of Finisar
Corporation. This Agreement replaces and supersedes the Prior Agreement in its
entirety upon becoming effective.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants herein contained and
intending to be legally bound hereby, the parties hereto agree to the following:

1.    Employment. Employer shall continue to employ Employee as Chief Executive
Officer to perform such duties as may be determined and assigned to Employee by
the Employer from time to time.

2.    Term. Subject to earlier termination as provided in this Agreement,
Employee shall be employed for a term beginning on August 1, 2019 and ending on
August 1, 2023 (the “Initial Term”). Employee’s employment shall automatically
be extended for successive additional terms of one (1) year (each a “Renewal
Term”) unless either party gives the other written notice of its intent not to
renew at least ninety (90) days prior to the end of the Initial Term or the then
current Renewal Term. As used herein, “Term” shall mean collectively the Initial
Term and any Renewal Term(s). Notwithstanding any provision herein to the
contrary, Employee’s employment may be terminated prior to the end of the Term
in accordance with Section 10(a) either: (i) by Employee for any reason (i.e.,
with or without “Good Reason” as defined herein), (ii) by Employer for any
reason (i.e., with or without “Cause” as defined herein), or (iii) due to
Employee’s death or Employee having become permanently disabled as reasonably
determined by Employer’s board of directors (the “Board of Directors”) or as
certified by a qualified physician selected by the Board of Directors
(“Disability”).

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3.    Compensation.

(a)    Total Direct Compensation. In consideration of the services to be
performed by Employee, Employer agrees to pay Employee a base salary payable in
equal installments at the regularly scheduled pay dates of Employer. In addition
to base salary, Employee shall be eligible to receive cash bonuses and annual
long-term incentive awards as Employer shall determine from time to time at
Employer’s discretion and consistent with Employer’s senior executive
compensation policies and practices as established by the Board of Directors
from time to time and exclusive of the Deferred Compensation Plan contribution
described in Section 3(b) (collectively, the “Total Direct Compensation”).
Employee’s Total Direct Compensation for Employer’s Fiscal Year 2020 (July 1,
2019 – June 30, 2020) shall be the amounts shown and described on Exhibit 1,
which is attached hereto and incorporated herein. Employee’s base salary may be
adjusted from time to time in accordance with Employer’s performance review
processes and policies, provided that in no event will the amount of Employee’s
base salary be reduced.

(b)    Annual Employer Contribution Under the Deferred Compensation Plan. On
September 1, 2019, under the terms of the Prior Agreement, Employer credited
Employee’s account under Employer’s Nonqualified Deferred Compensation Plan (the
“Deferred Compensation Plan”) with an Employer contribution in the amount of
$100,000. As an additional retention incentive for Employee’s service during the
Initial Term, Employer shall credit Employee’s account under the Deferred
Compensation Plan with an Employer contribution in the following amounts on each
the following dates, provided Employee has not separated from service with
Employer prior to such date:

 

Date

   Amount of Credit  

June 30, 2020

   $ 150,000  

June 30, 2021

   $ 450,000  

June 30, 2022

   $ 700,000  

June 30, 2023

   $ 1,000,000  

Such Employer contributions shall be (i) vested as of the date credited except
in the case of involuntary termination by Employer for Cause, (ii) periodically
adjusted for deemed earnings in accordance with the terms of the Deferred
Compensation Plan, and (iii) payable to Employee in a single lump sum cash
payment upon Employee’s “separation from service” in accordance with the terms
of the Deferred Compensation Plan (subject to any six-month payment delay
required by “Section 409A” (as defined herein) and the terms of the Deferred
Compensation Plan).

(c)    Other Benefits. Employer also agrees to provide Employee with fringe
benefits and all other benefits from time to time provided to similarly situated
executive employees. Employer agrees to provide Employee with life insurance
coverage in an amount equal to two (2) times Employee’s annual base salary.
Employer agrees to provide Employee with a long-term disability benefit which
will provide Employee with a disability benefit in an amount equal to sixty
percent (60%) of his annual base salary in excess of two hundred thousand
dollars ($200,000) (“Supplemental Disability Benefit”). The Supplemental
Disability Benefit will be payable to Employee provided Employee has satisfied
and continues to satisfy the eligibility provisions and been determined to be
disabled under Employer’s long-term disability plan provided to all employees of
Employer. Employer shall pay directly

 

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to Employee the Supplemental Disability Benefit in equal monthly installments,
subject to all applicable withholding as required by law, and shall provide
Employee with the Supplemental Disability Benefit until Employee attains the age
of sixty-six (66). Employee shall be eligible to receive five (5) weeks of
vacation per year.

4.    Full Time, Best Efforts and Conduct. Employee covenants and agrees to
devote all of Employee’s business time and efforts to the faithful performance
of the duties assigned to Employee from time to time by Employer, except to the
extent that Employer expressly permits Employee to engage in outside activities
during business hours. Employer and Employee acknowledge that from time to time,
Employee may either desire or be asked by Employer to engage in business
activities or perform business services for the benefit of third parties, such
as, e.g., serving as an outside director or consultant for another company. In
each case, Employee’s involvement in such business activities or services shall
be subject to the mutual agreement and approval of both Employer and Employee.
Employee shall at all times engage in conduct in accordance with the highest
standards of ethics and shall take no action that will harm the reputation of
Employer. To every extent not inconsistent with the terms of this Agreement, the
terms and conditions of Employee’s employment are also governed by Employer’s
personnel policies and employee handbook, as they may be issued and amended from
time to time.

5.    Confidential Information.

(a)    Nondisclosure and Non-use. Both during the term of Employee’s employment
with Employer and thereafter, Employee covenants and agrees that Employee
(i) shall exercise the utmost diligence to protect and safeguard the
Confidential Information of Employer and its Affiliates; (ii) shall not disclose
to any third party any Confidential Information, except as may be required by
Employer in the course of Employee’s employment or by law; and (iii) shall not
use, directly or indirectly, for Employee’s own benefit or for the benefit of
another, any Confidential Information. Employee acknowledges that Confidential
Information has been and will be developed and acquired by Employer and its
Affiliates by means of substantial expense and effort, that the Confidential
Information is a valuable proprietary asset of Employer’s and its Affiliates’
business, and that its disclosure would cause substantial and irreparable injury
to Employer’s and its Affiliates’ business. For purposes of this Agreement,
“Affiliate” shall mean any entity controlling, controlled by, or under common
control with Employer.

(b)    Definition of Confidential Information. “Confidential Information” means
all information of a confidential or proprietary nature, whether or not
specifically labeled or identified as “confidential,” in any form or medium,
that is or was disclosed to, or developed or learned by, Employee in connection
with Employee’s past, present or future employment with Employer and that
relates to the business, products, services, research or development of any of
the Employer or its Affiliates or their suppliers, distributors or customers.
Confidential Information includes, but is not limited to, the following:
(i) internal business information (including, but not limited to, information
relating to strategic plans and practices, business, training, marketing,
promotional and sales plans and practices, cost, rate and pricing structures,
accounting and business methods); (ii) identities of, individual requirements
of, specific contractual arrangements with, and information about, any of
Employer’s, or any of its Affiliates’, suppliers, distributors and customers and
their confidential information; (iii) trade secrets, know-how, compilations of
data and analyses, techniques, systems, formulae, research, records, reports,
manuals, documentation, models, data and data bases relating thereto;
(iv) inventions, innovations, improvements, developments, methods, designs,
analyses, drawings, reports and all similar

 

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or related information (whether or not patentable); and (v) other information or
thing that has economic value, actual or potential, from not being generally
known to or not being readily ascertainable by proper means by other persons.

(c)    Not Confidential Information. Confidential Information shall not include
information that Employee can demonstrate: (i) is publicly known through no
wrongful act or breach of obligation of confidentiality; (ii) was rightfully
received by Employee from a third party without a breach of any obligation of
confidentiality by such third party; or (iii) was known to Employee on a
non-confidential basis prior to the Employee’s employment with Employer.

(d)    Presumption of Confidentiality. In any judicial proceeding, it will be
presumed that the Confidential Information constitutes protectable trade secrets
and Employee will bear the burden of proving that any Confidential Information
is publicly or rightfully known by Employee.

(e)    Return of Confidential Information and Materials. Employee agrees to
return to Employer either before or immediately upon the termination of
Employee’s employment with Employer any and all information, materials or
equipment which constitutes, contains or in any way relates to the Confidential
Information and any other document, equipment or materials of any kind relating
in any way to the business of Employer in the possession, custody or control of
Employee which was obtained by Employee during the course of or as a result of
Employee’s employment with Employer whether confidential or not, including, but
without limitation, any copies thereof which may have been made by or for
Employee. Employee shall also provide Employer, if requested to do so, the name
of the new employer of Employee and Employer shall have the right to advise any
subsequent employer of Employee’s obligations hereunder.

6.    Inventions.

(a)    Ownership of Inventions. Any and all developments, discoveries,
inventions, enhancements, modifications and improvements (collectively,
“Inventions”) created or developed by Employee alone or with others during the
term of Employee’s employment, whether or not during working hours and whether
on Employer’s premises or elsewhere, shall be deemed works for hire and will be
the sole and exclusive property of Employer if the Invention is:

(i)    within the scope of Employee’s duties assigned or implied in accordance
with Employee’s position; or

(ii)    a product, service, or other item which would be in competition with
Employer Products or which is related to Employer Products, whether presently
existing, under development, or under active consideration; or

(iii)    in whole or in part, the result of Employee’s use of Employer’s
resources, including, without limitation, personnel, computers, equipment,
facilities or otherwise.

(b)    Assignment of Inventions. Employee shall promptly and fully disclose all
Inventions to Employer and shall cooperate and perform all actions reasonably
requested by Employer to establish, confirm and protect Employer’s right, title
and interest in each such Invention. During the term of Employee’s employment
with Employer and after termination of such employment, if Employer should then
so request, Employee agrees to assign and does hereby assign to Employer all
rights in the Inventions. Employee agrees to execute and deliver to Employer any
instruments Employer deems necessary to vest in

 

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Employer the sole title to and all exclusive rights in the Inventions. Employee
agrees to execute and deliver to Employer all proper papers for use in applying
for, obtaining, maintaining, amending and enforcing any legal protections as
Employer may desire. Employee further agrees to assist fully Employer or its
nominees in the preparation and prosecution of any litigation connected with the
Inventions. If Employer is unable because of Employee’s mental or physical
incapacity or for any other reason (including, but without limitation,
Employee’s refusal to do so after request therefor is made by Employer) to
secure Employee’s signature to apply for or to pursue any application for any
United States or foreign patents or copyright registrations covering Inventions
belonging to or assigned to Employer pursuant to this Agreement, then Employee
hereby irrevocably designates and appoints Employer and its duly authorized
officers and agents as Employee’s agent and attorney-in-fact to act for and on
Employee’s behalf and stead to execute and file any such applications and to do
all other lawfully permitted acts to further the prosecution and issuance of
patents or copyright registrations thereon with the same legal force and effect
as if executed by Employee.

7.    Non-Competition. Employee covenants and agrees that during the term of
Employee’s employment with the Employer and for a period of two (2) years after
the date of termination of the Employee’s employment hereunder for any reason
(the “Restricted Period”), Employee shall not, directly or indirectly, for the
benefit of Employee or others, either as an employee, principal, agent,
stockholder, consultant or in any other capacity, engage in or have a financial
interest in any Competitor within the Restricted Territory. Notwithstanding the
foregoing, nothing herein shall prohibit the Employee from being a passive owner
of not more than 2% of the outstanding securities of any class of a corporation
which is publicly traded, so long as Employee has no active participation in the
business of any such corporation.

For purposes of this Agreement:

(a)    “Competitor” shall mean any corporation, limited liability company,
partnership, sole proprietorship or other person or entity who is involved or is
engaged in the design, manufacture, purchasing, distribution, sale, assembly,
provision or marketing of any products or services that are the same as or
similar to Employer Products.

(b)    “Employer Products” shall mean any products or services:

(i)    designed, manufactured, purchased, distributed, sold, assembled, provided
and/or marketed by Employer or its Affiliates; or

(ii)    that Employer or its Affiliates has planned to design, manufacture,
purchase, distribute, sell, assemble, provide or market, and for which Employee
has provided services or over which Employee had direct or indirect managerial
or supervisory authority or about which Employee received Confidential
Information.

(c)    “Restricted Territory” means anywhere in the world where Employer’s
Products are designed, manufactured, assembled, marketed or sold.

This covenant on the part of Employee shall be construed as an agreement
independent of any other provision of this Agreement; and the existence of any
claim or cause of action of Employee against Employer, whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by Employer of this covenant. Employee expressly agrees that the restrictions of
this Section 7

 

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will not prevent Employee from otherwise obtaining gainful employment upon
termination of Employee’s employment with Employer.

8.    Non-Solicitation of Business Associates. During the Restricted Period,
Employee shall not directly or indirectly induce, solicit or encourage any
customer, supplier or other business associate of Employer or an Affiliate to
terminate or alter its relationship with Employer or Affiliate, or introduce,
offer or sell to or for any customer or business associate, any products or
services that compete with the Employer Products.

9.    Non-Solicitation of Employees. During the Restricted Period, Employee
shall not, directly or indirectly, induce, solicit or encourage any employee of
Employer or its Affiliates to terminate or alter his, her or its relationship
with Employer or its Affiliates.

10.    Termination.

(a)    Termination Date and Procedures. If the Agreement is not renewed in
accordance with Section 2, Employee’s employment will automatically end upon the
end of the applicable Initial Term or Renewal Term. Employee’s employment may
also be ended earlier as follows:

(i)    Death. Employment hereunder shall terminate automatically upon Employee’s
death.

(ii)    Disability. Employment hereunder shall terminate upon written notice to
Employee by the Board of Directors of termination due to Disability.

(iii)    By Employer. Employer may terminate Employee’s employment hereunder
without Cause upon ninety (90) days’ advance written notice to Employee.
Employer may terminate Employee’s employment immediately for Cause, subject to
any applicable notice and cure requirements as specified in the definition of
“Cause” below.

(iv)    By Employee. Employee may terminate employment hereunder without Good
Reason upon ninety (90) days’ advance written notice to Employer. Employee may
terminate employment hereunder for Good Reason, subject to the applicable notice
and cure requirements as specified in the definition of “Good Reason” below.

(b)    Termination Without Cause or by Employee for Good Reason. If (i) Employer
terminates Employee without Cause, (ii) the Term of the Agreement is not renewed
under Section 2 by action of the Employer without Cause, or (iii) Employee
terminates his employment for Good Reason, except when such termination is
coincident with or within a twenty-four (24) month period following the
occurrence of a Change in Control, Employer shall pay Employee severance pay in
an amount equal to two (2) multiplied by Employee’s Average Annual Income;
provided, however, that if such termination of employment occurs after Employee
has attained age seventy (70), the amount shall equal one (1) times Employee’s
annual rate of base salary. In addition, Employer shall pay to Employee an
amount equal to the product of (A) eighteen (18) and (B) the full total monthly
premium cost (i.e., Employee’s and Employer’s portion) for Employee’s Healthcare
Coverage. The amounts payable under this Section 10(b) will be paid to Employee
no later than sixty (60) days after the date of termination, subject to the
conditions of Section 10(g). The severance pay will not be considered
compensation for the purpose of any other fringe benefit program of Employer.

 

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(c)    Termination on Death or Disability or by Employee without Good
Reason.    On termination of Employee’s employment as a result of Employee’s
death or Disability, Employer shall pay to Employee or his personal
representative on behalf of the estate of Employee, his annual base salary
through the last day of the fiscal year in which the date of death or Disability
occurs and payment of any bonuses that would have been paid to Employee for such
fiscal year had Employee remained employed by Employer, which bonuses shall not
be prorated because Employee was not employed for the full fiscal year. Any such
payments shall be made not later than the 15th day of the third month following
Employer’s fiscal year in which such death or Disability occurs. On the
termination of employment by Employee for other than Good Reason, Employer shall
promptly pay to Employee any unpaid annual base salary and bonuses, on a pro
rata basis, earned by Employee up to the date of termination in accordance with
Employer’s established payroll practices.

(d)    Termination after Change in Control. If (i) Employer terminates
Employee’s employment without Cause, (ii) the Term of the Agreement is not
renewed under Section 2 by action of the Employer without Cause, or
(iii) Employee terminates Employee’s employment for Good Reason, and in each
such case such termination is coincident with or within a twenty-four (24) month
period following the occurrence of a Change in Control, Employer shall pay
Employee severance pay in an amount equal to three (3) multiplied by Employee’s
Average Annual Income. The severance pay will be paid to Employee within the
period specified in Section 10(d)(iv) below after the expiration of any
applicable revocation periods set forth in the Release required under
Section 10(g)(i) below. This severance payment will not be considered
compensation for the purpose of any other fringe benefit plan of Employer.

(i)    In addition, Employer shall cause any unvested Equity Awards held by
Employee to become fully vested and, if applicable, shall cause each such Equity
Award to remain exercisable for the period set forth in the applicable Equity
Awards Agreement. For the avoidance of any doubt, the provisions of this
Section 10(d)(i) shall supersede the provisions contained in the applicable
Equity Award Agreements, provided that the provisions of the Equity Award
Agreements will control to the extent such provisions are more favorable to
Employee. In the case of any performance-based Equity Awards, “full vesting”
means vesting based on the level of performance adjustment determined under the
terms of the applicable Equity Award Agreement in connection with the Change in
Control.

(ii)    In addition, Employer shall pay to Employee an amount equal to the
product of (A) twenty-four (24) and (B) the full total monthly premium cost
(i.e., Employee’s and Employer’s portion) for Employee’s Healthcare Coverage.

(iii)    In addition, Employer shall pay Employee a lump sum cash payment of
Forty Thousand Dollars ($40,000.00) in order to cover the cost of
post-termination benefit coverage and expenses associated with seeking another
employment position.

(iv)    All payments to be made pursuant to this Section 10(d) shall be made, in
lump sum, no later than sixty (60) days after the date of termination.

(e)    Special Retirement Provisions for Equity Awards. Notwithstanding any
provision of this Agreement to the contrary, if Employee’s employment with the
Company terminates at any time on or after the date he attains age 65 for any
reason, whether voluntary or involuntary, other than a termination by the
Company for Cause, then the following vesting treatment shall apply to any

 

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outstanding Equity Awards granted from and after the date of this Agreement:
(i) stock options shall continue to vest and become exercisable in accordance
with the applicable vesting schedule and remain exercisable for the full option
term; (ii) time-vesting restricted stock units shall immediately vest in full;
and (iii) performance-vesting awards (including performance share units) shall
continue to vest in full (i.e., not prorated) upon completion of the applicable
performance period based on actual performance results; provided, however, that
if such termination of employment occurs before the end of the Initial Term,
performance-vesting awards shall be prorated for the portion of the performance
period completed unless aggregate performance results for the performance period
are achieved at 100% of target or greater (in which case the award as adjusted
for performance will vest in full as otherwise provided by this Section). For
the avoidance of any doubt, the provisions of this Section shall supersede the
provisions contained in the applicable Equity Award Agreements, provided that
the provisions of the Equity Award Agreements will control to the extent such
provisions are more favorable to Employee.

(f)    Adjustments to Payments.

(i)    Anything in this Agreement to the contrary notwithstanding, in the event
it shall be determined that any payment or distribution by Employer to Employee
or for Employee’s benefit (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise) (the
“Payments”) would be subject to the excise tax imposed by Section 4999 (or any
successor provisions) of the Internal Revenue Code of 1986, as amended (the
“IRC”), or any interest or penalty is incurred by Employee with respect to such
excise tax (such excise tax, together with any such interest and penalties, is
hereinafter collectively referred to as the “Excise Tax”), then the Payments
shall be reduced (but not below zero) if and to the extent that such reduction
would result in Employee retaining a larger amount, on an after-tax basis
(taking into account federal, state and local income taxes and the imposition of
the Excise Tax), than if Employee received all of the Payments. Employer shall
reduce or eliminate the Payments, by first reducing or eliminating the portion
of the Payments which are not payable in cash and then by reducing or
eliminating cash payments, in each case in reverse order beginning with payments
or benefits which are to be paid the farthest in time from the determination.

(ii)    All determinations required to be made under this Section, including
whether and when an adjustment to any Payments is required and, if applicable,
which Payments are to be so adjusted, shall be made by an independent accounting
firm selected by Employer from among the four (4) largest accounting firms in
the United States or any nationally recognized financial planning and benefits
consulting company (the “Accounting Firm”) which shall provide detailed
supporting calculations both to Employer and to Employee within fifteen
(15) business days of the receipt of notice from Employee that there has been a
Payment, or such earlier time as is requested by Employer. In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change in Control, Employer shall appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by Employer. If the Accounting Firm determines that no Excise Tax is
payable by Employee, it shall furnish Employee with a written opinion that
failure to report the Excise Tax on Employee’s applicable federal income tax
return would not result in the imposition of a negligence or similar penalty.
Any determination by the Accounting Firm shall be binding upon Employer and
Employee.

 

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(g)    Conditions to Receipt of Severance Benefits/Repayment of Severance
Benefits.

(i)    As a condition to receiving any severance benefits to which Employee may
otherwise be entitled under Sections 10(b) and 10(d) of this Agreement (the
“Severance Benefits”), Employee shall execute, deliver and not revoke a release
and waiver (the “Release”), in a form provided by Employer to be substantially
in the form as attached hereto as Exhibit 2, of any claims, whether arising
under Federal, state or local statute, common law or otherwise, against Employer
and its Affiliates. Unless otherwise required by applicable law, the Release
must be executed by Employee within twenty-one (21) days (or, if required by
law, forty-five (45) days) of the date of termination; provided, however, in all
cases, the Release must become final, binding and irrevocable prior to the
sixtieth (60th) day following Employee’s date of termination. If Employee fails
or otherwise refuses to execute a Release within the time specified herein, or
revokes the Release, Employee will not be entitled to any such Severance
Benefits and Employer shall have no further obligations with respect to the
payment of the Severance Benefits. In addition, if following a termination of
employment that gives Employee a right to the payment of Severance Benefits,
Employee engages in any activities that would have violated any of the covenants
in Sections 5, 6, 7, 8 or 9 of this Agreement, Employee shall have no further
right or claim to any Severance Benefits from and after the date on which
Employee engages in such activities and Employer shall have no further
obligations with respect to the payment of the Severance Benefits.

(ii)    If Employee violates any of Employee’s obligations set forth in Sections
5, 6, 7, 8 or 9 of this Agreement, Employer after becoming aware of such
violation may provide written notice of such violation or breach to Employee and
request repayment of Severance Benefits. Employee agrees that, in the event of
such a violation, within thirty (30) days after the date Employer provides
notice to Employee, Employee shall pay to Employer, in a form acceptable to
Employer, a dollar amount equal to any Severance Benefits paid to or on behalf
of Employee pursuant to this Agreement. The parties agree that during the thirty
(30) day period, they will use their best efforts to resolve the issues.
Employee agrees that failure to make such timely payment to Employer constitutes
an independent and material breach of the terms and conditions of this
Agreement, for which Employer may seek recovery of the unpaid amount as
liquidated damages, in addition to all other rights and remedies that Employer
may have resulting from Employee’s breach of the obligations set forth in
Sections 5, 6, 7, 8 or 9 of this Agreement. Employee agrees that timely payment
to Employer as set forth in this Section 10(g)(ii) is reasonable and necessary
because the compensatory damages that will result from breaches of Sections 5,
6, 7, 8 or 9 of this Agreement cannot readily be ascertained. Further, Employee
agrees that timely payment to Employer as set forth in this Section 10(g)(ii) is
not a penalty, and it does not preclude Employer from seeking all other remedies
including injunctive relief that may be available to Employer.

(h)    Section 409A/Termination of Employment. The provisions of this Agreement
will be administered, interpreted and construed in a manner intended to comply
with Section 409A of the IRC (“Section 409A”), the regulations issued thereunder
or any exception thereto (or disregarded to the extent such provision cannot be
so administered, interpreted, or construed).

(i)    For purposes of the Agreement, Employee shall be considered to have
experienced a termination of employment only if Employee has terminated
employment with Employer and all of its controlled group members within the
meaning of Section 409A. For

 

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purposes hereof, the determination of controlled group members shall be made
pursuant to the provisions of Sections 414(b) and 414(c) of the IRC; provided
that the language “at least 50 percent” shall be used instead of “at least 80
percent” in each place it appears in Section 1563(a)(1),(2) and (3) of the IRC
and Treas. Reg. § 1.414(c)-2; provided, further, where legitimate business
reasons exist (within the meaning of Treas. Reg. § 1.409A-1(h)(3)), the language
“at least 20 percent” shall be used instead of “at least 80 percent” in each
place it appears. Whether Employee’s employment has been terminated shall be
determined by all of the facts and circumstances and in accordance with the
guidance issued under Section 409A of the IRC.

(ii)    For purposes of Section 409A, each severance benefit payment shall be
treated as a separate payment. Each payment under this Agreement is intended to
be excepted from Section 409A to the maximum extent provided under Section 409A
as follows: (1) each payment that is scheduled to be made following Employee’s
termination date and within the applicable two and one-half (21⁄2) month period
specified in Treas. Reg. § 1.409A-1(b)(4) is intended to be excepted under the
short-term deferral exception as specified in Treas. Reg. § 1.409A-1(b)(4); (2)
post-termination medical benefits are intended to be excepted under the medical
benefits exception as specified in Treas. Reg. § 1.409A-1(b)(9)(v)(B); and
(3) each payment that is not otherwise excepted under the short-term deferral
exception or medical benefits exception is intended to be excepted under the
involuntary pay exception as specified in Treas. Reg. § 1.409A-1(b)(9)(iii).
Employee shall have no right to designate the date of any payment under this
Agreement.

(iii)    With respect to payments subject to Section 409A (and not excepted
therefrom), if any, it is intended that each payment is paid on permissible
distribution event and at a specified time consistent with Section 409A.
Employer reserves the right to accelerate and/or defer any payment to the extent
permitted and consistent with Section 409A. Notwithstanding any provision of
this Agreement to the contrary, to the extent that a payment hereunder is
subject to Section 409A (and not excepted therefrom) and payable on account of a
termination of employment, such payment shall be delayed for a period of six
months after the date of termination (or, if earlier, the death of the Employee)
if the Employee is a “specified employee” (as defined in Section 409A and
determined in accordance with the procedures established by Employer). Any
payment that would otherwise have been due or owing during such six (6) month
period will be paid immediately following the end of the six (6) month period in
the month following the month containing the six (6) month anniversary of the
date of termination.

(i)    Definitions. For purposes of this Agreement, the following definitions
shall have the following meanings:

(i)    “Average Annual Income” means an amount equal to (A) the sum of
Employee’s annual base salary and annual cash bonuses for the three (3) fiscal
years of Employer preceding the date of Employee’s termination of employment
divided by (B) three (3).

(ii)    “Cause” shall mean a determination by the Board of Directors, in the
exercise of its reasonable judgment that any of the following has occurred:

(1)    the willful and continued failure by Employee to perform Employee’s
duties and responsibilities with Employer under the Agreement (other than any
such

 

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failure resulting from incapacity due to physical or mental illness or
disability) which is not cured within thirty (30) days of receiving written
notice from Employer specifying in reasonable detail the duties and
responsibilities which Employer believes are not being adequately performed;

(2)    the willful engaging by Employee in any act which is materially damaging
to Employer;

(3)    the conviction of Employee of, or a plea of “guilty” or “no contest” to:
(A) any felony; or (B) a criminal offense involving fraud, dishonesty or other
moral turpitude;

(4)    any material breach by Employee of the terms of the Agreement; or

(5)    the engaging by Employee in any intentional act of dishonesty resulting
or intended to result, directly or indirectly, in personal gain to Employee at
Employer’s expense.

(iii)    “Change in Control” shall be deemed to have occurred when:

(1)    Employer is merged or consolidated with another entity the result of
which is that immediately following such transaction (A) the persons who were
the shareholders of Employer immediately prior to such transaction have less
than a majority of the voting power of Employer or the entity owning or
controlling Employer; or (B) the individuals who comprised the Board of
Directors of Employer immediately prior to such transaction cease to be at least
a majority of the members of the Board of Directors of Employer or of the entity
controlling Employer, or

(2)    a majority of Employer’s assets are sold or otherwise transferred to
another corporation not controlled by or under common control with Employer or
to a partnership, firm, entity or one or more individuals not so controlled, or

(3)    a majority of the members of Employer’s Board of Directors consists of
persons who were not nominated for election as directors by or on behalf of
Employer’s Board of Directors or with the express concurrence of the Employer’s
Board of Directors, or

(4)    a single person, or a group of persons acting in concert, obtains voting
control over a majority of Employer’s outstanding voting shares.

(iv)    “Equity Award” means an award granted to Employee covering the common
stock of Employer, including stock options, restricted stock, restricted stock
units, and performance stock units, granted under any equity incentive plan
maintained by Employer from time to time, including: (1) the II-VI Incorporated
2005 Omnibus Incentive Plan, (2) the II-VI Incorporated 2009 Omnibus Incentive
Plan, (3) the II-VI Incorporated Second Amended and Restated 2012 Omnibus
Incentive Plan, (4) the II-VI Incorporated 2018 Omnibus Incentive Plan, or
(5) any successor plan(s) thereto.

 

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(v)    “Equity Award Agreement” means the agreement evidencing, and governing
the terms of, an Equity Award.

(vi)    “Good Reason” means, without Employee’s express written consent:

(1)    a reduction in title or position;

(2)    a material reduction of Employee’s employment responsibilities;

(3)    a material reduction by Employer of (i) Employee’s annual rate of base
salary, (ii) Employee’s target Total Direct Compensation under Section 3(a) to a
level below 50th percentile of the Employer’s compensation competitor group as
determined by the Board of Directors from time to time, or (iii) the annual
Employer contribution under the Deferred Compensation Plan under Section 3(b),
in each case as provided as in effect immediately prior to such reduction;

(4)    a material increase in the amount of Employee’s business travel which
produces a constructive relocation of Employee; or

(5)    a material reduction by Employer in the kind or level of employee
benefits to which Employee is entitled immediately prior to such reduction with
the result that Employee’s overall benefits package is significantly reduced.

In order for Employee to terminate for Good Reason: Employer must be notified by
Employee in writing within ninety (90) days of the event constituting Good
Reason; the event must remain uncorrected by Employer for thirty (30) days
following such notice (the “Notice Period”); and such termination must occur
within sixty (60) days after the expiration of the Notice Period.

(vii)    “Healthcare Coverage” means coverage for Employee and his tax-qualified
dependents under Employer’s group health plan that provides medical care
(including group dental and vision), based on the applicable plans and
Employee’s coverage elections in effect immediately prior to the Employee’s date
of termination of employment. Employer’s group health plan does not include
other benefits offered under an Employer welfare plan such as life insurance and
disability insurance.

11.    Remedies.

(a)    Arbitration. Except to the extent set forth in Section 11(b) below, any
dispute arising out of or relating to this Agreement or the breach, termination
or validity hereof shall be finally settled by arbitration conducted
expeditiously in accordance with the rules of the American Arbitration
Association by three independent and impartial arbitrators. Each party shall
appoint one of such arbitrators, and the two arbitrators so appointed shall
appoint the third arbitrator. The arbitration shall be governed by the United
States Arbitration Act, 9 U.S.C. §§ 1-16, and judgment on the award rendered by
the arbitrators may be entered by any court having jurisdiction thereof. The
place of arbitration shall be Pittsburgh, Pennsylvania. The arbitrators are not
empowered to award damages in excess of economic and compensatory damages.

 

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(b)    Injunctive Relief. It is agreed by the parties hereto that any violation
by Employee of any of the covenants contained in Sections 5, 6, 7, 8 or 9 herein
would cause immediate, material and irreparable harm to Employer and/or its
Affiliates which may not be adequately compensated for by money damages and,
therefore, Employer and/or its Affiliates shall be entitled to injunctive relief
(including, without limitation, one or more preliminary injunctions and/or ex
parte restraining orders) in addition to, and not in derogation of, any other
remedies provided by law, in equity or otherwise for such a violation including,
but not limited to, the right to have such covenants specifically enforced by
any court of competent jurisdiction and the right to require Employee to account
for and pay over to Employer and/or its Affiliates all benefits derived or
received by Employee as a result of any such breach of covenant together with
interest thereon, from the date of such initial violation until such sums are
received by Employer and/or its Affiliates. The Restricted Period set forth
herein shall be extended by any period of time in which Employee is in breach of
the covenants contained in Sections 5, 6, 7, 8 or 9 of this Agreement and for
any period of time which may be necessary to secure an order of court or
injunction, either temporary or permanent, to enforce any of the covenants
contained in Sections 5, 6, 7, 8 or 9 of this Agreement.

(c)    Employee Acknowledgment. Employee acknowledges and agrees that the
periods of restriction and geographical areas of restriction imposed by the
confidentiality and non-competition covenants of this Agreement are fair and
reasonably required for the protection of Employer and its Affiliates.

12.    Severability. In the event that, and if for any reason, any portion of
this Agreement shall be held to be invalid or unenforceable, it is agreed that
the remaining covenants and restrictions or portions thereof shall remain in
full force and effect, and that if the validity or unenforceability is due to
the unreasonableness of the time or geographical area covered by said covenants
and restrictions, said covenants and restrictions of this Agreement shall
nevertheless be effective for such period of time and for such area as may be
determined to be reasonable by a Court of competent jurisdiction.

13.    Disparaging Statements. Both parties agree not to make any disparaging
statements that reflect negatively on the reputation or good name of the other.

14.    Entire Agreement; Amendments; No Waiver. This Agreement supersedes the
Prior Agreement and any and all other agreements, either oral or in writing,
between the parties hereto with respect to the employment of Employee by
Employer and contains all of the covenants and agreements between the parties
with respect to such employment in any manner whatsoever, provided that this
Agreement does not supersede, replace or modify in any respect any
indemnification agreement between Employer and Employee. No alterations,
amendments, changes or additions to this Agreement will be binding upon either
Employer or Employee unless in writing and signed by both parties. No waiver of
any right arising under this Agreement made by either party will be valid unless
set forth in writing signed by both parties. Notwithstanding the foregoing or
any provision of this Agreement to the contrary, Employer may at any time (after
consultation with Employee) modify, amend or terminate any or all of the
provisions of this Agreement or take any other action, to the extent necessary
or advisable to conform the provisions of this Agreement or the benefits
provided thereunder with Section 409A, the regulations issued thereunder or an
exception thereto.

15.    Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania, without reference
to its conflict of laws provisions.

 

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16.    Employee’s Representations. Employee warrants and represents that, to the
best of Employee’s knowledge, Employee has provided Employer with copies of all
agreements with previous employers that may still be applicable and that
Employee’s performance under this Agreement will not violate any agreement to
which Employee is a party and that Employee will not bring any materials which
are proprietary to a third party to Employer without the prior written consent
of such third party.

17.    Binding Effect. This Agreement is binding upon the parties hereto and on
their respective heirs, personal representatives, successors and assigns.
Employee agrees that the obligations contained in Sections 5, 6, 7, 8 and 9 of
this Agreement will survive the termination of this Agreement.

18.    Assignment. Employee’s rights and obligations under this Agreement shall
not be transferable by Employee, by assignment or otherwise, and any purported
assignment, transfer or delegation thereof by Employee shall be void. Employer
may assign/delegate all or any portion of this Agreement whereupon Employee
shall continue to be bound hereby with respect to such assignee/delegatee,
without prior notice to Employee and without need of Employee’s consent thereto.
In addition to and without limiting the Employer’s right to assign, transfer, or
convey this Agreement or any portion of it, Employee recognizes that Employer
may assign the Employee temporarily or permanently to one or more Affiliates of
Employer. In such event, all of Employee’s duties under this Agreement shall
apply with equal force to the Affiliate(s), and the Affiliate(s) shall be
empowered to stand in the shoes of the Employer for purposes of enforcing this
Agreement.

19.    Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

[SIGNATURES ON NEXT PAGE]

 

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IN WITNESS WHEREOF, the parties hereto intending to be legally bound have set
their hands and seals the day and year first above written.

 

II-VI INCORPORATED

By:

 

/s/ Walter R. Bashaw II

 

Walter R. Bashaw II, President

EMPLOYEE:

/s/ Vincent D. Mattera, Jr.

Vincent D. Mattera, Jr.

 

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Exhibit 1

 

1.

Total Direct Compensation for Fiscal Year 2020 (July 1, 2019 - June 30, 2020)

Target Total Direct Compensation on an annualized basis of $7,439,998, as
follows:

 

Compensation
Element

   FY20
Target
Amount     

Comment

Base Salary

   $ 920,200      This amount approximates 50th percentile CEO base salary
versus approved compensation competitor group (based on the combined business
following the closing of the Finisar acquisition). This change is effective
August 1, 2019.

Target STI
BIP
GRIP
Total

   $

$

$

153,673

1,655,575

1,809,248

 

 

 

  

    

BIP based on standard target of 16.7% of base salary

Equity

   $ 4,710,550      Awarded 30% stock options, 30% time-vesting restricted
shares and 40% performance shares, on the date approved by the Compensation
Committee of the Board of Directors, following standard practice for determining
number of shares/options, standard vesting conditions and standard award
agreement forms as generally applicable to senior executive officers and
approved by the Board of Directors

TDC

   $ 7,439,998      FY20 target amount determined by Board of Directors, with
advice and analysis of compensation consultant, approximates 50th percentile
versus approved compensation competitor group (based on the combined business
following the closing of the Finisar acquisition)

 

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Exhibit 2

Form of Release

AGREEMENT AND GENERAL RELEASE

THIS AGREEMENT (“Agreement”) dated as of the              day of             ,
20    ,

BY AND BETWEEN

II-VI INCORPORATED,

a Pennsylvania corporation (“Employer”)

AND

                                 , an individual, (“Employee”)

W I T N E S E T H:

WHEREAS, Employee has been employed by Employer as a
                                ;

WHEREAS, effective as of             , 20     (the “Separation Date”),
Employee’s position with Employer has been terminated; and

WHEREAS, the parties desire to meet and conclude certain aspects of the
employment relationship.

NOW, THEREFORE, in consideration of the mutual covenants herein contained and
intending to be legally bound hereby, the parties hereto for themselves and
their respective heirs, personal representatives, successors and assigns, hereby
agree as follows:

 

  1.

Releases.

(a)    Employee, for Employee and Employee’s heirs, administrators, and assigns,
irrevocably and unconditionally generally releases and forever discharges any
causes of action or claims, known or unknown (including, but not limited to,
claims for attorneys’ fees, expenses and/or costs) that Employee has or may have
against (a) Employer, (b) its or their past or present parents, affiliates or
subsidiaries and/or any of their predecessors or successors and (c) the current
and former directors, owners, administrators, shareholders, managers, agents,
and officers of Employer (collectively referred to as “Company”) and expressly
waives and releases Company from any and all claims, grievances, actions and
causes of action, at law or in equity, contract or tort, including negligence,
or any other cause or claim that has or may have or could be brought before any
federal, state, local or municipal court directly or indirectly relating to or
connected with Employee’s employment with Company, Employee’s termination from
employment with Company, or the facts, circumstances, actions or inactions
arising out of or relating to any aspect of Company’s treatment of Employee
until the date of this Agreement. Without limitation of the foregoing general
terms, this release includes, but is not

 

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limited to, claims (including for costs and attorneys’ fees) arising from any
alleged violation of any federal, state or local statutes, ordinances, executive
orders, or common law principles relating to tort law, education, employment,
the payment of wages and benefits, educational benefits, training, or any other
claims relating to or arising from, in connection with or during Employee’s
employment and/or affiliation with Company, including but not limited to, claims
arising under the Civil Rights Act of 1964 as amended, including Title IX, 20
U.S.C. § 1687, Title VI, 42 U.S.C. § 2000(d), and Title VII of the Civil Rights
Act, as amended, the Americans with Disabilities Act, as amended, the
Rehabilitation Act of 1973, the Civil Rights Acts of 1866 and 1871, the Civil
Rights Act of 1991, the Employment Retirement Income Security Act (ERISA), the
Age Discrimination in Employment Act, as amended (ADEA), the Consolidated
Omnibus Budget Reconciliation Act of 1985 (COBRA), the Equal Pay Act of 1963,
the Older Workers Benefit Protection Act, the Family and Medical Leave Act
(FMLA), whistle-blower, and any and all common law claims, including but not
limited to, all other forms of employment discrimination, wrongful termination,
retaliatory discharge, breach of express, implied, or oral contact, interference
with contractual relations, commission of tort, fraud, defamation, and slander
based on any act, transaction, circumstance or event contemporaneous with, or
prior to, the date of this Agreement. This release also expressly includes any
pension or benefit plans of Company and/or the past or present officers,
directors, trustees, administrators, agents and employees of Company or of any
Company benefit plan, for any actions up to and including the date hereof and
the continuing efforts thereof, except for the performance of the provisions of
this Agreement and except for the payment of any vested pension benefits to
which Employee may be entitled, if any, under the express provisions of the
Company pension plan, subject to ERISA’s vesting requirements. It is the
intention of Employee to effect a general release of all actual and potential
claims as of the date of this Agreement. Provided, however, that nothing
contained in this Agreement shall prevent Employee from challenging the validity
and legality of the release under the ADEA.

(b)    Employee agrees that Employee will not initiate or cause to have
initiated or be a party to any legal action against Employer, except to the
extent necessary to enforce any remaining aspect of the Agreement or as
specifically excluded in this Paragraph 1(b) or in Paragraph 1(a) above. In the
event that Employee brings or causes to bring any action against Company that
Employee has agreed in the preceding sentence not to bring or should Company
prevail in any claim of a breach of this Agreement, Employee will indemnify and
hold the Company harmless from and against all costs incurred in connection with
defense or prosecution of the legal action, including attorneys’ fees. Company
will be entitled to all damages available at law or equity in addition to its
costs of defending or prosecuting such action. The Employee’s right to file a
charge of discrimination with the Equal Employment Opportunity Commission or
similar agency and Employee’s right to challenge the validity and legality of
the release in paragraph 1(a) under the ADEA are expressly excluded from the
Employee’s promise not to bring any legal action against the Company. However,
if any charge, complaint, lawsuit or administrative claim is filed by or in the
name of Employee or on Employee’s behalf with the Equal Employment Opportunity
Commission, the Pennsylvania Human Relations Commission, or any other similar
administrative agency or organization, or in any other forum, against any of the
persons or entities released in this Agreement, based upon any act or event
which occurred on or before the date Employee signed this Agreement, Employee
will not seek or accept any personal relief, including but not limited to any
award of monetary damages or reinstatement to Employee’s employment with
Employer. (Provided, however, that this provision shall not apply to a claim for
damages under the ADEA in the event that the Agreement is declared invalid with
respect to the waiver of all ADEA claims. If successful on such a claim,
however, any monetary damages obtained by Employee shall be offset by the monies
paid under the Agreement, together with all allowable interest thereon.)

 

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(c)    As of the date of execution of this Agreement, the Employee represents
and warrants that Employee knows of no work-related injury, illness, or
condition sustained during Employee’s employment with Employer. As of the date
of execution of this Agreement, Employee further represents and warrants that
Employee knows of no condition or event that would entitle him to benefits under
the FMLA.

(d)    As of the Separation Date, Employee has                     
(            ) earned and unused vacation days, having a gross value of
                             ($                ). This amount, from which all
required taxes and withholdings shall be deducted, shall be paid in the
Employee’s final paycheck as an active employee. Employee acknowledges that with
the payments set forth in this Paragraph 1(d), the Employer shall have paid him
in full. The Employee also represents that Employee knows of no claim that would
entitle him to relief under the Fair Labor Standards Act.

(e)    Employee agrees that the payment set forth in Section 2(a) below exceeds
any amounts Employee is entitled to receive and shall be sufficient
consideration for all of the Employee’s agreements, obligations, covenants, and
releases contained in this Agreement. Employee further agrees that the Employer
has no plan or practice of paying severance covering Employee.

(f)    Effective                     , neither party shall be required to
perform under any agreement related or ancillary to Employee’s employment with
Employer, including, without limitation,                     , except as
expressly set forth in this Agreement. Employee shall cease to perform any
duties for the Employer, and shall cease to represent that Employee is a current
employee of Employer, effective                     .

 

  2.

Wage Payments, Severance Payments and Benefits.

In consideration of the representations and covenants of Employee contained in
this Agreement, Employer agrees to do the following:

(a)    Employer shall pay Employee the severance payments and benefits specified
in the Employment Agreement between Employer and Employee dated January     ,
2020, as the same may be amended from time to time (the “Employment Agreement”).

(b)    Employer agrees not to contest Employee’s application for unemployment
compensation unless (i) Employee becomes employed; or (ii) the Employee provides
inaccurate information in Employee’s application for benefits. The parties agree
that the reason for Employee’s unemployment for purposes of seeking unemployment
compensation benefits shall be “                    .”

(c)    Nothing contained in this Agreement or the payments and benefits
contemplated in it shall be interpreted to be inconsistent with the fact that
Employee’s employment with Employer was terminated for all purposes on the
Separation Date. Employee further acknowledges that the payments set forth in
Paragraph 2 do not constitute any type of admission by Employer.

 

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  3.

Returning Company’s Property and Maintaining Confidentiality.

Employee agrees to return all Company property and confidential and proprietary
information which may be in Employee’s possession including, but not limited to
supplier lists, proprietary, confidential or secret information, customer lists,
customer file information, product information and data, financial matters,
competitive status, organizational matters, technical capabilities, marketing
and distribution plans, customer or supplier data, strategies, processes, books,
computer hardware, software, diskettes, notes, reports, work products, and any
other information prepared for Employer by him or at Employee’s or Employer’s
direction (collectively, “confidential and proprietary information”). Employee
shall also delete all confidential and proprietary information from any personal
electronic files, including, without limitation, information or files maintained
in any personal computer, PDA, blackberry or other electronic device. Such
deletions shall be done in a manner that will not allow them to be recovered or
duplicated. All such property shall be returned and deletions made by the
Effective Date. Employee further agrees not to use or apply confidential and
proprietary information for Employee’s own advantage or for the benefit of any
person or entity except Employer and its affiliates and agrees not to disclose,
divulge or disseminate confidential and proprietary information or any other
customer or product information to anyone not affiliated with Employer, except
with the prior written consent of Employer. Employee also agrees to provide
Employer with all passwords that Employee uses in connection with Employee’s
employment to allow Employer to have access to all information to which Employee
has access and to comply with all exit routines, including check lists, that the
Employer normally uses in connection with terminations from employment.

 

  4.

Opportunity to Review and Revoke.

Employee acknowledges that this Agreement contains a complete waiver and release
of claims of age discrimination under, among other statutes, the ADEA and that
Company offered Employee a period of at least twenty-one (21) days (or, if
required by law, forty-five (45) days) within which to consider this Agreement.
Employee acknowledges that 21 days (or 45 days, if applicable) is a reasonable
period of time to review this Agreement, but that Employee may voluntarily elect
to sign this Agreement earlier. Employee further acknowledges that Employee has
been advised and has had a full and fair opportunity to consult with an attorney
of Employee’s choosing. Within a period of seven (7) days following the
execution of this Agreement, Employee may revoke this Agreement by delivery (in
person or by certified mail) of a written notice revoking the same, to the Vice
President, Human Resources, II-VI Incorporated, 375 Saxonburg Boulevard,
Saxonburg, PA 16056. The notice must be received within the said seven (7) day
period. This Agreement shall not become effective or enforceable until that date
on which the seven-day revocation period has expired without a revocation of
this Agreement (the “Effective Date”). Employee fully understands the terms and
significance of this Agreement including the release contained within it, and
Employee particularly understands that Employee is waiving and releasing any and
all claims against the Company.

 

  5.

Continuation of Restrictive Covenants.

Employee acknowledges and agrees that Employee remains subject to the covenants
set forth in Sections 5, 6, 7, 8 and 9 of the Employment Agreement.

 

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  6.

Non-Disclosure.

Employee agrees to keep confidential and not discuss, disclose, or reveal,
directly or indirectly, the terms of this Agreement to any person, corporation,
or entity with the exception of the members of Employee’s immediate family, any
person from whom Employee legitimately seeks financial or tax advice, and/or any
person consulted by Employee prior to Employee signing this Agreement to
understand the interpretation, application, or legal effect of this Agreement,
who (prior to disclosure to them) shall likewise agree to maintain the
confidentiality of this Agreement. It shall be deemed a material breach of this
Agreement for Employee to disclose or reveal the existence of this Agreement or
any of the terms hereof to anyone in violation of the confidentiality provisions
of this Agreement, provided, however, that nothing in this Agreement prohibits
Employee from reporting possible violations of federal law or regulation to any
governmental agency or entity, including but not limited to the Department of
Justice, the Securities and Exchange Commission, the Congress, and any agency
Inspector General, or making other disclosures that are protected under the
whistleblower provisions of federal law or regulation. Employee does not need
the prior authorization of the Company to make any such reports or disclosures
and Employee is not required to notify the Company that he has made such reports
or disclosures.

 

  7.

Miscellaneous.

(a)    There are no understandings between the parties regarding this Agreement
other than as specifically set forth herein and there have been no promises,
inducements or commitments made to or by Employer in conjunction with this
Agreement that are not explicitly set forth herein.

(b)    This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

(c)    This Agreement supersedes any and all other agreements, either oral or in
writing, between the parties hereto with respect to the employment of Employee
by Employer and the termination of such employment and contains all of the
covenants and agreements between the parties with respect to such employment and
the termination thereof, provided that this Agreement does not supersede,
replace or modify in any respect any indemnification agreement between Employer
and Employee. No alterations, amendments, changes or additions to this Agreement
will be binding upon either Employer or Employee unless reduced to writing and
signed by both parties. No waiver of any right arising under this Agreement made
by either party will be valid unless given in writing and signed by both
parties.

(d)    This Agreement is binding upon the parties hereto and their respective
heirs, personal representatives, successors, affiliates and assigns.

(e)    By Employee’s execution of this Agreement, Employee expressly
understands, covenants and agrees that Employee will not apply for or seek in
any way to be employed, hired, recalled or reinstated by the Company now or in
the future; and Employee covenants and agrees that Company will not ever be
obligated to employ or reemploy him or engage Employee’s services.

(f)    The provisions, including individual terms and phrases, of this Agreement
are severable. Any provision of this Agreement or portion thereof which is held
to be prohibited or

 

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unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability, without invalidating the
remaining portion of any such provision or this Agreement as a whole, and
without affecting the validity or enforceability of such provision in any other
jurisdiction.

(g)    All parties represent and warrant that each is fully capable of
performing all obligations required under this Agreement and has not assigned or
otherwise alienated any right or obligation that in any manner would reduce or
undermine the full implementation and effect of this Agreement.

 

  8.

Right to Seek Counsel of Attorney.

EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS FULLY READ AND FULLY UNDERSTOOD THIS
AGREEMENT; THAT EMPLOYEE ENTERED INTO IT FREELY AND VOLUNTARILY AND WITHOUT
COERCION OR PROMISES NOT CONTAINED IN THIS AGREEMENT; THAT EMPLOYEE WAS GIVEN
THE OPPORTUNITY TO REVIEW THIS AGREEMENT WITH LEGAL COUNSEL OF EMPLOYEE’S CHOICE
BEFORE SIGNING IT, AND THAT EMPLOYEE WAS ENCOURAGED AND ADVISED IN WRITING TO
CONSULT WITH AN ATTORNEY PRIOR TO SIGNING IT.

IN WITNESS WHEREOF, the parties hereto intending to be legally bound have set
their hands and seals on this date,             , 20    .

 

[EMPLOYEE]

  

II-VI INCORPORATED

                                                        
By:                                             

 

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