Exhibit 10.2

 

2001 STOCK PLAN

 

APPENDIX A

 

TERMS AND CONDITIONS OF RESTRICTED STOCK UNIT

 

1.               Grant.  The Company hereby grants to the Employee an award of
Restricted Stock Units (“RSUs”), as set forth in the Notice of Grant, subject to
the terms and conditions in this Agreement and in the Company’s 2001 Stock Plan
(the “Plan”).  Initially capitalized terms herein shall have the meanings set
forth in the Plan or as defined herein, as applicable.

 

2.               Company’s Obligation.  Each RSU represents the right to receive
a Share on the vesting date.  Unless and until the RSUs vest, the Employee will
have no right to receive Shares under such RSUs.  Prior to actual distribution
of Shares pursuant to any vested RSUs, such RSUs will represent an unsecured
obligation of the Company, payable (if at all) only from the general assets of
the Company.

 

3.               Vesting Schedule; Assumption or Substitution Calculation.  You
have been granted an RSU with a target payout of                           
Shares (the “Target Amount”) and a maximum payout of                      Shares
(the “Maximum Amount”).

 

The Restricted Stock Units shall vest as follows:

 

First Tranche Vesting

 

Up to one-third of the Maximum Amount (the “First Tranche”) will vest and be
settled on December 15, 2011, based upon the extent, if any, to which the First
Tranche performance metric has been achieved.  The First Tranche performance
metric is the relative performance of Company stock against the Russell 2000
index over a one-year period, with the target Company stock performance
equivalent to the performance of the Russell 2000 index.  To determine relative
performance for the First Tranche, the baseline metrics are the 30 trading day
average closing price of the Company and the Russell 2000 Index (“RUT”), as
reported in The Wall Street Journal, or such other reliable source as is
determined by the Administrator, in its sole discretion, with the last of the 30
trading days falling on November 29, 2010.  This 30 day average establishes both
the Company baseline stock price (the “2010 Company Baseline Stock Price”) and
the Russell 2000 Index baseline (the “2010 Russell 2000 Baseline”) against which
future Company stock and Russell 2000 Index performance will be compared.

 

Next, the Company will measure the 30 trading day average closing price of the
Company and the Russell 2000 Index, as reported in The Wall Street Journal, or
such other reliable source as is determined by the Administrator, in its sole
discretion, with the last trading day of such 30-trading

 

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day period ending on November 29, 2011 (establishing both the “First Tranche
Company Closing Price” and the “First Tranche Russell 2000 Index Closing
Price”).

 

The Company will then measure Company performance by dividing the First Tranche
Company Closing Price by the 2010 Company Baseline Stock Price, with the
quotient expressed as a percentage of the 2010 Company Baseline Stock Price (the
“2011 Company Percentage Performance”). The Company will then measure Russell
2000 Index Performance over the same period by dividing the First Tranche
Russell 2000 Index Closing Price by the 2010 Russell 2000 Index Baseline with
the quotient expressed as a percentage of the 2010 Russell 2000 Index Baseline
(the “2011 Russell 2000 Index Percentage Performance”).

 

The Company will then subtract the 2011 Russell 2000 Index Percentage
Performance from the 2011 Company Percentage Performance, then add 100 to the
result, with the final result constituting the relative Company performance as a
percentage (the “2011 Relative Performance Percentage”).

 

If the 2011 Relative Performance Percentage is less than 51%, no First Tranche
Shares shall vest.  If the 2011 Relative Performance Percentage equals 51%, then
1% of the First Tranche Shares shall vest. If the 2011 Relative Performance
Percentage equals 100%, then one-third of the Target Amount shall vest. If the
2011 Relative Performance Percentage equals 150% or more, then 100% of the First
Tranche Shares shall vest (i.e., one-third of the Maximum Amount shall vest). 
2011 Relative Performance Percentages between 51% and 150% shall result in
incremental vesting on a straight-line basis (e.g., if the 2011 Relative
Performance Percentage is 129%, 79% of the First Tranche Shares shall vest.)

 

Second Tranche Vesting

 

Similarly, up to one-third of the Maximum Amount (the “Second Tranche”) will
vest and be settled on December 15, 2012, based upon the extent, if any, to
which the Second Tranche performance metric has been achieved.  The Second
Tranche performance metric is the relative performance of Company stock against
the Russell 2000 index over a two-year period, with the target Company stock
performance equivalent to the performance of the Russell 2000 index over such
period.  To determine relative performance for the Second Tranche, the baseline
metrics are the 2010 Company Baseline Stock Price and the 2010 Russell 2000
Index Baseline.

 

The Company will measure the 30 trading day average closing price of the Company
and the Russell 2000 Index, as reported in The Wall Street Journal, or such
other reliable source as is determined by the Administrator, in its sole
discretion, with the last trading day of such 30-trading day period ending on
November 29, 2012 (establishing both the “Second Tranche Company Closing Price”
and the “Second Tranche Russell 2000 Index Closing Price”).

 

The Company will then measure Company performance by dividing the Second Tranche
Company Closing Price by the 2010 Company Baseline Stock Price, with the
quotient expressed as a percentage of the 2010 Company Baseline Stock Price (the
“2010-2012 Company Percentage Performance”). The Company will then measure the
Russell 2000 Index Performance over the same period by dividing the Second
Tranche Russell 2000 Index Closing Price by the 2010 Russell 2000

 

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Index Baseline with the quotient expressed as a percentage of the 2010 Russell
2000 Index Baseline (the “2010-2012 Russell 2000 Index Percentage Performance”).

 

The Company will then subtract the 2010-2012 Russell 2000 Index Percentage
Performance from the 2010-2012 Company Percentage Performance, then add 100 to
the result, with the final result constituting the relative Company performance
as a percentage (the “2010-2012 Relative Performance Percentage”).

 

If the 2010-2012 Relative Performance Percentage is less than 51%, no Second
Tranche Shares shall vest.  If the 2010-2012 Relative Performance Percentage
equals 51%, then 1% of the Second Tranche Shares shall vest.  If the 2010-2012
Relative Performance Percentage equals 100%, then one-third of the Target Amount
shall vest. If the 2010-2012 Relative Performance Percentage equals 150% or
more, then 100% of the Second Tranche Shares shall vest (i.e., one-third of the
Maximum Amount shall vest).  2010-2012 Relative Performance Percentages between
51% and 150% shall result in incremental vesting on a straight-line basis (e.g.,
if the 2010-2012 Relative Performance Percentage is 129%, 79% of the Second
Tranche Shares shall vest.)

 

Third Tranche Vesting

 

Similarly, up to the final one-third of the total number of Shares subject to
this RSU grant (the “Third Tranche”) will vest and be settled on December 15,
2013, based upon the extent, if any, to which the Third Tranche performance
metric has been achieved.  The Third Tranche performance metric is the relative
performance of Company stock against the Russell 2000 index over a three-year
period, with the target Company stock performance equivalent to the performance
of the Russell 2000 index over such period.  To determine relative performance
for the Third Tranche, the baseline metrics are the 2010 Company Baseline Stock
Price and the 2010 Russell 2000 Index Baseline.

 

The Company will measure the 30 trading day average closing price of the Company
and the Russell 2000 Index, as reported in The Wall Street Journal, or such
other reliable source as is determined by the Administrator, in its sole
discretion, with the last trading day of such 30-trading day period ending on
November 29, 2013 (establishing both the “Third Tranche Company Closing Price”
and the “Third Tranche Russell 2000 Index Closing Price”).

 

The Company will then measure Company performance by dividing the Third Tranche
Company Closing Price by the 2010 Company Baseline Stock Price, with the
quotient expressed as a percentage of the 2010 Company Baseline Stock Price (the
“2010-2013 Company Percentage Performance”). The Company will then measure the
Russell 2000 Index Performance over the same period by dividing the Third
Tranche Russell 2000 Index Closing Price by the 2010 Russell 2000 Index Baseline
with the quotient expressed as a percentage of the 2010 Russell 2000 Index
Baseline (the “2010-2013 Russell 2000 Index Percentage Performance”).

 

The Company will then subtract the 2010-2013 Russell 2000 Index Percentage
Performance from the 2010-2013 Company Percentage Performance, then add 100 to
the result, with the final result constituting the relative Company performance
as a percentage (the “2010-2013 Relative Performance Percentage”).

 

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If the 2010-2013 Relative Performance Percentage is less than 51%, no Third
Tranche Shares shall vest.  If the 2010-2013 Relative Performance Percentage
equals 51%, then 1% of the Third Tranche Shares shall vest.  If the 2010-2013
Relative Performance Percentage equals 100%, then one-third of the Target Amount
shall vest. If the 2010-2013 Relative Performance Percentage equals 150% or
more, then 100% of the Third Tranche Shares shall vest (i.e., one-third of the
Maximum Amount shall vest).  2010-2013 Relative Performance Percentages between
51% and 150% shall result in incremental vesting on a straight-line basis (e.g.,
if the 2010-2013 Relative Performance Percentage is 129%, 79% of the Third
Tranche Shares shall vest.)

 

General Rules

 

Both the First Tranche Company Closing Price, the Second Tranche Company Closing
Price and the Third Tranche Company Closing Price shall be automatically
adjusted to account for any Company stock split or similar change in
capitalization effected without receipt of consideration by the Company set
forth in Plan Section 16(a) in the same manner as set forth in Plan
Section 26(a).  In making determinations hereunder, all fractional percentages
and Share numbers below .5 shall be rounded down to the nearest whole percentage
and all fractional percentages and Share numbers of .5 or greater shall be
rounded up to the nearest whole percentage.  All vesting and delivery of Shares
hereunder, except pursuant to assumed or substituted awards in a change of
control as specified in the following paragraph, shall be subject to the prior
written or electronic certification of the Compensation Committee of the Board
as to the extent to which the applicable performance milestones have been
achieved.

 

Change of Control

 

In the event the Company is acquired in a merger or asset sale pursuant to which
this RSU is assumed or substituted pursuant to Plan Section 16(c)(ii) (a “Change
of Control”), then for any Tranches as to which the performance period has not
been completed as of the date of the Change of Control, the First, Second, or
Third Tranche Company Closing Price, as applicable, shall be deemed to be the
price per share received by the Company’s stockholders in the Change of
Control.  Relative performance for each such uncompleted performance period
shall then be measured against the Russell 2000 Index performance from the 2010
Russell 2000 Index Baseline through the 30 trading day average closing price of
the Russell 2000 Index in the period ending on the date of the Change of
Control.  The Company’s stock performance relative to the Russell 2000 Index
shall then be determined consistently with the methodology specified herein for
completed performance periods.  This shall result in the determination of a
percentage of the Tranches for which the performance period has not been
completed as of the date of the Change of Control from 0-100%.  The number of
Shares subject to this RSU so determined shall then continue to vest based upon
Employee’s continuing as a Service Provider to the Company, the acquirer, or
their Parents or Subsidiaries upon November 29, 2011 for First Tranche shares
(if the First Tranche performance period was not completed as of the date of the
Change of Control), November 29, 2012 for Second Tranche shares (if the Second
Tranche performance period was not completed as of the date of the Change of
Control), and November 29, 2013, for Third Tranche Shares (if the Third Tranche
performance period was not completed as of the date of the Change of Control),
subject to accelerated vesting as

 

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set forth in the Company’s Change of Control Severance Plan (but only for
participants in such plan), as amended from time to time.

 

EXAMPLE 1:

 

2010 Company Baseline Stock Price =  $40

 

2010 Russell 2000 Index Baseline = 700

 

First Tranche Company Closing Price = $48

 

First Tranche Russell 2000 Index Closing Price = 770

 

2011 Company Percentage Performance = 120%

 

2011 Russell 2000 Index Percentage = 110%

 

2011 Relative Performance Percentage = 120-110 = 10% plus 100 = 110%

 

First Tranche Vesting = 60% of the First Tranche Shares (i.e., 60% of one-third
of the Maximum Amount, which is equal to 120% of the Target Amount)

 

EXAMPLE 2:

 

2010 Company Baseline Stock Price =  $40

 

2010 Russell 2000 Index Baseline = 700

 

First Tranche Company Closing Price = $30

 

First Tranche Russell 2000 Index Closing Price = 350

 

2011 Company Percentage Performance = 75%

 

2011 Russell 2000 Index Percentage = 50%

 

2011 Relative Performance Percentage = 75-50 = 25% plus 100 = 125%

 

First Tranche Vesting = 75% of the First Tranche Shares (i.e., 75% of one-third
of the Maximum Amount, which is equal to 150% of the Target Amount)

 

EXAMPLE 3:

 

2010 Company Baseline Stock Price =  $40

 

2010 Russell 2000 Index Baseline = 700

 

Second Tranche Company Closing Price = $60

 

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Second Tranche Russell 2000 Index Closing Price = 700

 

2012 Company Percentage Performance = 150%

 

2012 Russell 2000 Index Percentage = 100%

 

2012 Relative Performance Percentage = 150-100 = 50% plus 100 = 150%

 

Second Tranche Vesting = 100% of the Second Tranche Shares (i.e., one-third of
the Maximum Amount, which is equal to 200% of the Target Amount)

 

EXAMPLE 4:

 

2010 Company Baseline Stock Price =  $40

 

2010 Russell 2000 Index Baseline = 700

 

Change of Control Date = June 30, 2011

 

Change of Control Consideration received by Company stockholders = $50 per share

 

Russell 2000 Index 30-day Trailing June 30, 2011 Price = 630

 

Deemed (all Tranches) Company Percentage Performance = 125%

 

Russell 2000 Index Percentage through Change of Control = 90%

 

First, Second and Third Tranche Relative Performance Percentage = 125-90 = 35%
plus 100 = 135%

 

First, Second and Third Tranche Vesting = 85% of the Maximum Amount (which
equals 170% of the Target Amount, vesting ratably as to one-third of 85% of the
Maximum Amount on each of November 29, 2011, November 29, 2012 and November 29,
2013, subject to Employee’s continuing as a Service Provider through such dates
and further subject to accelerated vesting as set forth in the Company’s Change
of Control Severance Plan (but only for participants in such plan), as amended
from time to time.

 

4.               Forfeiture upon Termination as an Employee.  Notwithstanding
any contrary provision of this Agreement or the Notice of Grant, if the Employee
terminates service as a Service Provider for any or no reason prior to vesting,
the unvested RSUs awarded by this Agreement will thereupon be forfeited at no
cost to the Company, subject to accelerated vesting as set forth in the
Company’s Change of Control Severance Plan (but only for participants in such
plan), as amended from time to time.

 

5.               Settlement Upon Vesting.  Any RSUs that vest in accordance with
paragraph 3 will be distributed to the Employee (or in the event of the
Employee’s death, to his or her estate) in Shares.

 

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6.               Withholding of Taxes.  Notwithstanding the foregoing paragraph
5, no Shares shall be distributed to Employee unless and until the Employee
shall have delivered to the Company or its designated Subsidiary the full amount
of any federal, state or local income or other taxes which the Company or such
Subsidiary may be required by law to withhold with respect to such Shares.  The
Employee may elect to satisfy any such statutory minimum tax withholding
requirement by having the Company withhold Shares otherwise deliverable to the
Employee or by delivering to the Company already-owned Shares, subject to the
absolute discretion of the Company to disallow satisfaction of such withholding
by the delivery or withholding of stock.

 

7.               Rights as Stockholder.  Neither the Employee nor any person
claiming under or through the Employee will have any of the rights or privileges
of a stockholder of the Company in respect of any Shares deliverable hereunder
unless and until certificates representing such Shares will have been issued,
recorded on the records of the Company or its transfer agents or registrars, and
delivered to the Employee or Employee’s broker.

 

8.               Acknowledgements.  Employee acknowledges the following:

 

a.                                       The Company (and not Employee’s
employer) is granting the RSU.  The Company will administer the Plan from
outside Employee’s country of residence and United States of America law will
govern all RSUs granted under the Plan.

 

b.                                      That benefits and rights provided under
the Plan are wholly discretionary and, although provided by the Company, do not
constitute regular or periodic payments.

 

c.                                       The benefits and rights provided under
the Plan are not to be considered part of Employee’s salary or compensation for
purposes of calculating any severance, resignation, redundancy or other end of
service payments, vacation, bonuses, long-term service awards, indemnification,
pension or retirement benefits, or any other payments, benefits or rights of any
kind.

 

d.                                      Employee waives any and all rights to
compensation or damages as a result of the termination of employment with the
Company for any reason whatsoever insofar as those rights result or may result
from:

 

·                                          the loss or diminution in value of
such rights under the Plan, or

 

·                                          Employee ceasing to have any rights
under, or ceasing to be entitled to any rights under the Plan as a result of
such termination.

 

e.                                 The grant of the RSU, and any future grant of
RSUs under the Plan is entirely voluntary, and at the complete discretion of the
Company.

 

f.                                   Neither the grant of the RSU nor any future
grant of an RSU by the Company will be deemed to create any obligation to grant
any further RSUs, whether or not such a reservation is explicitly stated at the
time of such a grant.

 

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g.                                The Company has the right, at any time to
amend, suspend or terminate the Plan.

 

h.                                The Plan will not be deemed to constitute, and
will not be construed by Employee to constitute, part of the terms and
conditions of employment, and the Company will not incur any liability of any
kind to Employee as a result of any change or amendment, or any cancellation, of
the Plan at any time.

 

i.                                    Participation in the Plan will not be
deemed to constitute, and will not be deemed by Employee to constitute, an
employment or labor relationship of any kind with the Company.

 

j.                                    By entering into this RSU Agreement, and
as a condition of the grant of the RSU, Employee consents to the collection,
use, and transfer of personal data as described in this subsection to the full
extent permitted by and in full compliance with Applicable Law.

 

k.                                 Employee understands that the Company and its
Subsidiaries hold certain personal information about the Employee, including,
but not limited to, name, home address and telephone number, date of birth,
social insurance number, salary, nationality, job title, any Shares or
directorships held in the Company, details of all RSUs or other entitlement to
Shares awarded, canceled, exercised, vested, unvested, or outstanding in
Employee’s favor, for the purpose of managing and administering the Plan
(“Data”).

 

l.                                    Employee further understands that the
Company and/or its Subsidiaries will transfer Data among themselves as necessary
for the purposes of implementation, administration, and management of Employee’s
participation in the Plan, and that the Company and/or its Subsidiary may each
further transfer Data to any third parties assisting the Company in the
implementation, administration, and management of the Plan (“Data Recipients”).

 

m.                              Employee understands that these Data Recipients
may be located in Employee’s country of residence or elsewhere, such as the
United States.  Employee authorizes the Data Recipients to receive, possess,
use, retain, and transfer Data in electronic or other form, for the purposes of
implementing, administering, and managing Employee’s participation in the Plan,
including any transfer of such Data, as may be required for the administration
of the Plan and/or the subsequent holding of Shares on Employee’s behalf, to a
broker or third party with whom the Shares acquired on exercise may be
deposited.

 

n.                                Employee understands that Employee may, at any
time, review the Data, request that any necessary amendments be made to it, or
withdraw Employee’s consent herein in writing by contacting the Company. 
Employee further understands that withdrawing consent may affect Employee’s
ability to participate in the Plan.

 

o.                                Employee has received the terms and conditions
of this RSU Agreement and any other related communications, and Employee
consents to having received these documents in English.

 

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9.                     Address for Notices.  Any notice to be given to the
Company under the terms of this Agreement shall be addressed to the Company, in
care of Stock Plan Administration at Coherent, Inc., 5100 Patrick Henry Drive,
Santa Clara, CA  95054, or at such other address as the Company may hereafter
designate in writing.

 

10.               Conditions for Issuance of Certificates for Stock.  The shares
of stock deliverable to the Employee may be either previously authorized but
unissued shares or issued shares that have been reacquired by the Company.  The
Company shall not be required to issue any certificate or certificates for
shares of stock hereunder prior to fulfillment of all the following conditions: 
(a) the admission of such shares to listing on all stock exchanges on which such
class of stock is then listed; (b) the completion of any registration or other
qualification of such shares under any State or Federal law or under the rulings
or regulations of the Securities and Exchange Commission or any other
governmental regulatory body, which the Company shall, in its absolute
discretion, deem necessary or advisable; (c) the obtaining of any approval or
other clearance from any State or Federal governmental agency, which the Company
shall, in its absolute discretion, determine to be necessary or advisable; and
(d) the lapse of such reasonable period of time following the date of grant of
the Restricted Stock Unit as the Company may establish from time to time for
reasons of administrative convenience.

 

11.               Plan Governs.  This Agreement is subject to all terms and
provisions of the Plan.  In the event of a conflict between one or more
provisions of this Agreement and one or more provisions of the Plan, the
provisions of the Plan shall govern.  Capitalized terms used and not defined in
this Agreement shall have the meaning set forth in the Plan.

 

12.               Captions.  Captions provided herein are for convenience only
and are not to serve as a basis for interpretation or construction of this
Agreement.

 

13.               Agreement Severable.  In the event that any provision in this
Agreement shall be held invalid or unenforceable, such provision shall be
severable from, and such invalidity or unenforceability shall not be construed
to have any effect on, the remaining provisions of this Agreement.

 

14.               Modifications to the Agreement.  This Agreement constitutes
the entire understanding of the parties on the subjects covered.  The Employee
expressly warrants that he or she is not executing this Agreement in reliance on
any promises, representations, or inducements other than those contained
herein.  Modifications to this Agreement or the Plan can be made only in an
express written contract executed by a duly authorized officer of the Company.

 

15.               Governing Law.  This Agreement will be covered by the internal
substantive laws, but not the choice of law rules, of California.

 

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