Exhibit 10.1


 


CHANGE OF CONTROL SEVERANCE PLAN


 


As amended and restated effective December 10,
2008


 


Introduction


 


The Board of Directors of
Coherent, Inc., a Delaware corporation (“Company”), has evaluated the
economic and social impact of an acquisition or other change of control on its
key employees.  The Board recognizes that
the potential of such an acquisition or change of control can be a distraction
to its key employees and can cause them to consider alternative employment
opportunities.  The Board has determined
that it is in the best interests of the Company and its stockholders to assure
that the Company will have the continued dedication and objectivity of its key
employees.  The Board believes that the
adoption of this amended and restated Plan will enhance the ability of the
Company’s key employees’ to assist the Board in objectively evaluating
potential acquisitions or other changes of control.


 


Furthermore, the Board
believes a change of control severance plan of this kind will aid the Company
in attracting and retaining the highly qualified, high performing individuals
who are essential to its success.  The
plan’s assurance of fair treatment will ensure that key employees will be able
to maintain productivity, objectivity and focus during the period of
significant uncertainty that is inherent in an acquisition or other change of
control.


 


Accordingly, the
following plan has been developed and is hereby adopted.


 


ARTICLE I



ESTABLISHMENT OF PLAN


 


1.1           Establishment of Plan.  As of the Effective Date, the Company hereby
establishes an amended and restated severance plan to be known as the “Change
of Control Severance Plan” (the “Plan”), as set forth in this document.  The purposes of the Plan are as set forth in
the Introduction.


 


1.2           Applicability of Plan.  The benefits provided by this Plan shall be
available to certain key Employees of the Company who, at or after the
Effective Date, meet the eligibility requirements of Article III.


 


1.3           Contractual Right to Benefits.  This Plan establishes and vests in each
Participant a contractual right to the benefits to which he or she is entitled
hereunder, enforceable by the Participant against his or her Employer or the
Company, or both.


 

















 


ARTICLE II



DEFINITIONS AND CONSTRUCTION


 


2.1                               Definitions. 
Whenever used in the Plan, the following terms shall have the meanings
set forth below and, when the meaning is intended, the initial letter of the
term is capitalized.


 


(a)           “Acquiror” means the Person,
successor, or assignee, if any, that consummates a Business Combination with
the Company or that acquires fifty percent (50%) or more of the combined voting
power of the outstanding shares of capital stock of the Company entitled to
vote generally in the election of directors.


 


(b)           “Base Pay” means all base
straight time gross earnings, exclusive of incentive compensation, incentive
payments, bonuses, commissions or other compensation, for the calendar year
coinciding with or immediately preceding the year in which the Severance
Payment becomes payable.


 


(c)           “Beneficial Owner” shall have
the meaning ascribed to such term in Rule l3d-3 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”).


 


(d)           “Bonus Pay” means, with
respect to a Participant, the total target payments to the Participant under
the Company’s cash bonus, commission and incentive programs at 100% of plan for
the Company fiscal year in which the Change of Control occurs, or, if greater,
for the Company fiscal year in which the Participant’s employment terminates,
and Company contributions allocated to the Participant’s account under the
Company’s 401(k) plan (other than contributions attributable to the Participant’s
salary deferral election), for the calendar year coinciding with or immediately
preceding the year in which the Severance Payment becomes payable.


 


(e)           “Change of Control” means a (i) change
in ownership of the Company, (ii) change in effective control of the
Company, or (iii) change in the ownership of a substantial portion of the
Company’s assets (with an asset value change in ownership exceeding more than
50% of the total gross fair market value replacing the 40% default rule), all
as defined under Code Section 409A and the final Treasury Regulations
thereunder.


 


(f)            “Code” means the Internal
Revenue Code of 1986, as amended.


 


(g)           “Company” means Coherent, Inc.,
a Delaware corporation, and any successor as provided in Article VII
hereof.


 


(h)           “Effective Date” means December 10,
2008.


 


(i)            “Employee” means a common law
employee of an Employer (other than an employee who is a party to an individual
agreement with the Company which provides severance or severance-type
benefits), whose customary employment as of a Change of Control is 20 hours or
more per week.  For purposes of this
Plan, an Employee shall be considered to continue to be 


 


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employed in the case of
sick leave, military leave, or any other leave of absence approved by the
Company.


 


(j)            “Employer” means the Company
or a subsidiary of the Company which has adopted the Plan pursuant to Article VI
hereof.


 


(k)           “ERISA” means the Employee
Retirement Income Security Act of 1974, as amended.


 


(l)            “Just Cause” means the
termination of employment of an Employee shall have taken place as a result of (i) an
act or acts of dishonesty undertaken by such Employee and intended to result in
substantial gain or personal enrichment of the Employee at the expense of his
or her Employer, (ii) persistent failure or inability to perform the
duties and obligations of such Employee’s employment which are demonstrably
willful and deliberate on the Employee’s part and which are not remedied in a
reasonable period of time after receipt of written notice from the Company, or (iii) Employee’s
conviction of, or plea of nolo contendere to, a felony.


 


(m)          “Participant” means an Employee
who meets the eligibility requirements of Section III.


 


(n)           “Person” shall have the
meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and
as used in Sections 13(d) and 14(d) thereof, including a “group” as
defined in Section 13(d) of the Exchange Act but excluding the Company and
any subsidiary and any employee benefit plan sponsored or maintained by the
Company or any subsidiary (including any trustee of such plan acting as
Trustee).


 


(o)           “Plan” means the Coherent, Inc.
Change of Control Severance Plan, as amended and restated as of the Effective
Date.


 


(p)           “Review Committee” means a
committee established by the Board of Directors of the Company, the primary functions
of which shall be to determine whether Participants have incurred a significant
reduction in duties and responsibilities, and to establish, where necessary,
the date of a Participant’s termination of employment for purposes of the
Plan.  The Review Committee shall be
composed solely of members of the Company’s Board of Directors serving as such
immediately prior to a Change of Control. 
The Review Committee shall establish such procedures as it deems
appropriate to facilitate a fair and objective review process to determine
whether a Participant has incurred a significant reduction in his or her duties
and responsibilities.


 


(q)           “Severance Payment” means the
payment of severance compensation as provided in Article IV hereof.


 


2.2           Applicable Law.  To the extent not preempted by the laws of
the United States, the laws of the State of California shall be the controlling
law in all matters relating to the Plan.


 


2.3           Severability.  If a provision of this Plan shall be held
illegal or invalid, the illegality or invalidity shall not affect the remaining
parts of the Plan and the Plan shall be construed and enforced as if the
illegal or invalid provision had not been included.


 


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ARTICLE III




ELIGIBILITY


 


3.1                               Participation in Plan. 
As of the Effective Date, only Employees who are Non-Officer
Vice-Presidents, Officer Vice-Presidents or the Chief Executive Officer shall
be Participants in the Plan.  Following
the Effective Date, new Officers of the Company shall automatically become
Participants in the Plan; provided, however, that new Non-Officer
Vice-Presidents shall only become Participants in the Plan if the Board, in its
sole discretion, affirmatively determines that they are eligible Participants.  A Participant shall cease to be a Participant
in the Plan when he or she ceases to be an Employee of an Employer, unless such
Participant is then entitled to payment of a Severance Payment as provided in
the Plan.  A Participant entitled to
payment of a Severance Payment shall remain a Participant in the Plan until the
full amount of the Severance Payment has been paid to the Participant.


 


ARTICLE IV




SEVERANCE BENEFITS


 


4.1                               Right to Severance Payment. 
A Participant shall be entitled to receive from the Company a Severance
Payment in the amount provided in Section 4.3 if there has been a Change
of Control of the Company and if, within two (2) years of the Change of
Control, the Participant’s employment by an Employer shall terminate for any
reason specified in Section 4.2, whether the termination is voluntary or
involuntary.  A Participant shall not be
entitled to a Severance Payment if termination occurs for reasons not specified
in Section 4.2, including (but not limited to) death, voluntary retirement
at or after age 65, total and permanent disability, or for Just Cause.


 


4.2                               Good Reasons for Termination. 
Following a Change of Control, and subject to a Participant’s entering
into and not revoking a Release of Claims in favor of the Company or any
successor company in substantially the form attached hereto as Exhibit A
(the “Release”), a Participant shall be entitled to a Severance Payment and to
the benefits described in Section 4.5 if his or her employment by an
Employer is terminated, voluntarily or involuntarily, following any one or more
of the following events:


 


(a)           The Employer reduces the Participant’s
Base Pay as in effect immediately prior to the Change of Control.


 


(b)           Without the Participant’s express
written consent, the Employer requires the Participant to change the location
of his or her job or office, so that he or she will be based at a location more
than twenty-five (25) miles from the location of his job or office immediately
prior to the Change of Control.


 


(c)           The Employer decreases its cost of Employer-provided
benefits, under plans, arrangements, policies and procedures, taken as a whole,
compared to the Employer-provided cost of 


 


4

















 


such benefits immediately
prior to the Change of Control, or the Employer increases the cost of such
benefits to the Participant compared to the Participant cost immediately prior
to the Change of Control; provided, however, that if such decrease or increase
results from the Employer’s good faith exercise of business judgment or in
response to changes in federal or state law, such decrease or increase shall
not be a Good Reason for termination.


 


(d)           The Participant incurs a significant
reduction in duties and responsibilities as determined by the Review Committee.


 


(e)           A successor company fails or refuses
to assume the Company’s obligations under this Plan, as required by Article VII.


 


(f)            The Company or any successor company
breaches any of the provisions of this Plan.


 


(g)           The Employer terminates the
employment of a Participant other than for Just Cause.


 


Provided, however,
that such events shall not constitute grounds for a Good Reason termination
unless the Participant has provided notice to the Company of the existence of
the one or more of the above conditions within 90 days of its initial existence
and the Company has been provided at least 30 days to remedy the condition.


 


4.3                               Amount of Severance Payment. 
Each Participant entitled to a Severance Payment under this Plan shall
receive from the Company a cash payment as follows:


 


(a)           Chief Executive Officer.  The Severance Payment for the Company’s Chief
Executive Officer shall equal the product of 2.99 times the sum of the Chief
Executive Officer’s Base Pay and Bonus Pay.


 


(b)           Officer Vice-Presidents.  The Severance Payment for the Company’s
Officer Vice-Presidents shall equal the product of two times the sum of the
Officer Vice-President’s Base Pay and Bonus Pay.


 


(c)           Non-Officer Vice-Presidents.  The Severance Payment for the Company’s
Non-Officer Vice-Presidents shall equal the product of one times the sum of the
Non-Officer Vice-President’s Base Pay and Bonus Pay.


 


(d)           Non-U.S. Participants.  In the case of a Participant who performs all
or substantially all of his or her employment services outside of the United States,
the Company may, in its discretion, reduce the Severance Payment otherwise
calculated under Section 4.3(a), (b) or (c) by the amount of
severance-type benefits to which such Participant is then entitled under the
laws of the country or countries in which such services are performed.


 


4.4                               Time of Severance Payment. 
Subject to section 4.5(e) hereof, the Severance Payment to which a
Participant is entitled shall be paid by the Company to the Participant, in
cash and in full, not later than the later of (i) ten calendar days after
the termination date or, (ii) two business days 


 


5

















 


following the date of
effectiveness of the Release (the “Payment Date”).  If such a Participant should die before all
amounts payable to him or her have been paid, such unpaid amounts shall be paid
to the Participant’s designated beneficiary, if living, otherwise to the
personal representative of the Participant’s estate.


 


4.5                               Other Severance Provisions. 
In the event a Severance Payment obligation is triggered under this Plan
for a Participant, such Participant shall also receive the following benefits:


 


(a)           Equity Compensation Acceleration.  One hundred percent of Participant’s
outstanding unvested equity compensation awards shall automatically accelerate
their vesting so as to become fully vested and, with respect to stock options
and stock appreciation rights, exercisable.


 


(b)           Health Insurance.  In addition, for a period set forth below,
the Company shall be obligated to continue to make available to the Participant
and to pay directly or reimburse premiums for Participant and his or her
covered dependents within thirty (30) days of the premium due date for all
group health, dental, vision and life insurance plans existing on the date of
the Participant’s termination at the same level and with the same employee
premium cost as provided to such Participant immediately prior to the
Participant’s termination (the “Company-Paid Coverage”); provided, however that
such payments or reimbursements shall be delayed six months and one day from
the date of termination (and then paid in full in arrears) to the extent
required to avoid the imposition of additional tax under Internal Revenue Code Section 409A
(“Code Section 409A”).  If a Participant’s
coverage under such plans coverage included the Participant’s dependents
immediately prior to the Participant’s termination, such dependents shall also
be covered at Company expense. 
Company-Paid Coverage shall continue for three years for the Company’s
Chief Executive Officer, for two years for the Company’s Officer
Vice-Presidents and for one year for the Company’s non-Officer Vice
Presidents.  For purposes of the
continuation health coverage required under Section 4980B of the Code (“COBRA”),
the date of the “qualifying event” giving rise to a Participant’s COBRA
election period (and that of his “qualifying beneficiaries”) shall be the last
date on which the Participant receives Company-Paid Coverage under this Plan.


 


(c)           Outplacement Assistance.  On termination, the Participant shall be
entitled to reasonable, pre-approved Company-paid outplacement assistance,
including job counseling and referral services.


 


(d)           Golden Parachute Excise Taxes.


 


(i)       Chief Executive Officer — Reduction if
Parachute Payments Are Less than 3.59 x Base Amount.  In the event that the benefits provided for
in this Plan or otherwise payable to the Company’s Chief Executive Officer (a) constitute
“parachute payments” within the meaning of Code Section 280G, (b) would
be subject to the excise tax imposed by Section 4999 of the Code (the “Excise
Tax”), and (c) the aggregate value of such parachute payments, as
determined in accordance with Section 280G of the Code and the Treasury
Regulations thereunder is less than the product obtained by multiplying 3.59 by
Chief Executive Officer’s “base amount” within the meaning of Code Section 280G(b)(3),
then the benefits under this Plan shall be reduced to the extent necessary (but
only to that extent) so that no portion of such benefits will be subject to the
Excise Tax.


 


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(ii)      Chief Executive Officer — Full Excise
Tax Gross-Up if Parachute Payments Equal to or Greater than 3.59 x Base Amount.  In the event that the benefits provided for
in this Plan or otherwise payable to the Company’s Chief Executive Officer (a) constitute
“parachute payments” within the meaning of Code Section 280G, (b) would
be subject to the Excise Tax, and (c) the aggregate value of such
parachute payments, as determined in accordance with Section 280G of the
Code and the Treasury Regulations thereunder is equal to or greater than the
product obtained by multiplying 3.59 by the Chief Executive Officer’s “base
amount” within the meaning of Code Section 280G(b)(3), then the Chief
Executive Officer shall receive (i) a payment from the Company sufficient
to pay such Excise Tax, plus (ii) an additional payment from the Company
sufficient to pay the Excise Tax and federal and state income and employment
taxes arising from the payments made by the Company to its Chief Executive
Officer pursuant to this sentence.  The
Executive shall receive such payments no later than the end of the Executive’s
taxable year following the taxable year in which the Executive remitted the
applicable taxes.


 


(iii)     Best Results Approach for Participants
other than Chief Executive Officer. 
In the event that the severance and other benefits provided for in this
Plan or otherwise payable or provided to a Participant other than the Company’s
Chief Executive Officer (i) constitute “parachute payments” within the
meaning of Section 280G of the Code, and (ii) but for this Section 4.5(d)(iii),
would be subject to the Excise Tax, then the Participant’s Plan benefits shall
be either (a) delivered in full, or (b) delivered as to such lesser
extent which would result in no portion of such severance benefits being
subject to the Excise Tax, whichever of the foregoing amounts, taking into
account the applicable federal, state and local income taxes and the Excise
Tax, results in the receipt by the Participant on an after-tax basis, of the
greatest amount of severance benefits, notwithstanding that all or some portion
of such severance benefits may be taxable under Section 4999 of the Code.


 


(iv)     General 280G.  Unless the Company and Employee otherwise
agree in writing, any determination required under this Section 4.5(d) will
be made in writing by a national “Big Four” accounting firm selected by the
Company or such other person or entity to which the parties mutually agree (the
“Accountants”), whose determination will be conclusive and binding upon
Employee and the Company for all purposes. 
For purposes of making the calculations required by this Section 4.5(d)
the Accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of Sections 280G and 4999 of the Code.  The Company and the Participants shall
furnish to the Accountants such information and documents as the Accountants
may reasonably request in order to make a determination under this
Section.  The Company shall bear all
costs the Accountants may reasonably incur in connection with any calculations
contemplated by this Section 4.5(d)(iii) Any reduction in payments and/or
benefits required by this Section4.5(d)
shall occur in the following order: (1) reduction of cash payments; and (2) reduction
of equity acceleration (full-value awards first, then stock options), and (3) other
benefits paid to Executive.  In the event
that acceleration of vesting of equity awards is to be reduced, such
acceleration of vesting shall be cancelled in the reverse order of the date of
grant for Executive’s equity awards.


 


7

















 


(e)           Internal Revenue Code Section 409A.


 


(i)       Notwithstanding anything to the contrary
in this Plan, if Participant is a “specified employee” within the meaning of Section 409A
of the Code, and the final regulations and any guidance promulgated thereunder
(“Section 409A”) at the time of Participant’s separation from service (as
such term is defined in Section 409A), then the cash severance
benefits payable to Participant under this Agreement, if any, and any other
severance payments or separation benefits that may be considered deferred
compensation under Section 409A (together, the “Deferred Compensation
Separation Benefits”) otherwise due to Participant on or within the six (6) month
period following Participant’s separation from service shall accrue during such
six (6) month period and shall become payable in a lump sum payment on the date
six (6) months and one (1) day following the date of Participant’s separation
from service.  All subsequent payments,
if any, shall be payable in accordance with the payment schedule applicable to
each payment or benefit.  Notwithstanding
anything herein to the contrary, if Participant dies following his separation from service but prior to
the six (6) month anniversary of his date of
separation from service, then any payments delayed
in accordance with this Section shall be payable in a lump sum as soon as
administratively practicable after the date of Participant’s death and all
other Deferred Compensation Separation Benefits shall be payable in accordance
with the payment schedule applicable to each payment or benefit.


 


(f)    It is the intent of this Agreement to comply
with the requirements of Section 409A so that none of the severance
payments and benefits to be provided hereunder shall be subject to the
additional tax imposed under Section 409A, and any ambiguities herein
shall be interpreted to so comply.  The
Company and Participant agree to work together in good faith to consider
amendments to this Agreement and to take such reasonable actions which are
necessary, appropriate or desirable to avoid imposition of any additional tax
or income recognition under Section 409A prior to actual payment to
Participant.


 


(g)   Notwithstanding any other
provisions of this Agreement, Participant’s receipt of severance payments
and benefits under this Agreement is conditioned
upon Participant signing and not revoking the Release and subject to the
Release becoming effective within sixty (60) days following Participant’s
termination of employment (the “Release Period”).  No severance will be paid or provided until
the Release becomes effective.  No
severance will be paid or provided unless the Release becomes effective during
the Release Period.  In the event
Participant’s separation from service occurs on or after November 1 of any
year, any severance hereunder will be paid in arrears on the first payroll date
to occur during the following calendar year, or such later time as required by Section 409A.


 


ARTICLE V



OTHER RIGHTS AND BENEFITS NOT AFFECTED


 


5.1           Other Benefits.  Neither the provisions of this Plan nor the
Severance Payment provided for hereunder shall reduce any amounts otherwise
payable, or in any way diminish the Participant’s rights as an Employee of an
Employer, whether existing now or hereafter, under any 


 


8

















 


benefit, incentive,
retirement, stock option, stock bonus, stock purchase plan, or any employment
agreement or other plan or arrangement.


 


5.2           Employment Status.  This Plan does not constitute a contract of
employment or impose on the Participant or the Participant’s Employer any
obligation to retain the Participant as an Employee, to change the status of
the Participant’s employment, or to change the Company’s policies regarding
termination of employment.


 


5.3           Taxation of Plan Payments.  All Severance Payments paid pursuant to this
Plan shall be subject to regular payroll and withholding taxes.


 


ARTICLE VI




PARTICIPATING EMPLOYERS


 


6.1           Upon approval by the Board of
Directors of the Company, this Plan may be adopted by any Subsidiary of the
Company.  Upon such adoption, the
Subsidiary shall become an Employer hereunder and the provisions of the Plan
shall be fully applicable to the Employees of that Subsidiary.  The term “Subsidiary” means any corporation
in which the Company, directly or indirectly, holds a majority of the voting
power of its outstanding shares of capital stock.


 


ARTICLE VII




SUCCESSOR TO COMPANY


 


7.1           The Company shall require any
successor or assignee, whether direct or indirect, by purchase, merger, consolidation
or otherwise, to all or substantially all the business or assets of the
Company, expressly and unconditionally to assume and agree to perform the
Company’s obligations under this Plan, in the same manner and to the same
extent that the Company would be required to perform if no such succession or
assignment had taken place.  In such
event, the term “Company,” as used in this Plan, shall mean the Company as
hereinbefore defined and any successor or assignee to the business or assets
which by reason hereof becomes bound by the terms and provisions of this Plan.


 


ARTICLE VIII




DURATION, AMENDMENT AND TERMINATION


 


8.1           Duration.  If a Change of Control has not occurred, this
Plan shall expire two (2) years from the Effective Date, unless sooner terminated
as provided in Section 8.2, or unless extended for an additional period or
periods by resolution adopted by the Board of Directors of the Company at any
time during the second year of the Plan.


 


9
















 


If a Change of Control
occurs, this Plan shall continue in full force and effect, and shall not
terminate or expire until after all Participants who become entitled to
Severance Payments hereunder shall have received such payments in full.


 


8.2           Amendment and Termination.  The Plan may be amended in any respect by
resolution adopted by a majority of the Board of Directors of the Company,
unless a Change of Control has previously occurred.  The Plan may be terminated by resolution
adopted by a majority of the Board of Directors, provided that written notice
is furnished to all Participants at least sixty (60) days prior to such
termination.  If a Change of Control
occurs, the Plan no longer shall be subject to amendment, change, substitution,
deletion, revocation or termination in any respect whatsoever.


 


8.3           Form of Amendment.  The form of any proper amendment or
termination of the Plan shall be a written instrument signed by a duly
authorized officer or officers of the Company, certifying that the amendment or
termination has been approved by the Board of Directors.  A proper amendment of the Plan automatically
shall effect a corresponding amendment to all Participants’ rights
hereunder.  A proper termination of the
Plan automatically shall effect a termination of all Participants’ rights and
benefits hereunder.


 


ARTICLE IX



LEGAL FEES AND EXPENSES


 


9.1           The Company shall pay all legal fees,
costs of litigation, and other expenses incurred in good faith by each
Participant as a result of the Company’s refusal to make the Severance Payment
to which the Participant becomes entitled under this Plan, or as a result of
the Company’s contesting the validity, enforceability or interpretation of the
Plan, within 30 days of the invoice date for such expenses.


 


ARTICLE X



PLAN ADMINISTRATION


 


10.1         The Employer shall have discretionary
authority to construe and interpret the terms of the Plan, and to determine
eligibility and the amount and manner of any payment of benefits hereunder.


 


10.2         An employee or former employee of an
Employer who disagrees with their allotment of benefits under this Plan may
file a written appeal with the designated Human Resources representative.  Any claim relating to this Plan shall be
subject to this appeal process.  If an
employee or former employee of an Employer, or their representative (the “Claimant”)
submits a written claim for a benefit under the Plan and the claim is denied in
whole or in part, the Employer shall provide the Claimant with a written or
electronic notification that complies with Department of Labor Regulation Section 2520.104b-1(c)(1).
The denial notice will include:


 


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(1)           specific reason(s) for the denial;


 


(2)           reference to the specific Plan
provision(s) on which the denial is based;


 


(3)           a description of any additional
material or information necessary for the Claimant to perfect the claim, and an
explanation of why the material or information is necessary; and


 


(4)           an explanation of the Plan’s claims
review procedure and the time limits applicable to such procedures, including a
statement of the Claimant’s right to bring a civil action under ERISA Section 502(a)
following a denial on review (as set forth in Section 12.4 below).


 


(b)           The denial notice shall be furnished
to the Claimant no later than ninety (90)-days after receipt of the claim by
the Employer, unless the Employer determines that special circumstances require
an extension of time for processing the claim. 
If the Employer determines that an extension of time for processing is
required, then notice of the extension shall be furnished to the Claimant prior
to the termination of the initial ninety (90)-day period.  In no event shall such extension exceed a
period of ninety (90)-days from the end of such initial period.  The extension notice shall indicate the
special circumstances requiring an extension of time and the date by which the
Plan expects to render the benefits determination.


 


(c)           Claim Review Procedure.  The Claimant may request review of the denial
at any time within sixty (60) days following the date the Claimant received
notice of the denial of his or her claim. 
The Employer shall afford the Claimant a full and fair review of the
decision denying the claim and, if so requested, shall:


 


(i)       provide the Claimant with the opportunity
to submit written comments, documents, records and other information relating
to the claim for benefits;


 


(ii)      provide that the Claimant shall be
provided, upon request and free of charge, reasonable access to, and copies of,
all documents, records and other information (other than documents, records and
other information that is legally-privileged) relevant to the Claimant’s claim
for benefits; and


 


(iii)     provide for a review that takes into
account all comments, documents, records and other information submitted by the
Claimant relating to the claim, without regard to whether such information was
submitted or considered in the initial benefit determination.


 


(d)           If the claim is subsequently also
denied by the Employer, in whole or in part, then the Claimant shall be
furnished with a denial notice that shall contain the following:


 


(i)       specific reason(s) for the denial;


 


(ii)      reference to the specific Plan provision(s)
on which the denial is based; and


 


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(iii)     an explanation of the Plan’s claims review
procedure and the time limits applicable to such procedures, including a
statement of the Claimant’s right to bring a civil action under ERISA Section 502(a)
following the denial on review.


 


(e)           The decision on review shall be
issued within sixty (60) days following receipt of the request for review.  The period for decision may, however, be
extended up to one hundred twenty (120) days after such receipt if the Employer
determines that special circumstances require extension.  In the case of an extension, notice of the
extension shall be furnished to the Claimant prior to the expiration of the
initial sixty (60)-day period.  In no
event shall such extension exceed a period of sixty (60) days from the end of
such initial period.  The extension
notice shall indicate the special circumstances requiring an extension of time
and the date by which the Plan expects to render the benefits determination.


 


10.3         If the appeal of an employee or former
employee of an employer appeal is denied, such employee or former employee
shall have the right and option to elect (in lieu of litigation) to have any
dispute or controversy arising under or in connection with the Plan settled by
arbitration, conducted before a panel of three arbitrators sitting in a
location selected by the employee within fifty (50) miles from the location of
his or her job with an Employer, in accordance with rules of the American
Arbitration Association then in effect. 
Judgment may be entered on the award of the arbitrator in any court
having jurisdiction.  All expenses of
such arbitration, including the fees and expenses of the counsel for the
employee, shall be borne by the Employer.


 


ARTICLE XI



ERISA REQUIRED INFORMATION


 


11.1         The Plan sponsor and administrator is:


 


Coherent, Inc.

5100 Patrick Henry Drive

Santa Clara, CA  95054

(408) 764-4000


 


11.2         Designated agent for service of
process:


 


General Counsel

Coherent, Inc.

5100 Patrick Henry Drive

Santa Clara, CA  95054

(408) 764-4000


 


11.3         Plan records are kept on a fiscal year
basis.


 


11.4         The Plan shall be funded from the
Employer’s general assets only.


 


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EXHIBIT A


 


COHERENT, INC. CHANGE OF CONTROL SEVERANCE PLAN


 


RELEASE OF CLAIMS


 


This Release of Claims (“Agreement”)
is made by and between Coherent, Inc. (the “Company”), and
                        
(“Employee”).


 


WHEREAS, Employee has
agreed to enter into a release of claims in favor of the Company in return for
obtaining certain severance benefits specified in the Coherent, Inc.
Change of Control Severance Plan (the “Plan”).


 


NOW THEREFORE, in
consideration of the mutual promises made herein, the Parties hereby agree as
follows:


 


1.                                     Termination.  Employee’s employment from the Company
terminated on
                        .


 


2.                                     Confidential Information. 
Employee shall continue to maintain the confidentiality of all
confidential and proprietary information of the Company and shall continue to
comply with the terms and conditions of the Employee Confidential Information
and Arbitration Agreement between Employee and the Company.  Employee shall return all the Company
property and confidential and proprietary information in his possession to the
Company on the Effective Date of this Agreement.


 


3.                                     Payment of Salary. 
Employee acknowledges and represents that the Company has paid all
salary, wages, bonuses, accrued vacation, commissions and any and all other
benefits due to Employee.


 


4.                                     Release of Claims. 
Employee agrees that the foregoing consideration represents settlement
in full of all outstanding obligations owed to Employee by the Company.  Employee, on behalf of himself, and his
respective heirs, family members, executors and assigns, hereby fully and
forever releases the Company and its past, present and future officers, agents,
directors, employees, investors, shareholders, administrators, affiliates,
divisions, subsidiaries, parents, predecessor and successor corporations, and
assigns, from, and agrees not to sue or otherwise institute or cause to be
instituted any legal or administrative proceedings concerning any claim, duty,
obligation or cause of action relating to any matters of any kind, whether
presently known or unknown, suspected or unsuspected, that he may possess
arising from any omissions, acts or facts that have occurred up until and
including the Effective Date of this Agreement including, without limitation,


 


(a)           any
and all claims relating to or arising from Employee’s employment relationship
with the Company and the termination of that relationship;


 


(b)           any
and all claims relating to, or arising from, Employee’s right to purchase, or
actual purchase of shares of stock of the Company, including, without
limitation, any claims for 


 

















 


fraud, misrepresentation,
breach of fiduciary duty, breach of duty under applicable state corporate law,
and securities fraud under any state or federal law;


 


(c)           any
and all claims for wrongful discharge of employment; termination in violation
of public policy; discrimination; breach of contract, both express and implied;
breach of a covenant of good faith and fair dealing, both express and implied;
promissory estoppel; negligent or intentional infliction of emotional distress;
negligent or intentional misrepresentation; negligent or intentional
interference with contract or prospective economic advantage; unfair business
practices; defamation; libel; slander; negligence; personal injury; assault;
battery; invasion of privacy; false imprisonment; and conversion;


 


(d)           any
and all claims for violation of any federal, state or municipal statute,
including, but not limited to, Title VII of the Civil Rights Act of 1964, the
Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the
Americans with Disabilities Act of 1990, the Fair Labor Standards Act, the
Employee Retirement Income Security Act of 1974, The Worker Adjustment and
Retraining Notification Act, the California Fair Employment and Housing Act,
and Labor Code section 201, et seq. and
section 970, et seq. and all amendments to
each such Act as well as the regulations issued thereunder;


 


(e)           any
and all claims for violation of the federal, or any state, constitution;


 


(f)            any
and all claims arising out of any other laws and regulations relating to employment
or employment discrimination; and


 


(g)           any
and all claims for attorneys’ fees and costs.


 


Employee agrees that the
release set forth in this section shall be and remain in effect in all respects
as a complete general release as to the matters released.  This release does not extend to (i) any
obligations due Employee under the Plan (ii) Employee’s right to file a
charge with, or participate in a charge by, the Equal Employment Opportunity
Commission or comparable state agency against the Company (with the
understanding that any such filing or participation does not give Employee the
right to recover any monetary damages against the Company; Employee’s release
of claims herein bars Employee from recovering such monetary relief from the
Company); (iii) claims under Division 3, Article 2 of the California
Labor Code (which includes California Labor Code section 2802 regarding
indemnity for necessary expenditures or losses by Employee); (iv) claims
prohibited from release as set forth in California Labor Code section 206.5
(specifically “any claim or right on account of wages due, or to become due, or
made as an advance on wages to be earned, unless payment of such wages has been
made”); and (v) Employee’s rights to coverage under any fiduciary
insurance policy purchased or obtained by or on behalf of the Company in which
Employee is insured or in connection with the Company’s Change in Control (as
defined in the Plan) or to indemnification under any contract, by-law or other
arrangement that would cover Employee but for this Release.


 


5.             [40 or Over Employees Only] Acknowledgment of Waiver of
Claims under ADEA.  Employee
acknowledges that he is waiving and releasing any rights he may have under the
Age Discrimination in Employment Act of 1967 (“ADEA”) and that this waiver and
release is knowing 


 


2

















 


and
voluntary.  Employee and the Company
agree that this waiver and release does not apply to any rights or claims that
may arise under the ADEA after the Effective Date of this Agreement.  Employee acknowledges that the consideration
given for this waiver and release Agreement is in addition to anything of value
to which Employee was already entitled. 
Employee further acknowledges that he has been advised by this writing
that (a) he should consult with an attorney prior to executing this
Agreement; (b) he has at least twenty-one (21) days within which to
consider this Agreement; (c) he has seven (7) days following the execution
of this Agreement by the parties to revoke the Agreement; (d) this
Agreement shall not be effective until the revocation period has expired; and (e) nothing
in this Agreement prevents or precludes Employee from challenging or seeking a
determination in good faith of the validity of this waiver under the ADEA, nor
does it impose any condition precedent, penalties or costs for doing so, unless
specifically authorized by federal law. 
Any revocation should be in writing and delivered to the Vice-President
of Human Resources at the Company by close of business on the seventh day from
the date that Employee signs this Agreement.


 


6.                                     Civil Code Section 1542. 
Employee represents that he is not aware of any claims against the
Company other than the claims that are released by this Agreement.  Employee acknowledges that he has been
advised by legal counsel and is familiar with the provisions of California
Civil Code 1542, below, which provides as follows:


 


A GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY
HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.


 


Employee, being aware of
said code section, agrees to expressly waive any rights he may have thereunder,
as well as under any statute or common law principles of similar effect.


 


7.                                     No Pending or Future Lawsuits. 
Employee represents that he has no lawsuits, claims, or actions pending
in his name, or on behalf of any other person or entity, against the Company or
any other person or entity referred to herein. 
Employee also represents that he does not intend to bring any claims on
his own behalf or on behalf of any other person or entity against the Company
or any other person or entity referred to herein.


 


8.                                     Application for Employment. 
Employee understands and agrees that, as a condition of this Agreement,
he shall not be entitled to any employment with the Company, its subsidiaries,
or any successor, and he hereby waives any right, or alleged right, of
employment or re-employment with the Company.


 


9.                                     No Cooperation. 
Employee agrees that he will not counsel or assist any attorneys or
their clients in the presentation or prosecution of any disputes, differences,
grievances, claims, charges, or complaints by any third party against the
Company and/or any officer, director, employee, agent, representative,
shareholder or attorney of the Company, unless under a subpoena or other court
order to do so.


 


3

















 


10.                               Costs.  The Parties
shall each bear their own costs, expert fees, attorneys’ fees and other fees
incurred in connection with this Agreement.


 


11.                               Authority.  Employee
represents and warrants that he has the capacity to act on his own behalf and
on behalf of all who might claim through him to bind them to the terms and
conditions of this Agreement.


 


12.                               No Representations. 
Employee represents that he has had the opportunity to consult with an
attorney, and has carefully read and understands the scope and effect of the
provisions of this Agreement.  Neither
party has relied upon any representations or statements made by the other party
hereto which are not specifically set forth in this Agreement.


 


13.                               Severability. 
In the event that any provision hereof becomes or is declared by a court
of competent jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect without said provision.


 


14.                               Entire Agreement. 
This Agreement, along with the Plan and the Employee Confidential
Information and Arbitration Agreement, represents the entire agreement and
understanding between the Company and Employee concerning Employee’s separation
from the Company.


 


15.                               No Oral Modification. 
This Agreement may only be amended in writing signed by Employee and the
CEO of the Company.


 


16.                               Governing Law. 
This Agreement shall be governed by the internal substantive laws, but
not the choice of law rules, of the State of California.


 


17.                               Effective Date. 
[40 or Over Employees Only — otherwise effective upon signing by both
parties] This Agreement is effective eight (8) days after it has been signed by
both Parties.


 


18.                               Counterparts. 
This Agreement may be executed in counterparts, and each counterpart
shall have the same force and effect as an original and shall constitute an
effective, binding agreement on the part of each of the undersigned.


 


19.                               Voluntary Execution of Agreement. 
This Agreement is executed voluntarily and without any duress or undue
influence on the part or behalf of the Parties hereto, with the full intent of
releasing all claims.  The Parties
acknowledge that:


 


(a)           They
have read this Agreement;


 


(b)           They
have been represented in the preparation, negotiation, and execution of this
Agreement by legal counsel of their own choice or that they have voluntarily
declined to seek such counsel;


 


(c)           They
understand the terms and consequences of this Agreement and of the releases it
contains;


 


4

















 


(d)           They
are fully aware of the legal and binding effect of this Agreement.


 


IN
WITNESS WHEREOF, the Parties have executed this Agreement on the respective
dates set forth below.


 


	
   

  	
  Coherent, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:                                  ,
  20

  	
  By

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:                                  ,
  20

  	
   

  



 


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