Exhibit 10.1


 





EMPLOYMENT AGREEMENT


 


This Employment Agreement (the “Agreement”) is
entered into for employment as Chief Executive Officer beginning on April 6, 2020 (the “Effective Date”) between
Coherent, Inc. (the “Company”) and Andreas W. Mattes (“Executive”) (hereinafter collectively referred
to as the “Parties”).


 


1.            Duties
and Scope of Employment. Executive will initially serve as the President and Chief Executive Officer of the Company reporting
to the Company’s Board of Directors (the “Board”), and will perform the duties, consistent with this position,
as the Board reasonably assigns. Effective as of the Effective Date, Executive will be appointed to serve as a member of the Board
and during the period in which Executive is serving as Chief Executive Officer, the Board shall nominate Executive to continue
such service on the Board.


 


2.            Employment
Term. Subject to the provisions of Section 5, beginning on the Effective Date and, continuing until May 31, 2023
(“Initial Term”), Executive will be employed with the Company on the terms and subject to the conditions set
forth in this Agreement; provided, however, that beginning on May 31, 2022 and on each 1-year anniversary thereafter
(each an “Extension Date”), the Employment Term will be automatically extended for an additional one-year period, unless
the Company or Executive provides the other party written notice at least 30 calendar days before the Extension Date that the Employment
Term will not be extended.


 


3.            Compensation.


 


(a)            Signing
Bonus. Executive will receive a signing bonus of $500,000, payable in the first pay period after his start date. If Executive’s
employment with the Company ends within the first year of employment due to Executive’s resignation without Good Reason or
termination by the Company for Cause, Executive will be required to return the signing bonus.


 


(b)            Base
Salary. The Company will pay Executive an annual salary of $850,000 as compensation for services (the “Base Salary”).
The Base Salary will be paid according to the Company’s normal payroll practices and subject to the usual and required withholdings.
Executive’s salary may be reviewed and adjusted annually pursuant to the regular executive compensation practices of the
Board and its committees.


 


(c)            Annual
Bonus. Commencing with the 2020 fiscal year, Executive will have a target annual cash incentive opportunity (the “Target
Bonus”) equal to 120% of Executive’s annual base salary, based upon achievement of performance goals established by
the Board or the Compensation and HR Committee of the Board (the “Committee”) after consultation with Executive. For
the 2020 fiscal year, the Target Bonus equal to 100% of Executive’s full annual base salary will be based on Company financial
goals consistent with the goals of other executive officers under the Company’s Variable Compensation Plan (“VCP”),
with a maximum award of 200% of Executive’s annual base salary and the Target Bonus equal to 20% of Executive’s annual
base salary will be based on individual goals established by the Board or Committee with a maximum award of 20% of Executive’s
annual base salary. The annual bonus will be subject to the VCP. For future years, the Committee may modify the structure and performance
objectives used for such determinations.


 






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(d)            Equity
Awards. As soon as practicable following, and in no event more than 30 days after, the Effective Date, Executive will be granted
an equity award with an aggregate value of $5,200,000 covering the Company’s common stock (the “Equity Awards”),
which will be governed by the terms and conditions of the Company’s 2011 Equity Incentive Plan (the “2011 Equity Incentive
Plan”) and the publicly-filed and currently available forms of award agreement thereunder (collectively, including the 2011
Equity Incentive Plan, the “Equity Documents”) to be allocated as follows:


 


(i)            1/3
to time-based restricted stock units (“RSUs”); and


 


(ii)            2/3
to performance-based restricted stock units (“PSUs”).


 


The number of shares of the Company’s
common stock subject to Executive’s RSUs will be calculated by dividing (1) the value of the proposed RSU award by (2) the
trailing 30 trading day average closing price of the Company’s common stock on the Nasdaq Stock Market measured from the
last trading day prior to the date of grant. The number of shares of the Company’s common stock subject to Executive’s
PSUs will be calculated by dividing (1) the value of the proposed PSU award by (2) the estimated per share fair value
of such award as determined under the financial accounting assumptions used by the Company (e.g., the estimated Monte-Carlo value
of such award).


 


(e)            Equity
Award Vesting. Executive’s equity grant will vest as follows, provided Executive continues to be a Service Provider (as
defined in the 2011 Equity Incentive Plan) through the applicable vesting date:


 


(i)            RSUs.
Executive’s RSU award will vest based on the Executive’s vesting start date as determined by the Committee which date
will be no later than 30 days after the Effective Date (“Initial RSU Vesting Start Date”) over a 3-year period as follows:
(a) 1/3 of the RSUs will vest on the 1-year anniversary of the Initial RSU Vesting Start Date; and (b) 1/3 of the RSUs
will vest on each of the next 2 anniversaries of the Initial RSU Vesting Start Date.


 


(ii)            PSUs.
Executive’s PSU award will vest based on the Company’s achievement of a relative total shareholder return performance
goal as compared to the Russell 1000 Index for the period beginning on the Effective Date and ending on the 3rd anniversary
of the Effective Date. The terms of the PSU award will be substantially consistent with the form of PSU award agreement filed as
an exhibit to the Company’s Form 10-K for the fiscal year ending September 28, 2019.


 


(f)            Annual
Equity Awards. Beginning with the Company’s 2021 fiscal year and each fiscal year thereafter during the term of this
Agreement (and subject to the approval of the Board or Committee), Executive will be eligible for an annual equity award as determined
by the Board or Committee.


 


(g)            Attorney’s
Fees. The Company will pay Executive’s reasonable attorney fees incurred in the review of this Agreement, up to a maximum
of $10,000.


 


 4.            Employee Benefits.




 


(a)            Executive
will be entitled to participate in the employee benefit plans maintained by the Company and generally applicable to senior executives
of the Company. The Company may cancel or change the benefit plans and programs it offers and those changes will not breach this
Agreement.


 


(b)            The
Company will enter into an indemnification agreement with Executive substantially in the form as in effect for other senior executives
of the Company and its Board members.


 






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5.            Termination
of Employment; Severance.


 


(a)            At-Will
Employment. Executive and the Company agree that Executive’s employment with the Company will be
 “at-will” employment and may be terminated at any time with or without Cause or notice. Executive understands and
agrees this at-will employment relationship will not be modified or amended unless it is done in a writing that complies with
Section 8(f) and Section 8(i) and explicitly references this Section 5(a). Executive’s
employment will terminate upon the earlier to occur of:


 


(i)            a
termination by the Company with or without Cause (for clarity, including Executive’s termination in connection with the Company
delivering notice to Executive that the Company will not renew the Employment Term pursuant to Section 2 above if Executive
is able and willing to continue employment on the terms set forth in this Agreement at the time of such notice of non-renewal and
further that Executive continues to perform services hereunder through the remainder of the Employment Term under the Agreement,
or if earlier, the date set forth in the notice);


 


(ii)            Executive’s
Disability or death; or


 


(iii)            a
resignation by Executive with or without Good Reason.


 


(b)            Terminations
of Employment. Executive’s employment may be terminated for any reason. Upon any termination of employment, Executive
will receive benefits described in Section 5(b)(i). Executive agrees that upon termination of Executive’s employment
for any reason, Executive will resign as of the date of such termination and to the extent applicable, from the Board (and any
committees thereof), the board of directors (and any committees thereof) of any of the Company’s affiliates and from any
other positions Executive holds with the Company or any of its affiliates.


 


(i)            Termination
for Cause or Resignation Other Than for Good Reason. Executive’s employment may be terminated for Cause, effective upon
the Company’s delivery to Executive of a notice of termination or Executive may resign. If Executive’s employment is
terminated for Cause or Executive resigns other than for Good Reason, Executive will receive:


 


(1)            the
Base Salary accrued through the termination date, payable under the Company’s usual payment practices;


 


(2)            reimbursement
within 60 days following submission by Executive to the Company of appropriate supporting documentation for any unreimbursed business
expenses properly incurred by Executive prior to the termination date; provided that claims for reimbursement are submitted, under
Company policy, to the Company within 30 days following the termination date; and


 


(3)            any
fully vested and non-forfeitable employee benefits to which Executive may be entitled under the Company’s employee benefit
plans (other than benefits in the nature of severance pay) (the amounts described in clauses (1) through (3) above
are referred to later as the “Accrued Obligations”).


 






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(ii)            Termination
by Reason of Disability or Death. Executive’s employment may be terminated effective upon the Company’s delivery
to Executive of a notice of termination if Executive becomes Disabled and will automatically terminate upon Executive’s death.
Upon termination of Executive’s employment for either Disability or death, Executive or Executive’s estate (as the
case may be) will receive:


 


(1)            the
Accrued Obligations;


 


(2)            any
earned but unpaid Annual Bonus for a prior year. For the avoidance of doubt, if Executive is terminated after the end of a
fiscal year but before annual bonuses are approved and paid to other senior executives in the normal course of business, then
Executive will receive an Annual Bonus for the prior fiscal year, the actual amount of which will still be subject to the
achievement of any performance targets as established by the Company the achievement of which will be determined by the
Company. Any payment under this Section 5(b)(ii)(2) will be paid on the first to occur of (A) the date on
which Annual Bonuses are paid generally to the Company’s senior executives for the prior year or (B) 1 day
prior to the date that is 21⁄2 months following the last day of the fiscal year in which such termination occurred;
and


 


(3)            a
prorated Annual Bonus amount for the year of termination, if any would have been payable to Executive based on achievement of performance
criteria if Executive had remained employed through the full fiscal year in which the termination of employment occurred. The prorated
amount will be calculated based on the number of calendar days employed and any such prorated amount will be paid no later than
1 day prior to the date that is 21⁄2 months following the last day of the fiscal year in which such termination occurred.


 


(iii)            Termination
without Cause or Resignation for Good Reason. Executive’s employment may be terminated by the Company without Cause or
Executive may resign with Good Reason and Executive will receive the Accrued Obligations.


 


(1)            Subject
to the conditions in the Company’s Change of Control and Leadership Change Severance Plan, as filed as Exhibit 10.1
to the Company’s Form 10-Q for the fiscal quarter ending March 30, 2019 (the “COC/Severance Plan”),
Executive may be entitled to the Change of Control Severance Benefits as set forth for the Chief Executive Officer in the COC/Severance
Plan. Executive shall not be eligible for a Change in Leadership Severance Benefits under the COC/Severance Plan.


 


(2)            If
Executive’s employment is terminated by the Company other than for Cause or Executive resigns for Good Reason, in either
case, either (a) before a Change of Control but not In Anticipation of a Change of Control as such term is defined in the
COC/Severance Plan or (b) after the second anniversary of a Change of Control, Executive shall be eligible for a severance
payment on the Payment Date equal to the product of 2 times the sum of the Executive’s Base Salary and Target Bonus for the
fiscal year in which the Executive’s employment terminates. In addition, if the Executive qualifies for severance under this
Section 5(b)(iii)(2), the Executive shall receive from the Company, beginning on the Payment Date, and in lieu of monthly
Company-subsidized COBRA, life insurance plan premiums and/or any other welfare benefits, 18 monthly cash payments in monthly amounts
equal to $2,750; provided, however that such additional monthly cash payments shall be delayed 6 months and 1 day from the
date of termination (and then paid in one first installment equal to delayed amounts) to the extent required to avoid the imposition
of additional tax under Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) .
The Executive may, but is not obligated to, use such additional monthly cash payments toward the cost of COBRA and/or life insurance
plan premiums.


 






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(3)            As
a condition to receiving the payments and benefits set forth in Section 5(b)(iii)(1) or 5(b)(iii)(2), Executive shall
be required, within 60 days of Executive’s termination of employment (including, without limitation, a termination of employment
that occurs with the expiration of the Employment Term), to execute, deliver and not revoke (with any applicable revocation period
having expired) a general release of claims (“Release”) in a form provided by the Company substantially similar to
that set forth in Exhibit A of the COC/Severance Plan.


 


(c)            Exclusive
Remedy. If a termination of Executive’s employment with the Company occurs, the provisions of this Section 5 and
in the COC/Severance Plan are intended to be and are exclusive and in lieu of any other rights or remedies to which Executive may
otherwise be entitled, whether at law, tort or contract, in equity, or under this Agreement. Executive will be entitled to no severance
or other benefits upon termination of employment other than those benefits expressly set forth in this Section 5 and with
respect to any termination by the Company without Cause or resignation by the Executive for Good Reason, Executive shall be eligible
only for benefits under either Section 5.3(b)(iii)(1) or 5.3(b)(iii)(2) and never under both sections.


 


6.            Definitions.


 


(a)            Cause
means (i) refusal or failure to substantially perform (other than incapacity due to physical or mental illness) Executive’s
duties; provided that if curable, the failure to substantially perform will constitute Cause only if such failure continues after
the Board has provided Executive with a written demand for substantial performance setting forth in detail the specific respects
in which it believes Executive has not substantially performed Executive’s duties and has provided Executive a reasonable
opportunity to cure the same; (ii) Executive’s refusal or failure to adhere to any Company policy or follow any lawful
directive of the Board; provided that if curable, the failure will constitute Cause only if such failure continues after the Board
has provided the Executive with a written demand for adherence to such policy or following of the directive and Executive has been
provided a reasonable opportunity to cure the same; (iii) Executive discriminates or harasses, as determined in good faith
by the Board after a formal investigation by an outside investigator (which must include a good faith discussion with the Executive),
another employee or contractor of the Company or any of its affiliates on the basis of gender, race, color, creed, religion, sexual
orientation, marital status, veteran status, or any other category protected by applicable law; (iv) Executive’s breach
of a fiduciary duty owed to the Company or any of its affiliates; (v) Executive’s commission of a felony; (vi) Executive’s
misappropriation (or attempted misappropriation) of any of the funds, information, or property of the Company or any of its affiliates;
(vii) Executive’s commission of any other act or willful omission involving theft, moral turpitude, misappropriation,
embezzlement, fraud or dishonesty; or (viii) other misconduct or gross negligence by Executive that has caused or is likely
to cause, as determined in good faith by the Board, a materially adverse impact, monetary, reputational or otherwise, to the Company
or on Executive’s ability to effectively perform Executive’s duties with the Company or any affiliate.


 


(b)            Change
of Control has the meaning in the COC/Severance Plan.


 


(c)            Disabled
means physically or mentally incapacitated and unable for a period of 6 consecutive months or for an aggregate of 9 months
in any 24 consecutive month period to perform Executive’s duties (such incapacity is a “Disability”). Any
question as to the existence of a Disability will be determined in writing by a qualified independent physician mutually acceptable
to Executive and the Company. If Executive and the Company cannot agree as to a qualified independent physician, each will appoint
a physician and those 2 physicians will select a third physician who will make such determination in writing. The determination
will be final and conclusive for this Agreement.


 






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(d)            Good
Reason means, without the Executive’s consent, (i) the Company reduces Executive’s Base Salary; (ii) without
the Executive’s express written consent, the Company requires the Executive to change the location of Executive’s job
or office, so that the Executive will be based at a location more than 50 miles from the Company’s Santa Clara location;
(iii) the Executive’s Target Bonus as a percentage of Base Salary is reduced; (iv) the Executive is no longer Chief
Executive Officer of the Company; or (v) the Company or any successor company breaches any provision of this Agreement; provided,
however, that such events shall not constitute grounds for a Good Reason termination unless the Executive has provided notice to
the Company of the existence of the one or more of the above conditions within 90 days of Executive’s knowledge of its initial
existence and the Company has been provided at least 30 days to remedy the condition.


 


(e)            Payment
Date means the date which occurs 60 days following the Executive’s separation from service (as that term is defined in
Section 409A); provided, however, if the Release becomes effective and irrevocable prior to 60 days following the
Executive’s separation from service, the Payment Date means the second business day after the Release becomes effective
and irrevocable unless the 60 day period following the Executive’s separation from service spans 2 calendar years in
which event the Payment Date means the later of (i) the second business day after the Release becomes effective and
irrevocable and (ii) the second business day of the second calendar year in such 60 day period.


 


7.            Covenants.


 


(a)            Concurrently
with his entry into this Agreement, Executive has entered into the Employee Confidential Information and Arbitration Agreement
in the form substantially consistent with the form provided to the Company’s other employees.


 


(b)            During
the Employment Term and continuing for a period of 1 year after Executive’s termination date, Executive agrees not to
make any public statement that is intended, or may reasonably be expected to harm the reputation, business, prospects or operations
of the Company or any of its subsidiaries (collectively, the “Company Group”). During the Employment Term and continuing
for a period of 1 year after Executive’s termination date, the Company agrees not to make any public statement that
is intended, or may reasonably be expected to harm the reputation of Executive. The non-disparagement provisions will not apply
to any statements that a Party or its respective officers and directors make in addressing any disparaging statements made by the
other Party so long as such statements are truthful. Executive and the Company expressly consider the restrictions contained in
this Section 7(b) to be reasonable. Executive acknowledges that nothing in this Agreement prohibits or restricts Executive
from initiating communications directly with, responding to any inquiry from, or providing information to or testimony before,
the Securities and Exchange Commission, Department of Justice, or any other governmental agency or self-regulatory organization,
about actual or potential violations of laws or regulations. Executive further acknowledges that Executive is not required to obtain
the Company’s prior authorization before engaging in such communications, nor is Executive required to inform the Company
about such communications.


 


8.            Miscellaneous.


 


(a)            Governing
Law. This Agreement will be governed by and construed in accordance with the laws of the State of California, without regard
to conflicts of laws principles thereof.


 


(b)            Entire
Agreement. This Agreement, the Employee Confidential Information and Arbitration Agreement, and the Equity Documents, contains
the entire understanding of the parties with respect to Executive’s employment and supersedes any prior agreements or understandings
(including verbal agreements) between the parties relating to the subject matter of this agreement. There are no restrictions,
agreements, promises, warranties, covenants or undertakings between the parties with respect to the subject matter herein other
than those expressly set forth herein. This Agreement may not be altered, modified, or amended except by written instrument signed
by the parties that references this Section 8(b).


 


 






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(c)            Severability.
In the event that any one or more of the provisions of this Agreement will be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions of this Agreement will not be affected.


 


(d)            Assignment.
Neither this Agreement nor any of Executive’s rights and duties under it is assignable or delegable by Executive. Any purported
assignment or delegation by Executive will be null and void. This Agreement may be assigned by the Company to a person or entity
which is an affiliate or a successor in interest to substantially all of its business operations. Upon such assignment, the rights
and obligations of the Company hereunder will become the rights and obligations of such affiliate or successor person or entity.


 


(e)            Successors;
Binding Agreement. This Agreement will inure to the benefit of and be binding upon personal or legal representatives, executors,
administrators, successors and heirs.


 


(f)            Notice.
The notices and all other communications provided for in this Agreement will be deemed to have been duly given when delivered by
hand or overnight courier addressed to the addresses set forth below, or to such other address as either party may have furnished
to the other in writing in accordance herewith, except that notice of change of address will be effective only upon receipt.


 


	Coherent, Inc. 
 5100 Patrick Henry Drive

Santa Clara, California 95054 

Attention: General Counsel	To
most recent address as set forth in
Executive’s personnel records






 


(g)            Executive
Representations. Executive represents to the Company that the execution of this Agreement by Executive and the Company and
the performance of Executive’s duties hereunder will not breach, or otherwise contravene, the terms of any employment agreement
or other agreement or policy to which Executive is a party or otherwise bound. Executive acknowledges that he has had the opportunity
to discuss this matter with and obtain advice from his private attorney, has had sufficient time to, and has carefully read and
fully understands all the provisions of this Agreement, and is knowingly and voluntarily entering into this Agreement.


 


(h)            Cooperation.
Executive will provide Executive’s reasonable cooperation in connection with any action or proceeding (or any appeal from
any action or proceeding) which relates to events occurring during Executive’s employment with the Company or its affiliates.
Executive’s cooperation pursuant to this Section 8(h) will be at no cost to Executive, and if such cooperation
occurs after the termination of this Agreement, the Company will promptly advance or reimburse all reasonable costs incurred by
Executive in connection with such cooperation, including reasonable documented fees of one legal counsel and costs. This provision
will survive any termination of this Agreement.


 


(i)            Amendment;
Waiver of Breach. No amendment of this Agreement will be effective unless it is in writing and signed by both parties. No waiver
of satisfaction of a condition or failure to comply with an obligation under this Agreement will be effective unless it is in writing
and signed by the party granting the waiver, and no such waiver will be a waiver of satisfaction of any other condition or failure
to comply with any other obligation. To be valid, any document signed by the Company must be signed by the Company’s Chairman
of the Board.


 






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(j)            Withholdings.
The Company shall withhold applicable Federal, state and local income tax and applicable other deductions from payments in accordance
with the Company’s general procedures.


 


(k)            Section 409A.
The Company and Executive intend that this Agreement and the payments provided hereunder be exempt from the requirements of
Section 409A to the maximum extent possible, or to the extent Section 409A is applicable to this Agreement, the
Company and Executive intend that this Agreement and any payments thereunder comply with the deferral, payout and other
limitations and restrictions imposed under Section 409A. Notwithstanding anything herein to the contrary, this Agreement
is intended to be interpreted, operated and administered in a manner consistent with such intentions; provided, however that
in no event shall the Company or any of its affiliates (or any of their successors) be liable for any additional tax,
interest or penalty that may be imposed on the Executive pursuant to Section 409A or for any damages incurred by the
Executive as a result of this Agreement (or the payments hereunder) failing to comply with, or be exempt from
Section 409A. Without limiting the generality of the foregoing, and notwithstanding any other provision of this
Agreement to the contrary if at the time the Executive’s employment hereunder terminates, the Executive is a
 “specified employee” within the meaning of Section 409A, then to the extent necessary to avoid subjecting
the Executive to the imposition of any additional tax or interest under Section 409A, amounts that would (but for this
provision) be payable within 6 months following the date of the Executive’s separation from service shall not be paid
to the Executive during such period, but shall instead be paid in a lump sum on the first payroll date that occurs on or
after the date 6 months and 1 day following the date of such Executive’s separation from service or, if earlier,
upon the Executive’s death.


 


(l)            Counterparts.
This Agreement may be executed in counterparts. Each counterpart will have the same force and effect as an original and will constitute
an effective, binding agreement.


 


Each party is signing this Agreement on
the date set out below its signature.


 


	Coherent, Inc.	 	Andreas W. Mattes
	 	 	 
	/s/
    Garry Rogerson	 	/s/ Andreas Mattes
	 	 	 
	By:
    Garry Rogerson	 	 
	 	 	 
	Title:
    Chairman of the Board	 	 
	 	 	 
	March 31,
    2020	 	3/31/2020




 








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