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Exhibit 4.1    
    


 
 

COHERENT, INC.
  
  2001 STOCK PLAN    
    



 Amended and restated as of the date of obtaining stockholder approval in 2004  




        1.     Purposes of the Plan.    The purposes of this 2001 Stock Plan are: 




	•
	to
attract and retain the best available personnel for positions of substantial responsibility,



	•
	to
provide additional incentive to Employees, Directors and Consultants, and



	•
	to
promote the success of the Company's business by motivating the Employees and Consultants to superior performance. 







        Awards
granted under the Plan may be Incentive Stock Options, Nonstatutory Stock Options, Restricted Stock, Stock Appreciation Rights, Performance Units, Performance Units or Deferred
Stock Units, as determined by the Administrator at the time of grant. 


        2.     Definitions.    As used herein, the following definitions shall apply: 



        (a)   "Administrator" means the Board or any of its Committees as shall be administering the Plan, in accordance with
Section 4 of the Plan. 


        (b)   "Applicable Laws" means the requirements relating to the administration of equity compensation plans under U.S. state
corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or
jurisdiction where Awards are, or will be, granted under the Plan. 


        (c)   "Award" means, individually or collectively, a grant under the Plan of Options, SARs, Restricted Stock, Stock
Appreciation Rights, Performance Shares, Performance Units or Deferred Stock Units. 



        (d)   "Award Agreement" means the written agreement setting forth the terms and provisions applicable to each Award granted
under the Plan. The Award Agreement is subject to the terms and conditions of the Plan. 


        (e)   "Awarded Stock" means the Common Stock subject to an Award. 


        (f)    "Board" means the Board of Directors of the Company. 


        (g)   "Code" means the Internal Revenue Code of 1986, as amended. 


        (h)   "Committee" means a committee of Directors appointed by the Board in accordance with Section 4 of the Plan, which
shall consist solely of Independent Directors who are not eligible to receive stock option grants or Restricted Stock under the Plan. 


        (i)    "Common Stock" means the common stock of the Company, or in the case of Performance Units, the cash equivalent thereof. 



        (j)    "Company" means Coherent, Inc., a Delaware corporation. 


        (k)   "Consultant" means any natural person, including an advisor, engaged by the Company or a Parent or Subsidiary to render
services to such entity. 


        (l)    "Deferred Stock Unit" means a deferred stock unit Award granted to a Service Provider pursuant to Section 13. 


        (m)  "Director" means a member of the Board. 


        (n)   "Disability" means total and permanent disability as defined in Section 22(e)(3) of the Code. 








 




        (o)   "Employee" means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the
Company. A Service Provider shall not cease to be treated as an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor. For purposes of Incentive Stock Options, no such leave may exceed ninety days, unless reemployment upon expiration of such
leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, on the 181st day of such leave any Incentive Stock
Option held by the Optionee shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option. Neither service as a Director nor payment of a
director's fee by the Company shall be sufficient to constitute "employment" by the Company. 


        (p)   "Exchange Act" means the Securities Exchange Act of 1934, as amended. 



        (q)   "Fair Market Value" means, as of any date, the value of Common Stock determined as follows: 



        (i)    If
the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq
SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system
for the last market trading day prior to the time of determination, as reported in The Wall Street Journal or such other source as the Administrator
deems reliable; 


        (ii)   If
the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share of Common Stock shall be
the mean between the high bid and low asked prices for the Common Stock on the last market trading day prior to the day of determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable; or 


        (iii)  In
the absence of an established market for the Common Stock, the Fair Market Value shall be determined in good faith by the Administrator. 




        (r)   "Incentive Stock Option" means an Option intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code and the regulations promulgated thereunder. 


        (s)   "Independent Director" means a Director of the Company who is not also an Employee of the Company and who qualifies as an
"outside director" within the meaning of Code Section 162(m), Section 16(b) of the Exchange Act and Applicable Laws. 



        (t)    "Nonstatutory Stock Option" means an Option not intended to qualify as an Incentive Stock Option. 


        (u)   "Notice of Grant" means a written or electronic notice evidencing certain terms and conditions of an individual Award.
The Notice of Grant is part of the Award Agreement. 


        (v)   "Officer" means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and
the rules and regulations promulgated thereunder. 


        (w)  "Option" means a stock option granted pursuant to the Plan. 


        (x)   "Option Agreement" means an agreement between the Company and an Optionee evidencing the terms and conditions of an
individual Option grant. The Option Agreement is subject to the terms and conditions of the Plan. 


        (y)   "Parent" means a "parent corporation," whether now or hereafter existing, as defined in Section 424(e) of the
Code. 



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        (z)   "Participant" means the holder of an outstanding Award granted under the Plan. 


        (aa) "Performance Share" means a performance share Award granted to a Service Provider pursuant to Section 11. 



        (bb) "Performance Unit" a performance unit Award granted to a Service Provider pursuant to Section 12. 


        (cc) "Plan" means this Coherent, Inc. 2001 Stock Plan. 


        (dd) "Restricted Stock" means shares of Common Stock granted pursuant to Section 10 of the Plan that are subject to
vesting, if any, based solely on continuing as a Service Provider. 



        (ee) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor to
Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan. 


        (ff)  "Stock Appreciation Right" or "SAR" means an Award, granted alone or in connection with a related Option, that pursuant
to Section 9 is designated as an SAR. 


        (gg) "Section 16(b)" means Section 16(b) of the Exchange Act. 


        (hh) "Service Provider" means an Employee or Consultant. 


        (ii)   "Share" means a share of the Common Stock, as adjusted in accordance with Section 16 of the Plan. 


        (jj)   "Subsidiary" means a "subsidiary corporation", whether now or hereafter existing, as defined in Section 424(f) of
the Code. 




        3.     Stock Subject to the Plan.    Subject to the provisions of Section 16 of the Plan, the maximum aggregate
number of Shares that may be issued under the Plan is 6,300,000 Shares; provided, however, that in no event shall more than 30% of the Shares issuable under the Plan be granted pursuant to Awards with
an exercise price or purchase price that is less than 100% of Fair Market Value on the date of grant. Notwithstanding the foregoing, no Options shall be granted with an exercise price less than Fair
Market Value on the date of grant. The Shares may be authorized, but unissued, or reacquired Common Stock. 



        If
an Award expires or becomes unexercisable without having been exercised in full, or, with respect to Restricted Stock, Performance Shares, Performance Units or Deferred Stock Units,
is forfeited back to or repurchased by the Company, the unpurchased Shares (or for Awards other than Options and SARs, the forfeited or repurchased shares) which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has terminated). With respect to SARs, only shares actually issued pursuant to an SAR shall cease to be available under the Plan; all
remaining shares under SARs, shall remain available for future grant or sale under the Plan (unless the Plan has terminated). However, Shares that have actually been issued under the Plan under any
Award shall not be returned to the Plan and shall not become available for future distribution under the Plan, except that if Shares of Restricted Stock, Performance Shares, Performance Units or
Deferred Stock Units are repurchased by the Company at their original purchase price or are forfeited to the Company, such Shares shall become available for future grant under the Plan. To the extent
an Award under the Plan is paid out in cash rather than stock, such cash payment shall not result in reducing the number of Shares available for issuance under the Plan. 


        4.     Administration of the Plan. 



        (a)   Procedure. 



        (i)    Section 162(m).    To the extent that the Administrator determines it to be desirable to qualify Options
granted hereunder as "performance-based compensation" within the 




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meaning
of Section 162(m) of the Code, the Plan shall be administered by a Committee of two or more Independent Directors. 


        (ii)   Rule 16b-3.    To the extent desirable to qualify transactions hereunder as exempt under
Rule 16b-3, the transactions contemplated hereunder shall be structured to satisfy the requirements for exemption under Rule 16b-3. 


        (iii)  Other Administration.    Other than as provided above, the Plan shall be administered by (A) the Board
or (B) a Committee of Independent Directors with the ability to obtain the advice of independent counsel, which committee shall be constituted to satisfy Applicable Laws. 




        (b)   Powers of the Administrator. Subject to the provisions of the Plan, including, without limitation
Section 8(b)(iii), and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator shall have the authority, in its discretion: 



        (i)    to
determine the Fair Market Value; 


        (ii)   to
select the Service Providers to whom Awards may be granted hereunder; 


        (iii)  to
determine the number of shares of Common Stock to be covered by each Award granted hereunder; 


        (iv)  to
approve forms of agreement for use under the Plan; 


        (v)   to
determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and conditions include, but are not
limited to, the exercise price, the time or times when Options or SARs may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture or repurchase
restrictions, and any restriction or limitation regarding any Award or the shares of Common Stock relating thereto, based in each case on such factors as the Administrator, in its sole discretion,
shall determine; 


        (vi)  to
construe and interpret the terms of the Plan and awards granted pursuant to the Plan; 


        (vii) to
prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the
purpose of qualifying for preferred tax treatment under foreign tax laws; 


        (viii) to
modify or amend each Award (subject to Section 18(c) of the Plan), including the discretionary authority to extend the post-termination
exercisability period of Options or SARs longer than is otherwise provided for in the Plan; 


        (ix)  to
allow Participants to satisfy withholding tax obligations by electing to have the Company withhold from the Shares or cash to be issued upon exercise or vesting of
an Award that number of Shares or cash having a Fair Market Value equal to the amount required to be withheld. The Fair Market Value of any Shares to be withheld shall be determined on the date that
the amount of tax to be withheld is to be determined. All elections by an Optionee to have Shares or cash withheld for this purpose shall be made in such form and under such conditions as the
Administrator may deem necessary or advisable; 


        (x)   to
authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator; 


        (xi)  to
make all other determinations deemed necessary or advisable for administering the Plan. 




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        (c)   Effect of Administrator's Decision.    The Administrator's decisions, determinations and interpretations shall
be final and binding on all Participants. 




        5.     Eligibility.    Restricted Stock, Performance Shares, Performance Units, Stock Appreciation Rights, Deferred
Stock Units and Nonstatutory Stock Options may be granted to Service Providers. Incentive Stock Options may be granted only to Employees. 


        6.     Limitations. 



        (a)   ISO $100,000 Rule.    Each Option shall be designated in the Option Agreement as either an Incentive Stock
Option or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory
Stock Options. For purposes of this Section 6(a), Incentive Stock Options shall be taken into account in the order in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted. 


        (b)   No Rights as a Service Provider.    Neither the Plan nor any Award shall confer upon a Participant any right
with respect to continuing their relationship as a Service Provider, nor shall they interfere in any way with the right of the Participant or the right of the Company or its Parent or Subsidiaries to
terminate such relationship at any time, with or without cause. 


        (c)   162(m) Limitation.    The following limitations shall apply to grants of Options and SARs with an exercise
price equal to or exceeding 100% of Fair Market Value on the grant date: 



        (i)    No
Service Provider shall be granted, in any fiscal year of the Company, Option or SARs to purchase more than 250,000 Shares. 



        (ii)   In
connection with his or her initial service, a Service Provider may be granted Options or SARs to purchase up to an additional 250,000 Shares which shall not count
against the limit set forth in subsection (i) above. 





        The
foregoing limitations shall be adjusted proportionately in connection with any change in the Company's capitalization as described in Section 16(a). 


        If
an Option or SAR is cancelled in the same fiscal year of the Company in which it was granted (other than in connection with a transaction described in Section 16(c)), the
cancelled Option or SAR will be counted against the limits set forth in subsections (i) and (ii) above. 


        7.     Term of Plan.    The Plan shall become effective upon its adoption by the Board. It shall continue in effect for
a term of ten (10) years unless terminated earlier under Section 18 of the Plan. 


        8.     Stock Options. 



        (a)   Term of Options.    The term of each Option shall be stated in the Option Agreement. In the case of an
Incentive Stock Option, the term shall be ten (10) years from the date of grant or such shorter term as may be provided in the Option Agreement. Moreover, in the case of an Incentive Stock
Option granted to an Optionee who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of
the Company or any Parent or Subsidiary, the term of the Incentive Stock Option shall be five (5) years from the date of grant or such shorter term as may be provided in the Option Agreement. 



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        (b)   Option Exercise Price and Consideration. 



        (i)    Exercise Price.    The per share exercise price for the Shares to be issued pursuant to exercise of an Option
shall be determined by the Administrator, subject to the following: 





        In
the case of an Incentive Stock Option: 





        (A)  granted
to an Employee who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the per Share exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant. 



        (B)  granted
to any Employee other than an Employee described in paragraph (A) immediately above, the per Share exercise price shall be no less than 100% of the Fair
Market Value per Share on the date of grant. 




        (ii)   In
the case of a Nonstatutory Stock Option, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant. 


        (iii)  The
exercise price for the Shares to be issued pursuant to an already granted Option may not be changed without the consent of the Company's shareholders. This shall
include, without limitation, a repricing of the Option as well as an option exchange program whereby the Optionee agrees to cancel an existing Option in exchange for an Option to be granted in the
future with an exercise price equal to the Fair Market Value of the Shares on the date of grant. 




        (c)   Waiting Period and Exercise Dates.    At the time an Option is granted, the Administrator shall fix the period
within which the Option may be exercised and shall determine any conditions that must be satisfied before the Option may be exercised. 



        (d)   Form of Consideration.    The Administrator shall determine the acceptable form of consideration for exercising
an Option, including the method of payment. In the case of an Incentive Stock Option, the Administrator shall determine the acceptable form of consideration at the time of grant. Such consideration,
to the extent permitted by Applicable Laws, may consist entirely of: 



        (i)    cash;



        (ii)   check;



        (iii)  other
Shares which (A) in the case of Shares acquired upon exercise of an option, have been owned by the Optionee for more than six months on the date of
surrender, and (B) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option shall be exercised; 


        (iv)  broker-assisted
cashless exercise; 


        (v)   any
combination of the foregoing methods of payment; or such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable
Laws; or 


        (vi)  such
other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws. 




        (e)   Exercise of Option. 



        (i)    Procedure for Exercise; Rights as a Shareholder.    Any Option granted hereunder shall be exercisable according
to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Option Agreement. An Option may not be exercised for a fraction of a Share. 




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        An
Option shall be deemed exercised when the Company receives: (i) written or electronic notice of exercise (in accordance with the Option Agreement) from the person entitled to
exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised. Full payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued upon exercise of an Option shall be issued in the name of the Optionee or, if requested by the Optionee, in the name of
the Optionee and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to
vote or receive dividends or any other rights as a shareholder shall exist with respect to the Awarded Stock, notwithstanding the exercise of the Option. The Company shall issue (or cause to be
issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as
provided in Section 16 of the Plan. 


        Exercising
an Option in any manner shall decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to
which the Option is exercised. 


        (f)    Termination of Relationship as Service Provider.    If an Optionee ceases to be Service Provider, other than
upon the Optionee's death or Disability, the Optionee may exercise his or her Option within such period of time as is specified in the Option Agreement to the extent that the Option is vested on the
date of termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement). In the absence of a specified time in the Option Agreement, the Option
shall remain exercisable for ninety (90) days following the Optionee's termination. If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered
by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan. 


        (g)   Disability of Optionee.    If an Optionee ceases to be a Service Provider as a result of the Optionee's
Disability, the Optionee may exercise his or her Option within such period of time as is specified in the Option Agreement to the extent the Option is vested on the date of termination (but in no
event later than the expiration of the term of such Option as set forth in the Option Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for
twelve (12) months following the Optionee's termination. If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of
the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the
time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 



        (h)   Death of Optionee.    If an Optionee dies while a Service Provider, the Option may be exercised within such
period of time as is specified in the Option Agreement (but in no event later than the expiration of the term of such Option as set forth in the Notice of Grant), by the Optionee's estate or by a
person who acquires the right to exercise the Option by bequest or inheritance, but only to the extent that the Option is vested on the date of death. In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for twelve (12) months following the Optionee's termination. If, at the time of death, the Optionee is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall immediately revert to the Plan. The Option may be exercised by the executor or administrator of the Optionee's estate or, if none, by the
person(s) entitled to exercise the Option under the Optionee's will or the laws of descent or distribution. If the Option is not so exercised 



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within
the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 



        (i)    Buyout Provisions.    The Administrator may at any time offer to buy out for a payment in cash or Shares an
Option previously granted based on such terms and conditions as the Administrator shall establish and communicate to the Optionee at the time that such offer is made. 




        9.     Stock Appreciation Rights. 



        (a)   Grant of SARs.    Subject to the terms and conditions of the Plan, SARs may be granted to Service Providers at
any time and from time to time as shall be determined by the Administrator, in its sole discretion. The Administrator shall have complete discretion to determine the number of SARs granted to any
Participant. 


        (b)   Exercise Price and other Terms.    The Administrator, subject to the provisions of the Plan, shall have
complete discretion to determine the terms and conditions of SARs granted under the Plan; provided, however, that no SAR may have a term of more than ten (10) years from the date of grant. 



        (c)   Payment of SAR Amount.    Upon exercise of a SAR, a Participant shall be entitled to receive payment from the
Company in an amount determined by multiplying: 



        (i)    The
difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times 


        (ii)   the
number of Shares with respect to which the SAR is exercised. 




        (d)   Payment upon Exercise of SAR.    At the discretion of the Administrator, payment for a SAR may be in cash,
Shares or a combination thereof. 


        (e)   SAR Agreement.    Each SAR grant shall be evidenced by an Award Agreement that shall specify the exercise
price, the term of the SAR, the conditions of exercise, and such other terms and conditions as the Administrator, in its sole discretion, shall determine. 



        (f)    Expiration of SARs.    A SAR granted under the Plan shall expire upon the date determined by the Administrator,
in its sole discretion, and set forth in the Award Agreement. 


        (g)   Termination of Relationship as a Service Provider.    If a Participant ceases to be a Service Provider, other
than upon the Participant's death or Disability, the Participant may exercise his or her Stock Appreciation Right within such period of time as is specified in the Stock Appreciation Right Agreement
to the extent that the Stock Appreciation Right is vested and exercisable on the date of termination (but in no event later than the expiration of the term of such Stock Appreciation Right as set
forth in the Stock Appreciation Right Agreement). In the absence of a specified time in the Stock Appreciation Right Agreement, the Stock Appreciation Right shall remain exercisable for three
(3) months following the Participant's termination. If, on the date of termination, the Participant is not vested as to his or her entire Stock Appreciation Right, the Shares covered by the
unvested portion of the Stock Appreciation Right shall revert to the Plan. If, after termination, the Participant does not exercise his or her Stock Appreciation Right within the time specified by the
Administrator, the Stock Appreciation Right shall terminate, and the Shares covered by such Stock Appreciation Right shall revert to the Plan. 



        Notwithstanding
the above, in the event of a Participant's change in status from Consultant, Employee or Director to Employee, Consultant or Director, a Participant's status as a Service
Provider shall continue notwithstanding the change in status. 


        (h)   Disability of Participant.    If a Participant ceases to be a Service Provider as a result of the Participant's
Disability, the Participant may exercise his or her Stock Appreciation Right within 



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such
period of time as is specified in the Stock Appreciation Right Agreement to the extent the Stock Appreciation Right is vested and exercisable on the date of termination (but in no event later
than the expiration of the term of such Stock Appreciation Right as set forth in the Stock Appreciation Right Agreement). In the absence of a specified time in the Stock Appreciation Right Agreement,
the Stock Appreciation Right shall remain exercisable for twelve (12) months following the Participant's termination. If, on the date of termination, the Participant is not vested as to his or
her entire Stock Appreciation Right, the Shares covered by the unvested portion of the Stock Appreciation Right shall revert to the Plan. If, after termination, the Participant does not exercise his
or her Stock Appreciation Right within the time specified herein, the Stock Appreciation Right shall terminate, and the Shares covered by such Stock Appreciation Right shall revert to the Plan. 


        (i)    Death of Participant.    If a Participant dies while a Service Provider, the Stock Appreciation Right may be
exercised within such period of time as is specified in the Stock Appreciation Right Agreement (but in no event later than the expiration of the term of such Stock Appreciation Right as set forth in
the Notice of Grant), by the Participant's estate or by a person who acquires the right to exercise the Stock Appreciation Right by bequest or inheritance, but only to the extent that the Stock
Appreciation Right is vested and exercisable on the date of death. In the absence of a specified time in the Stock Appreciation Right Agreement, the Stock Appreciation Right shall remain exercisable
for twelve (12) months following the Participant's termination. If, at the time of death, the Participant is not vested as to his or her entire Stock Appreciation Right, the Shares covered by
the unvested portion of the Stock Appreciation Right shall immediately revert to the Plan. The Stock Appreciation Right may be exercised by the executor or administrator of the Participant's estate
or, if none, by the person(s) entitled to exercise the Stock Appreciation Right under the Participant's will or the laws of descent or distribution. If the Stock Appreciation Right is not so exercised
within the time specified herein, the Stock Appreciation Right shall terminate, and the Shares covered by such Stock Appreciation Right shall revert to the Plan. 



        (j)    Buyout Provisions.    The Administrator may at any time offer to buy out for a payment in cash or Shares a
Stock Appreciation Right previously granted based on such terms and conditions as the Administrator shall establish and communicate to the Participant at the time that such offer is made. 




        10.   Restricted Stock. 



        (a)   Grant of Restricted Stock.    Subject to the terms and conditions of the Plan, Restricted Stock may be granted
to Service Providers at any time and from time to time as shall be determined by the Administrator, in its sole discretion. The Administrator shall have complete discretion to determine (i) the
number of Shares subject to a Restricted Stock award granted to any Participant, and (ii) the conditions that must be satisfied, which typically will be based principally or solely on continued
provision of services but may include a performance-based component, upon which is conditioned the
grant or vesting of Restricted Stock. Restricted Stock shall be granted in the form of units/rights to acquire Shares. Each such unit/right shall be the equivalent of one Share of Common Stock for
purposes of determining the number of Shares subject to an Award. Until the Shares are issued, no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to
the units/rights to acquire Shares. 


        (b)   Other Terms.    The Administrator, subject to the provisions of the Plan, shall have complete discretion to
determine the terms and conditions of Restricted Stock granted under the Plan. Restricted Stock grants shall be subject to the terms, conditions, and restrictions determined by the Administrator at
the time the stock is awarded. The Administrator may require the recipient to sign a Restricted Stock Award agreement as a condition of the award. Any certificates 



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representing
the Shares of stock awarded shall bear such legends as shall be determined by the Administrator. 


        (c)   Restricted Stock Award Agreement.    Each Restricted Stock grant shall be evidenced by an agreement that shall
specify the purchase price (if any) and such other terms and conditions as the Administrator, in its sole discretion, shall determine; provided; however, that if the Restricted Stock grant has a
purchase price, such purchase price must be paid no more than ten (10) years following the date of grant. 




        11.   Performance Shares. 



        (a)   Grant of Performance Shares.    Subject to the terms and conditions of the Plan, Performance Shares may be
granted to Service Providers at any time and from time to time as shall be determined by the Administrator, in its sole discretion. The Administrator shall have complete discretion to determine
(i) the number of Shares subject to a Performance Share award granted to any Participant, and (ii) the conditions that must be satisfied, which typically will be based principally or
solely on achievement of performance milestones but may include a service-based component, upon which is conditioned the grant or vesting of Performance Shares. Performance Shares shall be granted in
the form of units/rights to acquire Shares. Each such unit/right shall be the equivalent of one Share of Common Stock for purposes of determining the number of Shares subject to an Award. Until the
Shares are issued, no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the units/rights to acquire Shares. 


        (b)   Other Terms.    The Administrator, subject to the provisions of the Plan, shall have complete discretion to
determine the terms and conditions of Performance Shares granted under the Plan. Performance Share grants shall be subject to the terms, conditions, and restrictions determined by the Administrator at
the time the stock is awarded, which may include such performance-based milestones as are determined appropriate by the Administrator. The Administrator may require the recipient to sign a
Performance Shares agreement as a condition of the award. Any certificates representing the Shares of stock awarded shall bear such legends as shall be determined by the Administrator. 


        (c)   Performance Share Award Agreement.    Each Performance Share grant shall be evidenced by an agreement that
shall specify such other terms and conditions as the Administrator, in its sole discretion, shall determine. 




        12.   Performance Units. 



        (a)   Grant of Performance Units.    Performance Units are similar to Performance Shares, except that they shall be
settled in a cash equivalent to the Fair Market Value of the underlying Shares, determined as of the vesting date. Subject to the terms and conditions of the Plan, Performance Units may be granted to
Service Providers at any time and from time to time as shall be determined by the Administrator, in its sole discretion. The Administrator shall have complete discretion to determine (i) the
number of Shares subject to a Performance Unit award granted to any Participant, and (ii) the conditions that must be satisfied, which typically will be based principally or solely on
achievement of performance milestones but may include a service-based component, upon which is conditioned the grant or vesting of Performance Units. Performance Units shall be granted in the form of
units/rights to acquire Shares. Each such unit/right shall be the cash equivalent of one Share of Common Stock. No right to vote or receive dividends or any other rights as a stockholder shall exist
with respect to Performance Units or the cash payable thereunder. 



        (b)   Other Terms.    The Administrator, subject to the provisions of the Plan, shall have complete discretion to
determine the terms and conditions of Performance Units granted under 



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the
Plan. Performance Unit grants shall be subject to the terms, conditions, and restrictions determined by the Administrator at the time the stock is awarded, which may include such performance-based
milestones as are determined appropriate by the Administrator. The Administrator may require the recipient to sign a Performance Unit agreement as a condition of the award. Any certificates
representing the Shares of stock awarded shall bear such legends as shall be determined by the Administrator. 


        (c)   Performance Unit Award Agreement.    Each Performance Unit grant shall be evidenced by an agreement that shall
specify such terms and conditions as the Administrator, in its sole discretion, shall determine. 




        13.   Deferred Stock Units.    Deferred Stock Units shall consist of a Restricted Stock, Performance Share or
Performance Unit Award that the Administrator, in its sole discretion permits to be paid out in installments or on a deferred basis, in accordance with rules and procedures established by the
Administrator. 


        14.   Non-Transferability of Awards.    Unless determined otherwise by the Administrator, an Award may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the
recipient, only by the recipient. If the Administrator makes an Award transferable, such Award shall contain such additional terms and conditions as the Administrator deems appropriate. 



        15.   Leaves of Absence.    Unless the Administrator provides otherwise or as otherwise required by Applicable Laws,
vesting of Awards granted hereunder shall cease commencing on the first day of any unpaid leave of absence and shall only recommence upon return to active service. 


        16.   Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset Sale. 



        (a)   Changes in Capitalization.    Subject to any required action by the stockholders of the Company, the number of
shares of Common Stock covered by each outstanding Award, the number of shares of Common Stock which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an Award, as well as the price per share of Common Stock covered by each such outstanding Award and the 162(m) annual share
issuance limits under Section 6(c) shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock
split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration
by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration." Such adjustment shall be
made by the Compensation Committee, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock
subject to an Award. 


        (b)   Dissolution or Liquidation.    In the event of the proposed dissolution or liquidation of the Company, the
Administrator shall notify each Participant as soon as practicable prior to the effective date of such proposed transaction. The Administrator in its discretion may provide for a Participant to have
the right to exercise his or her Option or SAR until ten (10) days prior to such transaction as to all of the Awarded Stock covered thereby, including Shares as to which the Award would not
otherwise be exercisable. In addition, the Administrator may provide that any Company repurchase option or forfeiture rights applicable to any Award shall lapse 100%, and that any Award vesting shall
accelerate 100%, provided the proposed dissolution or liquidation takes place at the time and in the manner contemplated. To the extent it has not been previously 



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exercised
(with respect to Options and SARs) or vested (with respect to other Awards), an Award will terminate immediately prior to the consummation of such proposed action. 


        (c)   Merger or Asset Sale. 



        (i)    Stock Options and SARs.    In the event of a merger of the Company with or into another corporation, or the
sale of substantially all of the assets of the Company, each outstanding Option and SAR shall be assumed or an equivalent option or SAR substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the Option or SAR, the Participant shall fully vest in and have the right to
exercise the Option or SAR as to all of the Awarded Stock, including Shares as to which it would not otherwise be vested or exercisable. If an Option or SAR becomes fully vested and exercisable in
lieu of assumption or substitution in the event of a merger or sale of assets, the Administrator shall notify the Participant in writing or electronically that the Option or SAR shall be fully vested
and exercisable for a period of fifteen (15) days from the date of such notice, and the Option or SAR shall terminate upon the expiration of such period. For the purposes of this paragraph, the
Option or SAR shall be considered assumed if, following the merger or sale of assets, the option or stock appreciation right confers the right to purchase or receive, for each Share of Awarded Stock
subject to the Option or SAR immediately prior to the merger or sale of assets, the consideration (whether stock, cash, or other securities or property) received in the merger or sale of assets by
holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such consideration received in the merger or sale of assets is not solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Option or SAR, for each Share of Awarded Stock subject to the
Option or SAR, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the merger or sale
of assets. 


        (ii)   Restricted Stock, Performance Shares, Performance Units and Deferred Stock Units.    In the event of a merger
of the Company with or into another corporation, or the sale of substantially all of the assets of the Company, each outstanding Restricted Stock, Performance Share, Performance Unit and Deferred
Stock Unit award shall be assumed or an equivalent Restricted Stock, Performance Share, Performance Unit and Deferred Stock Unit award substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the Restricted Stock, Performance Share, Performance Unit or Deferred Stock
Unit award, the Participant shall fully vest in the Restricted Stock, Performance Share, Performance Unit or Deferred Stock Unit including as to Shares (or with respect to Performance Units, the cash
equivalent thereof) which would not otherwise be vested. For the purposes of this paragraph, a Restricted Stock, Performance Share, Performance Unit and Deferred Stock Unit award shall be considered
assumed if, following the merger or sale of assets, the award confers the right to purchase or receive, for each Share (or with respect to Performance Units, the cash equivalent thereof) subject to
the Award immediately prior to the merger or sale of assets, the consideration (whether stock, cash, or other securities or property) received in the merger or sale of assets by holders of Common
Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the
outstanding Shares); provided, however, that if such consideration received in the merger or sale of assets is not solely common stock of the successor corporation or its Parent, the Administrator
may, with the consent of the successor 




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corporation,
provide for the consideration to be received, for each Share and each unit/right to acquire a Share subject to the Award, to be solely common stock of the successor corporation or its
Parent equal in fair market value to the per share consideration received by holders of Common Stock in the merger or sale of assets. 





        17.   Date of Grant.    The date of grant of an Award shall be, for all purposes, the date on which the Administrator
makes the determination granting such Award, or such other later date as is determined by the Administrator. Notice of the determination shall be provided to each recipient within a reasonable time
after the date of such grant. 


        18.   Amendment and Termination of the Plan. 



        (a)   Amendment and Termination.    The Board may at any time amend, alter, suspend or terminate the Plan. 


        (b)   Shareholder Approval.    The Company shall obtain shareholder approval of any Plan amendment to the extent
necessary and desirable to comply with Applicable Laws. 



        (c)   Effect of Amendment or Termination.    No amendment, alteration, suspension or termination of the Plan shall
impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination. 




        19.   Conditions Upon Issuance of Shares. 



        (a)   Legal Compliance.    Shares shall not be issued pursuant to the exercise of an Award unless the exercise of the
Award or the issuance and delivery of such Shares (or with respect to Performance Units, the cash equivalent thereof) shall comply with Applicable Laws and shall be further subject to the approval of
counsel for the Company with respect to such compliance. 


        (b)   Investment Representations.    As a condition to the exercise or receipt of an Award, the Company may require
the person exercising or receiving such Award to represent and warrant at the time of any such exercise or receipt that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required. 




        20.   Inability to Obtain Authority.    The inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares hereunder (or with respect to Performance Units, the cash
equivalent thereof), shall relieve the Company of any liability in respect of the failure to issue or sell such Shares (or with respect to Performance Units, the cash equivalent thereof) as to which
such requisite authority shall not have been obtained. 


        21.   Reservation of Shares.    The Company, during the term of this Plan, will at all times reserve and keep
available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. 


        22.   Shareholder Approval.    The 2004 amendment to the Plan shall be subject to approval by the shareholders of the
Company within twelve (12) months after the date the amendment is adopted by the Board. Such shareholder approval shall be obtained in the manner and to the degree required under Applicable
Laws. 


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Exhibit 4.1


COHERENT, INC. 2001 STOCK PLAN