EXHIBIT
10.14


 


COHERENT, INC.


 


2001 STOCK PLAN


 


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.


 


Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, 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 stock option 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 Options are, or will be, granted under the Plan.


 


(c)   “Board”
means the Board of Directors of the Company.


 


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


 


(e)   “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 under the Plan.


 


(f)    “Common Stock”
means the common stock of the Company.


 


(g)   “Company”
means Coherent, Inc., a Delaware corporation.


 


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


 


(i)    “Director”
means a member of the Board.


 


(j)    “Disability”
means total and permanent disability as defined in Section 22(e)(3) of the
Code.


 


(k)   “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.


 


(l)    “Exchange Act”
means the Securities Exchange Act of 1934, as amended.


 


(m)  “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.


 


(n)   “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.


 


(o)   “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) and Section 16(b) of the Exchange Act.


 


(p)   “Nonstatutory
Stock Option” means an Option not intended to qualify as an
Incentive Stock Option.


 


(q)   “Notice of Grant”
means a written or electronic notice evidencing certain terms and conditions of
an individual Option grant. The Notice of Grant is part of the Option
Agreement.


 


(r)    “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.


 


(s)   “Option”
means a stock option granted pursuant to the Plan.


 


(t)    “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.


 


(u)   “Optioned Stock”
means the Common Stock subject to an Option.


 


(v)   “Optionee”
means the holder of an outstanding Option granted under the Plan.


 


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


 


(x)    “Plan”
means this Coherent, Inc. 2001 Stock Plan.


 


(y)  “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.


 


(z)    “Section 16(b)”
means Section 16(b) of the Exchange Act.


 


(aa) “Service Provider”
means an Employee or Consultant.


 


(bb) “Share”
means a share of the Common Stock, as adjusted in accordance with
Section 12 of the Plan.


 


(cc) “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 12 of the Plan, the maximum aggregate number of
Shares that may be optioned and sold under the Plan is 2,800,000 Shares. The
Shares may be authorized, but unissued, or reacquired Common Stock.


 


If an Option expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Option Exchange Program,
the unpurchased Shares which were subject thereto shall become available for
future grant or sale under the Plan (unless the Plan has terminated); provided, however, that Shares that have
actually been issued under the Plan upon exercise of an Option shall not be
returned to the Plan and shall not become available for future distribution
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
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 9(a)(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 Options
may be granted hereunder;


 


(iii)       to determine the number of shares of Common
Stock to be covered by each Option 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 Option granted hereunder. Such
terms and conditions include, but are not limited to, the exercise price, the
time or times when Options may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation regarding any Option 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 Option (subject to
Section 14(c) of the Plan), including the discretionary authority to
extend the post-termination exercisability period of Options longer than is
otherwise provided for in the Plan;


 


(ix)       to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option that number of Shares having a Fair Market
Value equal to the amount required to be withheld. The Fair Market Value of the
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
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 Option previously
granted by the Administrator;


 


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


 


(c)   Effect of
Administrator’s Decision. The Administrator’s decisions,
determinations and interpretations shall be final and binding on all Optionees
and any other holders of Options.


 


5.     Eligibility.  Nonstatutory Stock Options may be granted to
Service Providers. Incentive Stock Options may be granted only to Employees.


 

















 


6.     Limitations.


 


(a)   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)   Neither the Plan nor any Option shall confer upon an
Optionee any right with respect to continuing the Optionee’s relationship as a
Service Provider with the Company, nor shall they interfere in any way with the
Optionee’s right or the Company’s right to terminate such relationship at any
time, with or without cause.


 


(c)   The following limitations shall apply to grants of
Options:


 


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


 


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


 


(iii)       The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company’s capitalization as
described in Section 12.


 


7.     Term of Plan.  Subject to Section 18 of the 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 14 of the Plan.


 


8.     Term of Option.  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.


 


9.     Option Exercise
Price and Consideration.


 


(a)   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:


 


(i)         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.


 


(b)   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.


 

















 


(c)   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 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)       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


 


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


 


10.   Exercise of
Option.


 


(a)   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. Unless the Administrator provides otherwise, vesting of
Options granted hereunder shall be tolled during any unpaid leave of absence.
An Option may not be exercised for a fraction of a Share.


 


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 Optioned 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 12 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.


 


(b)   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.


 


(c)   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.


 


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


 


(e)   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.


 


11.   Non-Transferability
of Options.  Unless
determined otherwise by the Administrator, an Option 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 Optionee, only by the Optionee. If the Administrator makes an
Option transferable, such Option shall contain such additional terms and
conditions as the Administrator deems appropriate.


 


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


 


(a)   Changes in Capitalization.
Subject to any required action by the shareholders of the Company, the number
of shares of Common Stock covered by each outstanding Option and the number of
shares of Common Stock which have been authorized for issuance under the Plan
but as to which no Options have yet been granted or which have been returned to
the Plan upon cancellation or expiration of an Option, as well as the price per
share of Common Stock covered by each such outstanding Option, 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 Board, 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
Option.


 


(b)   Dissolution or
Liquidation. In the event of the proposed dissolution or liquidation
of the Company, the Administrator shall notify each Optionee as soon as
practicable prior to the effective date of such proposed transaction. The
Administrator in its discretion may provide for an Optionee to have the right
to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares
as to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the time and in
the manner contemplated. To the extent it has not been previously exercised, an
Option will terminate immediately prior to the consummation of such proposed
action.


 


(c)   Merger or Asset
Sale. 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 shall be assumed or an equivalent option 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, the Optionee shall fully vest in and have the right
to exercise the Option as to all of the Optioned Stock, including Shares as to
which it would not otherwise be vested or exercisable. If an Option 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 Optionee in
writing or electronically that the Option shall be fully vested and exercisable
for a period of fifteen (15) days from the date of such notice, and the
Option shall terminate upon the expiration of such period. For the purposes of
this paragraph, the Option shall be considered assumed if, following the merger
or sale of assets, the option confers the right to purchase or receive, for
each Share of Optioned Stock subject to the Option 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, for each
Share of Optioned Stock subject to the Option, 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.


 

















 


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


 


14.   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 Optionee, unless
mutually agreed otherwise between the Optionee and the Administrator, which
agreement must be in writing and signed by the Optionee 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 Options granted
under the Plan prior to the date of such termination.


 


15.   Conditions Upon
Issuance of Shares.


 


(a)   Legal Compliance.
Shares shall not be issued pursuant to the exercise of an Option unless the
exercise of such Option and the issuance and delivery of such Shares 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 of an Option, the
Company may require the person exercising such Option to represent and warrant
at the time of any such exercise 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.


 


16.   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, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.


 


17.   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.


 


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