Document:

Exhibit

Exhibit 4.1

DESCRIPTION OF CAPITAL STOCK    
The following description of the capital stock of Coherent, Inc. (“us,” “our,” “we” or the “Company”) is a summary of the rights of our common stock and certain provisions of our amended and restated certificate of incorporation, as amended, and our amended and restated bylaws currently in effect. This summary does not purport to be complete and is qualified in its entirety by the provisions of our amended and restated certificate of incorporation, as amended, and amended and restated bylaws, each previously filed with the Securities and Exchange Commission and incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.1 is a part, as well as to the applicable provisions of the Delaware General Corporation Law (the “DGCL”). We encourage you to read our certificate of incorporation, bylaws and the applicable portions of the DGCL carefully.
Authorized Capital Stock
Our authorized capital stock consists of 500,000,000 shares of common stock, par value $0.01 per share. We do not have any authorized preferred stock.
Voting Rights
At all elections of our directors, the holders of our common stock are entitled to cumulative voting rights, which means that holders of our common stock are entitled to as many votes as equal the number of shares held, multiplied by the number of directors being elected, and may cast all votes for a single candidate or may distribute their votes among any two or more candidates. However, no stockholder will be entitled to cumulate votes for a candidate unless (i) such candidate’s name has been properly placed in nomination for election at the applicable meeting prior to the voting and (ii) the stockholder, or any other stockholder, has given notice at the meeting prior to the voting of the intention to cumulate the stockholder’s votes. For all other matters to be voted upon by the stockholders, the holders of common stock are entitled to one vote for each share held of record. 
Dividend Rights
Holders of common stock may receive ratably any dividends that our board of directors may declare out of funds legally available for that purpose. 
Liquidation Rights
In the event of our liquidation, dissolution or winding up, the holders of our common stock are entitled to share ratably in all assets remaining after the payment of our liabilities.
No Preemption, Conversion of Redemption Rights; No Sinking Fund Provisions
Holders of common stock have no preemptive rights or rights to convert their common stock into any other securities. There are no redemption or sinking fund provisions applicable to the common stock.
Delaware Anti-Takeover Law and Other Anti-Takeover Provisions
Delaware Law
We are subject to Section 203 of the DGCL, which regulates acquisitions of Delaware corporations. In general, Section 203 prohibits a publicly-held Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years following the date the person became an interested stockholder, unless:

		
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	prior to the date of the transaction, the board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;

		
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	upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock outstanding at the time the transaction commenced excluding for purposes of determining the number of shares outstanding the shares owned by directors and officers and shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

		
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	on or following the date of the transaction, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders by the affirmative vote of at least 66% of the outstanding voting stock that is not owned by the interested stockholder.

An interested stockholder is a person who, together with affiliates and associates, owns or, within three years prior to the determination of interested stockholder status, did own 15% or more of a corporation’s outstanding voting securities. We expect the existence of this provision to have an anti-takeover effect with respect to transactions that our board of directors do not approve in advance. We also anticipate that Section 203 may also discourage attempts that might result in a premium over the market price for the shares of common stock held by stockholders. A Delaware corporation may opt out of Section 203 with an express provision in its original certificate of incorporation or an express provision in its certification of incorporation or bylaws resulting from amendments approved by the holders of at least a majority of the corporation’s outstanding voting shares. We have not opted out of Section 203.
Certificate of Incorporation and Bylaw Provisions
Provisions of our certificate of incorporation and bylaws may have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from attempting to acquire, control of us. These provisions are expected to discourage coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of us to first obtain the prior approval of our board of directors. We believe that the benefits of increased protection of our ability to negotiate with the proponent of an unfriendly or unsolicited acquisition proposal outweigh the disadvantages of discouraging these proposals because, among other things, negotiation will result in an improvement of their terms. These provisions could limit the price that investors might be willing to pay in the future for shares of our common stock. These provisions include:
		
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	the ability of our board of directors to alter our bylaws without stockholder approval;

		
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	limiting the ability of our stockholders to call special meetings;

		
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	the ability of our board of directors to fix in advance a record date for the purpose of determining the stockholders entitled to notice of or to vote at any meeting of stockholders and to consent to corporate action in writing; and

		
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	establishing advance notification requirements for nominations for election to our board of directors or for proposing matters that can be acted on by stockholders at a stockholder meeting.

These and other provisions contained in our certificate of incorporation and bylaws could have the effect of delaying or preventing a change in control.
Listing 
Our common stock is listed on the Nasdaq Global Select Market under the symbol “COHR”.Exhibit

[2011] EQUITY INCENTIVE PLAN

FORM OF PERFORMANCE RESTRICTED STOCK UNIT AWARD TERMS

1.Grant.  The Company hereby grants to the Employee an award of Restricted Stock Units (“RSUs”), as set forth in the Notice of Grant, subject to the terms and conditions in this Agreement and in the Company’s [2011] Equity Incentive Plan (the “Plan”).  Initially capitalized terms herein shall have the meanings set forth in the Plan or as defined herein, as applicable.
2.Company’s Obligation.  Each RSU represents the right to receive a Share on the vesting date.  Unless and until the RSUs vest, the Employee will have no right to receive Shares under such RSUs.  Prior to actual distribution of Shares pursuant to any vested RSUs, such RSUs will represent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company.
3.Vesting Schedule; Assumption or Substitution Calculation.  The RSUs shall vest as follows:
Up to the Maximum Amount will vest and be settled, based upon the extent, if any, to which the performance metric has been achieved.  The performance metric is the relative performance of Company stock against the [Applicable TSR Metric] (the “Index”) over a three-year period, with the target Company stock performance equivalent to the performance of the Index over such period.  To determine relative performance, the baseline metrics are the [__] trading day average closing price of the Company and the Index, as reported in The Wall Street Journal, or such other reliable source as is determined by the Administrator, in its sole discretion, with [] of such [__] trading day period [beginning] on [___________ __, 20XX].  This [  ] trading day average closing price establishes both the Company baseline stock price (the “Company Baseline Stock Price”) and the Index baseline (the “Index Baseline”) against which future Company stock and Index performance will be compared.
Next, the Company will measure the [__] trading day average closing price of the Company and the Index, as reported in The Wall Street Journal, or such other reliable source as is determined by the Administrator, in its sole discretion, with the last trading day of such [__] trading day period ending on [___________ __, 20XX+3] (establishing both the “Company Closing Price” and the “Index Closing Price”).
The Company will then measure Company performance by dividing the Company Closing Price by the Company Baseline Stock Price, with the quotient expressed as a percentage of the Company Baseline Stock Price (the “Company Percentage Performance”).  The Company will then measure Index Performance over the same period by dividing the Index Closing Price by the Index Baseline with the quotient expressed as a percentage of the Index Baseline (the “Index Percentage Performance”).
The Company will then subtract the Index Percentage Performance from the Company Percentage Performance, then add 100 to the result, with the final result constituting the relative Company performance as a percentage (the “Relative Performance Percentage”).
	
		
	Relative Performance Percentage
	Vesting

	w% or greater
	Maximum Amount (v% Target Amount)

	Between x% - w%
	100% Target Amount + u% Target Amount for Every t% Relative Performance Percentage above x%

	x%
	100% Target Amount

	Between y% - x%
	100% Target Amount - s% Target Amount for Every t% Relative Performance Percentage below x%

	Between z% - y%
	q% Target Amount – r% Target Amount for Every t% Relative Performance Percentage below y%

	z%
	0% Target Amount

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[Examples] Relative Performance Percentages shall result in incremental vesting on a straight-line basis within tiers based on full percentage Relative Performance Percentages as set forth below:
General Rules
The Company Closing Price shall be automatically adjusted to account for any Company stock split or similar change in capitalization effected without receipt of consideration by the Company set forth in Plan Section [19(a)] in the same manner as set forth in Plan Section [19(a)].  In making determinations of the number of Shares that vest hereunder, all Relative Performance Percentage fractional percentages and Share numbers below .5 shall be rounded down to the nearest whole percentage or Share number, respectively and all Relative Performance Percentage fractional percentages and Share numbers of .5 or greater shall be rounded up to the nearest whole percentage or Share number, respectively.  All vesting and delivery of Shares hereunder, except pursuant to assumed or substituted awards in a change of control as specified in the following paragraph, shall be subject to the prior written or electronic certification of the Compensation Committee of the Board as to the extent to which the applicable performance milestones have been achieved.
Change of Control
In the event the Company is acquired in a merger or asset sale pursuant to which this RSU is assumed or substituted pursuant to Plan Section [19(c)] (a “Change of Control”), then if the performance period has not been completed as of the date of the Change of Control, the Company Closing Price shall be deemed to be the price per share received by the Company’s stockholders in the Change of Control.  Relative performance for such uncompleted performance period shall then be measured against the Index performance from the Index Baseline through the [__] trading day average closing price of the Index in the period ending on the date of the Change of Control.  The Company’s stock performance relative to the Index shall then be determined consistently with the methodology specified herein for completed performance period.  The number of Shares subject to this RSU so determined shall then continue to vest based upon Employee’s continuing as a Service Provider to the Company, the acquirer, or their Parents or Subsidiaries through [___________ __, 20XX+3], subject to accelerated vesting as set forth in the Company’s Change of Control and Leadership Change Severance Plan (but only for participants in such plan), as amended from time to time.  
[EXAMPLES]
4.Forfeiture upon Termination as a Service Provider.  Notwithstanding any contrary provision of this Agreement or the Notice of Grant, if the Employee terminates service as a Service Provider for any or no reason prior to vesting, the unvested RSUs awarded by this Agreement will thereupon be forfeited at no cost to the Company, subject to accelerated vesting as set forth in the Company’s Change of Control and Leadership Change Severance Plan (but only for participants in such plan), as amended from time to time.
5.Settlement Upon Vesting.  Any RSUs that vest in accordance with paragraph 3 will be distributed to the Employee (or in the event of the Employee’s death, to his or her estate) in Shares.
6.Withholding of Taxes.  Notwithstanding the foregoing paragraph 5, no Shares shall be distributed to Employee unless and until the Employee shall have delivered to the Company or its designated Subsidiary the full amount of any federal, state or local income or other taxes which the Company or such Subsidiary may be required by law to withhold with respect to such Shares.  The Employee may elect to satisfy any such statutory minimum tax withholding requirement by having the Company withhold Shares otherwise deliverable to the Employee or by delivering to the Company already-owned Shares, subject to the absolute discretion of the Company to disallow satisfaction of such withholding by the delivery or withholding of stock.

7.Rights as Stockholder.  Neither the Employee nor any person claiming under or through the Employee will have any of the rights or privileges of a stockholder of the Company in respect of any Shares 

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deliverable hereunder unless and until certificates representing such Shares will have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to the Employee or Employee’s broker.
8.Acknowledgements.  Employee acknowledges the following:
a.The Company (and not Employee’s employer) is granting the RSU.  The Company will administer the Plan from outside Employee’s country of residence if the Employee’s country of residence is outside the United States and United States of America law will govern all RSUs granted under the Plan.
b.That benefits and rights provided under the Plan are wholly discretionary and, although provided by the Company, do not constitute regular or periodic payments.
c.The benefits and rights provided under the Plan are not to be considered part of Employee’s salary or compensation for purposes of calculating any severance, resignation, redundancy or other end of service payments, vacation, bonuses, long-term service awards, indemnification, pension or retirement benefits, or any other payments, benefits or rights of any kind.
d.Employee waives any and all rights to compensation or damages as a result of the termination of employment or other service with the Company for any reason whatsoever insofar as those rights result or may result from:
1the loss or diminution in value of such rights under the Plan, or
2Employee ceasing to have any rights under, or ceasing to be entitled to any rights under the Plan as a result of such termination.
e.The grant of the RSU, and any future grant of RSUs under the Plan is entirely voluntary, and at the complete discretion of the Company.
f.Neither the grant of the RSU nor any future grant of an RSU by the Company will be deemed to create any obligation to grant any further RSUs, whether or not such a reservation is explicitly stated at the time of such a grant.
g.The Company has the right, at any time to amend, suspend or terminate the Plan.
h.The Plan will not be deemed to constitute, and will not be construed by Employee to constitute, part of the terms and conditions of employment or other service, and the Company will not incur any liability of any kind to Employee as a result of any change or amendment, or any cancellation, of the Plan at any time.
i.Participation in the Plan will not be deemed to constitute, and will not be deemed by Employee to constitute, an employment or labor relationship of any kind with the Company.
j.By entering into this RSU Agreement, and as a condition of the grant of the RSU, Employee consents to the collection, use, and transfer of personal data as described in this subsection to the full extent permitted by and in full compliance with Applicable Law.
k.Employee understands that the Company and its Subsidiaries hold certain personal information about the Employee, including, but not limited to, name, home address, telephone number, email address, date of birth, social insurance number, passport or other identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all RSUs or other entitlement to Shares awarded, canceled, exercised, vested, unvested, or outstanding in Employee’s favor, for the purpose of managing and administering the Plan (“Data”).

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l.Employee further understands that the Company and/or its Subsidiaries will transfer Data among themselves as necessary for the purposes of implementation, administration, and management of Employee’s participation in the Plan, and that the Company and/or its Subsidiary may each further transfer Data to any third parties assisting the Company in the implementation, administration, and management of the Plan (“Data Recipients”).
m.Employee understands that these Data Recipients may be located in Employee’s country of residence or elsewhere, such as the United States.  Employee authorizes the Data Recipients to receive, possess, use, retain, and transfer Data in electronic or other form, for the purposes of implementing, administering, and managing Employee’s participation in the Plan, including any transfer of such Data, as may be required for the administration of the Plan and/or the subsequent holding of Shares on Employee’s behalf, to a broker or third party with whom the Shares acquired on exercise may be deposited.
n.Employee understands that Employee may, at any time, review the Data, request that any necessary amendments be made to it, or withdraw Employee’s consent herein in writing by contacting the Company.  Employee further understands that withdrawing consent may affect Employee’s ability to participate in the Plan.
o.Employee has received the terms and conditions of this RSU Agreement and any other related communications, and Employee consents to having received these documents in English.
9.Address for Notices.  Any notice to be given to the Company under the terms of this Agreement shall be addressed to the Company, in care of Stock Plan Administration at Coherent, Inc., 5100 Patrick Henry Drive, Santa Clara, CA 95054, or at such other address as the Company may hereafter designate in writing.
10.Conditions for Issuance of Shares.  The shares of stock deliverable to the Employee may be either previously authorized but unissued shares or issued shares that have been reacquired by the Company.  The Company shall not be required to issue any shares of stock hereunder prior to fulfillment of all the following conditions:  (a) the admission of such shares to listing on all stock exchanges on which such class of stock is then listed; (b) the completion of any registration or other qualification of such shares under any State or Federal law or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body, which the Company shall, in its absolute discretion, deem necessary or advisable; (c) the obtaining of any approval or other clearance from any State or Federal governmental agency, which the Company shall, in its absolute discretion, determine to be necessary or advisable; and (d) the lapse of such reasonable period of time following the date of grant of the Restricted Stock Unit as the Company may establish from time to time for legal or other administrative reasons.
11.Plan Governs.  This Agreement is subject to all terms and provisions of the Plan.  In the event of a conflict between one or more provisions of this Agreement and one or more provisions of the Plan, the provisions of the Plan shall govern.  Capitalized terms used and not defined in this Agreement shall have the meaning set forth in the Plan.
12.Captions.  Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.
13.Agreement Severable.  In the event that any provision in this Agreement shall be held invalid or unenforceable, such provision shall be severable from, and such invalidity or unenforceability shall not be construed to have any effect on, the remaining provisions of this Agreement.
14.Modifications to the Agreement.  This Agreement constitutes the entire understanding of the parties on the subjects covered.  The Employee expressly warrants that he or she is not executing this Agreement in reliance on any promises, representations, or inducements other than those contained herein.  Modifications to this Agreement or the Plan can be made only in an express written contract executed by a duly authorized officer of the Company.

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

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