Document:

Exhibit 10.1

 

Coherent, Inc.

5100 Patrick Henry Drive

Santa Clara, CA 95054

 

 

 

January 31,
2008

 

 

Oliver Press
Partners, LLC

152 West 57th
Street

New York, NY 10019

 

Re:                             Letter Agreement

 

Ladies and
Gentlemen:

 

This letter agreement
confirms the understanding and agreement between Coherent, Inc., a
Delaware corporation (the “Company”), on the one hand, and Oliver Press
Partners, LLC, Oliver Press Investors, LLC, Augustus K. Oliver and Clifford
Press (hereinafter collectively referred to as the “OPP Parties”), on
the other hand, as follows:

 

1.                                       Board Matters.

 

(a)                                  The Company hereby confirms that the
Board of Directors of the Company (the “Board”) has considered the
nomination of Mr. Clifford Press (“Clifford Press”) as a candidate
for election to the Board and has approved his nomination as a candidate for
election to the Board at the next annual meeting of stockholders of the
Company.  The Company shall include
Clifford Press among its slate of candidates (the “Slate”) to be
presented to the stockholders of the Company at the Company’s next annual
meeting of stockholders, including any adjournment or postponement thereof (the
“Next Annual Meeting”).  The
Company shall include in its proxy statement for the Next Annual Meeting (the “Company
Proxy Statement”) a recommendation of the Board that all stockholders of
the Company vote their shares of Company stock “FOR” the election of all of the
Company’s director candidates on the Slate, including Clifford Press.  In connection with the preparation of the
Proxy Statement, Clifford Press shall provide the Company with all information
the Company may reasonably require or reasonably request from him in order to
enable the Company to comply with all applicable laws, rules and
regulations, including all rules and regulations of the Securities and
Exchange Commission (the “SEC”). 
In furtherance thereof, Clifford Press hereby consents to being included
on the Slate and being named in the Proxy Statement as a candidate for election
as a director of the Company.  In the event
that the Company shall not convene and hold the Next Annual Meeting on or
before March 19, 2008, the Company (acting through the Board) shall take
any and all corporate and other action necessary to increase the size of the
Board by one seat and appoint Clifford Press to fill the vacancy so created by
such increase no later than March 21, 2008.

 

(b)                                 Each of Clifford Press and the other OPP
Parties hereby agree that, if at any time prior to the Next Annual Meeting, the
OPP Parties cease to beneficially own, in the

 

 

 

 

aggregate, at least 50%
of the number of shares of the Company’s common stock set forth in the Schedule
13D filed by the OPP Parties with the SEC in respect of Company common stock on
January 10, 2008 (the “Most Recent 13D”), the covenants and other
obligations of the Company set forth in Section 1(a) hereof
shall terminate and expire automatically and without any action on the part of
the Company or any of the OPP Parties. 
In clarification and not in limitation of the foregoing, if at any time
prior to the Next Annual Meeting, the OPP Parties cease to beneficially own, in
the aggregate, at least 50% of the number of shares of the Company’s common
stock set forth in the Most Recent 13D, the Company may, in its sole and
absolute election, among other things, (i) withdraw its nomination of
Clifford Press as a candidate for election to the Board at the Next Annual
Meeting, (ii) remove Clifford Press from the Slate by any means available,
and/or (iii) recommend that Company stockholders vote against Clifford
Press as a director of the Company at the Next Annual Meeting by any means
available, including, without limitation, by marking available proxy cards for
the Next Annual Meeting with a “WITHHOLD” or “ABSTAIN” notation in respect of
the candidacy of Clifford Press.

 

(c)                                  Each of Clifford Press and the other OPP
Parties hereby agree that, if at any time after the date of the Next Annual
Meeting and Clifford Press’ election to the Board, the OPP Parties cease to
beneficially own, in the aggregate, at least 50% of the number of shares of the
Company’s common stock set forth in the Most Recent 13D, then Clifford Press
shall promptly (and in any event within 2 business days) offer to resign from
the Board and all committees of the Board of which he may be a member at such
time by delivering a written resignation letter to the Board, which resignation
will be effective only if (and when) such resignation is accepted by a duly
authorized resolution of the Board within 30 days after the Board receives such
resignation offer (it being understood and hereby agreed that Clifford Press
shall recuse himself from any Board deliberations and determinations with
respect to such resignation).

 

(d)                                 Each of Clifford Press and the other OPP
Parties hereby agree that, if at any time after the date of the Next Annual
Meeting and Clifford Press’ election to the Board, (i) (A) there is
any judgment or ruling by a court of competent jurisdiction which contains a
finding of fact or conclusion of law that Clifford Press has engaged in any
negligent action in the performance of his service as a director or officer of
a corporation or other business enterprise, any fraudulent conduct or any other
actions which constitute a breach of fiduciary duty, or (B) Clifford Press
admits in the course of settlement of any litigation or otherwise to engaging
in any of the conduct described in the immediately preceding clauses (i)(A),
and (ii) the Board shall thereafter request that Clifford Press resign
from the Board, then Clifford Press shall promptly (and in any event within 2
business days) resign from the Board and all committees of the Board of which
he may be a member at such time and the Company and OPP shall thereupon
negotiate in good faith to identify a mutually agreeable designee of OPP to be
appointed promptly to the Board to serve out the remainder of Clifford Press’
then effective term on the Board, provided that such designee executes a
counterpart to this letter agreement pursuant to which he or she agrees to
become bound by the terms and conditions set forth herein that apply to
Clifford Press (whether in his individual capacity or as an OPP Party).  Upon appointment of such designee to the
Board and the execution of a counterpart to this letter agreement by such
designee in accordance with the preceding sentence, all references to “Clifford
Press” herein shall, where the context requires, be deemed to refer to such
designee.  Clifford Press hereby agrees
that he shall promptly forward to the Company (pursuant to the notice provisions
hereof) copies of any and

 

 

2

 

all judgments,
rulings or settlement documents arising out of any litigation or the settlement
of any litigation to which this

Section 1(d) applies, subject to any confidentiality
restrictions set forth in such judgments, rulings or settlement documents.

 

(e)                                  If Clifford Press is elected to the Board
at the Next Annual Meeting, for so long as he is a member of the Board,
Clifford Press hereby agrees that, subject to the terms of Section 2(c),
he shall comply with the Company’s lawful policies and procedures applicable to
members of the Board (as the same may be amended from time to time), including,
without limitation, the Company’s “Corporate Governance Guidelines” and insider
trading policy (a copy of which has been provided to Clifford Press), it being
understood that such insider trading policies restrict Clifford Press’
communications with the other OPP Parties concerning material, non-public
information with respect to the Company.

 

(f)                                    Clifford Press understands and hereby
acknowledges that if he is elected to the Board at the Next Annual Meeting, he
will owe fiduciary duties to the Company and its stockholders as a director of
the Company as prescribed by applicable law, and he hereby agrees to discharge
such fiduciary duties in good faith while he is a member of the Board.

 

(g)                                 In addition to and not in limitation of
the provisions of Section 1(d), during the Standstill Period (as
defined in Section 3), in the event that Clifford Press or his
successor as provided in Section 1(d) shall no longer be able
to serve as a director of the Company for any reason, the Company and OPP shall
thereupon negotiate in good faith to identify a mutually agreeable designee of
OPP to be appointed promptly to the Board to serve out the remainder of such
individual’s then effective term on the Board, provided that any such designee
executes a counterpart to this letter agreement pursuant to which he or she
agrees to become bound by the terms and conditions set forth herein that apply
to Clifford Press or his successor as provided in Section 1(d) (whether
in his or her individual capacity or as an OPP Party).  Upon appointment of such designee to the
Board and the execution of a counterpart to this letter agreement by such
designee in accordance with the preceding sentence, all references to “Clifford
Press” herein shall, where the context requires, be deemed to refer to such
designee.

 

2.                                       Confidentiality.

 

(a)                                  For all purposes under this Agreement,
the term “Confidential Information” shall mean and include any and all
non-public information regarding the Company, including, without limitation,
its business, operations, plans, strategies, financial condition, results of
operations and prospects, and shall not include any information which is
publicly disclosed by the Company or otherwise becomes part of the public
domain through no action of any OPP Party.

 

(b)                                 Clifford Press hereby agrees that,
subject to the provisions of this Section 2, (i) he shall keep
confidential all Confidential Information and shall not disclose or reveal any
such Confidential Information to any third party, including, for avoidance of
doubt, the other OPP Parties; provided,
however, that the foregoing shall not restrict the authority or
right of Clifford Press to take any action that he in good faith believes,
after consultation with his outside legal counsel and the Company’s outside
legal counsel, he is required to take in order to fulfill his fiduciary duties
to the Company and its stockholders under applicable law, (ii) he shall
not

 

 

3

 

use any such
Confidential Information to publicly contest any action taken, or determination
made, by the Board or any of its committees; provided,
however, that the foregoing shall not restrict the authority or
right of Clifford Press to take any action that he in good faith believes,
after consultation with his outside legal counsel and the Company’s outside
legal counsel, he is required to take in order to fulfill his fiduciary duties
to the Company and its stockholders under applicable law, and (iii) he
shall not take any action with respect to Confidential Information that is
subject to the attorney-client privilege that would cause or result in the loss
of such privilege under applicable law if and to the extent such privilege is
available.

 

(c)                                  Notwithstanding the foregoing provisions
of Section 1(e) (including anything to the contrary set forth
in the Company’s “Corporate Governance Guidelines” and insider trading policy)
and Section 2(a), Clifford Press may disclose to Gus Oliver any
Confidential Information which involves consideration by the Board of strategic
matters of the Company (such as significant uses of cash and budgetary
processes), provided that such Confidential Information is not covered by or
subject to attorney-client privilege and does not relate to ordinary course
business matters of the Company.  Gus
Oliver hereby agrees that, subject to the provisions of this Section 2,
(i) he shall keep confidential all Confidential Information and shall not
disclose or reveal any Confidential Information to any third party, (ii) he
shall not use any such Confidential Information to publicly contest any action
taken, or determination made, by the Board or any of its committees, and (iii) in
the event that he obtains Confidential Information that is subject to the
attorney-client privilege notwithstanding the restrictions set forth in the
immediately preceding sentence, he shall not take any action with respect to
such Confidential Information subject to the attorney-client privilege that
would cause or result in the loss of such privilege under applicable law if and
to the extent such privilege is available.

 

(d)                                 Notwithstanding the foregoing provisions
of this Section 2, nothing in this letter agreement shall preclude
the disclosure of any Confidential Information pursuant to a court order,
governmental subpoena or other judicial process, subject to compliance with the
provisions of this Section 2(d). 
In the event that any OPP Party is required by any court order,
governmental subpoena or other judicial process to disclose any Confidential
Information, prior to making such disclosure and to the extent not prohibited
by applicable law, such OPP Party shall notify the Company of such disclosure
requirement and provide the Company with a list of all Confidential Information
that such OPP Party intends to so disclose pursuant to such disclosure
requirement (and, if applicable, the text of the disclosure language itself)
and cooperate with the Company, at the Company’s expense, to the extent the
Company may seek to limit such disclosure (including, if requested by the
Company, by taking all reasonable steps (at the Company’s expense) to resist or
avoid any such judicial or administrative proceeding referred to above).  If, in the absence of a protective order or
the receipt of a waiver from the Company of the confidentiality provisions set
forth in this Section 2, any OPP Party is legally required to
disclose any Confidential Information pursuant to a court order, governmental
subpoena or other judicial process, such OPP Party shall disclose only that
portion of the Confidential Information which such OPP Party reasonably
believes, after consultation with its outside counsel, is legally required to
be disclosed and shall use such OPP Party’s reasonable best efforts to obtain
assurances that confidential treatment will be accorded to such Confidential
Information.

 

 

4

 

3.                                       Insider Trading. 
Each of the OPP Parties hereby acknowledges that he or it is aware that
the United States securities laws prohibit, among other things, any person who
has obtained from the Company or any of its agents material, non-public
information with respect to the Company from transacting in the securities of
the Company or from communicating such information to any other person under
circumstances in which it is reasonably foreseeable that such person is likely
to transact in such securities.  Each of
the OPP Parties hereby agrees to comply with such laws.

 

4.                                       Standstill Restrictions. 
For a period beginning on the date hereof and continuing until (x) the
first (1st) anniversary of the Next Annual Meeting
if Clifford Press is elected to the Board at the Next Annual Meeting, or (y) the
final adjournment of the Next Annual Meeting if Clifford Press is not elected
to the Board at the Next Annual Meeting (such period, the “Standstill Period”),
unless specifically invited in writing by the Board (acting pursuant to
approval of at least a majority of the members of the Board) pursuant to a duly
adopted resolution of the Board in advance, none of the OPP Parties, acting on
his or its behalf or on behalf of other persons acting in concert with any of
the OPP Parties, shall in any manner, directly or indirectly:

 

(a)                                  (i) commence or initiate, or induce
or attempt to induce any person or “group” (as defined in and within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and whether or not required to file a
Schedule 13D containing the information contemplated by Rule 13d-1 under
the Exchange Act) (a “13D Group”) to commence or initiate, any tender or
exchange offer for any securities of the Company, or (ii) take, or induce
or attempt to induce any person or 13D Group to take, any other action that is
intended to result in, or would be reasonably expected to result in, a change
of control of the Company;

 

(b)                                 (i) submit, encourage any person or
13D Group to submit, advise or assist any person or 13D Group with respect to
the submission of, or otherwise participate in, endorse or facilitate any
nominations or proposals to the Company or to the holders of any Company voting
stock for consideration by the holders of Company voting stock at any annual or
special meeting of the Company’s stockholders or in any action to be taken by
written consent pursuant to the Company’s charter or bylaws, Rule 14a-3
promulgated under the Exchange Act, the provisions of any documents governing
the terms of any such Company voting stock or governing the rights of any
holders thereof, or otherwise, (ii) take any action to call or request
that the Company call, or encourage any person or 13D Group to call or request
that the Company call, advise or assist any person or 13D Group with respect to
calling or requesting that the Company call, or otherwise participate in,
endorse or facilitate the calling of or any request that the Company call, an
annual or special meeting of the Company’s stockholders, (iii) solicit,
encourage any person or 13D Group to solicit, advise or assist any person or
13D Group with respect to the solicitation of, or otherwise participate in,
endorse or facilitate any solicitation of, proxies or consents with respect to
any Company voting stock, including, without limitation, (A) with respect
to any matter submitted or to be submitted for the consideration and approval
of the Company’s stockholders at any annual or special meeting of the Company’s
stockholders or by written consent, including, without limitation, with respect
to the election of directors in opposition to the director nominees

 

 

5

 

recommended by the
Board or otherwise for purposes of influencing or acquiring control of the
Board or management of the Company, and (B) for the purpose of calling a
special meeting of the Company’s stockholders, or (iv) advise, influence
or seek to advise or influence any person or 13D Group with respect to the
voting of any Company voting stock;

 

(c)                                  (i) join a 13D Group, or otherwise
act in concert with any person or 13D Group for the purpose of acquiring,
holding, voting or disposing of Company voting stock, or for purposes of
circumventing or avoiding any of the terms or provisions of this letter
agreement, or advise or assist any person or 13D Group with respect to the
Company, (ii) contact, or enter into any discussions or arrangements with,
any other person or “group” (as defined in and within the meaning of Section 13(d)(3) of
the Exchange Act) who, within ten (10) days thereafter, will be required
to file, a statement containing the information required by Rule 13d-1
under the Exchange Act, concerning any of the matters set forth in this letter
agreement, or (iii) sell or otherwise transfer any Company securities to
any person if, to the knowledge of any of the OPP Parties, the transferee of
such securities would thereafter be required to file a Schedule 13D containing
the information required by Rule 13d-1 under the Exchange Act, or an
amendment thereto;

 

(d)                                 engage in or offer, agree or propose to
engage in, encourage any person or 13D Group to engage in or offer, agree or
propose to engage in, advise or assist any person or 13D Group with respect to
engaging in or offering or proposing to engage in, or otherwise directly or
indirectly participate in, endorse or facilitate any offer or proposal
(including, without limitation, by seeking or otherwise soliciting interest,
providing or arranging for financing, providing for or arranging the sale of
Company voting stock, making any offer or proposal to the Board or management
of the Company (or any of them), formulating a plan or proposal, or making any
public statement or announcement, offer, proposal or filing) regarding (i) any
form of business combination transaction involving the Company, including,
without limitation, a merger, consolidation, acquisition of Company voting
stock by tender or exchange offer or otherwise, acquisition of assets or
otherwise, (ii) any liquidation, dissolution or winding up of the Company,
or (iii) any recapitalization, restructuring, reorganization or other
similar transaction involving the Company;

 

(e)                                  seek or take any action to (i) change
the composition of the Board other than in respect of the nomination and
election of Clifford Press to the Board at the Next Annual Meeting as
contemplated by and pursuant to Section 1 of this letter agreement,
(ii) remove any directors from the Board, or (iii) increase the size
of the Board, other than in connection with the nomination and election of
Clifford Press to the Board at the Next Annual Meeting as contemplated by and
pursuant to Section 1 of this letter agreement or (iv) fill
any vacancies on the Board, except in any manner permitted by this letter
agreement;

 

(f)                                    (i) seek to become involved in the
business, management or operations of the Company, (ii) except for an
amendment to the Most Recent 13D for the purpose of describing this letter
agreement and any related matters, publicly disclose any intent,

 

 

6

 

purpose, plan or
proposal with respect to the Company, the Board, Company management or the
policies or affairs of the Company, or (iii) make any public disclosure or
take any action (including making any non-public communication to the Company)
that could require the Company to make any public disclosure relating to any
such intent, purpose, plan or proposal;

 

(g)                                 initiate or facilitate any action
intended to cause cumulative voting to be in effect in an election of directors
of the Company;

 

(h)                                 request or otherwise seek a waiver of any
provision of this letter agreement; or

 

(i)                                     assist, advise, encourage, facilitate or
enter into any agreement, arrangement or other understanding to assist or
advise, any person or 13D Group in taking any of the actions described in
paragraphs (a) through (h) of this Section 4.

 

Notwithstanding the
foregoing, none of the restrictions set forth in paragraphs (a) through (i) of
this Section 4 shall be deemed to (i) restrict the authority
or right of Clifford Press to take any action (A) in his capacity as a
member of the Board of the Company or (B) that he in good faith believes,
after consultation with his outside legal counsel and the Company’s outside
legal counsel, he is required to take in order to fulfill his fiduciary duties
to the Company and its stockholders under applicable law, or (ii) prevent
or otherwise restrict the OPP Parties from (A) subject to the applicable
provisions of the Company’s bylaws and applicable law, nominating one or more
persons for election as a director(s) at any annual meeting of Company
stockholders called by the Board and proposed to be held after the Next Annual
Meeting (each, a “Subsequent Annual Meeting”) if any advance notice
deadline for submitting a nominee (whether under the Company’s bylaws or
applicable law) will occur prior to the expiration of the Standstill Period,
and (B) soliciting proxies or consents with respect to Company voting
stock (including taking actions in support or furtherance of any such
solicitation including to cause cumulative voting to be in effect) (i) in
favor of or in opposition to the election of any persons so nominated for
election to the Board at any annual meeting of Company stockholders called by
the Board and proposed to be held after the Next Annual Meeting or (ii) in
regard to any other matter that may be brought before the Company’s
stockholders by the Company or any other stockholder at a Subsequent Annual
Meeting.

 

5.                                       Voting Agreement.

 

(a)                                  During the Standstill Period, on all
matters that are presented to the stockholders of the Company for approval
(whether by the Board or any third party, and whether at an annual or special
meeting of Company stockholders or pursuant to a proposed action by written
consent), the OPP Parties shall cause to be voted all shares of the Company
voting stock beneficially owned by the OPP Parties (or any of them) as of the
applicable record date for the determination of stockholders entitled to vote
on any such matters in accordance with the recommendations of the Board,
provided the provisions of this Section 5 shall not be binding on the
OPP Parties unless Clifford Press has approved and joined in such
recommendation in his capacity as a director of the Company.

 

 

7

 

(b)                                 None of the OPP Parties shall enter into
any agreement or understanding with any person to vote or give instructions in
any manner inconsistent with the terms of this letter agreement.

 

6.                                       Public Disclosure. 
Each of the parties hereto agrees that he or it shall not issue a press
release or otherwise make any public statement or disclosure regarding the
nomination or election of Clifford Press to the Board and/or any committee
thereof, this letter agreement or the subject matter hereof without the prior
consent of the other party hereto; provided, however,
that notwithstanding the foregoing, (i) the Company may issue a press
release and file a Current Report on Form 8-K to announce and report this
letter agreement and the subject matter hereof, provided that the Company
affords the OPP Parties an opportunity to review and provide comments on any
such press release or Current Report prior to the issuance or filing thereof, and
considers in good faith any comments of the OPP Parties thereto, and (ii) the
OPP Parties may issue a press release and file an amendment to the Most Recent
13D to report this letter agreement and the subject matter hereof (and any
related matters), provided that the OPP Parties afford the Company an
opportunity to review and provide comments on any such press release or
amendment to the Most Recent 13D prior to the issuance or filing thereof, and
considers in good faith any comments of the Company thereto. The parties hereto
agree that none of the OPP Parties shall issue such press release or file such
amendment to the Most Recent 13D prior to the time at which the Company issues
its press release and files its Current Report on Form 8-K to disclose and
report this letter agreement and the subject matter hereof.

 

7.                                       Entire Agreement. 
This letter agreement contains the entire agreement between and among
the parties concerning the subject matter of this letter agreement and
supersedes all prior agreements and understandings with respect to such subject
matter.

 

8.                                       Governing Law. 
This letter agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware.

 

9.                                       Jurisdiction and Venue. 
Any legal action or other legal proceeding relating to this letter
agreement or the enforcement of any provision of this letter agreement may be
brought or otherwise commenced in any state court located in Santa Clara County
in the State of California.  Each party
hereto (i) expressly and irrevocably consents and submits to the
jurisdiction of any state court located in Santa Clara County in the State of
California (and each state appellate court located in the State of California
in connection with any such legal proceeding, including to enforce any
settlement, order or award), (ii) agrees that any state court located in
Santa Clara County in the State of California shall be deemed to be a
convenient forum, and (iii) waives and agrees not to assert (by way of
motion, as a defense or otherwise), in any such legal proceeding commenced in
any state court located in Santa Clara County in the State of California, any
claim that such party is not subject personally to the jurisdiction of such
court, that such legal proceeding has been brought in an inconvenient forum,
that the venue of such proceeding is improper or that this letter agreement or
the subject matter hereof or thereof may not be enforced in or by such
court.  Each party hereto agrees to the
entry of an order to enforce any resolution, settlement, order or award made
pursuant to this Section 9 by the state courts located in Santa
Clara County in the State of California.

 

 

8

 

10.                                 WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY AND ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS LETTER AGREEMENT OR THE ACTIONS OF ANY PARTY HERETO IN
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

 

11.                                 SPECIFIC PERFORMANCE.  THE PARTIES HERETO AGREE THAT
IRREPARABLE DAMAGE WOULD OCCUR IN THE EVENT THAT ANY OF THE PROVISIONS OF THIS
LETTER AGREEMENT WERE NOT PERFORMED IN ACCORDANCE WITH THEIR SPECIFIC INTENT OR
WERE OTHERWISE BREACHED.  IT IS
ACCORDINGLY AGREED THAT THE PARTIES HERETO SHALL BE ENTITLED TO AN INJUNCTION
OR INJUNCTIONS, WITHOUT BOND, TO PREVENT OR CURE BREACHES OF THE PROVISIONS OF
THIS LETTER AGREEMENT AND TO ENFORCE SPECIFICALLY THE TERMS AND PROVISIONS HEREOF,
IN ADDITION TO ANY OTHER REMEDY TO WHICH SUCH PARTIES MAY BE ENTITLED BY
LAW OR EQUITY, AND ANY PARTY HERETO SUED FOR BREACH OF THIS LETTER AGREEMENT
EXPRESSLY WAIVES ANY DEFENSE THAT A REMEDY IN DAMAGES WOULD BE ADEQUATE.

 

12.                                 Attorneys’ Fees.  In any action at law or suit in
equity in relation to this letter agreement, the prevailing party in such
action or suit shall be entitled to receive a reasonable sum for its attorneys’
fees and all other reasonable costs and expenses incurred in such action or suit.

 

13.                                 Delays or Omissions.  No delay or omission to exercise
any right, power or remedy accruing to a party under this letter agreement
shall impair any such right, power or remedy nor shall it be construed to be a
waiver of any such breach or default, or an acquiescence therein, or of or in
any similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring.

 

14.                                 Assignment.  This letter agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and assignees.  This letter
agreement may not be assigned by the Company without the consent or other
approval of the OPP Parties.  This letter
agreement may not be assigned by the OPP Parties (or any of them) without the
prior written consent of the Company.

 

15.                                 Amendment.  Except as
expressly provided herein, neither this letter agreement nor any term hereof
may be amended, waived, discharged or terminated other than by a written
instrument signed by the party against whom enforcement of any such amendment,
waiver, discharge or termination is sought.

 

16.                                 Termination. 
This letter agreement shall automatically terminate and be of no further
force or effect, without any action on the part of any of the parties hereto,
in the event of a change of control of the Company, which shall be deemed to
include, among other things, (i) any transaction or series of related
transactions pursuant to which the stockholders of the Company prior to such
transaction or series of transactions hold less than a majority of the voting

 

 

9

 

power of the
Company or any successor in interest thereto or less than a majority in
interest of all or substantially all of the assets of the Company, and (ii) any
transaction or series of related transactions pursuant to which the members of
the Board prior to such transaction or series of transactions constitute less
than a majority of the members of the Board or the board of directors of any
successor in interest thereto.

 

17.                                 Notices.  All notices
and other communications pursuant to this letter agreement shall be in writing
and shall be delivered personally, sent by facsimile, sent by
nationally-recognized overnight courier or mailed by registered or certified
mail (return receipt requested), postage prepaid, to the respective parties at
the following address (or at such other address for a party as shall be
specified by like notice):

 

	
  If to the Company:

  	
   

  	
  Coherent, Inc.

  
	
   

  	
   

  	
  5100 Patrick Henry Drive

  
	
   

  	
   

  	
  Santa Clara, CA 95054

  
	
   

  	
   

  	
  Attention: General Counsel

  
	
   

  	
   

  	
  Telephone: (408) 764-4180

  
	
   

  	
   

  	
  Facsimile: (408) 764-4928

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Wilson Sonsini
  Goodrich & Rosati

  
	
   

  	
   

  	
  Professional Corporation

  
	
   

  	
   

  	
  650 Page Mill Road

  
	
   

  	
   

  	
  Palo Alto, CA 94304

  
	
   

  	
   

  	
  Attention: Larry W.
  Sonsini and David Berger

  
	
   

  	
   

  	
  Telephone: (650) 493-9300

  
	
   

  	
   

  	
  Facsimile: (650) 493-6811

  
	
   

  	
   

  	
   

  
	
  If to the OPP Parties:

  	
   

  	
  Oliver Press Partners, LLC

  
	
   

  	
   

  	
  152 West 57th Street

  
	
   

  	
   

  	
  New York, New York 10019

  
	
   

  	
   

  	
  Attention: Gus Oliver and Clifford Press

  
	
   

  	
   

  	
  Telephone: (212) 277-5600

  
	
   

  	
   

  	
  Facsimile: (212) 974-1860

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Lowenstein Sandler PC

  
	
   

  	
   

  	
  65 Livingston Avenue

  
	
   

  	
   

  	
  Roseland, New Jersey 07068

  
	
   

  	
   

  	
  Attention: Allen B. Levithan and Jeffrey M. Shapiro

  
	
   

  	
   

  	
  Telephone: (973) 597 2500

  
	
   

  	
   

  	
  Facsimile: (973) 597 2400

  

 

Each such notice or other
communication shall for all purposes of this letter agreement be treated as
effective or having been given:  (i) if
delivered personally, when delivered, (ii) if sent by facsimile, upon
confirmation of facsimile transfer, (iii) if sent by nationally-recognized
overnight courier, on the first business day after the business day on which
the same has been deposited with such overnight courier, or (iv) if sent
by registered or certified mail, at the earlier

 

 

10

 

of its receipt or
72 hours after the same has been deposited in a regularly-maintained receptacle
for the deposit of the United States mail, addressed and mailed as aforesaid.

 

18.                                 Further Assurances.  The parties hereto shall do and
perform or cause to be done and performed all such further acts and things and
shall execute and deliver all such other agreements, certificates, instruments
or documents as any other party may reasonably request from time to time in
order to carry out the intent and purposes of this letter agreement and the
consummation of the transactions contemplated hereby.  Neither the Company nor any of the OPP
Parties shall voluntarily undertake any course of action inconsistent with
satisfaction of the requirements applicable to them set forth in this letter
agreement and each shall promptly do all such acts and take all such measures
as may be appropriate to enable them to perform as early as practicable the
obligations herein and therein required to be performed by them.

 

19.                                 Facsimile; Counterparts.  This letter agreement may be
executed by facsimile and in two or more counterparts, each of which may be
executed by fewer than all of the parties hereto, each of which shall be fully
enforceable against each of the other parties hereto actually executing such
counterparts, and all of which together shall constitute one and the same
instrument, enforceable against all of the parties hereto.

 

20.                                 Severability.  In the event that any term or
provision of this letter agreement shall become, or is declared by a court of
competent jurisdiction to be, illegal, unenforceable or void, this letter
agreement shall continue in full force and effect without said term or
provision as close as possible to the intent of the parties hereto.

 

21.                                 Headings.  The article
and section headings set forth in this letter agreement are included for
convenience of reference only and shall not affect the meaning or
interpretation of this letter agreement or any provision hereof.

 

22.                                 Full Knowledge; Independent Advice. 
This letter agreement is entered into with full knowledge of any and all
legal rights that the Company and the OPP Parties may have under applicable
law.  Each party hereto acknowledges that
it has been represented by competent counsel in connection with the negotiation
and preparation of this letter agreement, and that it participated in the
drafting of this letter agreement, and therefore hereby agrees that any
applicable rule of construction to the effect that ambiguities are to be
resolved against the drafting party shall not be applied in connection with the
construction or interpretation of this letter agreement.

 

23.                                 No Duress.  The Company
and the OPP Parties hereby acknowledge and agree that they have entered into
this letter agreement without duress, in good faith and for sufficient
consideration, and that it is fair, just and reasonable to all signatories
hereto and their respective affiliates.

 

24.                                 Authority.  Each of the
Company and the OPP Parties hereby represents and warrants to the other parties
that:

 

(a)                                  it has full power and authority to
execute and deliver this Agreement and to perform its obligations hereunder,
all of which have been duly authorized by all requisite

 

 

11

 

corporate,
partnership or limited liability company action, as the case may be and in the
case of the Company, that the Board has authorized and approved this letter agreement;
and

 

(b)                                 this letter agreement has been duly and
validly executed and delivered by such party and constitutes the legal, valid
and binding obligation of such party, enforceable against it in accordance with
its terms, except as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’
rights generally and by general principles of equity (regardless of whether
considered in a proceeding in equity or at law).

 

[Remainder of Page Intentionally
Left Blank]

 

 

12

 

If the foregoing is
acceptable, kindly sign and return a duplicate copy of this letter agreement to
the undersigned.

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  COHERENT, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ John R.
  Ambroseo

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name: John R.
  Ambroseo, PhD

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title: Chief
  Executive Officer and President

  

 

Agreed to by:

 

OLIVER PRESS
PARTNERS, LLC

 

	
  By:

  	
  /s/ Augustus K.
  Oliver

  
	
  Name: Augustus
  K. Oliver

  
	
  Title: Managing
  Member

  

 

OLIVER PRESS
INVESTORS, LLC

 

	
  By:

  	
  /s/ Clifford
  Press

  
	
  Name: Clifford
  Press

  
	
  Title: Managing
  Member

  

 

	
  AUGUSTUS K.
  OLIVER

  
	
   

  
	
  /s/ Augustus K.
  Oliver

  
	
   

  
	
  CLIFFORD PRESS

  
	
   

  
	
  /s/ Clifford
  Press

  

 

 

13Exhibit 10.41.3

 

Synplicity Variable Incentive Pay Plan

 

Adopted February 17, 2005, Amended through
January 30, 2008

Effective as of January 1, 2008

 

Plan Summary

 

The Synplicity Variable Incentive Pay Plan (“VIPP”) ties a portion of total
employee compensation to the performance of Synplicity, Inc. (the “Company”),
aligning employees to a common set of objectives and creating a “performance
culture” throughout the Company.   The
VIPP became effective April 1, 2005. 
The plan participants are U.S. non-commissioned employees.  Other plan participants may be added to the
VIPP by the Board of Directors (“Board”) by resolution.

 

VIPP payments are earned and paid quarterly based on achievement of a VIPP
quarterly target revenue range, quarterly target operating income range and one
or more additional Company objectives. The VIPP quarterly revenue and operating
income target ranges for the entire fiscal year are determined by the Company’s
Board at the beginning of each fiscal year, and the other Company objectives are
determined quarterly. The Board determines whether the various target ranges are
achieved, missed, or exceeded, and calculates the resulting quarterly payouts,
with input from the Chief Executive Officer (CEO).  Variable pay percentages correspond to individual
job categories and are consistent with industry levels as determined by
compensation survey information.

 

Plan Details

 

1.               The purpose of the plan is to
create
a closer risk/reward relationship between compensation and performance that
promotes a “performance culture.”

 

2.  Plan Participant
Eligibility

 

a.               All non-commissioned, U.S.
full-time and part-time exempt employees are included in the VIPP.

 

i.                  Any non-commissioned U.S. employees
who are not either full-time employees or part-time exempt employees are
excluded from the plan.

 

ii.               New hires will participate
from date of employment and are eligible to receive a pro rata share of the
plan payout amount in their first quarter of employment.

 

iii.            A plan participant must be an active U.S. employee on the
last day of a calendar quarter in order to be eligible for a potential VIPP
payout for that quarter, because payments are considered earned
on the last day of each quarter.

 

1

 

iv.           Plan participants for whom employment with the Company is
terminated non-voluntarily shall be an exception to (iii) above and are
eligible to receive plan payout for the quarter of their termination,
pro rata based on their length of employment during the quarter.

 

v.              Employees on leaves of absence shall be an exception to (iii) above
and are eligible for VIPP participation for any portion of leave that is paid
by the Company.  For unpaid leaves of any
kind, the VIPP will be suspended, and employees will earn a pro rata share of
the plan payout for the Company paid portion during the quarters they are
starting or returning from unpaid leave.

 

3.                 Plan Participant Variable
Compensation Target Amount and Percentages by Job Category

 

a.               The target percentage of an
employee’s compensation that is variable under the VIPP (assuming a 100% payout
percentage) is based upon the employees’ job category. The Company’s Board may
amend the VIPP to change the variable percentage for any job category effective
April 1 of any year.

 

b.              The
variable percentage target table (showing the target percentage of an
employee’s compensation that is variable under the VIPP, assuming a 100% payout
percentage) is as follows:

 

	
  Job Category

  	
   

  	
  Variable %

  
	
  CEO

  	
   

  	
  TBD

  
	
   

  	
   

  	
   

  
	
  Sr.
  VP/VP

  	
   

  	
  20%

  
	
   

  	
   

  	
   

  
	
  Director/Sr.
  Staff Eng.

  	
   

  	
  [***]%

  
	
   

  	
   

  	
   

  
	
  Manager/Staff
  Eng.

  	
   

  	
  [***]%

  
	
   

  	
   

  	
   

  
	
  Individual
  Contributor

  	
   

  	
  [***]%

  

 

c.               The non-variable and variable
amounts of an employee’s compensation are recalculated and prorated immediately
upon any changes in compensation and/or job category, as applicable.

 

d.              For example, if an
employee who is a manager and has cash compensation of $100,000 receives a 3%
annual increase, his compensation going forward will be established as a
$92,700 base compensation ($100,000 * 1.03 * 90%), and a $10,300 variable
compensation ($100,000 * 1.03 * 10%). 
The new base amount will be paid in semi-monthly payments of $3,862.50
($92,700 / 24), and the variable amount will be determined in accordance with
the payout formula and other terms of the VIPP. 
Note that the actual amount of the variable compensation paid to this
employee per quarter may be more or 

 

[***] Confidential
treatment requested pursuant to a request for confidential treatment filed with
the Securities and Exchange Commission. 
Omitted portions have been filed separately with the Commission.

 

2

 

less than $2,575 ($10,300 / 4), which is the
amount calculated assuming 100% as the payout percentage. Additionally, if the
compensation increase was effective in the middle of the quarter, the amounts
would be prorated accordingly.

 

e.               Notwithstanding anything to the contrary in this plan, in the event of a
merger, acquisition or other transaction in which the shareholders of the
Company prior to the transaction hold less than 50% of the surviving entity
immediately after the transaction, for purposes of any other Synplicity, Inc.
benefit plan or company agreement (as it applies to participants in the VIPP), “annual
base salary” shall be deemed to equal an amount that equals current base
compensation and variable compensation as determined under the terms of the
VIPP calculated using 100% as the payout percentage for the year.

 

4.                 Plan Payout Formula

 

a.               The “Plan Payout Formula” that determines the payout
percentage is as follows:

 

Plan Payout % = Revenue Achievement x 40%   +   Operating Income Achievement x 40% +   Company
Objective Achievement x 20%

 

This formula “weights”
revenue and operating income achievement equally at 40% each (or a total of
80%) when calculating the payout, and “weights” the other company objectives at
20% when calculating the payout.

 

b.              For every calendar quarter in which the VIPP is effective (“VIPP
Quarter”), the Company’s Board of Directors will generally determine the Plan
Payout % for that quarter within one month after the quarter ends. The
determination by the Company’s Board of Directors is final and binding.

 

c.               If the computed
Plan Payout % as determined in sections 4, 5, 6, and 7 herein exceeds 100%, in
no case will the actual quarterly payment above 100% of VIPP payout exceed 50%
of operating profit in excess of the quarterly operating income target (QOIT,
defined in section 6).

 

d.              Example Plan
Payout % Calculations

 

i.                  Assume a Revenue Achievement of 100%, Operating Income Achievement
of 100% and Company Objective Achievement of 80%, then:

 

Plan Payout % = (100% x 40%)  +  (100%
x 40%)  +  (80% x 20%)

              
            = 0.4 + 0.4 + 0.16

                 
         = 0.96 or 96%

 

ii.                     Assume a Revenue
Achievement of 130%, Operating Income Achievement of 94% and Company Objective
Achievement of 100%, then:

 

Plan Payout % = (130% x 40%)  +  (94%
x 40%)  + 
(100% x 20%)

                                = 0.52 + 0.376 + 0.20

                                = 1.096 or 109.6%

                                = 100% (VIPP payout cannot exceed
100% if the operating income target is not achieved, as described in section
4.c above)

 

3

 

5.                 Process for Plan Communication, Payout Determination, and
Payment

 

a.               For every calendar
quarter in which the VIPP is effective (“VIPP Quarter”), Company management
will communicate the current quarterly revenue target, quarterly operating
income target, revenue range percentage used to calculate the target revenue
range, operating income range percentage used to calculate the target operating
income range, and other VIPP Company objectives to plan participants at the
regular quarterly employee meeting. Additionally, Company management will
communicate the total of the four QRTs, the total of the four QOITs, the
revenue range percentage, and the operating income range percentage for the
year at the first regular quarterly employee meeting of the year.

 

b.              The Company’s Board of Directors will generally determine
the Plan Payout % for each quarter within one month after that quarter ends.
The determination by the Company’s Board of Directors is final and binding.

 

c.               Company management will communicate the Plan Payout % for
the preceding VIPP Quarter to plan participants at the regular quarterly
employee meeting following the VIPP Quarter.

 

d.              Payments to employees under
the VIPP are anticipated to be made by the 15th of the second month following
the applicable VIPP Quarter, except that the Company’s Board of Directors can
ask management to reasonably delay payment, at its sole discretion, if it
determines that more time is required to make an accurate determination of the
Plan Payout %.

 

e.               In no event will
VIPP payments be delayed past March 15 of the year following the year to
which the VIPP applies.

 

6.                 The Revenue Achievement and
Operating Income Achievement used in the Plan Payout Formula

 

a.               Overview

 

i.                  Each year, generally in
January, the Company’s Board of Directors will determine VIPP quarterly revenue
targets (“QRT”), quarterly operating income targets (“QOIT”), a revenue range
percentage used to calculate the VIPP quarterly target revenue ranges (“Revenue
Range Percentage”), and an operating income range percentage used to calculate
the VIPP quarterly target operating income ranges (“Operating Income Range
Percentage”) for the current fiscal year after consultation with management. QRTs,
QOITs, the Revenue Range Percentage, and the Operating Income Range Percentage
are determined specifically for the VIPP, and are not necessarily the same as
other internal goals or external financial “guidance” given to the public in
the Company’s financial conference calls.

 

ii.               The target revenue range for a VIPP Quarter is defined as the quarterly
revenue target for the quarter (QRT) plus or minus the Revenue Range
Percentage. The target operating income range for a 

 

4

 

VIPP Quarter is defined as the quarterly operating income
target for the quarter (QOIT) plus or minus the Operating Income Range
Percentage.

 

iii.            The Revenue Achievement and Operating Income Achievement
percentages in the Plan Payout Formula are computed as shown in sections 6.c
and 6.d, and represent how well the Company achieved its VIPP quarterly target
ranges. A high Revenue Achievement or Operating Income Achievement (100% or
more) indicates the Company met or exceeded its VIPP quarterly revenue or
operating income target ranges, respectively. A Revenue Achievement or
Operating Income Achievement less than 100% indicates the Company fell short of
its VIPP quarterly revenue or operating income target ranges, respectively. The
actual revenue and operating income numbers for the quarter that are used in
the formulas to determine Revenue Achievement and Operating Income Achievement
are taken from the Company’s financial statements, with actual operating income
on a proforma basis.

 

iv.           Although it is the goal that QRTs,
QOITs, the Revenue Range Percentage, and the Operating Income Range Percentage will
generally not change throughout the year once they are set by the Board, the
Board reserves the right to make changes to them, if, in its sole discretion,
market changes or other circumstances warrant changes to the targets.  The effectiveness
of any such change of financial targets adverse to a plan participant with
respect to the quarterly period then underway shall be subject to the consent
of the affected plan participant;  provided,
however that consent of affected plan participants shall not be required if the
Board changes the QRT, QOIT, the Revenue Range Percentage and the Operating
Income Range Percentage with respect to the quarterly period underway to
account for the impact of mergers or acquisitions completed by Synplicity,
changes in applicable financial accounting rules, or for the impact of
corporate restructurings or reorganizations.

 

b.              Process for Determining Revenue Achievement and Operating Income Achievement

 

i.                  Company management calculates the Revenue Achievement and Operating Income Achievement for a VIPP Quarter
and submits them to the Board for review. The Board reviews management’s
calculations and determines the Revenue Achievement and Operating Income Achievement to be
used in the Plan Payout Formula, such determinations being final and binding.

 

c.               Calculation of Revenue
Achievement for a VIPP Quarter

 

i.                  Revenue Achievement ranges
from 0% to 200%. If the actual revenue achieved is within the target revenue
range, the Revenue Achievement is 100%. For every 1% of the QRT achieved above
the high end of the target revenue range, there is a corresponding 10% increase
in the Revenue 

 

5

 

Achievement
percentage, for a maximum Revenue Achievement of 200%. For every 1% of the QRT
that the Company falls below the low end of the target revenue range, there is
a corresponding decrease in the Revenue Achievement percentage, for a minimum Revenue
Achievement of 0%.

 

ii.               Equations used to Calculate
Revenue Achievement

 

The Revenue
Achievement ranges from 0% to 200% and uses the following equations to
calculate the value within that range.

 

If the actual
revenue achieved during the prior VIPP Quarter is:

 

1.               Within the target
revenue range (QRT plus or minus the Revenue Range Percentage), then the Revenue
Achievement equals:

 

100%

 

2.               Above the top of the target revenue
range (greater than QRT
plus the Revenue Range Percentage), then the Revenue Achievement equals:

 

100%  +  10 x [ (actual revenue/QRT - 1) - Revenue
Range Percentage ]

 

3.               Below the bottom of the target revenue
range (less than QRT
minus the Revenue Range Percentage), then the Revenue Achievement equals:

 

100%  -  10 x [ (1 - actual revenue/QRT) - Revenue
Range Percentage ]

 

iii.                        Example Revenue Achievement Calculations

 

Assume the QRT for a VIPP Quarter is $18,000,000 and the
Revenue Range Percentage is 2%:

 

1.               If the actual
revenue achieved is $18,100,000,
then the Revenue Achievement is 100%. $18,100,000 falls within the target revenue
range of $18,000,000 plus or minus 2% (at, or between $17,640,000 and
$18,360,000), so the Revenue Achievement equals 100%.

 

2.               If the actual
revenue achieved is $17,700,000,
then the Revenue Achievement is 100%. $17,700,000 falls within the target revenue
range of $18,000,000 plus or minus 2% (at, or between $17,640,000 and
$18,360,000), so the Revenue Achievement equals 100%.

 

3.               If the actual
revenue achieved is $18,900,000,
then the Revenue Achievement is above the top of the target revenue range (greater
than $18,000,000 plus 2%, or $18,360,000), and the Revenue Achievement equals:

 

100%
 +  10 x [ ($18,900,000/$18,000,000 - 1) - 0.02 ]
= 1.30 or 130%

 

4.               If the actual
revenue achieved is $17,500,000,
then the Revenue Achievement is below the bottom of the target revenue range (less
than $18,000,000 minus 2%, or $17,640,000), and the Revenue Achievement equals:

 

100%  -  10 x
[ (1 - $17,500,000/$18,000,000) - 0.02 ] = 0.9222 or 92.22%

 

6

 

d.              Calculation of Operating Income
Achievement for a VIPP Quarter

 

i.                  As the amount of the VIPP
payout affects the financial results of the Company, throughout the calculation
of Operating Income Achievement, “actual operating income” refers to operating income
achieved after the total cost of the VIPP payout is considered.

 

ii.               Operating Income Achievement
ranges from 0% to 200%. If the actual operating income achieved is within the target
operating income range, the Operating Income Achievement is 100%. For every 1%
of the QOIT achieved above the high end of the operating income range, there is
an increase in the Operating Income Achievement percentage, for a maximum
Operating Income Achievement of 200%. For every 1% of the QOIT that the Company
falls below the low end of the operating income range, there is a decrease in
the Operating Income Achievement percentage, for a minimum Operating Income
Achievement of 0%.

 

iii.            Equations used to Calculate Operating Income Achievement

 

The Operating Income Achievement ranges from
0% to 200% and uses the following equations to calculate the value with that
range  (excludes the effect of
computing Operating Income Achievement after consideration of payout of the
VIPP at other than 100%):

 

If the actual operating income achieved during the prior VIPP
Quarter is:

 

1.               Within the target
operating income range (QOIT plus or minus the Operating Income Range
Percentage), then the Operating Income Achievement equals:

 

100%

 

2.               Above the top of the target operating
income range (greater
than QOIT plus the Operating Income Range Percentage), then the Operating
Income Achievement equals:

 

1 + [ (actual operating income - 
top of operating income range) / (QRT x .0333) ]

 

3.               Below the bottom of the target operating
income range (less than
QOIT minus the Operating Income Range Percentage), then the Operating Income
Achievement equals:

 

1 - [ (bottom of operating income range - actual operating income) /
(QRT x .0333) ]

 

(Note that the denominator in equations number 2 and
3 contains the quarterly revenue target, so as the Company’s revenue grows, the
operating income range will have to scale/grow with it.)

 

iv.           Example Operating Income Achievement Calculations (excludes the effect of computing Operating Income
Achievement after consideration of payout of the VIPP at other than 100%)

 

7

 

Assume the QOIT for a VIPP Quarter is $1,350,000, the QRT
is $18,000,000, and the Operating Income Range Percentage is 5%:

 

1.               If the actual operating
income is $1,400,000, then the Operating
Income Achievement is 100%. $1,400,000 falls within the target operating income
range of $1,350,000 plus or minus 5% (at, or between $1,282,500 and $1,417,500),
so the Operating Income Achievement equals 100%.

 

2.               If the actual
operating income is $1,290,000,
then the Operating Income Achievement is 100%. $1,290,000 falls within the target
operating income range of $1,350,000 plus or minus 5% (at, or between
$1,282,500 and $1,417,500), so the Operating Income Achievement equals 100%.

 

3.               If the actual operating
income is $1,500,000, then the Operating
Income Achievement is above the top of the target operating income range (greater
than $1,350,000 plus 5%, or $1,417,500), and the Operating Income Achievement
equals:

 

1
 +  [ ($1,500,000 - $1,417,500) / ($18,000,000 x
..0333) ] = 1.1376 or 113.76%

 

4.               If the actual operating
income is $1,175,000, then the Operating
Income Achievement is below the bottom of the target operating income range (less
than $1,350,000 minus 5%, or $1,282,500), and the Operating Income Achievement
equals:

 

1  -  [ ($1,282,500
- $1,175,000) / ($18,000,000 x .0333) ] = 0.8207 or 82.07%

 

7.                 The Company Objective
Achievement used in the Plan Payout Formula

 

a.               Overview

 

i.                  The
Company Objective Achievement is a metric that measures whether the Company
achieves important Company performance objectives that have been established
specifically for the VIPP.

 

ii.               Each
VIPP
Quarter the Company’s Board of Directors, in
consultation with the CEO, will determine VIPP Company Objectives (“VCOs”) for that
VIPP Quarter. The VCOs may include long term or short term objectives, and some
long term VCOs may be determined at the beginning of the year, and not change
throughout the year.

 

iii.            The VIPP Company Objectives (VCOs) for the current VIPP Quarter will
generally be communicated to VIPP participants at the regular quarterly
employee meeting, along with the determination of the Company
Objective Achievement for the previous quarter. VCOs that are long term in
nature will generally be communicated to participants at the first regular quarterly
employee meeting of the year.

 

iv.           It is anticipated that there
will generally be between 5 and 10 VCOs each VIPP Quarter, but there may be a
fewer, or greater, number.

 

8

 

v.              The VIPP Company Objectives (VCOs)
may include, but are not limited to the following areas:

 

1.               Customer bookings metrics

 

2.               Customer satisfaction metrics

 

3.               EE Times survey results

 

4.               Average time to respond to
support calls

 

5.               Average/weighted times to close problems/trouble tickets

 

6.               Bug backlog

 

7.               QoR metrics

 

8.               Market penetration with a
product

 

9.               Satisfaction of specific
commitments to partners

 

b.              Process
for Determining the Company Objective Achievement

 

i.                  After the end of each
quarter, the CEO will provide his recommendation to the Board as to whether the
Company achieved, exceeded, or did not achieve the prior VIPP Quarter’s VCOs.
 The CEO will provide whatever information he feels necessary to support
his recommendation to the Board.  The
Board of Directors, in its sole discretion, will make the determination as to
the achievement of the VCOs for that prior VIPP Quarter, and will determine the
resulting Company Objective Achievement to be used in the Plan Payout Formula,
such determination being final and binding.

 

c.               Calculation of Company
Objective Achievement

 

	
  Board of Director’s
  determination

  	
   

  	
  Company Objective Achievement 

  calculation

  
	
  All
  VCOs were achieved

  	
   

  	
  100%

  
	
  All
  VCOs were exceeded

  	
   

  	
  120%

  
	
  No
  VCOs were achieved

  	
   

  	
  80%

  
	
  Combination
  of the above, if there is more than one VCO for the quarter (some combination
  of achieving, exceeding, not achieving)

  	
   

  	
  Between 80 – 120%, at the discretion of the Board

  

 

8.                 Conflict
Resolution

 

a.               The Board of
Directors solely determines the Plan Payout % for a VIPP Quarter, as well as
the QRTs, QOITs, VCOs, the Revenue Range Percentage, the Operating Income Range
Percentage, and the Revenue Achievement, Operating Income Achievement, and
Company Objective Achievement, and such decisions are final and binding.

 

b.              Any other conflicts
or disputes arising from participation in the program must first be brought to
the attention of the Human Resources Director, who will attempt to resolve the
issue. Should the employee not attain resolution, the Chief Financial Officer
will review the issue and make a determination. If such other conflict or dispute
is not resolved by either the Human Resource 

 

9

 

Director or the Chief Financial Officer, the
Company’s Chief Executive Officer will review the dispute and make a final
determination.

 

c.               Any dispute or
controversy arising out of, relating to, or in connection with the VIPP, or the
interpretation, validity, construction, performance, breach, or termination
thereof, shall be finally settled by binding arbitration to be held in Santa
Clara County, California under the Employment Dispute Resolution Rules of
the American Arbitration Association as then in effect (the “Rules”).  The arbitrator may grant injunctions or other
relief in such dispute or controversy. 
The decision of the arbitrator shall be final, conclusive and binding on
the parties to the arbitration, and judgment may be entered on the decision of
the arbitrator in any court having jurisdiction.  The arbitrator shall apply California law to
the merits of any dispute or claim, without reference to rules of
conflicts of law, and the arbitration proceedings shall be governed by federal
arbitration law and by the Rules, without reference to state arbitration
law.  The Company shall pay the costs and
expenses of such arbitration, and each party shall pay its own counsel fees and
expenses.

 

9.                 Changes to the Plan

 

a.               The Company
reserves the right to make changes to the plan at any time.  All changes or amendments to the plan are
subject to the approval of the Board of Directors.

 

At Will
Employment

 

Employment at the Company is at will. 
Nothing in this plan modifies the at will nature of employment at the
Company, and the fact that any incentive payments are earned does not guarantee
continued employment at the Company.

 

10

 

Addendum 1

 

to the

 

Synplicity Variable Incentive Pay Plan

 

Eligibility of Employees of Swedish
Subsidiary

 

WHEREAS, Synplicity, Inc. (the “Company”) has a wholly owned
Swedish subsidiary called Synplicity AB, and that Synplicity AB has a wholly
owned Swedish subsidiary called Hardi Electronics AB (“Hardi”); and

 

WHEREAS, the Company would like to include current and future employees
of Hardi (or any successor organization to Hardi) in its Variable Incentive Pay
Plan (“VIPP”);

 

NOW, THEREFORE:

 

1.                               Employees
of Hardi are eligible to participate in the VIPP as of June 11, 2007,
unless otherwise stated in their employment contract, provided they meet the
eligibility criteria set out in the VIPP, including the exclusion of those
employees who receive commission pay, but not the criteria of those who work
less than full time, defined as 30 or more hours a week.  All Hardi employees, including those
scheduled to work fewer than 30 hours per week, are eligible to participate in
the VIPP, except those who receive commission pay.

 

2.                               Payment
of the VIPP to employees of Hardi is subject to Swedish labor laws in regards
to employment, dispute resolution and applicable statutory payments, taxes, and
fees.  All other terms and conditions of the VIPP apply.

 

3.                               Employees
of the Swedish entity will receive payment through the Hardi payroll, as their
employment contract terms stipulate. 
VIPP payments will be paid through Hardi accounting processes and follow
the usual and customary practices of the Hardi employee payroll.

 

4.                               This
Addendum also applies to employees of any successor organization to Hardi owned
by Synplicity AB, whether such successor organization is due to name change,
change of corporate structure, or the like, without further action.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}]]