Document:

EXHIBIT 10.1

 

COHERENT, INC.

 

2001 STOCK PLAN

 

Amended and restated as of March 25, 2004 and further
amended February 22, 2008.

 

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

 

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

 

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

 

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

 

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

 

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

 

(a) “Administrator” means the Board or any
Committee as shall be administering the Plan, in accordance with Section 4
of the Plan.

 

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

 

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

 

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

 

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

 

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

 

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

 

 (h) “Committee”
means a committee of one or more Directors appointed by the Board in accordance
with Section 4 of the Plan, which shall consist solely of Independent
Directors who are not eligible to receive stock option grants or Restricted
Stock under the Plan or such other committee delegated authority as set forth
in Section 4(c) of the Plan.

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(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 shall be such other
value determined in good faith by the Administrator; or

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(dd) “Restricted Stock” means shares of Common
Stock granted pursuant to Section 10 of the Plan.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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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 that the Administrator determines it to be 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 or in Section 4(c) of
the Plan, the Plan shall be administered by (A) the Board or (B) a
Committee of one or more Independent Directors with the ability to obtain the
advice of independent counsel, which committee shall be constituted to satisfy
Applicable Laws.

 

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

 

(i) to
determine the Fair Market Value;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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(c) Delegation.
The Board may delegate responsibility for administering the Plan, including
with respect to designated classes of Employees and Consultants, to different
committees consisting of one or more Directors subject to such limitations as
the Board deems appropriate. To the extent consistent with applicable law, the
Board or the Compensation and H.R. Committee may authorize one or more officers
of the Company to grant Awards to designated classes of Employees and
Consultants, within limits specifically prescribed by the Board or the
Compensation and H.R. Committee; provided, however, that no such officer shall
have or obtain authority to grant Awards to himself or herself.

 

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

 

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

 

6.  Limitations.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

8.  Stock
Options.

 

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

 

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(b) Option
Exercise Price and Consideration.

 

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

 

In the
case of an Incentive Stock Option:

 

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

 

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

 

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

 

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

 

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

 

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

 

(i) cash;

 

(ii) check;

 

(iii) other
Shares which have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which said Option shall be
exercised;

 

(iv) broker-assisted
cashless exercise;

 

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

 

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

 

(e) Exercise
of Option.

 

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

 

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 

 

6

 

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

 

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

 

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

 

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

 

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

 

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

 

9.  Stock
Appreciation Rights.

 

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

 

7

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(i) Death
of Participant. If a Participant dies while a Service Provider, the Stock
Appreciation Right may be exercised within such period of time as is specified
in the Stock Appreciation Right Agreement (but in no event later than the
expiration of the term of such Stock Appreciation Right as set forth in the
Notice of Grant), by the Participant’s estate or by a person who acquires the
right to exercise the Stock Appreciation Right by bequest or inheritance, but
only to the extent that the Stock Appreciation Right is vested and exercisable
on the date of death. In the absence of a specified time in the Stock Appreciation
Right Agreement, the Stock Appreciation Right shall remain exercisable for
twelve (12) months following the Participant’s termination. If, at the time of
death, the 

 

8

 

Participant is not vested
as to his or her entire Stock Appreciation Right, the Shares covered by the
unvested portion of the Stock Appreciation Right shall immediately revert to
the Plan. The Stock Appreciation Right may be exercised by the executor or
administrator of the Participant’s estate or, if none, by the person(s) entitled
to exercise the Stock Appreciation Right under the Participant’s will or the
laws of descent or distribution. If the Stock Appreciation Right is not so
exercised within the time specified herein, the Stock Appreciation Right shall
terminate, and the Shares covered by such Stock Appreciation Right shall revert
to the Plan.

 

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

 

10.  Restricted Stock.

 

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

 

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

 

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

 

11.  Performance Shares.

 

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

 

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

 

9

 

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

 

12.  Performance
Units.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

10

 

convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to an Award.

 

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

 

(c) Merger
or Asset Sale.

 

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

 

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

 

11

 

Share subject to the
Award, to be solely common stock of the successor corporation or its Parent
equal in fair market value to the per share consideration received by holders
of Common Stock in the merger or sale of assets.

 

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

 

18.  Amendment and Termination of the Plan.

 

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

 

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

 

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

 

19.  Conditions Upon Issuance of Shares.

 

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

 

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

 

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

 

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

 

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

 

23.  Section 409A Compliance.  Awards granted hereunder are intended to
comply with the requirements of Section 409A of the Code to the extent Section 409A
of the Code applies to such Awards and the terms of the Plan and any Award
granted under the Plan shall be interpreted, operated and administered in a
manner consistent with this intention to the extent the Administrator deems
necessary or advisable in its sole discretion. 
Notwithstanding any other provision in the Plan, the Administrator, to the
extent it unilaterally deems necessary or advisable in its sole discretion,
reserves the right, but shall not be required, to amend or modify the Plan and
any Award granted under the Plan so that the Award qualifies for exemption from
or complies with Section 409A of the Code; provided, however, that the
Company makes no representation that the Awards granted under the Plan shall be
exempt from or comply with Section 409A of the Code and makes no
undertaking to preclude Section 409A of the Code from applying to Awards
granted under the Plan.

 

12EXHIBIT
10.2

 

RETENTION AGREEMENT AND RELEASE

 

This Retention Agreement and Release (hereinafter “Agreement”)
is freely entered into by Coherent, Inc. (“Coherent”) and Ronald A. Victor
(“Victor”), dated April 4, 2008, in consideration of the commitments made
to them, all of which commitments are set forth in this document.

 

1.                                       Victor hereby submits his resignation of
employment with Coherent, and Coherent accepts his resignation, to become
effective January 2, 2009 (the “Resignation Date”).

 

(a)                                  At-Will employment: 
Until such Resignation Date, Victor shall continue to be an at-will
employee of Coherent, and retain his current title and position as Executive
Vice President of Human Resources. 
Specifically, as an at-will employee, either Coherent or Victor may
terminate his employment with or without cause and with or without notice.  In addition, if Coherent changes the
compensation, duties, assignments, responsibility and location of other
executive officers of Coherent to adjust to Coherent’s dynamic environment,
Coherent reserves the right to also modify, with or without prior notice,
Victor’s compensation, duties, assignments, responsibility and location of
Victor’s employment.

 

(b)                                 Compensation through Resignation Date: 
Victor will continue to receive his current base salary wages through
his Resignation Date, which will be paid pursuant to normal Company
practices.  Victor shall remain eligible
to earn a bonus through the end of Coherent’s Fiscal Year 2008, which shall be
determined according to the terms of Coherent’s 2008 Variable Compensation Plan
structure as approved by Coherent’s Compensation Committee, as amended from
time to time.  To the extent a Variable
Compensation Plan is adopted in Coherent’s Fiscal Year 2009 (“2009 Variable
Compensation Plan”), Victor shall be eligible to earn a bonus according to the
terms of the 2009 Variable Compensation Plan.

 

 

(c)                                  Fringe Benefits: 
Up to and until his Resignation Date, Victor will remain eligible to
participate in the employee benefits and benefit plans Coherent generally makes
available to its full-time regular U.S. executive employees with a similar
level of position and tenure, subject to the terms and conditions of such
benefits and benefit plans, and as may be modified by the Company from time to
time.

 

(d)                                 Stock Awards: 
Victor will continue to vest through the Resignation Date in options,
restricted stock units, and performance shares granted to him through the date
of this Agreement, in accordance with the terms of the agreements evidencing
such grants and the applicable plans pursuant to which such grants were granted
(collectively, the “Stock Award Documents”), and will also have the right to
exercise his options in accordance with the terms of his Stock Award Documents
and as permitted by law, including through the last day of his post-termination
exercise period set forth in the Stock Award Documents, but in no event later
than expiration of the terms of his options.

 

(e)                                  Indemnification Rights: 
Notwithstanding any other provision of this Agreement, Coherent will
comply with its obligations to indemnify Victor in accordance with the
Indemnification Agreement entered into by and between Victor and Coherent on March 27,
2003 and the By-laws of Coherent, Inc. as amended and restated on February 7,
2005 and in accordance with any requirements imposed by applicable law,
including, but not limited to, California Labor Code § 2802, subject in each
case to limitations on indemnity provided by the applicable document, contract
or law.  The release of claims set forth
in this Agreement does not extend to or limit in any way Victor’s contractual
or other rights of indemnification.

 

2.                                       To the fullest extent permitted by law,
Victor on behalf of himself, his spouse (if any), heirs, estate, executors,
administrators, insurers, attorneys, successors and assigns (all 

 

2

 

hereinafter “Releasors”)
hereby fully releases, acquits and forever discharges Coherent, and all of its
past and present parent companies, affiliates, subsidiaries, related companies,
successors, assigns and transferees, and each of their past and present agents,
officers, directors, insurers, investigators, attorneys, shareholders,
partners, and employees, and each of their spouses, heirs, estates, executors,
administrators, insurers, attorneys and assigns (all hereinafter “Releasees”)
from and against any and all claims, rights, demands, actions, obligations,
liability and causes of action, whether asserted or unasserted, of any and
every kind, nature and character whatsoever, known or unknown, which Victor has
or has had against the Releasees including but not limited to, those arising
from or in any way connected with or relating to:

 

(a)                                  Victor’s employment, lack of employment,
resignation or termination of employment;

 

(b)                                 All acts or omissions of Releasees
heretofore occurring or arising, including but not limited to any claim for
damages incurred at anytime after the date of this Agreement, or after the date
of its re-execution, because of alleged continuing effects of any alleged act
or omission occurring on or before the date of this Agreement or any
re-execution; and

 

(c)                                  Victor’s claims under any and all torts,
contract, common law or federal, state or local statutory theories, including
but not limited to claims arising under the Age Discrimination in Employment
Act of 1967 (“ADEA”), as amended by the Older Workers’ Benefit Protection Act (“OWBPA”).

 

Victor also agrees to reaffirm and re-execute this
Agreement (including but not limited to the release provided herein) on or
within twenty-one (21) days following his Resignation Date, in the form
provided herein.

 

3

 

3.                                       Notwithstanding the above, from the date
of this Agreement through the Resignation Date only, Victor does not release
any claims related to the grant, vesting, exercise and termination of his stock
options, rights to purchase, or actual purchase of, shares of stock of
Coherent, and including but not limited to any options which were unvested or
vested that were subsequently terminated, and any liability associated with the
application of Section 409A of the Code to such options or stock
rights.  At the time of Victor’s
re-execution of this Agreement, such claims will be released.  Victor expressly understands that the only
claims not released through this Agreement and its re-execution are any claims
that cannot be released by law such as claims for workers’ compensation, and/or
claims relating to the validity of this Release Agreement under the ADEA as
amended by the OWBPA.

 

4.                                       Victor understands and agrees that this
Agreement is a full and final release covering all known and unknown, suspected
or unsuspected injuries, debts, claims or damages which have arisen or may have
arisen from any matters, acts, omissions or dealings released in Paragraph 2
above and in the re-execution below. 
Victor, on behalf of himself and all Releasors, expressly waives any and
all rights or benefits which Victor may now have, or in the future may have,
under the terms of Section 1542 of the California Civil Code and any
similar law of any state or territory in the United States.  Said section provides as follows:

 

“A general release does not extend to claims which the
creditor does not know or suspect to exist in his or her favor at the time of
executing the release, which if known by him or her must have materially
affected his or her settlement with the debtor.”

 

Victor fully understands that, if any fact with
respect to any matter covered in this Agreement is found hereinafter to be
other than or different from the facts now or at the time of 

 

4

 

re-execution believed by Victor to be true, Victor
expressly accepts and assumes that this Agreement shall be and remain
effective, notwithstanding such difference in facts unless such fact is
expressly represented in this Agreement.

 

5.                                       Victor agrees not knowingly to apply,
reapply, or seek reinstatement for employment at any time with Coherent, or any
other subsidiary or related company.  In
the event Victor unknowingly applies for a position with such company, such
company is under no obligation to hire Victor.

 

6.                                       Coherent shall reimburse Victor for legal
fees and related costs incurred by him in the negotiation and preparation of
this Agreement, not to exceed $5,000.00. 
Victor expressly warrants and agrees that he shall bear his own legal
fees and related costs to the extent they exceed $5,000.00, or are otherwise unrelated
to the negotiation and preparation of this Agreement.

 

7.                                       Following his Resignation Date, Victor
agrees to cooperate with the Company by making himself reasonably available to
testify on behalf of the Company or any of its affiliates in any action, suit
or proceeding relating to events occurring during Victor’s employment with the
Company and to assist the Company or any of its affiliates in any such action,
suit or proceeding by providing information and meeting and consulting with the
Company’s Board of Directors or its representatives or counsel, as reasonably
requested by the Board or such representatives or counsel.  Victor will be reimbursed for any reasonable
expenses involved in such cooperation, but will not receive any additional
compensation for this cooperation.

 

8.                                       Victor warrants and agrees that at the
time of re-execution of this Agreement, Coherent has paid him any and all
vacation pay, salary and other undisputed wages due, and that no such payments
or amount are included in the sums specified in Paragraph 9, below.  Victor 

 

5

 

expressly states
that the release in this Agreement is not given in return for the payment of
any wages due and owing.

 

9.                                       Notwithstanding the at-will nature of
Victor’s employment, in the event (i) Coherent terminates Victor’s
employment without Good Cause as defined herein prior to the Resignation Date,
or (ii) Victor remains employed up to the Resignation Date, Coherent
agrees to pay Victor a lump-sum payment of two hundred and fifty thousand
dollars ($250,000.00), less deductions required by law. The aforementioned sum
is consideration to which Victor would otherwise not be entitled.  This sum shall be paid to Victor, by check or
wire transfer, as provided by written notice by Victor to Coherent, no later
than ten (10) days after receipt of a fully executed and re-executed
original of this Agreement following the Resignation Date, but in no event will
it be paid earlier than the seven (7) day revocation period or if this
Agreement or its re-execution is timely revoked.  As used herein, Good Cause shall mean any of
the following as set by Coherent in good faith at its sole discretion: Victor’s
performance of an act of dishonesty which is intended to result in substantial
gain or personal enrichment to him at the expense of Coherent; Victor’s
persistent failure or inability to perform the duties and obligations of his
employment which are demonstrably willful and deliberate on Victor’s part and
which are not remedied in a reasonable period of time after receipt of written
notice from Coherent; or Victor’s conviction of, or plea of nolo contendere to,
a felony.  If Victor becomes unable to
continue his employment through the Resignation Date due to death, or a
disability that cannot be reasonably accommodated and is confirmed by a health
care professional of Coherent’s choosing, Coherent will nevertheless pay this
sum to Victor or his estate in the same amount and at the same time that
payment would have been made to Victor, provided Victor has timely executed
and, in the event of his death, his estate on behalf of all Releasors,
re-executed this Agreement and has not 

 

6

 

timely
revoked.  Victor hereby agrees and
consents to an examination by Coherent’s chosen health care provider,
authorizes disclosure of all information by the health care professional
regarding such examination to be made to Coherent, and agrees to execute any
consent or waiver forms necessary to effectuate this provision.  If Victor’s employment is terminated by
Coherent prior to the Resignation Date for Good Cause, or if Victor resigns
earlier than the Resignation Date, no payments shall be due Victor under this
Agreement.

 

10.                                 This Agreement is binding on and for the
benefit of Victor, the Releasors, and the Releasees and their respective heirs,
executors, administrators, successors, and assigns, whenever the context
requires.  The parties agree that the
consideration provided by Coherent is for the benefit of and fully releases all
Releasees.

 

11.                                 Coherent and Victor agree to refrain from
any false or derogatory statements regarding, disparagement, defamation, libel,
slander, or tortious interference with the contracts and relationships of, the
other.

 

12.                                 Victor agrees that for a period of twelve
(12) months after the termination of his employment and within any geographical
location where Coherent does business as of the Resignation Date, including but
not limited to California, or other equivalent geographical subdivision in
foreign jurisdictions in which Coherent does business, he shall not induce or
attempt to induce any employee, agent or consultant of Coherent or its
affiliate or related companies to terminate his or her association with such
entity.  The parties agree that the
provisions of this Paragraph 12 contain restrictions that are not greater than
necessary to protect the interests of Coherent.

 

7

 

13.                                 The provisions of this Agreement are
severable, and if any term or condition of this Agreement is determined to be
overbroad or invalid, in whole or in part, the remainder of the provisions
shall remain in full force and effect.

 

14.                                 The execution and delivery of this
Agreement or any payments or the performance of any acts in connection
therewith shall not be deemed at any time or place to be an admission by Victor
or Releasees that Victor or Releasees at any time performed or failed to
perform any act, which performance or failure to perform was or is in violation
of any of Victor’s or Releasees’ rights and/or which performance or failure to
perform gives rise to any valid claim for damages or any other relief
whatsoever.

 

15.                                 Effective the Resignation Date, this
Agreement constitutes the entire agreement and understanding between the parties
with respect to the subject matters herein, and supersedes and replaces any
prior agreements or understandings, whether oral or written, between and among
them with respect to such matters, except for the agreements referred to in
paragraph 1(e) above, the Stock Award Documents, confidentiality or
proprietary information agreements which remain in full force and effect
according to their terms.  The provisions
of this Agreement may not be waived, altered, amended, or repealed in whole or
in part except upon the prior written consent of all the parties hereto.  Notwithstanding the above, if Victor becomes
entitled to severance benefits pursuant to the Coherent Change in Control
Severance Plan prior to the Resignation Date, he will receive benefits solely
under that Plan and not this Agreement.

 

16.                                 This Agreement shall be construed and
enforced in accordance with the laws of the State of California, without regard
to conflicts of law principles.  Both
parties agree to the exclusive jurisdiction and venue of the courts of the
State of California, County of Santa Clara, 

 

8

 

or, if applicable,
the federal courts having jurisdiction over Santa Clara County, California in
the event of any future dispute between them.

 

17.                                 Victor declares that prior to execution
of this Agreement, he has consulted
with his legal counsel of choice.  Victor
further apprised himself of sufficient relevant information, through sources of
his own selection, in order that he might intelligently exercise his own
judgment in deciding whether to execute the Agreement and in deciding on the
contents hereof.  Victor further declares
this decision is not predicated or influenced by any declarations or representations
of Releasees other than may be contained in this Agreement.  The contents of this Agreement have been
explained to Victor by his counsel of choice. 
Victor agrees that he is executing this Agreement voluntarily with full
knowledge of its significance.

 

18.                                 If any suit is brought relating to this
Agreement or any breach of it (with the exception of a claim brought by Victor
challenging the validity of this Agreement release under the ADEA as amended by
OWBPA), the prevailing party in such suit shall be entitled to all remedies and
reimbursement for costs, expenses and attorneys’ fees incurred by it in each
such suit.

 

19.                                 Victor expressly states that he has read
this Agreement, with the assistance of
his counsel of choice, and understands all of its terms, and that the preceding
paragraphs recite sole consideration for this Agreement, and that all
agreements and understandings between the parties are embodied and expressed
herein.  Victor states that he has been
given up to twenty-one (21) days to consider the contents of this Agreement, if
he wishes, that he has been advised to consult legal counsel, and that he has
been advised that he may revoke this Agreement within seven (7) days of
signing it.  If Victor does not revoke
this Agreement, this Agreement becomes effective 

 

9

 

the later of (i) eight
(8) days after Victor signs this Agreement or (ii) upon Coherent’s
execution of this Agreement.

 

20.                                 Each party agrees to execute any and all
documents and instruments necessary to facilitate and effect the terms of this
Agreement.

 

21.                                 The parties may execute the Agreement in
counterparts, which together constitute a complete document.  Each counterpart shall be delivered to
Jennifer L. Field, Baker & McKenzie, Palo Alto, California, 94304, telephone
650-856-5501, facsimile 650-856-9299.  An
executed counterpart may be transmitted by facsimile and shall be binding on
the parties at such time as transmission is complete, subject only to the seven
(7) day revocation period.  Each
party agrees to send the original counterpart by United States Postal Service
first class mail or overnight delivery on the same day it is sent by facsimile.

 

22.                                 Notices shall be provided as follows:

 

To Coherent:

 

Attn: General Counsel

Coherent, Inc.

5100 Patrick Henry Drive

Santa Clara, CA 95054

Direct: (408) 764-4180

 

To Ronald A. Victor:

 

Attn: Ronald A. Victor

Coherent, Inc.

5100 Patrick Henry Drive

Santa Clara, CA 95054

Phone: (408) 764-4000

 

10

 

Accepted by Victor, on behalf of himself and all the
Releasors.

 

	
  DATE: April 4,
  2008

  	
  /s/ Ronald A. Victor

  
	
   

  	
  Ronald A. Victor

  

 

 

Accepted by Coherent on behalf of all the Releasees.

 

	
  DATE:
  April 9, 2008

  	
  /s/
  Helene Simonet

  
	
   

  	
  Helene
  Simonet

  
	
   

  	
  Executive
  Vice President and Chief Financial

  
	
   

  	
  Officer,
  Coherent Inc.

  

 

APPROVED AS TO FORM AND ACKNOWLEDGED:

 

	
  DATE:
  April 4, 2008

  	
  Fenwick & West LLP

  
	
   

  	
   

  
	
   

  	
  /s/ Daniel J. McCoy

  
	
   

  	
  Daniel J. McCoy

  
	
   

  	
  Counsel
  for Ronald A. Victor

  

 

RE-EXECUTION AND RATIFICATION OF RELEASE

 

23.                                 Ronald Victor hereby re-executes and
reaffirms all releases, waivers, rights, and obligations set forth in the
Agreement above, including his time to consider the release and time to revoke
the Agreement, and voluntarily agrees to all the terms of the Agreement in
exchange for the additional benefits to which he would otherwise not be
entitled.

 

24.                                 Further, and in exchange for the
additional benefits set forth in the Agreement, Releasors hereby also fully
release, acquit and forever discharge Releasees from and against any and all
claims, rights, demands, actions, obligations, liability and causes of action,
whether asserted or unasserted, of any and every kind, nature and character
whatsoever, known or unknown, which Victor has or has had against the Releasees
related to the grant, vesting, exercise and termination of his stock options,
rights to purchase, or actual purchase of, shares of stock of Coherent, and
including but not limited to any options which were unvested or vested 

 

11

 

that were
subsequently terminated, and any liability associated with the application of Section 409A
of the Code to such options or stock rights.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Ronald
  A. Victor

  

 

12

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