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[LOGO]
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MARCH 31, 1994
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of COHERENT,
INC. (the "Company"), a Delaware corporation, will be held on March 31, 1994 at
5:30 p.m., local time, at the Company's principal offices located at 5100
Patrick Henry Drive, Santa Clara, California, for the following purposes:
1. To elect directors of the Company to serve for the ensuing year and
until their successors are elected.
2. To ratify the appointment of Deloitte & Touche as independent public
accountants to the Company for the 1994 fiscal year.
3. To transact such other business as may properly be brought before the
meeting and any adjournment(s) thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Stockholders of record at the close of business on January 31, 1994 are
entitled to notice of and to vote at the meeting.
All stockholders are cordially invited to attend the meeting. However, to
assure your representation at the meeting, you are urged to mark, sign, date and
return the enclosed proxy card as promptly as possible in the postage-prepaid
envelope enclosed for that purpose.
Any stockholder attending the meeting may vote in person even if he or she
has returned a proxy.
Sincerely,
Larry W. Sonsini
SECRETARY
Santa Clara, California
February 15, 1994
YOUR VOTE IS IMPORTANT
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE REQUESTED TO
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE AND
RETURN IT IN THE ENCLOSED ENVELOPE.
<PAGE>
COHERENT, INC.
5100 PATRICK HENRY DRIVE
SANTA CLARA, CALIFORNIA 95056
------------------------
PROXY STATEMENT
------------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed Proxy is solicited on behalf of the Board of Directors of
COHERENT, INC. (the "Company") for use at the Annual Meeting of Stockholders to
be held at the Company's principal offices located at 5100 Patrick Henry Drive,
Santa Clara, California on March 31, 1994 at 5:30 p.m., local time, and at any
adjournment(s) thereof, for the purposes set forth herein and in the
accompanying Notice of Annual Meeting of Stockholders. The Company's telephone
number at the address above is (408) 764-4000. These proxy solicitation
materials were mailed on or about February 15, 1994 to all stockholders entitled
to vote at the meeting.
RECORD DATE AND SHARE OWNERSHIP
Stockholders of record at the close of business on January 31, 1994 (the
"Record Date") are entitled to notice of and to vote at the meeting and at any
adjournment(s) thereof. At the Record Date, 10,108,560 shares of the Company's
Common Stock, $.01 par value, were issued and outstanding.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company (Attention:
Scott H. Miller, General Counsel) a written notice of revocation or a duly
executed proxy bearing a later date or by attending the meeting and voting in
person.
VOTING AND SOLICITATION
On all matters other than the election of directors, each share has one
vote. See "Election of Directors -- Vote Required."
The cost of this solicitation will be borne by the Company. The Company has
retained the services of D.F. King & Co., Inc. (the "Solicitor") to aid in the
solicitation of proxies from brokers, bank nominees and other institutional
owners. The Company estimates that it will pay the Solicitor a fee not to exceed
$2,500 for its services and will reimburse the Solicitor for certain
out-of-pocket expenses
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estimated to be $5,000. In addition, the Company may reimburse brokerage firms
and other persons representing beneficial owners of shares for their expenses in
forwarding solicitation material to such beneficial owners. Proxies may also be
solicited by certain of the Company's directors, officers and regular employees,
without additional compensation, personally or by telephone or telegram.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
The Company's Bylaws provide that stockholders holding a majority of the
shares of Common stock issued and outstanding and entitled to vote shall
constitute a quorum at meetings of stockholders.
Shares that are voted "FOR," "AGAINST" or "WITHHELD" from a matter are
treated as being present at the meeting for purposes of establishing a quorum
and are also treated as votes eligible to be cast by the Common Stock present or
represented by proxy at the Annual Meeting and "entitled to vote on the subject
matter" (the "Votes Cast") with respect to such matter.
While there is no definitive statutory or case law authority in Delaware as
to the proper treatment of abstentions, the Company believes that abstentions
should be counted for purposes of determining the presence or absence of a
quorum for the transaction of business. In the absence of controlling precedent
to the contrary, the Company intends to treat abstentions in this manner. In a
1988 Delaware case, Berlin v. Emerald Partners, the Delaware Supreme Court held
that broker non-votes may be counted as present or represented for purposes of
determining the presence or absence of a quorum for the transaction of business.
Accordingly, the Company intends to treat broker non-votes in this manner.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company that are intended to be presented
by such stockholders at the Company's 1995 Annual Meeting of Stockholders must
be received by the Company no later than September 18, 1994 and must otherwise
be in compliance with applicable laws and regulations in order to be considered
for inclusion in the proxy statement and form of proxy relating to that meeting.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership on Form 3 and changes in ownership on Form 4 or 5 with the Securities
and Exchange Commission (the "SEC") and the National Association of Securities
Dealers. Such officers, directors and ten-percent stockholders are also required
by SEC rules to furnish the Company with copies of all Section 16(a) forms that
they file. Based solely on its review of the copies of such forms received by
it, or written representations from certain reporting persons that no Forms 5
were required for such persons, the Company believes that all Section 16(a)
filing requirements applicable to its officers, directors and ten-percent
stockholders were complied with.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of the Record Date certain information
with respect to the beneficial ownership of the Company's Common stock by (i)
any person (including any "group" as that term is used in Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")) known by
the Company to be the beneficial owner of more than 5% of the Company's voting
securities, (ii) each director and each nominee for director to the Company,
(iii) each of the executive officers named in the Summary Compensation Table
appearing herein, and (iv) all executive officers and directors of the Company
as a group.
<TABLE>
<CAPTION>
Number of Percent of
Name and Address Shares Total
- -------------------------------------------------------------------------------- ----------- -----------
<S> <C> <C>
Hagler, Mastrovita & Hewitt, Inc. (1)........................................... 651,000 6.44%
One International Place, Suite 3190
Boston, Massachusetts 02110
First Pacific Advisors, Inc. (2)................................................ 617,000 6.10%
11400 W. Olympic Boulevard, Suite 120
Los Angeles, California 90064
James L. Hobart (3)............................................................. 231,977 2.29%
Henry E. Gauthier (4)........................................................... 118,065 1.17%
Charles W. Cantoni (5).......................................................... 10,000 *
Frank P. Carrubba (6)........................................................... 10,000 *
Thomas Sloan Nelsen (7)......................................................... 11,000 *
Robert J. Quillinan (8)......................................................... 42,055 *
Bernard Couillaud (9)........................................................... 16,813 *
Leonard C. DeBenedictis (10).................................................... 48,835 *
All directors and executive officers as a group (9 persons) (11)................ 510,566 5.05%
<FN>
- ------------------------
* Less than 1%
(1) Hagler, Mastrovita & Hewitt, Inc. filed a Form 13G with the Securities and
Exchange Commission on January 27, 1994 reporting ownership of 651,000
shares of the Company's Common Stock, with sole voting power with respect to
405,000 shares and sole dispositive power with respect to 651,000 shares.
(2) Represents shares reported by Vickers Corporate Report as being held by
First Pacific Advisors, Inc. as of January 10, 1994. First Pacific Advisors,
Inc. filed a Form 13G with the Securities and Exchange Commission on
February 11, 1993, reporting ownership of 687,000 shares of the Company's
Common Stock, with shared voting power with respect to 177,000 and shared
dispositive power with respect to 687,000.
</TABLE>
h-TM-
3
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<TABLE>
<S> <C>
(3) Includes 2,700 shares held of record by members of Dr. Hobart's family, as
to which shares he disclaims beneficial ownership. Also includes 26,750
shares issuable upon exercise of options which are currently exercisable or
will become exercisable within 60 days of the Record Date.
(4) Includes 25,250 shares issuable upon exercise of options held by Mr.
Gauthier which are currently exercisable or will become exercisable within
60 days of the Record Date.
(5) Includes 10,000 shares issuable upon exercise of options held by Mr. Cantoni
which are currently exercisable or will become exercisable within 60 days of
the Record Date.
(6) Includes 10,000 shares issuable upon exercise of options held by Mr.
Carrubba which are currently exercisable or will become exercisable within
60 days of the Record Date.
(7) Includes 10,000 shares issuable upon exercise of options held by Mr. Nelsen
which are currently exercisable or will become exercisable within 60 days of
the Record Date.
(8) Includes 14,500 shares issuable upon exercise of options held by Mr.
Quillinan which are currently exercisable or will become exercisable within
60 days of the Record Date.
(9) Includes 8,300 shares issuable upon exercise of options held by Mr.
Couillaud which are currently exercisable or will become exercisable within
60 days of the Record Date.
(10) Includes 25,500 shares issuable upon exercise of options held by Mr.
DeBenedictis which are currently exercisable or will become exercisable
within 60 days of the Record Date.
(11) At the Record Date, executive officers and directors of the Company as a
group (9 persons) held options to purchase an aggregate of 314,800 shares of
Common Stock, representing approximately 30.87% of outstanding options at
that date. The numbers set forth in this table include an aggregate of
143,800 shares which are currently exercisable or will become exercisable
within 60 days of such date.
</TABLE>
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PROPOSAL ONE
ELECTION OF DIRECTORS
NOMINEES
A board of five directors is to be elected at the meeting. Unless otherwise
instructed, the proxy holders will vote the proxies received by them for
management's five nominees named below, all of whom are presently directors of
the Company. In the event that any nominee of the Company is unable or declines
to serve as a director at the time of the Annual Meeting, the proxies will be
voted for any nominee who shall be designated by the present Board of Directors
to fill the vacancy. The Company is not aware of any nominee who will be unable
or will decline to serve as a director. In the event that additional persons are
nominated for election as directors, the proxy holders intend to vote all
proxies received by them in such a manner in accordance with cumulative voting
as will assure the election of as many of the nominees listed below as possible,
and, in such event, the specific nominees to be voted for will be determined by
the proxy holders. The term of office of each person elected as a director will
continue until the next Annual Meeting of Stockholders or until his successor
has been elected and qualified.
The names of the nominees, all of whom are currently directors of the
Company, and certain information about them, are set forth below.
<TABLE>
<CAPTION>
Name of Nominee Age Principal Occupation
- ----------------------------------------------- --- -----------------------------------------------
<S> <C> <C>
James L. Hobart................................ 60 Chairman of the Board of Directors and Chief
Executive Officer of the Company
Henry E. Gauthier.............................. 53 President and Chief Operating Officer of the
Company
Charles W. Cantoni (1)......................... 58 President of ImageComm Systems, Inc.
Frank P. Carrubba (1).......................... 56 Chief Technical Officer, Philips Electronics
N.V.
Thomas Sloan Nelsen (1)........................ 67 Retired Professor of Surgery, Stanford
University School of Medicine
<FN>
- ------------------------
(1) Member of the Compensation Committee
</TABLE>
Except as set forth below, each of the nominees has been engaged in his
principal occupation set forth above during the past five years. There is no
family relationship between any director or executive officer of the Company.
5
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Mr. Carrubba is currently Chief Technical Officer of Philips Electronics
N.V., a position he has held since September 1991. From March 1987 to September
1991, Mr. Carrubba was Director of Hewlett-Packard Laboratories.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of seven meetings during
the fiscal year ended September 25, 1993. No director serving during such fiscal
year attended fewer than 75% of the aggregate of all meetings of the Board of
Directors and the committees of the Board upon which such director served. The
Board of Directors has two committees, the Audit Committee and the Compensation
Committee. The Board of Directors has no nominating committee or any committee
performing such functions.
The Audit Committee of the Board of Directors which consists of directors
Carrubba, Cantoni and Nelsen held one meeting during the last fiscal year. The
Audit Committee recommends engagement of the Company's independent public
accountants and is primarily responsible for approving the services performed by
the Company's independent public accountants and for reviewing and evaluating
the Company's accounting principles and its system of internal accounting
controls.
The Compensation Committee of the Board of Directors consists of directors
Carrubba, Cantoni and Nelsen and held one meeting during the last fiscal year.
The Compensation Committee reviews and approves the Company's executive
compensation policy and grants stock options to employees of the Company,
including officers pursuant to the Company's stock option plans.
DIRECTOR COMPENSATION
Members of the Board of Directors who are not employees of the Company
receive $8,000 per year, plus $500 per meeting attended and are reimbursed for
their expenses incurred in attending meetings of the Board of Directors.
The Company's 1990 Directors' Stock Option Plan (the "Directors' Option
Plan") was adopted by the Board of Directors on December 8, 1989 and was
approved by the stockholders on March 29, 1990. The Directors' Option Plan
provides for the grant of a non-statutory stock option to purchase 10,000 shares
of Common Stock of the Company to each of the Company's non-employee directors
on the later of the effective date of the Directors' Option Plan (which date was
December 8, 1989) or the date on which such person becomes a director.
Thereafter, each non-employee director will be automatically granted a
nonstatutory stock option to purchase 2,500 shares of Common Stock of the
Company on the date of and immediately following each Annual Meeting of
Stockholders at which such non-employee director is re-elected to serve on the
Board of Directors, if, on such date, he or she has served on the Board for at
least three months. Such plan provides that the exercise price shall be equal to
the fair market value of the Common Stock on the date of grant of the options.
Each of the three non-
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employee directors has been granted options to purchase 17,500 shares of the
Company's Common Stock under such plan, at an average exercise price of $13.16
per share. As of the Record Date, no shares had been issued on exercise of such
options.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is composed of Directors Carrubba, Cantoni and
Nelsen. During fiscal 1993, the Company paid Dr. Thomas Nelsen $51,000 in
consulting fees. Dr. Nelsen has more than 40 years of experience as a physician
and, before his retirement, was a Professor of Surgery at Stanford University
School of Medicine. Utilizing this experience, Dr. Nelsen has worked closely
with the Company in developing and refining new laser products for the medical
field. Management believes that this arrangement is at least as favorable as
could be negotiated with an outside consultant.
VOTE REQUIRED
Every stockholder voting for the election of directors may cumulate such
stockholder's votes and give one candidate a number of votes equal to the number
of directors to be elected multiplied by the number of votes to which the
stockholder's shares are entitled, or distribute the stockholder's votes on the
same principle among as many candidates as the stockholder thinks fit, provided
that votes cannot be cast for more than five candidates. However, no stockholder
shall be entitled to cumulate votes unless the candidate's name has been placed
in nomination prior to the voting and the stockholder, or any other stockholder,
has given notice at the meeting prior to the voting of the intention to cumulate
the stockholder's votes.
If a quorum is present and voting, the five nominees receiving the highest
number of votes will be elected to the Board of Directors. Votes withheld from a
nominee and broker non-votes will be counted for purposes of determining the
presence or absence of a quorum and votes withheld will be treated as votes
against a nominee. See "Information Concerning Solicitation and Voting --
Quorum; Abstentions; Broker Non-Votes."
MANAGEMENT RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
THE NOMINEES LISTED ABOVE
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PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Deloitte & Touche, independent public
accountants, to audit the financial statements of the Company for the fiscal
year ending September 25, 1994, and recommends that stockholders vote for
ratification of such appointment. In the event of a negative vote on
ratification, the Board of Directors will reconsider its selection. Deloitte &
Touche has audited the Company's financial statements since the fiscal year
ended September 25, 1976. Representatives of Deloitte & Touche are expected to
be present at the meeting with the opportunity to make a statement if they
desire to do so, and are expected to be available to respond to appropriate
questions.
MANAGEMENT RECOMMENDS THAT STOCKHOLDERS VOTE "FOR"
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE
8
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
The following table shows, as to the Chief Executive Officer and each of the
other four most highly compensated executive officers whose salary plus bonus
exceeded $100,000, information concerning compensation awarded to, earned by or
paid for services to the Company in all capacities during the last three fiscal
years (to the extent that such person was the Chief Executive Officer and/or an
executive officer, as the case may be, during any part of such fiscal year):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
-------------
Annual Compensation
----------------------------------------------------- Awards
Other Annual ------------- All Other
Name and Principal Position Year Salary ($) Bonus ($) Compensation (1) Options (#) Compensation ($)
- --------------------------- --------- ----------- ----------- ---------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
James L. Hobart 1993 $ 224,994 $ 96,901 -- 12,500 $ 17,885(2)
Chairman and Chief 1992 $ 224,994 $ 70,697 -- 12,500 $ 15,592
Executive Officer 1991 $ 229,644 $ 30,904 -- -- --
Henry E. Gauthier 1993 $ 215,010 $ 91,310 -- 11,000 $ 15,857(3)
President and Chief 1992 $ 215,010 $ 71,981 -- 11,000 $ 13,627
Operating Officer 1991 $ 199,991 $ 35,078 -- -- --
Robert J. Quillinan 1993 $ 161,177 $ 60,792 -- 6,000 $ 10,679(4)
Vice President and 1992 $ 155,034 $ 42,426 -- 6,000 $ 9,539
Chief Financial 1991 $ 146,993 $ 16,577 -- -- --
Officer
Bernard J. Couillaud (5) 1993 $ 133,662 $ 78,668 -- 6,000 $ 9,536(6)
Vice President 1992 $ 118,712 $ 32,122 -- 12,750 $ 7,768
1991 -- -- -- -- --
Leonard C. DeBenedictis 1993 $ 159,994 $ 122,543 -- 6,000 $ 10,844(7)
Vice President 1992 $ 145,976 $ 51,481 -- 12,000 $ 10,003
1991 $ 122,013 $ 22,101 -- -- --
<FN>
- ------------------------
(1) In accordance with the rules of Securities and Exchange Commission, amounts
relating to fiscal 1991 and fiscal 1992, if any, and amounts totalling less
than $50,000 have been omitted.
(2) Includes $14,285 contributed by the Company under defined contribution plans
and $3,600 in life insurance benefits.
</TABLE>
h-TM-
9
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<TABLE>
<S> <C>
(3) Includes $13,663 contributed by the Company under defined contribution plans
and $2,194 in life insurance benefits.
(4) Includes $9,753 contributed by the Company under defined contribution plans
and $926 in life insurance benefits.
(5) Dr. Couillaud became an executive officer on March 23, 1992. The amounts for
1992 reflect annual compensation paid to Dr. Couillaud in all capacities for
the year.
(6) Includes $8,790 contributed by the Company under defined contribution plans
and $746 in life insurance benefits.
(7) Includes $9,600 contributed by the Company under defined contribution plans
and $1,244 in life insurance benefits.
</TABLE>
STOCK OPTION GRANTS AND EXERCISES
The following table shows, as to the individuals named in the Summary
Compensation Table above, information concerning stock options granted during
the fiscal year ended September 25, 1993. This table also sets forth
hypothetical gains or "option spreads" for the options at the end of their
respective ten-year terms, as calculated in accordance with the rules of the
Securities and Exchange Commission. Each gain is based on an arbitrarily assumed
annualized rate of compound appreciation of the market price at the date of
grant of 5% and 10% from the date the option was granted to the end of the
option term. The 5% and 10% rates of appreciation are specified by the rules of
the Securities and Exchange Commission and do not represent the Company's
estimate or projection of future Common Stock prices. The Company does not
necessarily agree that this method properly values an option. Actual gains, if
any, on option exercises are dependent on the future performance of the
Company's Common Stock and overall market conditions.
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OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------------------ Potential Realizable
Number of Value at Assumed
Securities Annual Rates of Stock
Underlying % of Total Price Appreciation for
Options Options Granted Exercise Option Term
Granted to Employees in Price ($/ Expiration ----------------------
Name (#)(1) Fiscal Year (2) Sh) Date 5% ($) 10% ($)
- --------------------------------------- ----------- ----------------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
James L. Hobart........................ 12,500 5.4% $ 14.00 5/14/99 $ 59,517 $ 135,023
Henry E. Gauthier...................... 11,000 4.7% $ 14.00 5/14/99 $ 52,375 $ 118,820
Robert J. Quillinan.................... 6,000 2.6% $ 14.00 5/14/99 $ 28,568 $ 64,811
Bernard J. Couillaud................... 6,000 2.6% $ 14.00 5/14/99 $ 28,568 $ 64,811
Leonard C. DeBenedictis................ 6,000 2.6% $ 14.00 5/14/99 $ 28,568 $ 64,811
<FN>
- ------------------------
(1) The Company's 1979 Stock Option Plan, 1981 Incentive Stock Option Plan and
1987 Stock Option Plan (collectively the "Option Plans") provide for the
grant of options to officers and key employees of the Company. Options
granted under the Option Plans may be either "nonstatutory options" or
"incentive stock options". The exercise price is determined by the Board of
Directors or its Compensation Committee and may not be less than 100% of the
fair market value of the Common Stock on the date of grant of the options.
The options expire not more than six years from the date of grant, unless
otherwise determined by the Board of Directors or its Compensation
Committee, and may be exercised only while the optionee is employed by the
Company or within thirty days after termination of employment or within six
months after death. The Board of Directors may determine when options
granted may be exercisable. The 1979 Stock Option Plan terminated on
December 10, 1989 and no further options may be granted thereunder. The 1981
Incentive Stock Option Plan terminated on December 10, 1991 and no further
options may be granted thereunder. The Company has not granted any stock
appreciation rights.
(2) The Company granted options to purchase an aggregate of 183,100 shares to
all employees other than executive officers and granted options to purchase
an aggregate of 50,000 shares to all executive officers as a group (7
persons), during fiscal 1993.
</TABLE>
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The following table shows, as to the individuals named in the Summary
Compensation Table above, information concerning stock options exercised during
the fiscal year ended September 25, 1993 and the value of unexercised options at
such date.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities
Underlying Value of Unexercised
Unexercised Options/SARS In-the-Money Options
Shares at FY-End (#)(2) at FY-End ($)(3)
Acquired on Value Realized -------------------------- --------------------------
Name Exercise (#) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
- --------------------------------- ------------ -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James L. Hobart.................. 14,250 $ 42,750 26,750 37,500 $ 105,031 $ 145,313
Henry E. Gauthier................ 14,250 $ 35,625 25,250 33,000 $ 97,344 $ 127,875
Robert J. Quillinan.............. 8,500 $ 21,250 14,500 18,000 $ 55,188 $ 69,750
Bernard J. Couillaud............. 1,750 $ 3,500 11,000 18,000 $ 57,838 $ 75,438
Leonard C. DeBenedictis.......... 4,500 $ 13,500 25,500 24,000 $ 122,250 $ 104,625
<FN>
- ------------------------
(1) The market value of underlying securities is based on the closing price of
the Company's Common Stock on the date of exercise.
(2) The Company has not granted any stock appreciation rights and its stock
plans do not provide for the granting of such rights.
(3) The market value of underlying securities is based on the difference between
the closing price for the Company's Common Stock on September 24, 1993 of
$14.875 (as reported by NASDAQ National Market System) and the exercise
price.
</TABLE>
OTHER EMPLOYEE BENEFIT PLANS
EMPLOYEE RETIREMENT AND INVESTMENT PLAN AND SUPPLEMENTARY RETIREMENT PLAN
Effective January 1, 1979, the Company adopted the Coherent Employee
Retirement and Investment Plan. Employees become eligible to participate after
completing one year of service. Under this plan, the Company will match employee
contributions to the plan up to a maximum of 6% of the employee's individual
earnings. An employee is not entitled to any part of the Company's contribution
until the completion of his or her third year of employment. After the end of
the third year of employment, 20% of the Company's contribution vests.
Thereafter, an additional 20% of the Company's contribution vests at the end of
each year of completed service until the end of the seventh year of employment
when such contributions become 100% vested. Effective as of 1985, the plan was
amended and restated to conform the plan to new regulations and to qualify under
Section 401(k) of the Internal Revenue Code of 1986, as amended to permit
employees to make contributions to the plan
12
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from their pre-tax earnings. Effective January 1, 1990, the Company adopted the
Supplementary Retirement Plan which provides that certain senior management may
contribute income to a trust fund. The Company will match such contributions up
to 6% of the participant's income. Such contributions are subject to the same
vesting requirements as contributions made under the Employment Retirement and
Investment Plan.
MANAGEMENT BONUS PLAN
The Company's Management Bonus Plan provides for the payment of quarterly
cash bonuses to members of management designated by the Board of Directors
determined by a formula based on improvements of pre-tax profits, cash flow and
asset management over preset threshold levels for each operating group or
business unit. Those employees who participate in the Bonus Plan who are not
assigned to an operating group or business unit receive an average of such
amounts.
PRODUCTIVITY INCENTIVE PLAN
Under the Company's Productivity Incentive Plan (the "Incentive Plan")
450,000 shares of Common Stock are reserved for issuance to employees of the
Company and its designated subsidiaries who are customarily employed for at
least twenty hours per week. The purpose of the Incentive Plan is to enhance an
employee's proprietary interest in the Company and to create an incentive for
the Company's success.
The Incentive Plan provides for the quarterly distribution of cash or Common
Stock, at the election of each participant, based upon the quarterly
profitability of the Company. The amount of cash or number of shares of Common
Stock distributed to each participant is determined by dividing a participant's
"incentive compensation" by the fair market value of the Company's Common Stock
at the end of each three-month period.
EMPLOYEE STOCK PURCHASE PLAN
The Company's Employee Stock Purchase Plan (the "Purchase Plan") was adopted
by the Board of Directors and approved by the stockholders in 1980. A total of
2,287,500 shares of Common Stock are reserved for issuance thereunder. The
Purchase Plan permits employees who are employed for at least twenty hours per
week and more than five months in a calendar year to purchase Common Stock of
the Company through payroll deductions, which may not exceed 10% of an
employee's compensation, at the lower of 85% of the fair market value of the
Common Stock at the beginning or at the end of each twelve-month period. The
Purchase Plan provides for two offerings during each fiscal year, each having a
duration of twelve months.
13
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REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
ACT OF 1934, AS AMENDED, THAT MIGHT INCORPORATE FUTURE FILINGS, INCLUDING THIS
PROXY STATEMENT, IN WHOLE OR IN PART, THE FOLLOWING REPORT AND THE PERFORMANCE
GRAPH ON PAGE 17 SHALL NOT BE INCORPORATED BY REFERENCE INTO ANY SUCH FILINGS.
INTRODUCTION
The Compensation Committee of the Board of Directors establishes the general
compensation policies of the Company, and establishes the compensation plans and
specific compensation levels for executive officers. The Committee strives to
ensure that the Company's executive compensation programs will enable the
Company to attract and retain key people and motivate them to achieve or exceed
certain key objectives of the Company by making individual compensation directly
dependent on the Company's achievement of certain financial goals, such as
profitability and asset management and by providing rewards for exceeding those
goals.
COMPENSATION PROGRAMS
BASE SALARY. The Committee establishes base salaries for executive
officers, normally within ten percent of the average paid for comparable
positions at other similarly sized companies as set forth in national and local
compensation surveys. Base pay increases vary according to individual
contributions to the Company's success and comparisons to similar positions
within the Company and at other comparable companies.
BONUS PLANS. Each executive officer participates in the Management Bonus
Plan which provides for the payment of a quarterly bonus determined by a formula
based on improvements of pre-tax profits, cash flow and asset management over
preset threshold levels for each operating group or business unit.
STOCK OPTIONS. The Committee believes that stock options provide additional
incentive to officers to work towards maximizing stockholder value. The
Committee views stock options as one of the more important components of the
Company's long-term, performance-based compensation philosophy. These options
are provided through initial grants at or near the date of hire and through
subsequent periodic grants. Options granted by the Company to its executive
officers and other employees have exercise prices equal to fair market value at
the time of grant. Stock options generally vest over a four year period. The
initial option grant is designed to be competitive with those of comparable
companies for the level of job the executive holds and is designed to motivate
the officer to make the kind of decisions and implement strategies and programs
that will contribute to an increase in the Company's stock price over time.
Periodic additional stock options within the comparable range
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for the job are granted to reflect the executives ongoing contributions to the
Company, to create an incentive to remain at the Company and to provide a
long-term incentive to achieve or exceed the Company's financial goals.
OTHER. In addition to the foregoing, officers participate in compensation
plans available to all employees, such as a quarterly profit sharing plan and
participation in both the Company's 401(k) retirement plan and employee stock
purchase plan. See "Executive Compensation -- Other Employee Benefit Plans."
COMPENSATION OF CHIEF EXECUTIVE OFFICER
The factors considered by the Compensation Committee in determining the
compensation of the Chief Executive Officer, in addition to survey data, include
the Company's operating and financial performance, as well as his leadership and
establishment and implementation of strategic direction for the Company.
The Compensation Committee considers stock options to be an important
component of the Chief Executive Officer's compensation as a way to reward
performance and motivate leadership for long-term growth and profitability. In
1993, Dr. Hobart was granted an option to purchase 12,500 shares with an
exercise price equal to the fair market value at date of grant ($14.00 per
share). This option becomes exercisable at the end of four years. The Committee
believes that the quantity of shares granted to Dr. Hobart is consistent with
its philosophy of granting options to many management personnel rather than
concentrating grants on a few senior executives.
COMPENSATION COMMITTEE
Frank Carrubba
Charles Cantoni
Thomas Sloan Nelsen
Dated: May 14, 1993
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CERTAIN TRANSACTIONS
The following table sets forth information with respect to all executive
officers of the Company who had indebtedness outstanding during the past fiscal
year. This indebtedness arose as a result of the delivery of promissory notes in
connection with the exercise of stock options.
<TABLE>
<CAPTION>
LARGEST
AMOUNT BALANCE AT
NEW LOANS INTEREST MATURITY OUTSTANDING SEPTEMBER 25,
NAME DURING 1993 RATE(S) DATE(S) DURING 1993 1993
- -------------------------------------------- ----------- ------------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
James L. Hobart............................. $ 136,423 5.88% 3/2/98 $ 632,861 $ 487,089
Henry E. Gauthier........................... $ 134,467 6.22% 2/24/98 $ 924,940 $ 506,872
Robert J. Quillinan......................... $ 81,364 6.22% 2/22/98 $ 224,878 $ 224,878
Leonard C. DeBenedictis..................... $ 4,136 5.88% 3/2/98 $ 115,688 $ 111,552
Robert Gelber............................... $ 130,482 5.32-6.22% 2/22/98- $ 130,482 $ 130,482
8/19/98
</TABLE>
All promissory notes are full recourse and are secured by the shares of
Common Stock of the Company issued upon exercise of the options. Interest is
paid annually.
See "Election of Directors -- Director Compensation" for a description of
Dr. Nelsen's consulting arrangement with the Company.
COMPANY STOCK PRICE PERFORMANCE
The following graph shows a five-year comparison of cumulative total
stockholder return, calculated on a dividend reinvestment basis and based on a
$100 investment, from September 30, 1988 through September 30, 1993 comparing
the return on the Company's Common Stock with the Standard & Poor's 500 Stock
Index and High Technology Composite Index. No dividends have been declared or
paid on the Company's Common Stock during such period. The stock price
performance shown on the graph following is not necessarily indicative of future
price performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
A B C D E F G
------------------------------------------- --------- --------- --------- --------- --------- ---------
<C> <S> <C> <C> <C> <C> <C> <C>
1 9/30/88 9/30/89 9/29/90 9/28/91 9/30/92 9/30/93
2 S&P 500 I 100 133.01 120.71 158.34 175.83 198.69
3 S&P High 100 107.69 92.53 113.55 115.66 139.51
4 Coherent 100 172.14 88.6 136.7 86.07 144.3
</TABLE>
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OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting. If any
other matters properly come before the meeting, it is the intention of the
persons named in the enclosed form of Proxy to vote the shares they represent as
the Board of Directors may recommend.
THE BOARD OF DIRECTORS
Dated: February 15, 1994
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
COHERENT, INC.
P 1994 ANNUAL MEETING OF STOCKHOLDERS
R The undersigned stockholder of COHERENT, INC., a Delaware
corporation, hereby acknowledges receipt of the Notice of Annual
O Meeting of Stockholders and Proxy Statement, each dated February 15,
1994, and hereby appoints Henry E. Gauthier and Robert J. Quillinan,
X and each of them, proxies and attorneys-in-fact, with full power to
each of substitution, on behalf and in the name of the undersigned,
Y to represent the undersigned at the 1994 Annual Meeting of Stockholders
of COHERENT, INC. to be held on Thursday, March 31, 1994 at 5:30 p.m.,
local time, at the principal offices of the Company, located at 5100
Patrick Henry Drive, Santa Clara, California, and at any adjournment(s)
thereof, and to vote all shares of Common Stock which the undersigned
would be entitled to vote if then and there personally present, on the
matters set forth on the reverse side. Either of such attorneys or
substitutes shall have and may exercise all of the powers of said
attorneys-in-fact hereunder.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IN NO CONTRARY DIRECTION
IS INDICATED, WILL BE VOTED FOR THE ELECTION OF DIRECTORS, FOR THE
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE AS INDEPENDENT
PUBLIC ACCOUNTANTS, AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER
MATTERS AS MAY COME BEFORE THE MEETING.
---------------
| SEE REVERSE |
CONTINUED AND TO BE SIGNED ON REVERSE SIDE | SIDE |
---------------
<PAGE>
- ----- PLEASE MARK
| X | VOTES AS IN |
- ----- THIS EXAMPLE. |____
1. ELECTION OF DIRECTORS:
NOMINEES: James L. Hobart; Henry E. Gauthier; Charles
W. Canton; Frank P. Carrubba; Thomas Sloan Nelson
FOR WITHHELD
_____ _____
| | | |
|_____| |_____|
- --------------------------------------
For all nominees except as noted above
2. PROPOSAL TO RATIFY THE APPOINTMENT OF FOR AGAINST ABSTAIN
DELOITTE & TOUCHE AS THE INDEPENDENT _____ _____ _____
PUBLIC ACCOUNTANTS OF THE COMPANY FOR | | | | | |
THE 1994 FISCAL YEAR: |_____| |_____| |_____|
and upon such other matter or matters which may
properly come before the meeting and any
adjournment(s) thereof.
MARK HERE _____
FOR ADDRESS | |
CHANGE AND |_____|
NOTE AT LEFT
(This Proxy should be dated, signed by the stockholder(s) exactly
as his or her name appears hereon, and returned promptly in the
enclosed envelope. Persons signing in a fiduciary capacity should
so indicate. If shares are held by joint tenants or as community
property, both should sign.)
Signature: ________________________________Date __________________
Signature: ________________________________Date __________________
