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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K/A
AMENDMENT NO. 1
(Mark One)
/x/ Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended: SEPTEMBER 27, 1997
OR
/ / Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
Commission File Number: 0-5255
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COHERENT, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-1622541
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5100 PATRICK HENRY DRIVE, SANTA CLARA, CALIFORNIA 95054
(Address of principal executive offices) (zip code)
(408) 764-4000
(Registrant's telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $.01 PAR VALUE PER SHARE
COMMON STOCK PURCHASE RIGHTS
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes /x/ No / /
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. /x/
As of December 1, 1997, 11,585,847 shares of Common Stock were
outstanding. The aggregate market value of the voting shares (based upon
the closing price reported by the Nasdaq National Market on December 1,
1997) of Coherent, Inc., held by nonaffiliates was $405,855,509. For purposes
of this disclosure, shares of Common Stock and shares of Common Stock held by
persons who own 5% or more of the outstanding Common Stock and shares of
Common Stock held by each officer and director have been excluded in that
such persons may be deemed to be "affiliates" as that term is defined under
the Rules and Regulations of the Act. This determination of affiliate status
is not necessarily a conclusive.
DOCUMENTS INCORPORATED BY REFERENCE
None.
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EXPLANATORY NOTE
This Annual Report on Form 10-K/A ("Form 10-K/A") is being filed as
Amendment No. 1 to the Registrant's Annual Report on Form 10-K for the fiscal
year ended September 27, 1997 filed with the Securities and Exchange
Commission (the "Commission") solely for the purpose of revising and
restating the following items in their entirety.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY.
The following table sets forth the name, age and certain other
information regarding the directors of the Company.
<TABLE>
<CAPTION>
NAME AGE DIRECTOR SINCE PRINCIPAL OCCUPATION
---- --- -------------- --------------------
<S> <C> <C> <C>
Bernard J. Couillaud ....... 53 1966 President and Chief Executive
Officer of the Company
Henry E. Gauthier .......... 57 1983 Chairman of the Board of
Directors of the Company
Charles W. Cantoni(1)(2) ... 62 1983 Vice President, Quinton
Instruments, Inc.
Frank P. Carrubba (1)(2) ... 60 1989 Retired Chief Technical Officer,
Phillips Electronics N.V.
Thomas Sloan Nelsen(1)(2) .. 71 1983 Retired Professor of Surgery,
Stanford University School of Medicine
Jerry E. Robertson (1)(2) .. 65 1994 Retired Executive Vice
President, 3M Life Sciences
Sector and Corporate Services
</TABLE>
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
Except as set forth below, each of the directors 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.
Mr. Cantoni is a Vice President of Quinton Instruments, Inc., a
manufacturer of medical instrumentation products, a position he has held
since October 1994. From August 1988 until September 1994 he was President
of ImageComm Systems, Inc., a value added reseller of medical image
processing systems.
Mr. Robertson retired from 3M in 1994. He is a member of the board of
directors of Manor Care, Inc., Cardinal Health, Inc., Haemonetics
Corporation, Steris Corporation, Life Technologies, Inc., Allianz Life
Insurance Company of North America, Choice Hotels International, Medwave,
Inc. and Project HOPE.
Mr. Couillaud has been the President and Chief Executive Officer as well
as a member of the Board of Directors of the Company since July 1996. He
served as Vice President and General Manager of Coherent Laser Group from
March 1992 to July 1996. From 1990 to March 30, 1992, he served as Manager
of the Advanced Systems Business Unit, and from 1987 to 1990 served as
Director of R&D for the Coherent Laser Group.
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The information required by this item concerning the executive officers
of the Company is incorporated by reference to the information set forth in
the section entitled "Executive Officers of the Company" at the end of Part I
of the Company's Annual Report on Form 10-K for the fiscal year ended
September 27, 1997.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of four (4) meetings
during the fiscal year ended September 27, 1997. 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, Nelsen and Robertson, held one (1) 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, Nelsen and Robertson, and held one (1) 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
received $8,000 during the fiscal year, plus $500 per meeting attended and
are reimbursed for their expenses incurred in attending meetings of the Board
of Directors. Members of the Board of Directors who are not employees of the
Company will receive $16,000 during fiscal year 1998, plus $1,500 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
was amended by the Board of Directors on January 25, 1996 and was approved by
the stockholders on March 20, 1996. The Directors' Option Plan provides for
the automatic and nondiscretionary grant of a non-statutory stock option to
purchase 10,000 shares of the Company's Common Stock to each non-employee
director on the later of the effective date of the Directors' Option Plan 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 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.
Three non-employee directors have each been granted options to purchase
27,500 shares of the Company's Common Stock under such plan at a weighted
average exercise price of $20.55. One non-employee director has been granted
options to purchase 17,500 shares of the Company's Common Stock under such
plan at a weighted average exercise price of $24.45 per share. One
non-employee director has been granted options to purchase 10,000 shares of
the Company's Common Stock under such plan at a weighted average exercise
price of $45.00 per share. As of the Record Date, 50,000 shares had been
issued on exercise of such options. The following table shows, as to each
non-employee director, information concerning options exercised under the
Directors' Option Plan during the last fiscal year:
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OPTION EXERCISES IN LAST FISCAL YEAR
SHARES ACQUIRED
NAME ON EXERCISE VALUE REALIZED (1)
- --------------------------------------- --------------- ------------------
Frank P. Carrubba ..................... 2,500 83,750
Thomas Sloan Nelsen ................... 2,500 90,000
Jerry E. Robertson .................... 2,500 50,625
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(1) The market value of underlying securities is based on the closing
price of the Company's Common Stock on the date of exercise.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is composed of Directors Carrubba, Cantoni,
Nelsen and Robertson. During the last fiscal year, the Company paid Dr.
Thomas Nelsen $63,000 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.
Mr. Gauthier and the Company have entered into a Management Transition
Agreement pursuant to which Mr. Gauthier has agreed to provide employment and
consulting services to the Company through June 30, 1999. In consideration
for these services, the Company has agreed to pay Mr. Gauthier his base
salary through June 30, 1997, an hourly consulting fee equal to $175.00 for
services rendered through June 30, 1999, and to provide him with benefits
under the Company's medical, dental and life insurance plans.
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 and changes in ownership 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 forms that they file
pursuant to Section 16(a). Based solely on its review of the copies of such
forms received by the Company, or on written representations from certain
reporting persons that no other reports were required for such persons, the
Company believes that, during fiscal 1997, all Section 16(a) filing
requirements applicable to its officers, directors and ten-percent
stockholders were complied with.
ITEM 11. 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 $100,000, information concerning compensation awarded to,
earned by or paid for services to the Company in all capacities during the
last three fiscal years (to the extent that such person was the Chief
Executive Officer and/or executive officer, as the case may be, during any
part of such fiscal year):
SUMMARY COMPENSATION TABLE
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<TABLE>
<CAPTION>
AWARDS
NAME YEAR SALARY($) BONUS($) OPTIONS(#) ALL OTHER
- ------------------------------------- ---- --------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C>
Bernard J. Couillaud ................ 1997 $273,229 $341,797 12,000 $14,834(1)
President and Chief 1996 185,353 258,595 15,000 12,937
Executive Officer 1995 166,156 140,898 6,000 11,791
Robert J. Quillinan ................. 1997 $194,964 $192,491 7,000 $15,267(2)
Executive Vice President and 1996 182,361 268,251 6,000 9,527
Chief Financial Officer 1995 173,218 159,461 6,000 11,643
John Ambroseo (3) ................... 1997 $304,897(4) $ 80,605 10,500 $ 9,266(5)
Executive Vice President and 1996 119,900 98,408 2,500 6,803
President, Coherent Medical Group 1995 133,503 14,271 1,000 8,075
Kevin P. Connors .................... 1997 $191,540 $142,389 6,000 $10,859(6)
Executive Vice President and 1996 116,917 91,215 10,750 9,890
President, Coherent Medical Group 1995 96,601 35,042 1,500 5,463
Gerald C. Barker (7) ................ 1997 $159,234 $166,925 4,500 $11,647(8)
Former Vice President and General 1996 133,260 138,618 9,000 9,224
Manager, Coherent Laser Group 1995 123,888 69,149 2,250 10,660
Scott H. Miller ..................... 1997 $153,877 $132,780 3,500 $12,154(9)
Sr. Vice President and General 1996 146,308 154,521 2,500 14,362
Counsel 1995 139,562 81,971 2,500 12,831
</TABLE>
* Perquisites are not included since the aggregate amount is less than the
lesser of $50,000 or 10% of salary and bonus, in accordance with
regulations promulgated by the SEC. Therefore, the Other Annual
Compensation column has not been included in this table.
(1) Includes $12,344 contributed by the Company under defined contribution
plans and $2,490 in life insurance benefits.
(2) Includes $13,462 contributed by the Company under defined contribution
plans and $1,805 in life insurance benefits.
(3) Mr. Ambroseo became Executive Vice President and President, Coherent Laser
Group on July 25, 1997.
(4) Includes $186,162 compensation related to European assignment.
(5) Includes $9,026 contributed by the Company under defined contribution
plans and $240 in life insurance benefits.
(6) Includes $10,506 contributed by the Company under defined contribution
plans and $353 in life insurance benefits.
(7) Mr. Barker resigned from his position as Vice President and General
Manager, Coherent Laser Group on July 25, 1997.
(8) Includes $9,554 contributed by the Company under defined contribution
plans and $2,093 in life insurance benefits.
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(9) Includes $11,638 contributed by the Company under defined contribution
plans and $516 in life insurance benefits.
STOCK OPTION GRANTS AND EXERCISES
The following table shows, as to the individuals named in the Summary
Compensation Table above, information concerning stock options granted during
the fiscal year ended September 27, 1997
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
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POTENTIAL REALIZABLE VALUE
% OF TOTAL AT ASSUMED ANNUAL
NUMBER OF OPTIONS RATES OF STOCK PRICE
SECURITIES GRANTED TO APPRECIATION FOR
UNDERLYING EMPLOYEES OPTION TERM (3)
OPTIONS IN FISCAL EXERCISE EXPIRATION --------------------------
NAME GRANTED (#)(1) YEAR (2) PRICE ($/SH) DATE 5% ($) 10% ($)
- --------------------------- -------------- ---------- ------------ ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Bernard J. Couillaud ....... 2,547 0.60 $39.25 4/28/03 $ 33,999 $ 77,133
9,453 2.24 $39.25 4/28/03 126,186 286,272
Robert J. Quillinan ........ 2,547 0.60 $39.25 4/28/03 $ 33,999 $ 77,133
4,453 1.05 $39.25 4/28/03 59,442 134,854
John Ambroseo .............. 2,000 0.47 $39.25 4/28/03 $ 26,698 $ 60,568
2,385 0.56 $48.50 7/25/03 39,340 89,248
6,115 1.45 $48.50 7/25/03 100,865 228,828
Kevin P. Connors ........... 2,547 0.60 $39.25 4/28/03 $ 33,999 $ 77,133
3,453 0.82 $39.25 4/28/03 46,093 104,570
Gerald C. Barker ........... 2,503 0.59 $39.25 4/28/03 $ 33,412 $ 75,800
1,997 0.47 $39.25 4/28/03 26,657 60,477
Scott H. Miller ........... 2,547 0.60 $39.25 4/28/03 $ 33,999 $ 77,133
953 0.23 $39.25 4/28/03 12,721 28,860
</TABLE>
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(1) The Company's 1987 Stock Option Plan and 1995 Stock Plan (collectively
the "Option Plans") provide for the grant of options and stock purchase
rights to officers, employees and consultants 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 in the case of incentive
stock options may not be less than 100% of the fair market value of the
Common Stock on the date of grant (110% in the case of grants to 10%
shareholders). The options expire not more than ten years from the date
of grant, and may be exercised only while the optionee is employed by
the Company or within such period of time after termination of
employment as is determined by the Board or its Committee at the time of
grant. The Board of Directors may determine when options granted may be
exercisable.
(2) The Company granted options to purchase an aggregate of 363,600 to all
employees other than executive officers and granted options to purchase
an aggregate of 59,250 shares to all executive officers as a group (8
persons), during fiscal 1997.
(3) This column 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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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 27, 1997 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 UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT IN-THE MONEY OPTIONS AT
SHARES VALUE SEPTEMBER 27, 1997 (#) (2) SEPTEMBER 27, 1997 ($) (3)
ACQUIRED ON REALIZED ----------------------------- ----------------------------
NAME EXERCISE (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------- ------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Bernard J. Couillaud ...... 0 $0 15,000 30,000 $481,500 $407,250
Robert J. Quillinan ....... 0 $0 18,000 19,000 $750,750 $336,000
John Ambroseo ............. 2,200 $64,413 0 13,500 $0 $125,750
Kevin P. Connors .......... 0 $0 5,250 15,000 $115,844 $202,313
Gerald C. Barker .......... 0 $0 11,000 13,500 $380,281 $172,156
Scott H. Miller ........... 0 $0 7,500 8,500 $312,813 $148,313
</TABLE>
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(1) The value realized is calculated based on the closing price of the
Company's Common Stock as reported by the Nasdaq National Market on the
date of exercise minus the exercise price of the option, and does not
necessarily indicate that the optionee sold such stock.
(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 of the Company's Common Stock on September 27,
1997 of $53.50 (as reported by Nasdaq National Market) and the exercise
price.
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 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
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Under the Company's Productivity Incentive Plan (the "Incentive Plan")
450,000 shares of Common Stock were initially reserved and as of the fiscal
year ended September 27, 1997, 32,490 shares of Common Stock were available
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 were initially reserved and as of
the end of the fiscal year 430,647 shares of Common Stock remained available
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.
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 CONTAINED HEREIN 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 and asset management over
preset threshold levels for each operating group or business unit.
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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 the fair market value at the time of grant. Options vest and become
exercisable at such time as determined by the Board. The initial option
grant is designed to be competitive with those of comparable companies for
the level of the job that 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 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 1997, Mr. Couillaud was granted an option to purchase 12,000 shares with
an exercise price equal to the fair market value at date of grant ($39.25 per
share). This option becomes exercisable at the end of three years. The
Committee believes that the quantity of shares granted to Dr. Couillaud is
consistent with its philosophy of granting options to many management
personnel rather than concentrating grants on a few senior executives.
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COMPENSATION LIMITATIONS
Under Section 162(m) of the Internal Revenue Code, adopted in August
1993, and regulations adopted thereunder by the Internal Revenue Service,
publicly-held companies may be precluded from deducting certain compensation
paid to an executive officer in excess of $1.0 million in a year. The
regulations exclude from this limit performance-based compensation and stock
options provided certain requirements, such as stockholder approval, are
satisfied. The Company is studying these regulations and currently intends
to take the necessary actions to cause its stock option plans to qualify for
the exclusions. The Company does not currently anticipate taking actions
necessary to qualify the Company's executive annual cash bonus plans for the
exclusions.
COMPENSATION COMMITTEE
Frank P. Carrubba
Charles W. Cantoni
Thomas Sloan Nelsen
Jerry E. Robertson
Dated: January 23, 1998
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 28, 1992 through September 28, 1997
comparing the return on the Company's Common Stock with the Standard & Poors
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
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
COHERENT INC. S&P 500 INDEX TECHNOLOGY-500
------------- ------------- --------------
9/1/92 100.00 100.00 100.00
9/1/93 167.65 113.00 120.62
9/1/94 164.71 117.17 140.42
9/1/95 429.41 152.02 221.52
9/1/96 414.71 182.93 272.15
9/1/97 651.47 256.92 441.98
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth as of January 23, 1998 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
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<PAGE>
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.
NUMBER OF PERCENT OF
NAME AND ADDRESS SHARES (1) TOTAL
- ---------------- ---------- ----------
Franklin Advisers, Inc. (2) ......... 902,000 7.78
Henry E. Gauthier ................... 42,590 *
Robert J. Quillinan (3) ............. 26,447 *
Bernard J. Couillaud (4) ............ 25,468 *
Gerald C. Barker (5) ................ 22,143 *
Scott H. Miller (6) ................. 19,096 *
Frank P. Carrubba (7) ............... 10,000 *
Kevin P. Connors (8) ................ 8,730 *
Jerry E. Robertson .................. 7,500 *
Thomas Sloan Nelsen (9) ............. 6,000 *
John Ambroseo (10) .................. 2,969 *
Charles W. Cantoni (11) ............. 5,000 *
All directors and executive officers
as a group (13 persons) (12) ...... 190,836 1.65
- -----------------
* Represents less than 1%.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission (the "SEC") and generally includes
voting or investment power with respect to the securities. In
computing the number of shares beneficially owned by a person and the
percentage ownership of that person, shares of Coherent Common Stock
subject to options held by that person will be exercisable on or before
February 9, 1998, are deemed outstanding. Such shares, however, are not
deemed outstanding for the purpose of computing the percentage
ownership of any other person.
(2) Represents shares reported by Carson Group as being held by Franklin
Advisers, Inc. as of September 30, 1997.
(3) Includes 18,000 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.
(4) Includes 15,000 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.
(5) Includes 13,250 shares issuable upon exercise of options held by Mr.
Barker which are currently exercisable or will become exercisable
within 60 days of the Record Date.
(6) Includes 7,500 shares issuable upon exercise of options held by Mr.
Miller which are currently exercisable or will become exercisable
within 60 days of the Record Date.
(7) Includes 7,500 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.
(8) Includes 8,250 shares issuable upon exercise of options held by Mr.
Connors which are currently exercisable or will become exercisable
within 60 days of the Record Date.
(9) Includes 5,000 shares issuable upon exercise of options held by Dr.
Nelsen which are currently exercisable or will become exercisable
within 60 days of the Record Date.
(10) Includes 1,500 shares issuable upon exercise of options held by Mr.
Ambroseo which are currently exercisable or will become exercisable
within 60 days of the Record Date.
(11) Includes 5,000 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.
(12) Includes an aggregate of 88,750 options which are currently exercisable
or will become exercisable within 60 days of the Record Date.
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<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED 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 27,
NAME DURING 1997 RATE(S) DATE(S) DURING 1997 1997
- ------------------------ ----------- -------- -------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Scott H. Miller ........ $0 7.1% 10/04/99 $111,680 $111,680
</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 "Compensation Committee Interlocks and Insider Participation" for a
description of Dr. Nelsen's consulting arrangement with the Company.
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<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Amendment No. 1 to
Form 10-K on Form 10-K/A to be signed on its behalf by the undersigned,
thereunto duly authorized on this 23rd day of January 1998.
COHERENT, INC.
By: /s/ BERNARD J. COUILLAUD
----------------------------------
Bernard J. Couillaud
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Amendment No 1 to Form 10-K on Form 10-K/A has been signed below by the
following persons on January 23, 1998 on behalf of the Registrant and in the
capacities and on the dates indicated:
SIGNATURES TITLE
---------- -----
*
------------------------
Bernard J. Couillaud Director, President & Chief Executive Officer
(Principal Executive Officer)
*
------------------------
Robert J. Quillinan Executive Vice President & Chief Financial
Officer
*
------------------------
Henry E. Gauthier Director, Chairman of the Board
*
------------------------
Charles W. Cantoni Director
*
------------------------
Frank Carrubba Director
*
------------------------
Thomas Sloan Nelsen Director
*
------------------------
Jerry E. Robertson Director
* By: /s/ Bernard J. Couillaud
------------------------
Bernard J. Couillaud
Attorney-in-Fact
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