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EXHIBIT 4.1
COHERENT, INC.
PRODUCTIVITY INCENTIVE PLAN
(AS LAST AMENDED MARCH 24, 2000)
1. PURPOSE. The purpose of this Productivity Incentive Plan is
to afford an incentive to employees of Coherent, Inc. and its subsidiaries
and to enable Coherent, Inc. and its subsidiaries to retain and attract
personnel of the highest caliber who by their position, ability and diligence
are able to make important contributions to the Company's success.
2. DEFINITIONS.
(a) "Company" means Coherent, Inc. and its
majority-owned domestic and foreign subsidiaries the employees of which are
designated from time to time by the Board of Directors as eligible to
participate in the Plan.
(b) "Common Stock" means the Common Stock, $.01 par
value, of the Company.
(c) "Employee" means any person, including an officer or
director of the Company, who is customarily employed for at least twenty (20)
hours per week by, and receives a regular salary from, the Company.
(d) "Participating Employee" means any Employee of the
Company, who has not elected to discontinue his or her participation in the
Plan.
(e) "Three Month Period of the Plan" means the three
months commencing on or about October 1, January 1, April 1 and July 1 of
each fiscal year.
(f) "Quarterly Base Earnings" means the aggregate
regular salary and earnings paid to a Participating Employee during each
Three Month Period of the Plan, exclusive of: bonuses, certain commissions as
determined by the Board of Directors from time to time, overtime payments,
lead or swing premiums, shift premiums, location cost premiums, or any other
form of extra compensation; Company payments for social security, worker's
compensation, unemployment compensation, or other Company payments required
by statute; or Company contributions for insurance, annuity, or employee
benefit plans.
(g) "Quarterly Pre-tax Profit Percentage" means that
percentage calculated to the nearest tenth of a percent arrived at by
dividing (i) the consolidated pre-tax profit earned by the Company for the
Three Month Period of the Plan, after deduction of the total Amount of
Incentive Compensation under the Plan, by (ii) the Company's consolidated net
sales for the Three Month Period of the Plan.
The Quarterly Pre-tax Profit Percentage shall be
calculated by the Company, and such calculation shall be final and conclusive
on all participants. In determining such amounts, the Company may be entitled
to rely upon a certificate or estimate prepared by the Company's independent
public accountants or by the Company's chief accounting or financial officer.
After such determination, no recalculation shall be made on account of any
subsequent adjustments or for any other reason.
(h) "Amount of Incentive Compensation" means that amount
arrived at by multiplying (i) the Quarterly Base Earnings of a Participating
Employee by (ii) fifty percent of the Quarterly Pre-tax Profit Percentage.
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(i) "Fair Market Value of Common Stock" means the fair
market value of the Common Stock as determined by the Board of Directors of
the Company based on the closing price per share, as reported in the Wall
Street Journal on the last day of each Three Month Period of the Plan.
(j) "Plan" means this Productivity Incentive Plan, as
amended from time to time.
3. ADMINISTRATION. The Plan shall be administered by the
management of the Company under the direction of the Board of Directors. The
administration, interpretation or application of the Plan by the Board or
management shall be final, conclusive and binding upon all participants.
Members of the Board of Directors and management are permitted to participate
in the Plan provided such persons are eligible Employees.
4. EFFECTIVE DATE. The effective date of the Plan was October
1, 1972.
5. PARTICIPATION. All Employees automatically become
participants in the Plan. Once an Employee elects to become a participant in
the Plan, such participation shall continue until the Employee has filed with
the Company a written statement on a form prescribed by the Company stating
his or her intention to discontinue participation.
6. DISTRIBUTION OF CASH OR COMMON STOCK. At the end of each
Three Month Period of the Plan, the Company shall distribute cash or shares
of Common Stock, at the election of the Participating Employee, to each
Participating Employee; provided, however, that only cash shall be
distributed to a Participating Employee when the Amount of Incentive
Compensation is less than one day's base earnings (i.e., eight hours) for
such Participating Employee. The Company will distribute cash to each
Participating Employee unless the Participating Employee notifies the Company
in writing on or before the last day of the Three Month Period that he or she
elects to receive Common Stock. The amount of cash distributed to a
Participating Employee shall be the Amount of Incentive Compensation. The
number of shares of Common Stock distributed to a Participating Employee
shall be that number arrived at by dividing the Amount of Incentive
Compensation by the Fair Market Value of Common Stock. No fractional shares
shall be distributed, but the dollar amount of such fractional share shall be
carried forward and included in the Amount of Incentive Compensation for the
succeeding Three Month Period if the Employee is still an eligible and
Participating Employee at that time.
7. DELIVERY OF CASH OR SHARE CERTIFICATES. As promptly as
practicable after each Three Month Period of the Plan, the Company shall
arrange to deliver to each Participating Employee who elected to receive
shares of Common Stock, the share certificates evidencing the shares of
Common Stock distributed for the Three Month Period of the Plan. As promptly
as practicable after each Three Month Period of the Plan, the Company shall
arrange to deliver to each Participating Employee who elected to receive
cash, a check in the amount of the cash distribution for the Three Month
Period.
8. TERMINATION OF EMPLOYMENT; DEATH. Upon termination of a
Participating Employee's employment for any reason, including retirement or
death, his participation in the Plan shall be automatically terminated. If
such termination occurs during a Three Month period of the Plan, such
Participating Employee shall not be entitled to any cash or stock
distribution for that period, unless the termination is caused by the
Employee's death, in which case his designated beneficiary shall receive a
cash or Common Stock distribution at the election of the designated
beneficiary, such election to be made on or before the last day of the
relevant Three Month Period, for the portion of the Three Month Period of the
Plan in which the Participating Employee's participation under the Plan was
effective.
9. TRANSFERABILITY. A Participating Employee's rights to
receive cash or shares of Common Stock under the Plan may not be assigned,
transferred, pledged or otherwise disposed of in any way by the Participating
Employee, except to the extent provided in Section 8.
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10. STOCK. The maximum number of shares of Common Stock which
shall be made available for distribution under the Plan shall be 2,125,000
shares, subject to adjustment upon changes in capitalization of the Company.
The shares of Common Stock to be distributed to Participating Employees may,
at the election of the Company, be either treasury shares or shares
authorized but unissued.
A Participating Employee shall have no interest in the
shares of Common Stock until such shares are distributed.
Shares of Common Stock to be distributed to a Participating
Employee under the Plan will be registered in the name of the Participating
Employee or in the name of the Participating Employee and his or her spouse,
or in the name of the Participating Employee's designated beneficiary
pursuant to Section 8.
11. AMENDMENT OR TERMINATION. The Board of Directors of the
Company may at any time terminate, modify, or amend the Plan; provided,
however, that approval of the holders of a majority of the outstanding shares
of the Company entitled to vote shall be required for any modification or
amendment which materially increases the benefits accruing hereunder to
Participating Employees, materially increases the number of shares issuable
pursuant to the Plan, or materially changes the standards of eligibility for
participation in the Plan.
