COHERENT CORP. Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangement of Certain
Officers.
(e) Dr.
• The Amended Agreement extends the current employment term for Dr. Mattera .
It provides for an initial term of four years from August 1, 2019 to
August 1, 2023 , with automatic one-year renewals thereafter. As under the
2016 Agreement, either party may elect not to renew the agreement with
90-days' advance notice before the end of the initial term or any renewal
term. The parties also may terminate the agreement before the end of the
term subject to certain notice requirements specified in the Amended
Agreement.
• With the advice and analysis of the Company's independent compensation
consultant, Dr. Mattera's "total direct compensation" - comprising base
salary, annual cash incentive awards and annual long-term incentive awards
- has been adjusted for fiscal year 2020 to approximate the 50th
percentile versus the Company's compensation competitor group based on the
combined business following the closing of the Finisar transaction. Under
the Amended Agreement, the fiscal year 2020 total direct compensation is
composed of (i) $920,200 in base salary (retroactive to August 1, 2019 ),
which approximates the 50th percentile CEO base salary for the peer group,
(ii) $1,809,248 in target annual incentive compensation awards under the
Company's Bonus Incentive Program and Goals/Results Incentive Program, and
(iii) $4,710,550 in target long-term equity incentive awards (30% as stock
options, 30% as time-vesting restricted stock awards and 40% as
performance share awards). The fiscal year 2020 long-term incentive awards
were granted on the date approved by the Compensation Committee of the
Board, January 28, 2020 .
• The 2016 Agreement included an annual Company contribution of $100,000 to
the Company's deferred compensation plan, with the most recent
contribution credited on September 1, 2019 . As a further retention
incentive for Dr. Mattera to remain with the Company, the Amended
Agreement provides for increasing annual contributions to the deferred
compensation plan over the next three and a half years in the following
amounts on each the following dates, subject to Dr. Mattera's continued
service with the Company through those dates:
Date Amount of Credit
June 30, 2020 $ 150,000
June 30, 2021 $ 450,000
June 30, 2022 $ 700,000
June 30, 2023 $ 1,000,000
• Like the 2016 Agreement, the Amended Agreement provides certain severance
benefits in the event of a "qualifying" involuntary termination (i.e., a
termination by the Company without "cause" (including non-renewal of the
agreement by the Company without cause) or termination by Dr. Mattera for
"good reason"). The severance provisions in the Amended Agreement
generally follow the provisions from the 2016 Agreement, with the
following exceptions:
• The Amended Agreement provides that the period following a change in
control of the Company during which certain enhanced severance benefits
may be provided for a qualifying involuntary termination (the "change
in control protected period") is 24 months (compared to 18 months under
the 2016 Agreement).
--------------------------------------------------------------------------------
• For a qualifying involuntary termination that does not occur during a
change in control protected period, instead of requiring the Company to
provide medical coverage for 18 months as under the 2016 Agreement, the
Amended Agreement provides for a lump sum payment equal to 18 months of
the applicable COBRA monthly premiums. Similarly, for a qualifying
involuntary termination that occurs during the change in control
protected period, the Amended Agreement provides for a lump sum payment
equal to 24 months of the COBRA monthly premiums.
• The cash severance for a qualifying involuntary termination during the
change in control protected period equals three times Dr. Mattera's
average annual salary and cash bonus for the preceding three years
(rather than 2.99 times the average annual salary and cash bonus for
the preceding five years under the 2016 Agreement).
• Consistent with the terms of the Company's current equity award
agreements, in case of a qualifying involuntary termination that occurs
during the change in control protected period, the Amended Agreement
provides for full vesting of all outstanding equity awards.
• The Amended Agreement also includes certain special retirement provisions
applicable to Dr. Mattera's outstanding equity awards granted after the
date of the Amended Agreement if he terminates employment with the Company
on or after age 65, other than a termination by the Company for cause, as
follows:
• Stock options will continue to vest per their original schedule and
remain exercisable for the full option term. This is the same
retirement treatment as in the Company's current standard form of stock
option award agreement.
• Time-vesting restricted stock units ("RSUs") will vest in full upon
retirement. This is the same retirement treatment as in the Company's
current standard form of time-vesting RSU award agreement.
• Performance-vesting RSUs (such as "performance share units") ("PSUs")
continue to vest in full (i.e., not prorated) upon completion of the
applicable performance period based on actual performance results;
provided, however, that if retirement occurs before the end of the
initial three-year term of the Amended Agreement, PSUs will be prorated
for the portion of the performance period completed unless aggregate
performance results for the performance period are achieved at 100% of
target or greater (in which case the PSUs as adjusted for performance
will vest in full).
• The Amended Agreement continues to include customary covenants regarding
protection of confidential information, inventions, post-employment
non-compete and post-employment non-solicitation of customers and
employees, but the relevant restricted period for the non-compete and
non-solicitation covenants has been increased from one to two years.
The description of the amendments made by the Amended Agreement as summarized above is qualified in its entirety by reference to the copy of the full text of the Amended Agreement, which is filed as Exhibit 10.1 to this Form 8-K and which is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
Exhibit 10.1. Amended and Restated Employment Agreement effective
January 26, 2020 .
Exhibit 104 Cover Page Interactive Data File (embedded within the Inline
XBRL document).
--------------------------------------------------------------------------------
© Edgar Online, source
