UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 30, 2000
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
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, including zip code)
(408) 764-4000
(Registrant's telephone number, including area code)
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 January 9, 2001, 24,336,512 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 January 9, 2001) of Coherent, Inc.,
held by nonaffiliates was $661,986,260.50. For purposes of this disclosure,
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 conclusive.
DOCUMENTS INCORPORATED BY REFERENCE
None.
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 30, 2000. This Form 10-K/A is 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
-----------------------------------------------
DIRECTORS
The names of the directors of the Company and certain information about
them are set forth below.
DIRECTOR
NAME OF DIRECTOR AGE SINCE PRINCIPAL OCCUPATION
---------------- --- ----- --------------------
Bernard J. Couillaud, PhD (3)....... 56 1996 President and Chief Executive Officer of the Company
Henry E. Gauthier (1) (2) (3)....... 60 1983 Chairman of the Board of Directors of the Company
Charles W. Cantoni (2)(3)........... 65 1983 Founder, Cantoni Consulting
Frank P. Carrubba (2)(3)............ 63 1989 Retired Chief Technical Officer, Phillips Electronics N.V.
John H. Hart (1)(2)(3).............. 54 2000 Sr. Vice President and Chief Technical Officer, 3Com
Corporation
Thomas Sloan Nelsen, MD (2)......... 74 1983 Retired Professor of Surgery, Stanford University School of
Medicine
Jerry E. Robertson (1)(2)........... 68 1994 Retired Executive Vice President, Life Sciences Sector and
Corporate Services Division, 3M
- ---------------------------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
(3) Member of the Nominating Committee
There are no family relationships between any director or executive officer
of the Company.
Dr. Couillaud has served as our President and Chief Executive Officer as
well as a member of our Board of Directors since July 1996. Dr. Couillaud served
as Vice President and General Manager of the Coherent Laser Group from March
1992 to July 1996. From July 1990 to March 1992, Dr. Couillaud served as Manager
of our Advanced Systems Business Unit, and from September 1987 to July 1990 he
served as Director of Research and Development for the Coherent Laser Group.
From November 1983, when he joined us, to September 1987, Dr. Couillaud held
various managerial positions with us. Dr. Couillaud was Professor of Physics at
Stanford University from January 1979 to November 1983. Dr. Couillaud received
his PhD in Chemistry from Bordeaux University, Bordeaux, France.
Mr. Gauthier has served on our Board of Directors since 1983 and as our
Chairman of the Board since 1997. From August 1988 until his retirement in June
1996, Mr. Gauthier served as our President and Chief Operating Officer. He
served as President and Chief Executive Officer of Coherent, Inc. from March
1983 through July 1988 and as President of Coherent General, Inc. from June 1986
through January 1987. Mr. Gauthier served as General Manager of the Coherent
Medical Group from May 1987 through July 1988.
Mr. Cantoni has served on our Board of Directors since 1983. Since June
1998, Mr. Cantoni has been providing management and medical consulting services
through Cantoni Consulting, of which Mr. Cantoni is the founder. From October
1994 to June 1998, Mr. Cantoni served as Vice President of Quinton Instruments,
Inc., a manufacturer of medical instrumentation products.
-1-
Mr. Carrubba has served on our Board of Directors since 1989. From
September 1991 to April 1997, Mr. Carrubba served as Executive Vice President
and Chief Technical Officer of Phillips Electronics, N.V., a large consumer
electronics company. Mr. Carrubba is currently retired. Mr. Carrubba serves as a
member of the Board of Directors of Exar Corporation, a manufacturer of
mixed-signal integrated circuits for the communications and video and imaging
markets.
Mr. Hart has served on our Board of Directors since March 2000. Since
September 1990, Mr. Hart served as a Senior Vice President and Chief Technical
Officer of 3Com Corporation, a manufacturer of data network systems.
Dr. Nelsen has served on our Board of Directors since 1983. Dr. Nelsen
retired as a Professor of Surgery at Stanford University School of Medicine in
1988.
Mr. Robertson has served on our Board of Directors since 1994. From 1986 to
1994, Mr. Robertson served as Executive Vice President of the Life Sciences
Sector and Corporate Services Division of 3M, a large diversified company whose
businesses include selling health care products. Mr. Robertson serves as a
member of the Board of Directors of Cardinal Health, Inc., Steris Corporation
and Choice Hotels International. Mr. Robertson is currently retired.
OFFICERS
The names, ages and offices of all of the executive officers of the Company
are set forth below. See the previous page for additional information about Dr.
Couillaud.
NAME OF OFFICER AGE OFFICE HELD
- --------------- --- -----------
Bernard J. Couillaud, PhD.................... 56 President and Chief Executive Officer
Robert J. Quillinan.......................... 53 Executive Vice President and Chief Financial Officer
John R. Ambroseo, PhD........................ 39 Executive Vice President, President and General Manager,
Coherent Photonics Group
Vittorio Fossati-Bellani, PhD................ 53 Executive Vice President, President and General Manager,
Coherent Telecom-Actives Group
James L. Taylor.............................. 51 Executive Vice President, President and General Manager,
Coherent Medical Group
Kevin McCarthy ............................. 44 Executive Vice President and Chief Information Officer
Ronald A. Victor ........................... 56 Executive Vice President, Human Resources
Scott H. Miller ............................ 46 Senior Vice President and General Counsel
There are no family relationships between any executive officer or director
of the Company.
Mr. Quillinan has served as Executive Vice President and Chief Financial
Officer since July 1984. He served as Vice President and Treasurer from March
1982 to July 1984 and as Corporate Controller from April 1980 to March 1982. Mr.
Quillinan received his MS degree in Accounting from Clarkson University and is a
CPA.
Dr. Ambroseo has served as Executive Vice President, President and General
Manager of the Coherent Photonics Group since September 2000. From July 1997 to
September 2000, Dr. Ambroseo served as Executive Vice President, President and
General Manager of the Coherent Laser Group. From March 1997 to September 1997,
Dr. Ambroseo served as Coherent's Scientific Business Unit Manager. From August
1988, when Dr. Ambroseo joined Coherent, until March 1997, he served as a Sales
Engineer, Product Marketing Manager, National Sales Manager and Director of
European Operations. Dr. Ambroseo received his PhD in Chemistry from the
University of Pennsylvania.
-2-
Dr. Fossati-Bellani has served as Executive Vice President, President and
General Manager of the Coherent Telecom-Actives Group since September 2000. From
September 1997 to September 2000, Dr. Fossati-Bellani served as Executive Vice
President, President and General Manager of the Coherent Semiconductor Group.
From May 1992 to September 1997, Dr. Fossati-Bellani served as Coherent's Diode
Laser Business Unit Manager. From December 1979, when he joined Coherent's
Italian office, to May 1992, Dr. Fossati-Bellani served in the capacity of
Scientific Sales Engineer, Product Manager, Director of Marketing, Direct of
Business Development, Scientific Business Unit Manager and Diode Laser Business
Unit Manager for the Coherent Laser Group. Dr. Fossati-Bellani received his PhD
degree in Physics from the University of Milano, Italy.
Mr. Taylor has served as served as Executive Vice President, President and
General Manager of the Coherent Medical Group since February 17, 1999. From
April 1997 to February 1999, Mr. Taylor served as President and Chief Executive
Officer of Andros, Inc., an analytical instruments company headquarter in
Berkeley, California. From January 1995 through April 1997, Mr. Taylor served as
President of the Medical Systems Division of Ohmeda Medical, Inc., a
manufacturer of anesthesia delivery and monitoring systems, and from April 1993
to December 1994 as Vice President, Marketing of the Medical Systems Division of
Ohmeda. Mr. Taylor received a BS degree from US Naval Academy in 1970, a MS
degree from John Hopkins University in 1982 and attended the Stanford Executive
Institute.
Mr. McCarthy has served as Executive Vice President and Chief Information
Officer since May 5, 2000. From August 1999 to May 2000, he was Chief
Information Officer for Unisphere Solutions, Inc., a subsidiary of Siemens AG, a
large diversified industrial company. From September 1993 to July 1999, Mr.
McCarthy was Vice President Information Technology for General Instrument, Inc.
a company that develops and sells interactive video, voice and data products.
Mr. McCarthy received a BSEE degree from Lafayette College in 1978 and an MBA
degree from Wharton School in 1991.
Mr. Victor has served as Executive Vice President of Human Resources since
May 2000. From August 1999 to May 2000, Mr. Victor was Corporate Vice President
of Human Resources. Mr. Victor was Vice President of Human Resources for the
Coherent Medical Group from September 1997 to August 1999. Between November 1996
and September 1997, he was Vice President Human Resources for Netsource
Communication, Inc., an internet advertisement and communication company. From
November 1995 to November 1996, Mr. Victor served as Vice President of Human
Resources for Micronics Computers, Inc., a manufacturer of computer components.
Between January 1982 and September 1995 he was Vice President of Human Resources
of Syntex, a pharmaceutical company. Mr. Victor received a BA degree from
American International College and a MA degree from Springfield College.
Mr. Miller has served as General Counsel to the Company since October 1988
and as Senior Vice President since March 1994. Mr. Miller received a BA degree
in Economics from UCLA and a JD from Stanford Law School.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 2000, its
officers, directors and ten-percent stockholders complied with all applicable
Section 16(a) filing requirements.
-3-
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 $100,000, information concerning compensation awarded to, earned
by or paid for services to the Company in all capacities during the last three
fiscal years (to the extent that such person was the Chief Executive Officer
and/or executive officer, as the case may be, during any part of such fiscal
year):
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- -----------
SECURITIES ALL OTHER
FISCAL UNDERLYING COMPENSATION
NAME YEAR SALARY($) BONUS($) OPTIONS(#) ($)
---- ------ -------- ------- ----------- ------------
Bernard J. Couillaud, PhD..................... 2000 $422,503 $519,459 110,000 $30,064(1)
President and Chief Executive Officer 1999 363,467 302,571 60,000 27,530
1998 337,492 147,578 138,000 23,393
Robert J. Quillinan........................... 2000 $243,279 $202,731 36,000 15,290(2)
Executive Vice President and 1999 222,665 130,662 22,000 15,067
Chief Financial Officer 1998 220,201 65,138 34,000 14,723
John Ambroseo, PhD............................ 2000 267,887 350,074 58,000 12,461(3)
Executive Vice President and 1999 240,292(4) 267,814 30,000 13,714
President and General Manager Coherent 1998 206,898(5) 108,668 36,000 8,672
Photonics Group
Vittorio Fossati-Bellani, PhD................. 2000 $223,275 $217,498 41,000 13,455(6)
Executive Vice President and 1999 189,566 153,813 18,000 11,998
President and General Manager Coherent 1998 178,288 46,669 24,000 11,207
Telecom-Actives Group
James L. Taylor............................... 2000 $272,280 $198,629 21,000 9,317(7)
Executive Vice President and 1999 152,894 97,275 80,000 1,234
President and General Manager Coherent Medical 1998 -- -- -- --
Group
- ---------------------------
(1) Includes $22,192 contributed by the Company under defined contribution
plans and $7,872 in life insurance benefits.
(2) Includes $14,047 contributed by the Company under defined contribution
plans and $1,243 in life insurance benefits.
(3) Includes $11,523 contributed by the Company under defined contribution
plans and $938 in life insurance benefits.
(4) Includes $10,779 related to European assignment.
(5) Includes $19,282 related to European assignment.
(6) Includes $12,131 contributed by the Company under defined contribution
plans and $1,324 in life insurance benefits.
(7) Includes $7,964 contributed by the Company under defined contribution plans
and $1,353 in life insurance benefits.
-4-
STOCK OPTION GRANTS AND EXERCISES
The following table shows, as to the individuals named in the Summary
Compensation Table above, information concerning stock options granted during
the fiscal year ended September 30, 2000.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
----------------------------------------------------
% OF TOTAL POTENTIAL REALIZABLE VALUE
NUMBER OF OPTIONS AT ASSUMED ANNUAL
SECURITIES GRANTED TO RATES OF STOCK PRICE
UNDERLYING EMPLOYEES APPRECIATION FOR
OPTIONS IN FISCAL EXERCISE OPTION TERM(4)
PRICE PER EXPIRATIONS --------------------------
GRANTED(#)(1)(2) YEAR(3) SHARE ($/SH) DATE 5%($) 10% ($)
NAME ---------------- ------- ------------ --------- ----------- -----------
- ----
Bernard J. Couillaud, PhD.... 4,010 .30 $49.875 2/1/06 $68,019 $154,311
105,990 7.93 $49.875 2/1/06 $1,797,831 $4,078,665
Robert J. Quillinan.......... 4,010 .30 $49.875 2/1/06 $68,019 $154,311
31,990 2.39 $49.875 2/1/06 $542,623 $1,231,027
John Ambroseo, PhD.............. 4,010 .30 $49.875 2/1/06 $68,019 $154,311
53,990 4.04 $49.875 2/1/06 $915,793 $2,077,622
Vittorio Fossati-Bellani, PhD 4,010 .30 $49.875 2/1/06 $68,019 $154,311
36,990 2.77 $49.875 2/1/06 $627,434 $1,423,435
James L. Taylor.............. 2,005 .15 $49.875 2/1/06 $34,009 $77,156
18,995 1.42 $49.875 2/1/06 $322,198 $730,958
- ---------------------------
(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 six 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 Compensation Committee at the time of grant. The Board of
Directors may determine when options granted may be exercisable.
(2) The first entry for each individual sets forth the number of options
awarded that are intended to qualify as "incentive stock options" within
the meaning of Section 422 of the Internal Revenue Code of 1986. The second
entry for each individual sets forth the number of options that are
nonstatutory stock options.
(3) The Company granted options to purchase an aggregate of 967,850, to all
employees other than executive officers and granted options to purchase an
aggregate of 324,000 shares to all executive officers as a group (8
persons), during fiscal 2000.
(4) 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.
-5-
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 30, 2000 and the value of unexercised options at
such date.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES VALUE OPTIONS/SARS AT IN-THE-MONEY OPTIONS AT
ACQUIRED ON REALIZED SEPTEMBER 30, 2000 (#)(2) SEPTEMBER 30, 2000 ($)(3)
EXERCISE(#) ($)(1) ----------------------------- ----------------------------
NAME ----------- -------- EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------ -------------- ----------- --------------
Bernard J. Couillaud, PhD..... 12,000 $768,000 144,000 230,000 $7,718,625 $8,665,000
Robert J. Quillinan........... 12,256 $982,723 30,838 78,000 $1,666,121 $2,980,500
John Ambroseo, PhD............ 29,770 $1,104,100 17,230 102,000 $925,125 $3,469,625
Vittorio Fossati-Bellani, PhD. 25,886 $963,025 2,614 73,000 $114,363 $2,508,250
James L. Taylor............... 8,000 $467,900 12,000 81,000 $630,000 $3,530,625
- ---------------------------
(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 30,
2000 of $68.00 (as reported by Nasdaq National Market) and the exercise
price.
DIRECTOR COMPENSATION
In fiscal year 2000, members of the Board of Directors who were not
employees of the Company received $16,000 plus $1,500 per board meeting attended
plus $750 per committee meeting attended and were reimbursed for their expenses
incurred in attending such meetings.
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 the amendment was
approved by the stockholders on March 20, 1996. The Directors' Option Plan
terminated on December 8, 1999 and no further options will be granted under this
plan. The Directors' Option Plan provided for the automatic and
non-discretionary grant of a non-statutory stock options to purchase 20,000
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 became a director. Thereafter, during the term of the Directors' Option
Plan, each non-employee director was automatically granted a non-statutory stock
option to purchase 5,000 shares of Common Stock on the date of and immediately
following each Annual Meeting of Stockholders at which such non-employee
director was reelected to serve on the Board of Directors, if, on such date, he
or she had served on the Board for at least three months. Such plan provided
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 each have been granted options to purchase
65,000 shares of the Company's Common Stock under the Directors' Option Plan at
a weighted average exercise price of $11.62. One non-employee director has been
granted options to purchase 45,000 shares of the Company's Common Stock under
such plan at a weighted average exercise price of $13.73 per share. One
non-employee director has been granted options to purchase 30,000 shares of the
Company's Common Stock under such plan at a weighted average exercise price of
$21.33 per
-6-
share. As of January 9, 2001, options to purchase 295,000 shares of the
Company's Common Stock had been granted under the Directors' Option Plan.
The Company's 1998 Directors' Stock Option Plan (the "1998 Directors'
Plan") was adopted by the Board of Directors on November 24, 1998 and was
approved by the stockholders on March 17, 1999. 100,000 shares of Common Stock
were reserved for issuance thereunder. Under the terms of the 1998 Directors'
Plan, the number of shares reserved for issuance thereunder is increased each
year by the number of shares necessary to restore the total number of shares
reserved to 100,000 shares. The 1998 Directors' Plan replaced the Directors'
Option Plan which expired on December 8, 1999. Like its predecessor, the 1998
Directors' Plan provides for the automatic and non-discretionary grant of a
non-statutory stock options to purchase 20,000 shares of the Company's Common
Stock to each non-employee director on the date on which such person becomes a
director. Thereafter, each non-employee director will be automatically granted a
non-statutory stock option to purchase 5,000 shares of Common Stock on the date
of and immediately following each Annual Meeting of Stockholders at which such
non-employee director is reelected 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.
Five non-employee directors each have been granted options to purchase
5,000 shares of the Company's Common Stock under such plan at a weighted average
exercise price of $75.75. One non-employee director has been granted options to
purchase 20,000 shares of the Company's Common Stock under such plan at a
weighted average exercise price of $75.75 per share. As of January 9, 2001,
options had been granted to purchase 45,000 shares of the Company's Common Stock
under the 1998 Directors' Plan.
The following table shows options granted to each director of the Company
during the last fiscal year. All options were granted under the 1998 Directors'
Plan, except for the options granted to Mr. Couillaud, which were granted under
the Company's 1995 Stock Plan.
OPTION GRANTS TO DIRECTORS DURING LAST FISCAL YEAR
NAME NUMBER OF OPTIONS
---- ---------------------
Bernard J. Couillaud.................................... 110,000
Henry E. Gautier........................................ 5,000
Charles W. Cantoni...................................... 5,000
Frank P. Carruba........................................ 5,000
John H. Hart............................................ 20,000
Thomas Sloan Nelsen, MD................................. 5,000
Jerry E. Robertson..................................... 5,000
OPTION EXERCISES IN LAST FISCAL YEAR BY DIRECTORS
The following table shows, as to each non-employee director, information
concerning options exercised under the Directors' Option Plan during the last
fiscal year. No options granted under the 1998 Directors' Plan were exercise
during the last fiscal year.
NAME SHARES ACQUIRED ON EXERCISE VALUE REALIZED(1)
- ---- -------------------------- -----------------
Charles W. Cantoni..................................... 8,000 $256,188
Frank Carrubba......................................... 5,000 $313,438
Thomas Sloan Nelsen, MD................................ 5,000 $189,750
Jerry E. Robertson..................................... 10,000 $658,125
- ---------------------------
-7-
(1) The value realized is calculated based on market value less exercise price.
The market value of underlying securities is based on the closing price of
the Company's Common Stock as reported by the NASDAQ National Market on the
date of exercise.
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
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 30, 2000, 108,425 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 4,575,000 shares of Common Stock have been reserved under the Purchase
Plan, and as of the end of fiscal year 2000, 1,682,754 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 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. Payroll deductions may
not exceed 10% of an employee's compensation. The Purchase Plan provides for two
offerings during each fiscal year, each having a duration of twelve months.
-8-
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
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.
VARIABLE COMPENSATION PLAN. Each executive officer participates in the Variable
Compensation Plan which provides for the payment of a quarterly amount
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.
STOCK OPTIONS. The Committee believes that stock options provide additional
incentive to officers to work towards maximizing stockholder value. 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
officer's 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 the Chief
Executive Officer's 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
fiscal 2000, Mr. Couillaud was granted options to purchase 110,000 shares with
an exercise price equal to the fair market value at date of grant ($49.875 per
share). Options to purchase 72,000 shares become exercisable at the end of three
years, and options to purchase the remaining 38,000 shares become exercisable at
the end of four years. The Committee believes that the quantity of shares
granted to Mr. 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 plans to take actions, as necessary, to insure that its
stock option plans and executive annual cash bonus plans qualify for exclusion.
Respectfully submitted by:
Jerry E. Robertson
Henry E.Gauthier
John H. Hart
COMPANY'S 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 29, 1995 through September 30, 2000 comparing
the return on the Company's Common Stock with the Standard & Poors 500 Stock
Index and the Standard & Poors Small Cap 600 Stock 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
S&P SMALL CAP
COHERENT INC. S&P 500 INDEX 600 INDEX
---------------- --------------- ---------------
9/29/95 100.00 100.00 100.00
9/28/96 96.5753 117.6075 114.1652
9/30/97 151.7123 162.0917 154.9810
9/26/98 51.1986 174.0234 125.0786
10/2/99 122.2603 219.4880 114.7885
9/30/00 372.6028 245.8052 179.7865
The information contained above under the captions "Report of the
Compensation Committee of the Board of Directors " and "Company's Stock Price
Performance" shall not be deemed to be "soliciting material" or to be "filed"
with the Securities and Exchange Commission, nor shall such information be
incorporated by reference into any future filing under the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as amended, except to
the extent that the Company specifically incorporates it by reference into such
filing.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors is composed of Mssrs.
Carrubba, Cantoni, Nelsen and Robertson. During the last fiscal year, the
Company paid Dr. Thomas Nelsen $22,500 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
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Management Transition Agreement pursuant to which the Company agreed to provide
him with benefits under the Company's medical, dental and life insurance plan.
Except as set forth above, none of the members of the Compensation
Committee is currently or has been, at any time since the beginning of the last
fiscal year, an officer or employee of the Company. No member of the
Compensation Committee serves as a member of the board of directors or
compensation committee of any entity that has one or more executive officers
serving as a member of the Company's Board of Directors or Compensation
committee.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------
The following table sets forth as of January 9, 2001 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.
NUMBER OF PERCENT
NAME AND ADDRESS SHARES(1) OF TOTAL
- ---------------- ----------- ----------
Oppenheimer Funds, Inc. (2)...................................................... 2,960,100 10.83%
Two World Trade Center, 31st Floor
New York, NY 10048
PRIMECAP Management (3).......................................................... 2,420,000 8.85%
225 S. Lake Ave, #400
Pasadena, CA 91101
Franklin Advisers, Inc. (4)...................................................... 2,358,706 8.63%
777 Mariners Blvd.
San Mateo, CA 94404
Bernard, J. Couillaud, PhD (5)................................................... 192,618 *
Henry E. Gauthier (6)............................................................ 102,130 *
Robert J. Quillinan (7).......................................................... 70,694 *
John Ambroseo, PhD (8)........................................................... 37,855 *
Vittorio Fossati-Bellani, PhD (9) ............................................... 33,824 *
James Taylor (10)................................................................ 32,861 *
Frank Carrubba (11).............................................................. 25,000 *
Thomas Sloan Nelsen, MD (12) .................................................... 20,500 *
Jerry Robertson (13)............................................................ 20,000 *
Charles W. Cantoni (14).......................................................... 12,000 *
John Hart 0 *
All directors and executive officers as
a group (14 persons) (15).................................................... 605,228 2.19%
- ---------------------------
* 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, each share of Coherent Common Stock subject to
options held by that person that will be exercisable on or before March 10,
2001, are
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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 on January 9, 2001 as being held
by Opennhiemer funds, Inc. as of September 30, 2000.
(3) Represents shares reported by Carson Group on January 9, 2001 as being held
by PRIMECAP Management as of September 30, 2000.
(4) Represents shares reported by Carson Group on January 9, 2001 as being held
by Franklin Advisers, Inc. as of September 30, 2000.
(5) Includes 144,000 shares issuable upon exercise of options held by Dr.
Couillaud which are currently exercisable or will become exercisable within
60 days of January 9, 2001.
(6) Includes 59,000 shares issuable upon exercise of options held by Mr.
Gauthier which are currently exercisable or will become exercisable within
60 days of January 9, 2001.
(7) Includes 39,744 shares issuable upon exercise of options held by Mr.
Quillinan which are currently exercisable or will become exercisable within
60 days of January 9, 2001.
(8) Includes 17,230 shares issuable upon exercise of options held by Dr.
Ambroseo which are currently exercisable or will become exercisable within
60 days of January 9, 2001.
(9) Includes 2,614 shares issuable upon exercise of options held by Dr.
Fossati-Bellani which are currently exercisable or will become exercisable
within 60 days of January 9, 2001.
(10) Includes 32,000 shares issuable upon exercise of options held by Mr. Taylor
which are currently exercisable or will become exercisable within 60 days
of January 9, 2001.
(11) 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 January 9, 2001.
(12) 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 January 9, 2001.
(13) Includes 5,000 shares issuable upon exercise of options held by Mr.
Robertson which are currently exercisable or will become exercisable within
60 days of January 9, 2001.
(14) Includes 7,000 shares issuable upon exercise of options held by Mr. Cantoni
which are currently exercisable or will become exercisable within 60 days
of January 9, 2001.
(15) Includes an aggregate of 335,588 options which are currently exercisable or
will become exercisable within 60 days of January 9, 2001.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------
Since the beginning of the Company's last fiscal year, there has not been
nor is there currently proposed any transaction or series of similar
transactions to which the Company was or is to be a party in which the amount
involved exceeds $60,000 and in which any director, executive officer, holder of
more than 5% of the common stock of the Company or any member of the immediate
family of any of the foregoing persons had or will have a direct or indirect
material interest other than the transactions described below.
LOANS TO EXECUTIVE OFFICERS
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.
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LARGEST
AMOUNT BALANCE AT
OUTSTANDING INTEREST MATURITY OUTSTANDING SEPTEMBER 30,
NAME LOANS RATES DATE(S) DURING 2000 2000
- ---- ----------- ------- -------- ----------- -------------
Scott Miller $365,125 4.83-7.1% 3/1/04-5/24/05 $400,125 $400,125
Robert Quillinan $99,992 6.8% 2/28/05 $212,250 $99,992
Bernard Couillaud, PhD $76,500 4.83-6.8% 3/1/04-3/15/05 $160,500 $160,500
Vittorio Fossati-Bellani, PhD $411,375 5.96-6.71% 8/31/04-4/28/05 $504,188 $504,188
John Ambroseo $158,688 6.21% 1/12/05 $158,688 $158,688
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 "Executive Compensation -- Compensation Committee Interlocks and
Insider Participation" for a description of Dr. Nelsen's consulting arrangement
with the Company.
See "Executive Compensation -- Director Compensation" for a description of
certain stock option grants to and exercises by directors of the Company.
INDEMNIFICATION
The Company has entered into indemnification agreements with each of its
directors and officers. Such indemnification agreements require the Company to
indemnify its directors and officers to the fullest extent permitted by Delaware
law.
CONFLICT OF INTEREST POLICY
The Company believes that all transactions with affiliates described above
were made on terms no less favorable to the Company than could have been
obtained from unaffiliated third parties. The Company's policy is to require
that a majority of the independent and disinterested outside directors on the
Board approve all future transactions between Coherent and its officers,
directors, principal stockholders and their affiliates. Such transactions will
continue to be on terms no less favorable to the Company than it could obtain
from unaffiliated third parties.
All future transactions, including loans, between the Company and its
officers, directors, principal stockholders and their affiliates will be
approved by a majority of the Board, including a majority of the independent and
disinterested outside directors, and will continue to be on terms no less
favorable to the Company than could be obtained from unaffiliated third parties.
-13-
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 29th day of January 2001.
COHERENT, INC.
By: /s/ ROBERT J. QUILLINAN
-----------------------------------------
Robert J. Quillinan
Executive Vice President &
Chief Financial 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 29, 2001 on behalf of the Registrant and in the
capacities and on the dates indicated:
SIGNATURES TITLE
---------- -----
* Director, President & Chief Executive Officer
- -------------------------------------------------- (Principal Executive Officer)
Bernard J. Couillaud
/S/ ROBERT J. QUILLINAN Executive Vice President & Chief Financial Officer
- -------------------------------------------------- (Principal Financial Officer)
Robert J. Quillinan
* Director, Chairman of the Board
- --------------------------------------------------
Henry E. Gauthier
* Director
- --------------------------------------------------
Charles W. Cantoni
* Director
- --------------------------------------------------
Frank Carrubba
* Director
- --------------------------------------------------
John Hart
* Director
- --------------------------------------------------
Thomas Sloan Nelsen
* Director
- --------------------------------------------------
Jerry E. Robertson
* By: /s/Robert J. Quillinan
Robert J. Quillinan
Attorney-in-Fact
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