EXHIBIT 10.35
COHERENT, INC.
MANAGEMENT TRANSITION AGREEMENT
THIS AGREEMENT is effective as of June 30, 1996 (the "Effective Date"), by
and between Coherent, Inc. ("Coherent") and Xxxxx X. Xxxxxxxx ("Xxxxxxxx").
RECITALS
X. Xxxxxxxx is employed by Coherent and is a member of the board of
directors of Coherent.
B. Effective June 30, 1997, Xxxxxxxx desires to voluntarily terminate his
employment with Coherent.
X. Xxxxxxxx will remain a member of the board of directors of Coherent.
D. Coherent desires to retain Xxxxxxxx'x services as an employee for the
period commencing June 30, 1996 and ending June 30, 1997 (the "Employment
Term"), and as a consultant for the period commencing with the day immediately
following the Employment Term and ending two (2) years thereafter (the
"Consulting Term"), and to set forth the terms upon which it will pay for
Xxxxxxxx'x health benefits during his lifetime, upon the terms set forth herein.
X. Xxxxxxxx is willing to provide services as an employee and as a
consultant pursuant to this Agreement.
X. Xxxxxxxx is willing to agree not to compete with Coherent during the
Employment Term and Consultant Term.
NOW THEREFORE, the parties agree as follows:
1. TERM. The term of this Agreement shall commence on the Effective Date
and shall continue until all the payments due and all other obligations of the
parties hereunder have been made or satisfied; provided, however, that
notwithstanding any other provision of this Agreement, Xxxxxxxx'x and Coherent's
representations, obligations, covenants and duties under the Employee Agreement
by and between Xxxxxxxx and Coherent dated January 23, 1973, shall survive any
termination of this Agreement.
2. DUTIES OF XXXXXXXX.
(a) EMPLOYMENT TERM. Except as provided otherwise herein, during the
Employment Term Xxxxxxxx agrees to continue to serve as an employee of Coherent
and as a member of the board of directors of Coherent, subject to his re-
election as a director by Coherent's shareholders. During the Employment Term,
Xxxxxxxx'x compensation and other benefits shall be as provided in Section 3(a).
(b) CONSULTING TERM. Except as otherwise provided herein, during the
Consulting Term, Xxxxxxxx agrees to perform services as a consultant to Coherent
as is reasonably requested
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by Coherent, and to continue to serve as a member of the board of directors of
Coherent subject to his re-election as a director by Coherent's shareholders.
Xxxxxxxx and Coherent both agree and acknowledge that there shall be no minimum
fees or hours during the Consulting Term and that all scheduling and payments of
fees will be made through the offices of Coherent's Chief Financial Officer.
Nothing in this Agreement shall in any way be construed to constitute Xxxxxxxx
as an agent, employee or representative of Coherent during the Consulting Term,
and Xxxxxxxx shall perform all services hereunder during the Consulting Term as
an independent contractor. Xxxxxxxx acknowledges and agrees that Xxxxxxxx is
obligated to report as income all compensation received by Gauthier pursuant to
this Agreement during the Consulting Term, and Xxxxxxxx agrees to and
acknowledges the obligation to pay all self-employment and other taxes thereon.
Xxxxxxxx further agrees to indemnify Coherent and hold it harmless to the extent
of any obligation imposed on Coherent during the Consulting Term to pay in
withholding taxes or similar items. During the Consulting Term, Xxxxxxxx'x
compensation and other benefits shall be as provided in Section 3(b).
3. COMPENSATION.
(a) EMPLOYMENT TERM.
(i) CASH COMPENSATION. Through the Employment Term, Xxxxxxxx
shall be paid his current base salary in accordance with Coherent's standard
payroll practices. Xxxxxxxx shall also receive, promptly following the
termination of the Employment Term, full payment for all accrued wages,
including, but not limited to, unused vacation days to which he is entitled
pursuant to Coherent policy. Xxxxxxxx shall not be entitled to any directors'
fees during the Employment Term.
(ii) BENEFITS. Through the Employment Term, Xxxxxxxx shall be
eligible to participate in the employee benefit plans and executive compensation
programs maintained by Coherent applicable to other key executives of Coherent,
including (without limitation) retirement plans, savings or profit sharing
plans, stock option, incentive or other bonus plans, life, disability, health,
accident and other insurance programs, paid vacations, and similar plans or
programs, subject, in each case, to the generally applicable terms and
conditions of the applicable plan or program in question and to the
determination of any committee administering such plan or program; provided,
however, that Xxxxxxxx'x participation in any Coherent incentive or bonus plan
shall terminate after payment of any amount earned through the third quarter of
Coherent's 1996 fiscal year. Coherent will make cc:mail and voice mail available
to Xxxxxxxx for such period of time as is mutually agreed upon by Xxxxxxxx and
Coherent's Chief Financial Officer.
(iii) COMPANY CAR. During the Employment Term, Xxxxxxxx shall
have the continued use of the 1996 BMW 750i provided to Xxxxxxxx by Coherent
(the "Company Car"). Xxxxxxxx authorizes Coherent to make monthly payroll
deductions equal to $250 during the Employment Term in connection with
Xxxxxxxx'x use of the Company Car. On July 1, 1997 Xxxxxxxx shall be obligated
to purchase from Coherent, and Coherent shall be obligated to sell to Xxxxxxxx,
the Company car for $46,005.54.
(b) CONSULTING TERM. Through the Consulting Term, Xxxxxxxx shall be
paid for his consulting services at a rate of $175.00 per hour, payable (to the
extent earned) no less frequently than twice per month. Notwithstanding the
foregoing, Xxxxxxxx shall be paid a $1,000 retainer for his consulting services
on the first and second anniversary of the Effective Date of this Agreement. In
addition, Xxxxxxxx shall be entitled to such directors' fees for his services as
a director as are customarily paid by Coherent to its directors from time-to-
time.
(c) BENEFITS. For the rest of his life, at Coherent's cost and
expense, Xxxxxxxx shall receive Coherent's Tier II Executive Group Medical,
Dental and Life Insurance (the "Coverage") under the following conditions:
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(i) Any cash contribution required from Coherent officers for
similar coverage will be invoiced by Coherent by December 31 of each year, and
must be paid by Xxxxxxxx no later than January 30 of the following year.
Failure to make such payment on time or within a thirty (30) day notice period
will be grounds for termination of the Coverage.
(ii) The Coverage shall immediately terminate on December 31st
of the year of Xxxxxxxx'x death.
(iii) If Xxxxxxxx accepts medical, dental and life insurance
coverage by another entity, the Coverage shall become secondary to that offered
by the new entity.
(iv) If Xxxxxxxx violates any provision of Section 5 during the
Employment Term, the Coverage shall immediately terminate.
(v) If Coherent changes or reduces the medical, dental or life
insurance coverage offered to its officers generally, such changes or reductions
shall be applicable to the Coverage provided Xxxxxxxx.
(vi) Notwithstanding any provision in the Coverage to the
contrary, the Life Insurance to be provided hereunder shall not be less than
that currently provided Xxxxxxxx, as an officer/employee of Coherent.
(vii) If for any reason Coherent is unable to maintain the the
Coverage for Xxxxxxxx through its regular insurers, Coherent shall provide
equivalent benefits through other qualified insurers acceptable to Xxxxxxxx.
(d) STOCK OPTIONS. Xxxxxxxx'x options to purchase Coherent stock
shall be governed by the provisions of the applicable option agreements by and
between Xxxxxxxx and Coherent, and the vesting, post-termination exercisability,
and other provisions of such options shall not be affected by this Agreement.
If Xxxxxxxx violates any provision of Section 5 during the Consulting Term, the
consulting portion of this Agreement shall terminate, in which case Xxxxxxxx
shall have thirty (30) days in which to exercise any vested stock options.
(e) COMPANY EQUIPMENT. Coherent acknowledges that Xxxxxxxx is in
possession of certain Coherent equipment consisting of a 280 Duo Power Mac with
accessories and a Motorola Microtech cellular telephone. Coherent acknowledges
that such equipment was given to Xxxxxxxx on June 30, 1996.
(f) IMPUTED INCOME. XXXXXXXX ACKNOWLEDGES AND AGREES THAT HE SHALL
BE SOLELY RESPONSIBLE FOR ALL TAXES ASSOCIATED WITH ANY INCOME IMPUTED TO
XXXXXXXX AS A RESULT OF BENEFITS PROVIDED UNDER THIS AGREEMENT.
4. TERMINATION.
(a) TERMINATION BY XXXXXXXX.
(i) Xxxxxxxx may voluntarily terminate this Agreement upon
ninety (90) days written notice to Coherent. Upon the effectiveness of such
termination, Xxxxxxxx shall immediately cease to accrue any benefits hereunder.
(ii) Upon Xxxxxxxx'x death during the term of this Agreement,
Xxxxxxxx shall immediately cease to accrue any benefits hereunder, except that
the Coverage shall continue to
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the end of the year of Xxxxxxxx'x death. In such event, any compensation
already accrued by Xxxxxxxx shall be paid to Xxxxxxxx'x estate in accordance
with his testamentary disposition or the laws of descent and distribution.
(b) TERMINATION BY COHERENT.
(i) Coherent may terminate this Agreement in the event Xxxxxxxx
violates the provisions of Section 5 hereof during the Employment Term. A
violation of Section 5 during the Consulting Term shall not be sufficient cause
for Coherent to terminate this Agreement, but would be sufficient to permit
Coherent to terminate the consulting portion hereof (in which case Xxxxxxxx
would have 30 days from the date of such termination to exercise any vested
stock options; any unvested stock options shall expire).
(ii) This Agreement shall not be terminated without reasonable
notice to Xxxxxxxx setting forth the facts on which the claimed violation of
Section 5 is based, and providing an opportunity for Xxxxxxxx, together with
his counsel, if any, to be heard before the board of directors of Coherent.
5. COVENANT NOT TO COMPETE OR SOLICIT.
(a) COVENANT NOT TO COMPETE. Until expiration of the Consulting
Term, Xxxxxxxx will not directly or indirectly engage in (whether as an
employee, consultant, proprietor, partner, director or otherwise), or have any
ownership interest in, or participate in the financing, operation, management or
control of, any person, firm, corporation or business that engages in a
"Restricted Business" in a "Restricted Territory" as such terms are defined
below. It is agreed, however, that ownership of no more than 2% of the
outstanding voting stock of a publicly traded corporation shall not constitute a
violation of this provision.
(b) COVENANT NOT TO SOLICIT. Until expiration of the Consulting
Term, Xxxxxxxx will not directly or indirectly:
(i) solicit, encourage or take any action which is intended to
induce any other employee, independent contractor, customer or supplier of
Coherent or any affiliated corporation to terminate his or its relationship with
Coherent or any affiliated corporation, or
(ii) interfere in any manner with the contractual or employment
relationship between Coherent or any affiliated corporation and any such
employee, independent contractor, customer or supplier of Coherent or any
affiliated corporation.
(c) REPRESENTATIONS. The parties intend that the covenants contained
in Sections 5(a) and (b) shall be construed as a series of separate covenants,
one for each county, city, state, territory, jurisdiction, country or analogous
entity of the Restricted Territory. Except for geographic coverage, each such
separate covenant shall be deemed identical. Xxxxxxxx represents that he is
familiar with the covenants not to compete and not to solicit contained herein,
and is fully aware of his obligations hereunder, including, without limitation,
the reasonableness of the length of time, scope and geographic coverage of these
covenants.
(d) DEFINITIONS. As used in this Section 5, the terms listed below
shall have the following meanings:
(i) "Restricted Business" means any business that manufactures
or sells laser or optical components for lasers which would compete against
Coherent's current or planned products, or any business that manufactures or
sells medical devices whose primary use is a competitive alternative to lasers.
Prior to engaging in any activities which might be deemed a
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"Restricted Business", Xxxxxxxx may seek approval from Coherent. Whether or not
such approval is sought, Coherent shall be reasonable in determining whether or
not such activity constitutes a Restricted Business.
(ii) "Restricted Territory" means any county, city, state,
territory, jurisdiction, country or analogous entity in which Coherent currently
conducts its business or may in the future conduct its business.
6. RELEASE OF CLAIMS.
(a) GENERAL. As a condition of entering into this Agreement,
Xxxxxxxx agrees that the consideration that he receives hereunder constitutes
settlement in full of all outstanding obligations owed to Xxxxxxxx by Coherent.
Xxxxxxxx, on behalf of himself and his heirs, executors, family members and
assigns, hereby fully and forever releases Coherent and its officers, directors,
employees, investors, shareholders, administrators, predecessor corporations,
successor and assigns, of and from any claim, duty, obligation or cause of
action relating to any matters of any kind whether presently known or unknown,
suspected or unsuspected, that any of them may possess arising from any
omissions, acts or facts that have occurred up until and including the Effective
Date of this Agreement.
Xxxxxxxx agrees that the release set forth in this section shall be and
remain in effect in all respects as a complete general release as to the matters
released and shall survive the termination of this Agreement, but does not
extend to any obligations incurred under this Agreement.
(b) CIVIL CODE SECTION 1542. Xxxxxxxx acknowledges that he has had
the opportunity to discuss this Agreement with his legal counsel and is familiar
with the provisions or California Civil Code Section 1542, which provides as
follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
Xxxxxxxx, being aware of said Code section, agrees to expressly waive any
rights he may have thereunder, as well as under any other statute or common law
principles of similar effect.
(c) AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967. Xxxxxxxx
understands and agrees that he: (i) Has had a full twenty-one (21) days within
which to consider this Agreement before executing it; (ii) Has carefully read
and fully understands all of these provisions of this Agreement; (iii) Is,
through this Agreement, releasing Coherent from any and all claims he may have
against Coherent; (iv) Knowingly and voluntarily agrees to all of the terms set
forth in this Agreement; (v) Knowingly and voluntarily intends to be legally
bound by the same; (vi) Has a full seven (7) days following the execution of
this Agreement to revoke this Agreement and has been and hereby is advised in
writing that this Agreement shall not become effective or enforceable until the
revocation period has expired; and (vii) Understands that rights or claims under
the Age Discrimination in Employment Act of 1967 (29 U.S.C. Section 621, ET
SEQ.) that may arise after the date this Agreement is executed are not waived.
7. ARBITRATION.
(a) Xxxxxxxx agrees that any dispute or controversy arising out of,
relating to, or in connection with this Agreement, or the interpretation,
validity, construction, performance, breach or termination thereof, shall be
finally settled by binding arbitration t be held in San Francisco
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County, California under the Commercial Arbitration Rules, supplemented by the
Supplemental Procedures for Large Complex Disputes, of the American Arbitration
Association as then in effect (the "Rules"). The arbitrator(s) may grant
injunctions or other relief in such dispute or controversy. The decision of the
arbitrator(s) shall be final, conclusive and binding on the parties to the
arbitration, and judgment may be entered on the decision of the arbitrator(s) in
any court having jurisdiction.
(b) The arbitrator(s) shall apply California law to the merits of any
dispute or claim, without reference to rules of conflicts of law, and the
arbitration proceedings shall be governed by federal arbitration law and by the
Rules, without reference to state arbitration law.
(c) The parties shall each pay one-half of the costs and expenses of
such arbitration, and each party shall pay its own counsel fees and expenses.
(d) XXXXXXXX HAS READ AND UNDERSTANDS THIS SECTION 7, WHICH DISCUSSES
ARBITRATION. XXXXXXXX UNDERSTANDS THAT BY SIGNING THIS AGREEMENT XXXXXXXX
AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH
THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE,
BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT THIS ARBITRATION
CLAUSE CONSTITUTES A WAIVER OF XXXXXXXX'X RIGHT TO A JURY TRIAL AND RELATES TO
THE RESOLUTION OF ALL DISPUTES RELATING TO XXXXXXXX'X RELATIONSHIP WITH
COHERENT.
8. GENERAL PROVISIONS.
(a) ENTIRE AGREEMENT. This Agreement and any written Coherent plan
or written agreement between Xxxxxxxx and Coherent that are referenced herein,
represent the entire agreement and understanding between the parties as to the
subject matter hereof, and supersede all prior or contemporaneous agreements,
whether written or oral. No waiver, alternation, or modification, if any, of
the provisions of this Agreement shall be binding unless in writing and signed
by duly authorized representatives of the parties hereto.
(b) SEVERABILITY. If one or more of the provisions in this Agreement
are deemed void by law, then the remaining provisions will continue in full
force and effect.
(c) SUCCESSORS. Any successor to Coherent (whether direct or
indirect and whether by purchase, lease, merger, consolidation, liquidation or
otherwise) to all or substantially all of Coherent's business and/or assets
shall assume the obligations under this Agreement and agree expressly to perform
the obligations under this Agreement in the same manner and to the same extent
as Coherent would be required to perform such obligations in the absence of a
succession. For all purposes under this Agreement, the term "Coherent" shall
include any successor to Coherent's business and/or assets that agrees to assume
Coherent's obligations hereunder or which becomes bound by the terms of this
Agreement by operation of law. The terms of this Agreement and all rights of
Xxxxxxxx hereunder shall inure to the benefit of, and be enforceable by,
Xxxxxxxx'x personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
(d) CONFLICTING OBLIGATIONS. Xxxxxxxx represents that he has not
entered into, and will not enter into, any oral or written agreement in conflict
herewith.
(e) COUNTERPARTS. This Agreement may be executed by either of the
parties hereto in counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.
COHERENT, INC. XXXXX X. XXXXXXXX
By:
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Title: Date:
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Date:
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