8-KMaterial Agreements

COHERENT CORP. 8-K Report, Material Agreement (Sep 7, 2006)

Filed September 7, 2006For Securities:COHR

Summary

This Form 8-K filing by II-VI Incorporated (now Coherent Corp.) reports on the Compensation Committee's decision on August 31, 2006, to grant Performance Share Awards to named executive officers under the Company's 2005 Omnibus Incentive Plan. These awards are tied to specific consolidated revenue and consolidated net cash provided by operating activities goals for an eighteen-month period ending December 31, 2007. The structure allows for payouts ranging from 50% up to 150% of the target award based on achieving between 80% and 120% (or more) of the performance goals, with a maximum payout of 150% for achieving 120% or greater performance. Investors should note that these awards are designed to incentivize executive performance in key financial metrics over an extended period. The payout for revenue and cash flow awards are independent of each other. The filing details the specific target award amounts for several key executives, including the CEO and CFO, providing transparency into the company's executive compensation strategy and its alignment with financial performance objectives.

Key Highlights

  • 1II-VI Incorporated granted Performance Share Awards to named executive officers on August 31, 2006.
  • 2Awards are part of the 2005 Omnibus Incentive Plan.
  • 3Performance is measured over an eighteen-month period ending December 31, 2007.
  • 4Payouts are based on achieving consolidated revenue and consolidated net cash from operating activities goals.
  • 5Payouts can range from 50% to 150% of target awards based on performance levels (80%-120%+).
  • 6Revenue and Cash Flow awards are independent of each other.
  • 7Specific target award amounts are listed for key executives, including Carl J. Johnson (CEO) and Craig A. Creaturo (CFO).

Frequently Asked Questions

The primary purpose of these Performance Share Awards is to incentivize named executive officers to achieve specific financial performance goals, namely consolidated revenue and consolidated net cash provided by operating activities, over an eighteen-month period. This aligns executive compensation with the company's financial performance and long-term objectives.

The payout levels are performance-dependent. Achieving between 80% and 99.99% of the performance goal earns between 50% and 99.99% of the target award. Achieving 100% of the goal earns 100%. Performance exceeding 100% results in escalating payouts, with achieving 120% or greater earning 150% of the target award. This structure rewards exceptional performance.

Performance is measured against two independent goals: consolidated revenue and consolidated net cash provided by operating activities. The payouts for revenue awards are not contingent on the payout of cash flow awards, and vice versa, allowing for separate achievement and reward.

Key executives receiving awards include Carl J. Johnson (CEO) and Francis J. Kramer, each with a target of 6,875 shares for both Revenue and Cash Flow awards. Craig A. Creaturo (CFO) and Vincent D. Mattera, Jr. each have a target of 1,500 shares for both award types. Herman E. Reedy and James Martinelli each have a target of 1,000 shares for both award types.