8-KLeadership ChangesExhibits & Filings

COHERENT CORP. 8-K Report, Executive Changes (Jun 6, 2024)

Filed June 6, 2024For Securities:COHR

Summary

Coherent Corp. (COHR) filed an 8-K on June 6, 2024, to disclose the award of Restricted Stock Units (RSUs) and Performance Stock Units (PSUs) to its new Chief Executive Officer, James R. Anderson. These awards, effective June 3, 2024, are intended as a material inducement for Mr. Anderson to join the company and are detailed in his offer letter agreement. The RSU award covers 147,214 shares and vests over three years, while the PSU award targets 694,007 shares with vesting contingent on the company's Total Shareholder Return (TSR) relative to the S&P Composite 1500—Electronic Equipment, Instruments & Components index over a period ending June 30, 2027. The PSU payout structure is performance-based, ranging from no payout below the 25th percentile to a 250% payout at or above the 75th percentile of relative TSR performance. However, payouts above target are capped at 100% if the company's absolute TSR is negative. Both awards include standard provisions for vesting acceleration upon termination of employment or a change in control, with specific, more favorable terms for PSUs in the event of a Qualifying Termination during a Non-CIC Period. The company also issued a press release on June 5, 2024, regarding these awards, in compliance with NYSE Listing Rules.

Key Highlights

  • 1New CEO, James R. Anderson, received significant RSU and PSU awards as an inducement to join Coherent Corp.
  • 2RSU award includes 147,214 shares, vesting in three equal annual installments over three years, subject to continued employment.
  • 3PSU award targets 694,007 shares, with vesting tied to Coherent's Total Shareholder Return (TSR) performance relative to a relevant industry index through June 30, 2027.
  • 4PSU payout is tiered based on percentile rank of relative TSR, with a maximum payout of 250% at the 75th percentile or higher.
  • 5A cap of 100% payout for PSUs above target applies if the company's absolute TSR is negative.
  • 6Awards include provisions for vesting acceleration in cases of termination of employment or change in control, with specific terms for 'Qualifying Terminations'.
  • 7The company issued a press release on June 5, 2024, regarding these executive compensation arrangements, as required by NYSE rules.

Frequently Asked Questions

The 8-K filing does not provide a specific dollar value for the RSU and PSU awards. The value would depend on the Company's stock price at the time of grant and the actual performance achieved for the PSUs. The RSUs cover 147,214 shares and the target for PSUs is 694,007 shares.

The Performance Stock Units (PSUs) are tied to Coherent Corp.'s Total Shareholder Return (TSR) performance over a period ending June 30, 2027. This performance is measured relative to the TSR of the S&P Composite 1500—Electronic Equipment, Instruments & Components index. The payout ranges from 0% to 250% of the target based on achieving certain percentiles in relative TSR.

Yes, while higher relative TSR performance can lead to payouts exceeding 100% of the target, these payouts are capped at 100% if Coherent Corp.'s absolute TSR for the performance period is negative. This means that even if the company outperforms its peers, a significant decline in its own stock price could limit the payout.

The RSUs and PSUs include provisions for vesting treatment upon termination of employment or a 'change in control,' consistent with the Company's standard terms for executive officers. For PSUs, in the event of a 'Qualifying Termination' during a 'Non-CIC Period,' the PSUs will be determined based on relative TSR performance up to the termination date and paid out on a prorated basis, adjusted for an additional 12 months of service, at the greater of target or actual performance.