California Transparency in Supply Chains Act Disclosure

The California Transparency in Supply Chains Act of 2010 (“TSCA” or

“SB 657”) requires Coherent to provide certain information on its
website, which is set forth herein:

The disclosure described in subdivision (a) shall, at a minimum,
disclose to what extent, if any, that the manufacturer does each of the

(1) Engages in verification of product supply chains to
evaluate and address risks of human trafficking and slavery. The
disclosure shall specify if the verification was not conducted by a
third party.

Coherent maintains a code of conduct for our suppliers, which is
incorporated by reference into our purchase orders, supply agreements
and terms and conditions. It requires compliance with all applicable
laws, including that any employment shall be voluntary, that the
supplier avoid the use of child labor, work hours must comply with
maximum work hours as stipulated in the applicable laws, compensation
paid shall comply with all applicable wage laws, then control of hazards
in the workplace, the humane treatment of supplier employees,
non-discrimination, and the freedom of association of work councils,
labor unions, or to seek representation.

(2) Conducts audits of suppliers to evaluate supplier
compliance with company standards for trafficking and slavery in supply
chains. The disclosure shall specify if the verification was not an
independent, unannounced audit.

Supplier audits are conducted periodically on an as needed basis
based on level of business or strategic relationship of the supplier.
Audits are focused on quality management systems. Furthermore, business
reviews are conducted on a periodic basis to review performance against
our business requirements. Audits have not historically included human
trafficking and slavery. We will, however, be requiring our suppliers
to certify that they do not utilize human trafficking or slavery and
Coherent’s right to audit for any such practices.

(3) Requires a direct supplier to certify that materials
incorporated into a product comply with slavery and human trafficking
laws in the country or countries in which that supplier is doing

Our purchase orders include a requirement that our suppliers follow our code of conduct, as outlined above.

(4) Maintains internal accountability standards and
procedures for employees or contractors failing to meet company
standards regarding slavery and trafficking.

Coherent prohibits any form of forced labor, including slavery and
human trafficking. This is a zero tolerance issue. If this grave concern
was to be found in our supply chain, we would take disciplinary action,
including remediation and/or possible termination of business.

(5) Provides company employees and management, who have
direct responsibility for supply chain management, training on human
trafficking and slavery, particularly with respect to mitigating risks
within the supply chains of products.

Our supply chain management team receives multiple trainings
throughout the year, including on compliance with laws. During 2012 we
intend to expand our internal training for our supply chain management
team to encompass specific slavery and human trafficking awareness.