EXHIBIT 10.3

 

RESTRICTED STOCK AGREEMENT

 

AUGUST TECHNOLOGY CORPORATION

1997 STOCK INCENTIVE PLAN

(As Amended and Restated Through February 4, 2004)

 

THIS AGREEMENT, made effective as of this ______ day of_____________________,
20______, by and between August Technology Corporation, a Minnesota corporation
(the “Company”), and _________________________________________ (“Participant”).

 

W I T N E S S E T H:

 

WHEREAS, the Participant on the date hereof is a consultant to, or a director or
an employee of the Company or one of its Subsidiaries; and

 

WHEREAS, the Company wishes to grant a restricted stock award to Participant for
shares of the Company’s Common Stock pursuant to the Company’s 1997 Stock
Incentive Plan (the “Plan”); and

 

WHEREAS, the Committee has authorized the grant of a restricted stock award to
the Participant;

 

NOW, THEREFORE, in consideration of the premises and of the mutual covenants
herein contained, the parties hereto agree as follows:

 

1.             Grant of Restricted Stock Award.  The Company hereby grants to
Participant on the date set forth above a restricted stock award (the “Award”)
for ____________________________________________________ (__________) shares of
Common Stock on the terms and conditions set forth herein and subject to
adjustment pursuant to Section 4.3 of the Plan.  The Company shall cause to be
issued a stock certificate representing such shares of Common Stock in the
Participant’s name and shall deliver such certificate to the Participant;
provided, however, that the Company shall place a legend on such certificate
describing the risks of forfeiture and other transfer restrictions set forth in
this Agreement and providing for the cancellation and return of such certificate
if such shares of Common Stock are forfeited as provided in Section 2 below. 
Until such risks of forfeiture have lapsed or the shares subject to this Award
have been forfeited pursuant to Section 2 below, the Participant shall be
entitled to vote the shares represented by such stock certificates and shall
receive all dividends attributable to such shares, but the Participant shall not
have any other rights as a shareholder with respect to such shares.

 

2.             Vesting of Restricted Stock.  The shares of Stock subject to this
Award shall remain forfeitable until the risks of forfeiture lapse according to
the following vesting schedule:

 

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Vesting Date

 

Cumulative Percentage
of Shares Vested

 

 

 

 

 

 

 

 

 

 

 

 

 

If the Participant’s employment or other relationship with the Company or any
Subsidiary ceases at any time prior to a Vesting Date for any reason, including
the Participant’s voluntary resignation or retirement but excluding termination
by the Company without “cause,” the Participant shall immediately forfeit all
shares of Stock subject to this Award which have not yet vested and for which
the risks of forfeiture have not lapsed.  If the Participant’s employment or
other relationship is terminated by the Company or any Subsidiary without
“cause” prior to the vesting date for this Award, all risks of forfeiture on the
shares of Stock subject to this Award shall immediately lapse.

 

b.             Solely for purposes of this Paragraph 2(b), “cause” shall mean
(i) Participant charged with a felony or convicted of any criminal misdemeanor
or more serious act; (ii) any intentional and/or willful act of fraud or
dishonesty by Participant related to or connected with Participant’s employment
by or other relationship with the Company or any of its Subsidiaries; (iii) the
willful and/or continued failure, neglect or refusal by Participant to perform
his or her employment duties with the Company or any of its Subsidiaries, (iv) a
material violation of the Company’s or a Subsidiary’s policies or codes of
conduct; or (v) the willful and/or material breach by Participant of any
agreement between Participant and the Company or any of its Subsidiaries,
including but not limited to an employment agreement or a noncompetition
agreement.

 

3.             Miscellaneous.

 

a.             Employment-at-Will.  This Agreement shall not confer on
Participant any right with respect to continuance of employment by or other
relationship with the Company or any of its Subsidiaries, nor will it interfere
in any way with the right of the Company or any of its Subsidiaries to terminate
such employment or other relationship.  Participant’s employment or other
relationship with the Company and its Subsidiaries shall be employment-at-will,
and nothing in this Agreement shall be construed as creating an employment
contract for any specified term between Participant and the Company or any of
its Subsidiaries.

 

b.             Securities Law Compliance.  Participant shall not transfer or
otherwise dispose of the shares of Stock received pursuant to this Agreement
until such time as counsel to the Company shall have determined that such
transfer or other disposition will not violate any state or federal securities
laws.  The Participant may be required by the Company, as a condition of the
effectiveness of this restricted stock award, to agree in writing that all Stock
subject to this Agreement shall be held, until such time that such Stock is
registered and freely tradable under applicable state and federal securities
laws, for Participant’s own account without a view to any further distribution
thereof, that the certificates for such shares shall bear an appropriate legend

 

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to that effect and that such shares will be not transferred or disposed of
except in compliance with applicable state and federal securities laws.

 

c.             Recapitalizations, Stock Splits, Etc.  Pursuant and subject to
Section 4.3 of the Plan, certain changes in the number or character of the
Common Stock of the Company (through consolidation, exchange, reorganization,
recapitalization, stock split, stock dividend or otherwise) shall result in an
adjustment, reduction or enlargement, as appropriate, in Participant’s rights
with respect to any shares of Common Stock for which the risks of forfeiture
have not lapsed  (i.e., Participant shall have such “anti-dilution” rights under
the Award with respect to such events, but shall not have “preemptive” rights).

 

d.             Shares Reserved.  The Company shall at all times during the term
of this Agreement reserve and keep available such number of shares as will be
sufficient to satisfy the requirements of this Agreement.

 

e.             Withholding Taxes.  In order to permit the Company to comply with
all applicable federal or state income tax laws or regulations, the Company may
take such action as it deems appropriate to insure that, if necessary, all
applicable federal or state payroll, income or other taxes are withheld from any
amounts payable by the Company to the Participant.  If the Company is unable to
withhold such federal and state taxes, for whatever reason, the Participant
hereby agrees to pay to the Company an amount equal to the amount the Company
would otherwise be required to withhold under federal or state law.

 

f.              1997 Stock Incentive Plan.  The Award evidenced by this
Agreement is granted pursuant to the Plan, a copy of which Plan has been made
available to Participant and is hereby incorporated into this Agreement.  This
Agreement is subject to and in all respects limited and conditioned as provided
in the Plan.  All defined terms of the Plan shall have the same meaning when
used in this Agreement.  The Plan governs this Agreement and, in the event of
any questions as to the construction of this Agreement or in the event of a
conflict between the Plan and this Agreement, the Plan shall govern, except as
the Plan otherwise provides.

 

g.             Lockup Period Limitation.  Participant agrees that in the event
the Company advises Participant that it plans an underwritten public offering of
its Common Stock in compliance with the Securities Act of 1933, as amended, and
that the underwriter(s) seek to impose restrictions under which certain
shareholders may not sell or contract to sell or grant any option to buy or
otherwise dispose of part or all of their stock purchase rights of the
underlying Common Stock, Participant hereby agrees that for a period not to
exceed 180 days from the prospectus, Participant will not sell or contract to
sell or grant an option to buy or otherwise dispose of this Agreement or any of
the underlying shares of Common Stock without the prior written consent of the
underwriter(s) or its representative(s).

 

h.             Accounting Compliance.  Participant agrees that, if a merger,
reorganization, liquidation or other “transaction” as defined in Section 4.3 of
the Plan occurs, and Participant is an “affiliate” of the Company or any
Subsidiary (as defined in applicable legal and accounting principles) at the
time of such transaction, Participant will comply with all requirements of Rule
145 of the Securities Act of 1933, as amended, and the requirements of such
other legal or accounting principles, and will execute any documents necessary
to ensure such compliance.

 

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i.              Stock Legend.  The Administrator may require that the
certificates for any shares of Common Stock purchased by Participant (or, in the
case of death, Participant’s successors) shall bear an appropriate legend to
reflect the restrictions of Paragraph 3(b) and Paragraphs 3(g) and 3(h) of this
Agreement.

 

j.              Scope of Agreement.  This Agreement shall bind and inure to the
benefit of the Company, its Subsidiaries and its successors and assigns and
Participant and any successor or successors of Participant permitted by this
Agreement.

 

k.             Arbitration.  Any dispute arising out of or relating to this
Agreement or the alleged breach of it, or the making of this Agreement,
including claims of fraud in the inducement, shall be discussed between the
disputing parties in a good faith effort to arrive at a mutual settlement of any
such controversy.  If, notwithstanding, such dispute cannot be resolved, such
dispute shall be settled by binding arbitration.  Judgment upon the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof.  The arbitrator shall be a retired state or federal judge or an
attorney who has practiced securities or business litigation for at least 10
years.  If the parties cannot agree on an arbitrator within 20 days, any party
may request that the chief judge of the District Court of Hennepin County,
Minnesota, select an arbitrator.  Arbitration will be conducted pursuant to the
provisions of this Agreement, and the commercial arbitration rules of the
American Arbitration Association, unless such rules are inconsistent with the
provisions of this Agreement.  Limited civil discovery shall be permitted for
the production of documents and taking of depositions.  Unresolved discovery
disputes may be brought to the attention of the arbitrator who may dispose of
such dispute. The arbitrator shall have the authority to award any remedy or
relief that a court of this state could order or grant; provided, however, that
punitive or exemplary damages shall not be awarded.  The arbitrator may award to
the prevailing party, if any, as determined by the arbitrator, all of its costs
and fees, including the arbitrator’s fees, administrative fees, travel expenses,
out-of-pocket expenses and reasonable attorneys’ fees.  Unless otherwise agreed
by the parties, the place of any arbitration proceedings shall be Hennepin
County, Minnesota.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on the day and year first above written.

 

 

AUGUST TECHNOLOGY CORPORATION

 

 

 

 

 

By:

 

 

 

Its:

 

 

COMPANY

 

 

 

 

 

 

 

PARTICIPANT

 

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