Exhibit 10.12

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”) is entered into on November 24,
2003, by and between John E. Denzel (the “Executive”) and Ultratech, Inc., a
Delaware corporation (the “Company”), and shall become effective on January 1,
2004.

 

W I T N E S S E T H:

 

WHEREAS, the Executive is currently employed as the Company’s Executive Vice
President of Operations; and

 

WHEREAS, the Company desires that the Executive continue to be employed by the
Company and become its President and Chief Operating Officer, effective
January 1, 2004 and the Executive is willing to continue to be employed by the
Company and to become its President and Chief Operating Officer, effective
January 1, 2004; and

 

WHEREAS, the Company and the Executive desire to set forth the terms and
conditions of such continued employment in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, the Company and the Executive agree as follows:

 

1.                                      Duties.

 

1.1                               Retention.  The Company does hereby hire,
engage, and employ the Executive as its President and Chief Operating Officer,
reporting to the Chief Executive Officer of the Company (the “Chief Executive
Officer”), and the Executive does hereby accept and agree to such hiring,
engagement, and employment.  The Executive shall serve the Company in such
positions and shall have the duties, responsibilities and authorities consistent
with such positions as well as any other reasonable duties determined by the
Chief Executive Officer.

 

1.2                               No Other Employment.  During the Executive’s
employment by the Company, the Executive shall devote substantially all of his
business time, energy, and skill to the performance of his duties for the
Company.

 

1.3                               No Breach of Contract.  The Executive hereby
represents to the Company that the execution and delivery of this Agreement by
the Executive and the Company and the performance by the Executive of the
Executive’s duties hereunder shall not constitute a breach of, or otherwise
contravene, the terms of any employment or other agreement or policy to which
the Executive is a party or otherwise bound.  The Company hereby represents to
the Executive that it is authorized to enter into this Agreement and that the
execution and delivery of this Agreement to the Executive and the employment of
the

 

 

1

--------------------------------------------------------------------------------

 

Executive hereunder shall not constitute a breach of, or otherwise contravene,
the terms of any law, agreement or policy by which it is bound.

 

2.                                      At-Will Employment.

 

The Executive and the Company agree that Executive’s employment with the Company
is and shall at all times during the Executive’s employment hereunder be
“at-will” employment.  The Company may terminate the Executive’s employment at
any time for any reason, with or without Cause, by providing thirty (30) days’
written notice to the Executive.  The Executive may terminate his employment
with the Company by providing thirty (30) days’ written notice to the Company. 
Notwithstanding the foregoing, the Company may relieve the Executive of his
duties immediately or at any time during the thirty-day period following the
written termination notice provided by the Company or the Executive hereunder. 
No provision of this Agreement shall be construed as conferring upon the
Executive a right to continue as an employee of the Company, and the “at-will”
relationship between the Executive and the Company may not be altered except as
agreed by the Executive and the Company in writing.

 

3.                                      Compensation.

 

3.1                               Base Salary.  The Executive’s initial Base
Salary shall be at a rate of $276,000 per year, paid in accordance with the
Company’s regular payroll practices in effect from time to time, but not less
frequently than monthly.  The Executive’s Base Salary shall be reviewed annually
and may be adjusted by the Board of Directors of the Company (the “Board”).  (As
used in this Agreement, “Base Salary” shall mean Base Salary as adjusted from
time to time.)

 

3.2                               Annual Bonus.  While employed hereunder, the
Executive shall be considered for an annual incentive bonus (“Annual Bonus”) of
up to 45% of his annual Base Salary, based upon the achievement of performance
objectives established by the Board or the compensation committee of the Board
(the “Compensation Committee”).  Payment of up to 50% of the Executive’s Annual
Bonus may be deferred and paid out in equal annual installments over a period of
no more than three years with interest at prime as set forth in The Wall Street
Journal from time to time (the “Deferral Period”), during which Deferral Period
the unpaid portion of the deferred Annual Bonus may be subject to forfeiture if
the Executive terminates employment without Good Reason (as defined in
Section 7.2.1) or is terminated by the Company for Cause (as defined in
Section 6.1.1).  The Executive’s performance objectives and maximum level of
Annual Bonus as a percentage of Base Salary, as well as the payment terms for
the Annual Bonus, shall be reviewed annually and may be adjusted by the
Compensation Committee, including, without limitation, an adjustment to increase
the maximum level of Annual Bonus as a percentage of Base Salary.

 

3.3                               Equity Compensation.

 

3.3.1                     Future Grants.  In addition to the stock options
previously granted to the Executive, the Executive shall be eligible for
periodic grants of stock options or other equity awards under the Company’s
equity award program, subject to the

 

2

--------------------------------------------------------------------------------

 

Executive’s continued employment hereunder.  The terms, exercise price (if
applicable), vesting period, any post-termination of employment provisions, and
other provisions of each stock option or other equity award granted pursuant to
this Section 3.3 shall, subject to the express provisions of this Agreement, be
determined by the Compensation Committee at the time of grant of the option or
other equity award.

 

3.3.2                     Acceleration and Extension.  Notwithstanding
Section 3.3.1, if the Executive’s employment is terminated (i) by the Company
for any reason other than for Cause (as defined in Section 6.1.1) prior to a
Change of Control (as defined in Section 8.1.1) or a Corporate Transaction (as
defined in Section 8.1.2) or (ii) by the Executive with Good Reason (as defined
in Section 7.2.1) prior to a Change of Control or a Corporate Transaction or
(iii) on account of death or Disability, then each stock option or other equity
award granted on or after July 21, 2003 shall thereupon become vested as to an
additional 25% of the shares of stock subject thereto (or such lesser percentage
as to make the award 100% vested).  Further, in the event of a Change of Control
or a Corporate Transaction, and within one (1) year following such Change of
Control or Corporate Transaction, either the Executive terminates his employment
with the Company with Good Reason or the Company terminates his employment for
any reason other than for Cause, all of the options or other equity awards
described in the preceding sentence shall immediately be fully vested.  To the
extent that the equity awards described in this Section 3.3.2 are stock options
and have become vested by their terms or become vested as described herein, such
stock options shall remain vested and exercisable at least until the date that
is one year and ninety (90) days after the termination of the Executive’s
employment as described in clauses (i), (ii), or (iii) of this Section 3.3.2 or
the termination of the Executive’s employment following a Change of Control or a
Corporate Transaction as described in the preceding sentence (or such later date
as may be specified in the award agreement), but in no event will such options
be exercisable after the expiration of their original terms.  Each of the
Executive’s stock options granted prior to July 21, 2003, shall be amended to
add the foregoing acceleration of vesting and extension of exercise period
provisions at such time, if any, that the Company’s Board of Directors
determines, in its sole discretion, that such amendments and the related
accounting charges would not adversely affect, when relevant, in any way, the
Company’s condition (financial or otherwise), financial statements, earnings,
earnings per share or other relevant Company information.

 

4.                                      Benefits.

 

4.1                               Pension and Welfare Plans.  While the
Executive is employed hereunder, he shall be entitled to participate in all
employee pension and welfare benefit plans and programs made available to the
Company’s senior level executives or to its employees generally, as such plans
or programs may be in effect from time to time.

 

3

--------------------------------------------------------------------------------

 

4.2                               Reimbursement of Business and Other Expenses

 

4.2.1                     Expense Reimbursement.  The Executive is authorized to
incur reasonable expenses in carrying out his duties and responsibilities under
this Agreement and the Company shall promptly reimburse him for all business
expenses incurred in connection with carrying out the business of the Company,
subject to documentation in accordance with the Company’s expense reporting
policy.

 

4.2.2                     Legal Expenses.  The Company shall promptly reimburse
the Executive for his legal expenses, up to a maximum of $3,000, incurred in
negotiating and documenting this Agreement with the Company.

 

4.3                               Vacation.  During the Executive’s employment
hereunder, the Executive shall be entitled to vacation in accordance with the
Company’s vacation policy for its executive officers.

 

5.                                      Death or Disability.

 

5.1                               Definition of Disabled and Disability.  For
purposes of this Agreement, the terms “Disabled” and “Disability” shall mean the
Executive’s inability, because of physical or mental illness or injury, to
perform his customary duties pursuant to this Agreement, with or without
reasonable accommodation, and the continuation of such disabled condition for a
period of one hundred eighty (180) continuous days as determined by an approved
medical doctor.  For purposes hereof, an approved medical doctor shall mean a
doctor selected by the Company and the Executive.  If the Company and the
Executive cannot agree on a medical doctor, each shall select a medical doctor
and the two doctors shall select a third who shall be the approved medical
doctor for this purpose.

 

5.2                               Termination Due to Death or Disability.  If
the Executive dies or becomes Disabled while employed hereunder, this Agreement
and the Executive’s employment shall automatically cease and terminate as of the
date of the Executive’s death or the date of Disability (which date shall be
determined under Section 5.1 above, and referred to as the “Disability Date”),
as the case may be.  In the event of the termination of the Executive’s
employment due to his death or Disability, the Executive (or, in the event of
his death, his estate) shall be entitled to receive:

 

(i)                                     a lump sum cash payment, payable within
ten (10) business days after the date of death or the Disability Date equal to
the sum of (A) any accrued but unpaid Base Salary as of the date of death or the
Disability Date, (B) any earned but unpaid portions of Annual Bonuses in respect
of fiscal years completed prior to the date of death or the Disability Date,
(C) any compensation deferred under the provisions of any deferred compensation
plan and (D) any unreimbursed business expenses due under Section 4.2.1 of this
Agreement;

 

(ii)                                  a monthly payment payable in each of the
twelve (12) months following the date of the Executive’s death or Disability
Date in an amount equal to one-twelfth (1/12th) of the Executive’s annual Base
Salary in effect immediately prior to his death or Disability Date;

 

(iii)                               solely in the event of the termination of
the Executive’s employment due to his Disability, if the Executive elects to
continue his medical coverage under

 

4

--------------------------------------------------------------------------------

 

COBRA, reimbursement by the Company of such COBRA costs for a period of up to
eighteen (18) months following the termination of his employment; provided,
however, that the Company’s obligation under this Section 5.2(iii) shall be
reduced to the extent that comparable medical coverage is provided by a
subsequent employer;

 

(iv)                              partial acceleration of the vesting of a
portion of the Executive’s stock options and other equity awards, and extension
of time to exercise any vested stock options, as provided in Section 3.3.2;  and

 

(v)                                 such employee benefits described in
Section 4.1 as the Executive or his estate may be entitled to hereunder or under
the employee benefit plans, programs and arrangements of the Company.

 

6.                                      Termination by the Company.

 

6.1                               Termination For Cause.

 

6.1.1                     Definition of Termination with Cause.  A termination
of the Executive’s employment by the Company for cause (“Cause”) shall mean the
termination of the Executive’s employment by the Board for any of the reasons
listed below, except in the case of the reason set forth in (i) below, only
after written notice by the Board stating the reason for the proposed
termination for Cause and the Executive’s failure to cure within ninety (90)
days of receipt of such notice:

 

(i)                                     the Executive’s repeated failure to
perform any essential duty of his position other than due to Disability or such
illness or injury as described in and determined under Section 5.1 that would
result in Disability if it continued for the period of time prescribed in
Section 5.1;

 

(ii)                                  the Executive’s commitment of an act that
constitutes gross misconduct and is injurious to the Company, any subsidiary of
the Company or any successor to the Company;

 

(iii)                               the Executive’s conviction of or pleading
guilty or nolo contendere to any  felony involving theft, embezzlement,
dishonesty or moral turpitude;

 

(iv)                              the Executive’s commission of an act of fraud
against, or the misappropriation of property belonging to, the Company, any
subsidiary of the Company or any successor to the Company;

 

(v)                                 the Executive’s commitment of an act of
dishonesty in connection with his responsibilities as an employee that is
intended to result in his personal enrichment or the personal enrichment of his
family or others; or

 

(vi)                              the Executive’s material breach of this
Agreement or other agreement between the Executive and the Company or any
subsidiary of or successor to the Company.

 

5

--------------------------------------------------------------------------------

 

6.1.2                     Entitlements Upon a Termination for Cause.  If the
Executive’s employment is terminated for Cause, the termination shall be
effective on the date the Company gives the Executive written notice of
termination, except in the case of a termination for the reason described in
Section 6.1.1(i), in which case the termination shall be effective on the last
day of the ninety-day cure period.  In the event of the termination of the
Executive’s employment hereunder due to a termination by the Company for Cause,
then the Executive shall be entitled to receive:

 

(i)                                     a lump sum cash payment, payable within
ten (10) business days after the date of termination of the Executive’s
employment, equal to the sum of (A) any accrued but unpaid Base Salary as of the
date of such termination, (B) any earned and vested but unpaid portions of
Annual Bonuses in respect of fiscal years completed prior to the date of such
termination, (C) any compensation deferred under the provisions of any deferred
compensation plan, (D) any unreimbursed business expenses that are due under
Section 4.2.1 of this Agreement and (E) any unpaid vacation.

 

(ii)                                  such employee benefits described in
Section 4.1 as the Executive or his estate may be entitled to hereunder or under
the employee benefit plans, programs and arrangements of the Company.

 

6.2                               Termination Without Cause.  If the Executive’s
employment is terminated by the Company without Cause, the termination shall be
effective on the thirtieth (30th) day following written notice of such
termination to the Executive.  In the event of such termination without Cause
prior to a Change of Control (as defined in Section 8.1.1) or a Corporate
Transaction (as defined in Section 8.1.2), then, subject to the Executive’s
execution of a release and non-disparagement agreement in a form acceptable to
the Company, the Executive shall be entitled to:

 

(i)                                     a lump sum cash payment, payable within
ten (10) business days after the date of termination of the Executive’s
employment, equal to the sum of (A) any accrued but unpaid Base Salary as of the
date of such termination, (B) any earned but unpaid portions of Annual Bonuses
in respect of fiscal years completed prior to the date of such termination,
(C) any compensation deferred under any deferred compensation plan and (D) any
unreimbursed business expenses due under Section 4.2.1 of this Agreement;

 

(ii)                                  a monthly severance payment payable in
each of the twelve (12) months following the date of termination of the
Executive’s employment in an amount equal to one-twelfth (1/12th) of the
Executive’s annual Base Salary in effect immediately prior to such termination;

 

(iii)                               if the Executive elects to continue his
medical coverage under COBRA, reimbursement by the Company of such COBRA costs
for a period of up to eighteen (18) months following the termination of his
employment; provided, however, that the Company’s obligation under this
Section 6.2(iii) shall be

 

6

--------------------------------------------------------------------------------

 

reduced to the extent that comparable medical coverage is provided by a
subsequent employer;

 

(iv)                              partial acceleration of the vesting of a
portion of the Executive’s outstanding stock options and other equity awards,
and extension of time to exercise any vested stock options, as provided in
Section 3.3.2;  and

 

(v)                                 such employee benefits described in
Section 4.1 as the Executive or his estate may be entitled to hereunder or under
the employee benefit plans, programs and arrangements of the Company.

 

7.                                      Termination by the Executive.

 

7.1                               Termination Without Good Reason.  If the
Executive voluntarily terminates his employment with the Company without Good
Reason, the termination shall be effective at the end of the thirty-day notice
period.  Upon such termination of employment without Good Reason, the Executive
shall have the same entitlements as provided in Section 6.1.2 in the case of a
termination by the Company for Cause.

 

7.2                               Termination With Good Reason.

 

7.2.1                     Definition of Good Reason.  For purposes of this
Agreement, “Good Reason” shall mean the occurrence of any of the following
events without the Executive’s written consent:

 

(i)                                     any reduction in the aggregate level of
the Executive’s Base Salary except a reduction that is part of a program
applicable to all of the Company’s officers to reduce expenses;

 

(ii)                                  the failure by the Company or any
subsidiary of or successor to the Company to comply with any material terms of
this Agreement or any other material agreement between the Executive and the
Company or any subsidiary of or successor to the Company;

 

(iii)                               any material reduction in the nature or
scope of the Executive’s duties, title, function, authority or responsibilities,
which reduction shall not be deemed to have occurred if the Executive has a
title of “Vice President” or a more senior title with the Company or any
surviving or successor entity of the Company; or

 

(iv)                              a requirement that the Executive relocate his
principal office to a location that is more than sixty (60) miles from the
location of his principal office on January 1, 2004;

 

provided, however, that none of the events specified above shall constitute Good
Reason unless the Executive shall have notified the Company in writing
describing the events which constitute Good Reason and the Company shall have

 

7

--------------------------------------------------------------------------------

 

failed to cure such event within thirty (30) days after the Company’s receipt of
such written notice.

 

7.2.2                     Entitlements Upon a Termination with Good Reason.  If
the Executive terminates his employment with Good Reason, the termination shall
be effective at the end of the thirty-day cure period.  Upon such termination of
his employment with Good Reason in accordance with Section 7.2.1 hereof prior to
Change of Control (as defined in Section 8.1.1) or a Corporate Transaction (as
defined in Section 8.1.2), the Executive shall, subject to the Executive’s
execution of a release and non-disparagement agreement in a form acceptable to
the Company, have the same entitlements as provided under Section 6.2 for a
termination by the Company without Cause.

 

8.                                      Change of Control Provisions.

 

8.1                               Definitions.

 

8.1.1                     Definition of Change of Control.  For purposes of this
Agreement, “Change of Control” shall mean either of the following events:

 

(i)                                     any person or related group of persons
(other than the Company or a person that directly or indirectly controls, is
controlled by, or is under common control with, the Company) directly or
indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 of
the Securities Exchange Act of 1934, as amended) of securities possessing more
than fifty percent (50%) of the total combined voting power of the Company’s
outstanding securities pursuant to a tender or exchange offer made directly to
the Company’s stockholders; or

 

(ii)                                  there is a change in the composition of
the Board over a period of thirty-six (36) consecutive months or less such that
a majority of the Board members ceases, by reason of one or more proxy contests
for the election of Board members to be comprised of individuals who either
(A) have been Board members continuously since the beginning of such period or
(B) have been elected or nominated for election as Board members during such
period by at least a majority of the Board members described in clause (A) who
were still in office at the time such election or nomination was approved by the
Board.

 

8.1.2                     Definition of Corporate Transaction.  For purposes of
this Agreement, “Corporate Transaction” shall mean any of the following
stockholder approved transactions to which the Company is a party:

 

(i)                                     a merger or consolidation in which the
Company is not the surviving entity, except for a transaction the principal
purpose of which is to change the state in which the Company is incorporated,

 

(ii)                                  the sale, transfer or other disposition of
all or substantially all of the assets of the Company in complete liquidation or
dissolution of the Company, or

 

8

--------------------------------------------------------------------------------

 

(iii)                               any reverse merger in which the Company is
the surviving entity but in which securities possessing more than fifty percent
(50%) of the total combined voting power of the Company’s outstanding securities
are transferred to person or persons different from the persons holding those
securities immediately prior to such merger.

 

8.2                               Effect of Change of Control or Corporate
Transaction.  In the event of a Change of Control or a Corporate Transaction,
and within one (1) year following such Change of Control or Corporate
Transaction, either the Executive terminates his employment with the Company
with Good Reason or the Company terminates his employment for any reason other
than for Cause, then, subject to the Executive’s execution of a release and
non-disparagement agreement in a form acceptable to the Company, the Executive
shall be entitled to the following in lieu of, and not in addition to, the
entitlements described in Sections 6.2 and 7.2.2:

 

(i)                                     a lump sum cash payment, payable within
ten (10) days after the date of the termination of the Executive’s employment
equal to the sum of (A) any accrued but unpaid Base Salary as of the date of
such termination, (B) any earned but unpaid portions of Annual Bonuses in
respect of fiscal years completed prior to the date of the termination of the
Executive’s employment, (C) any compensation deferred under any deferred
compensation plan and (D) any unreimbursed business expenses due under
Section 4.2.1 of this Agreement;

 

(ii)                                  a monthly payment in each of the twenty
four (24) months following the date of the termination of the Executive’s
employment in an amount equal to one-twelfth (1/12th) of the Executive’s annual
Base Salary in effect immediately prior to such termination (or, if greater, his
annual Base Salary in effect immediately prior to the Change of Control or
Corporate Transaction);

 

(iii)                               if the Executive elects to continue his
medical coverage under COBRA, reimbursement by the Company of such COBRA costs
for a period of up to eighteen (18) months following the termination of his
employment; provided, however, that the Company’s obligation under this
Section 8.2(iii) shall be reduced to the extent that comparable medical coverage
is provided by a subsequent employer;

 

(iv)                              acceleration of the vesting of the Executive’s
stock options and other equity awards, and extension of time to exercise any
vested stock options, as provided in Section 3.3.2; and

 

(v)                                 such employee benefits described in
Section 4.1 as the Executive or his estate may be entitled to hereunder or under
the employee benefit plans, programs and arrangements of the Company.

 

8.3                               Option to Refuse Payments.  The Executive
shall be entitled to refuse all or any portion of any payments or benefits under
this Agreement if the Executive determines that receipt of such payment or
benefit may result in adverse tax consequences to him under

 

9

--------------------------------------------------------------------------------

 

Section 4999 of the Code or otherwise.  The Company shall be totally and
permanently relieved of any obligation to pay any amounts or to provide any
benefits that the Executive specifically so refuses in writing.

 

9.                                      Non-Competition.

 

The Executive acknowledges and recognizes the highly competitive nature of the
businesses of the Company, the amount of sensitive and confidential information
involved in the discharge of the Executive’s position with the Company, and the
harm to the Company that would result if such knowledge or expertise was
disclosed or made available to a competitor, and accordingly agrees that during
the period that he is receiving any payments under this Agreement, he shall not,
directly or indirectly in any manner or capacity (e.g., as an advisor,
principal, agent, partner, officer, director, shareholder, employee, member of
any association or otherwise) engage in, work for, consult, provide advice or
assistance or otherwise participate in any activity that is competitive with the
business of the Company.  The Executive further agrees that during such period
he will not assist or encourage any other person in carrying out any activity
that would be prohibited by the foregoing provisions of this Section if such
activity were carried out by the Executive and, in particular, the Executive
agrees that he will not induce any employee of the Company to carry out any such
activity; provided, however, that the “beneficial ownership” by the Executive,
either individually or as a member of a “group,” as such terms are used in Rule
13d of the General Rules and Regulations under the Exchange Act, of not more
than one percent (1%) of the voting stock of any publicly held corporation shall
not be a violation of this Agreement.  It is further expressly agreed that the
Company will or would suffer irreparable injury if the Executive were to compete
with the Company or any subsidiary or affiliate of the Company in violation of
this Agreement and that the Company would by reason of such competition be
entitled to injunctive relief in a court of appropriate jurisdiction, and the
Executive further consents and stipulates to the entry of such injunctive relief
in such a court prohibiting the Executive from competing with the Company or any
subsidiary or affiliate of the Company in violation of this Agreement.  In the
event that the Executive breaches the provisions of this Section 9, the
severance benefits under Sections 6.2, 7.2.2 or 8.2, whichever is applicable,
shall immediately terminate, the Executive shall cease to be entitled to any
additional payments under this Agreement, and all stock options shall cease to
be exercisable.

 

10.                               Confidentiality and Treatment of Inventions.

 

10.1                        Confidentiality.  The Executive will not at any time
(whether during or after his employment with the Company), other than in the
course of his duties hereunder or unless compelled by lawful process, disclose
or use for his own benefit or purposes or the benefit or purposes of any other
person, firm, partnership, joint venture, association, corporation or other
business organization, entity or enterprise other than an entity within the
Company or any subsidiary or affiliate of the Company, any trade secrets, or
other confidential data or information relating to customers, development
programs, costs, marketing, trading, investment, sales activities, promotion,
credit and financial data, financing methods, or plans of any entity within the
Company or any subsidiary or

 

10

--------------------------------------------------------------------------------

 

affiliate of the Company; provided that the foregoing shall not apply to
information that is generally known to the industry or the public other than as
a result of the Executive’s breach of this covenant.  The Executive agrees that
upon termination of his employment with the Company for any reason, he will
return to the Company immediately all memoranda, books, papers, software, plans,
information, letters and other data, and all copies thereof or therefrom, in any
way relating to the business of any entity within the Company or any subsidiary
or affiliate of the Company, except that he may retain personal notes, notebooks
and diaries that do not contain confidential information of the type described
in the preceding sentence.  The Executive further agrees that he will not retain
or use for his account at any time any trade names, trademark or other
proprietary business designation used or owned in connection with the business
of any entity within the Company or any subsidiary or affiliate of the Company.

 

10.2                        Treatment of Inventions.

 

10.2.1              Prior Inventions.  The Executive understands and
acknowledges that he does not have any right or claim to any invention, idea,
process, formula, discovery, technical information, trade secret, design,
computer program, proprietary information, copyright, patent or other such item
or matter (together, any “Invention”), including without limitation any
Invention made prior to his employment with the Company.  The Executive further
understands and acknowledges that he has had the opportunity to disclose any
Invention to the Company, and has voluntarily and knowingly waived and declined
such opportunity because he has no Invention to disclose.

 

10.2.2              Subsequent Invention Disclosure.  The Executive hereby
agrees to disclose to the Company in a prompt manner any Invention that he
develops at any time prior to the six-month anniversary of his termination of
employment with the Company.

 

10.2.3              Assignment of Inventions.  Except as otherwise provided by
Section 10.2.4, the Executive hereby assigns and agrees to assign to the Company
or its designee the Executive’s entire right, title, and interest in and to any
Invention that the Executive, whether solely or jointly, develops prior to the
six-month anniversary of his termination of employment with the Company, with
the use of time, material, equipment, supplies, facilities or trade secret
information of the Company or any subsidiary or affiliate of the Company,
whether or not during working hours.  The Executive further agrees to cooperate
with the Company and to perform all acts deemed necessary or desirable by the
Company to permit and to assist the Company, at the Company’s expense, in
obtaining and enforcing the full benefits, enjoyment, rights and title (whether
domestic or foreign) to any Invention hereby assigned by the Executive to the
Company.

 

10.2.4              Inventions not Assigned.  Section 10.2.3 shall not apply to
an Invention that the Executive developed entirely on his own time without using
the Company’s or any of its subsidiaries’ or affiliates’ time, material,
equipment, supplies, facilities or trade secret information, except for any
Invention that either (i) relates at the time of conception or reduction to
practice of the Invention to

 

11

--------------------------------------------------------------------------------

 

the Company’s or a subsidiary’s or affiliate’s business, or actual or
demonstrably anticipated research development of the Company or a subsidiary or
affiliate of the Company or (ii) results from the Executive’s work with the
Company or a subsidiary or affiliate of the Company, whether or not during
normal working hours.

 

11.                               Antisolicitation.

 

The Executive promises and agrees that, for a period of twelve (12) months
following his termination of employment, he will not influence or attempt to
influence suppliers or customers of the Company hereunder, either directly or
indirectly, to divert their business away from the Company to any individual,
partnership, firm, corporation or other entity then in competition with the
Company or any subsidiary of successor to the Company.

 

12.                               Soliciting Employees.

 

The Executive promises and agrees that, for a period of twelve (12) months
following termination of his employment hereunder, he will not directly or
indirectly solicit any person who is then, or at any time within six months
prior thereto was, an employee of the Company to leave the employ of the Company
to work for any business, individual, partnership, firm, corporation, or other
entity then in competition with the business of the Company or any subsidiary of
or successor to the Company.

 

13.                               Cooperation in Litigation.

 

The Executive agrees that he will reasonably cooperate with the Company in any
litigation that arises out of events occurring prior to the termination of his
employment, including but not limited to, serving as a witness or consultant and
producing documents and information relevant to the case or helpful to the
Company.  The Company agrees to reimburse the Executive for all reasonable costs
and expenses he incurs in connection with his obligations under this Section 13.

 

14.                               Indemnification.

 

Indemnification shall be provided to the Executive as set forth in the
indemnification agreement entered into between the Company and the Executive
prior to the date hereof and/or any subsequent indemnification agreement between
the Company and the Executive (the “Indemnification Agreement”).

 

15.                               Assignment.

 

This Agreement is personal in its nature and neither of the parties hereto
shall, without the consent of the other, assign or transfer this Agreement or
any rights or obligations hereunder; provided, however, that, in the event of a
merger, consolidation, or transfer or sale of all or substantially all of the
assets of the Company with or to any other individual(s) or entity, this
Agreement shall, subject to the provisions hereof, be binding upon and inure to
the benefit of such successor and such successor shall discharge and perform all
the promises, covenants, duties, and obligations of the Company hereunder,

 

12

--------------------------------------------------------------------------------

 

and; provided, further, that the Executive may assign his rights to compensation
and benefits by will or by operation of law or pursuant to Section 27.

 

16.                               Governing Law.

 

This Agreement and the legal relations hereby created between the parties hereto
shall be governed by and construed under and in accordance with the internal
laws of the State of California, without regard to conflicts of laws principles
thereof, except as provided in Section 14.

 

17.                               Entire Agreement.

 

This Agreement and the Indemnification Agreement represent the entire agreement
of the parties hereto respecting the matters within the scope of this Agreement
and the Indemnification Agreement and supersede all prior agreements of the
parties hereto on the subject matter hereof.  Any prior negotiations,
correspondence, other agreements, proposals or understandings relating to the
subject matter hereof shall he deemed to be merged into this Agreement and to
the extent inconsistent herewith, such negotiations, correspondence, agreements,
proposals, or understandings shall be deemed to be of no force or effect.  There
are no representations, warranties, or agreements, whether express or implied,
or oral or written, with respect to the subject matter hereof, except as set
forth herein.

 

18.                               Modifications.

 

This Agreement shall not be modified by any oral agreement, either express or
implied, and all modifications hereof shall be in writing and signed by the
parties hereto.

 

19.                               Waiver.

 

Failure to insist upon strict compliance with any of the terms, covenants, or
conditions hereof shall not be deemed a waiver of such term, covenant, or
condition, nor shall any waiver or relinquishment of, or failure to insist upon
strict compliance with, any right or power hereunder at any one or more times be
deemed a waiver or relinquishment of such right or power at any other time or
times.

 

20.                               Number and Gender.

 

Where the context requires, the singular shall include the plural, the plural
shall include the singular, and any gender shall include all other genders.

 

21.                               Section Headings.

 

The section headings in this Agreement are for the purpose of convenience only
and shall not limit or otherwise affect any of the terms hereof.

 

13

--------------------------------------------------------------------------------

 

22.                               Resolution of Disputes.

 

Any controversy or claim arising out of or relating to the Executive’s
employment, this Agreement, its enforcement, arbitrability, or interpretation,
or because of an alleged breach, default, or misrepresentation in connection
with any of its provisions, shall be submitted to arbitration in Santa Clara
County, California, before a single arbitrator, in accordance with the National
Rules for the Resolution of Employment Disputes then in effect of the American
Arbitration Association (“AAA”) as modified by the terms and conditions of this
Section 22; provided, however, that provisional injunctive relief may, but need
not, be sought in a court of law while arbitration proceedings are pending, and
any provisional injunctive relief granted by such court shall remain effective
until the matter is finally determined by the arbitrator.  The arbitrator shall
be selected by mutual agreement of the parties or, if the parties cannot agree,
by striking from a list of arbitrators supplied by AAA.  The arbitrator shall
issue a written opinion revealing, however briefly, the essential findings and
conclusions upon which the award is based.  Final resolution of any dispute
through arbitration may include any remedy or relief which the arbitrator deems
just and equitable.  Any award or relief granted by the arbitrator hereunder
shall be final and binding on the parties hereto and may be enforced by any
court of competent jurisdiction.

 

The parties acknowledge that they are hereby waiving any rights to trial by jury
in any action, proceeding or counterclaim brought by either of the parties
against the other in connection with any matter whatsoever arising out of or in
any way connected with this Agreement or the Executive’s employment.

 

The Company shall pay the arbitrator’s fees and arbitration expenses and any
other costs associated with the arbitration or arbitration hearing that are
unique to artibration.  The Company and the Executive each shall separately pay
its or his own deposition, witness, expert and attorneys’ fees and other
expenses as and to the same extent as if the matter were being held in court
unless otherwise provided by law; provided, however, that if the Executive
prevails, the arbitrator may award the Executive reasonable attorneys’ fees. 
The arbitrator shall resolve any dispute as to reasonableness of any fee or
cost.  The arbitrator shall have the sole and exclusive power and authority to
decide any and all issues of or related to arbitrability.

 

23.                               Severability.

 

In the event that a court of competent jurisdiction determines that any portion
of this Agreement is in violation of any statute or public policy, then only the
portions of this Agreement which violate such statute or public policy shall be
stricken, and all portions of this Agreement which do not violate any statute or
public policy shall continue in full force and effect.  Furthermore, any court
order striking any portion of this Agreement shall modify the stricken terms as
narrowly as possible to give as much effect as possible to the intentions of the
parties under this Agreement.

 

14

--------------------------------------------------------------------------------

 

24.                               Notices.

 

All notices under this Agreement shall be in writing and shall be either
personally delivered or mailed postage prepaid, by certified mail, return
receipt requested:

 

(i)                                     if to the Company:

 

Ultratech, Inc.

3050 Zanker Road

San Jose, California  95134

Attention: Chair, Compensation Committee of the Board of Directors

 

(ii)                                  if to the Executive:

 

John E. Denzel

3371 Shady Spring Lane

Mountain View, CA 94040

 

Either party may change its address set forth above by written notice given to
the other party in accordance with the foregoing.  Any notice shall be effective
when personally delivered, or five (5) business days after being mailed in
accordance with the foregoing.

 

25.                               Counterparts.

 

This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original and all of which together shall constitute one and
the same instrument.

 

26.                               Withholding Taxes.

 

The Company may withhold from any amounts payable under this Agreement such
federal, state and local income, employment, or other taxes as may be required
to be withheld pursuant to any applicable law or regulation.

 

27.                               Beneficiaries.

 

The Executive shall be entitled, to the extent permitted under any applicable
law and to the extent permitted under any benefit plan or program maintained by
the Company, to select and change a beneficiary or beneficiaries to receive any
compensation or benefit hereunder following the Executive’s death by giving the
Company written notice thereof in accordance with the terms of such plan or
program.  In the event of the Executive’s death or a judicial determination of
his incompetence, reference in this Agreement to the Executive shall be deemed,
where appropriate, to refer to his beneficiary, estate or other legal
representative.

 

28.                               Director’s and Officer’s Insurance.

 

The Company shall provide director’s and officer’s insurance coverage for the
Executive to the extent the Company provides such coverage for its other senior
executive officers.

 

15

--------------------------------------------------------------------------------

 

29.                               No Mitigation or Offset.

 

In the event of any termination of employment under this Agreement, the
Executive shall be under no obligation to seek other employment and there shall
be no offset against amounts due the Executive under this Agreement on account
of any remuneration attributable to any subsequent employment that he may obtain
except (i) as specifically provided in Sections 5.2(iii), 6.2(iii) and 8.2(iii)
of this Agreement, or (ii) on account of any claims the Company may have against
the Executive.

 

30.                               Right to Advice of Counsel.

 

The Executive acknowledges that he has had the right to consult with counsel and
is fully aware of his rights and obligations under this Agreement.  O’Melveny &
Myers, LLP has served as the Company’s counsel with respect to this Agreement.

 

31.                               Survival.

 

Upon the termination of this Agreement, the provisions of Sections 5, 6, 7, 8,
9, 10, 11, 12, 13, 14, 16, 22, 23, 24, 26, 28 and 29 shall survive.

 

IN WITNESS WHEREOF, the Company and the Executive have executed this Employment
Agreement as of the date first above written.

 

 

THE COMPANY

 

 

 

Ultratech, Inc.,

 

a Delaware corporation

 

 

 

 

 

By:

/s/ Nicholas Konidaris

 

 

 

Nicholas Konidaris

 

 

Chairman, Compensation Committee of the
Board of Directors

 

 

 

 

 

 

 

THE EXECUTIVE

 

 

 

 

 

 

John E. Denzel

 

 

John E. Denzel

 

16

--------------------------------------------------------------------------------