Exhibit 10.20
KLA-Tencor Corporation
2004 EQUITY INCENTIVE PLAN
RESTRICTED STOCK UNIT AGREEMENT
     1.     Grant. The Company hereby grants to the Employee named in the
Restricted Stock Unit Award Notification an award of Restricted Stock Units
(“RSUs”), as set forth in the Restricted Stock Unit Award Notification and
subject to the terms and conditions in this Agreement and the Company’s 2004
Equity Incentive Plan (the “Plan”). When the Shares are issued pursuant to RSUs
which vest in accordance with paragraph 3, the par value per Share will be
deemed paid by the Employee as a result of the services rendered by the Employee
prior to the applicable vesting date. Unless otherwise defined herein, the terms
defined in the Plan shall have the same defined meanings in this Restricted
Stock Unit Agreement.
     2.     Company’s Obligation. Each RSU represents the right to receive one
Share on the vesting date of that unit. Unless and until the RSUs vest, the
Employee will have no right to receive Shares under such RSUs. Prior to actual
distribution of Shares pursuant to any vested RSUs, such RSUs will represent an
unsecured obligation of the Company, payable (if at all) only from the general
assets of the Company.
     3.     Vesting Schedule. Subject to paragraph 4, the Employee will vest in
the RSUs awarded by this Agreement according to the vesting schedule specified
in the Restricted Stock Unit Award Notification. Accordingly, such vesting may
be tied to the attainment of established performance goals and/or the completion
of a specified period of Service Provider status.
     4.     Administrator Discretion. The Administrator, in its discretion, may
accelerate the vesting of the balance, or some lesser portion of the balance, of
the RSU at any time, subject to the terms of the Plan. If so accelerated, such
RSUs will be considered as having vested as of the date specified by the
Administrator. If the Administrator, in its discretion, accelerates the vesting
of the balance, or some lesser portion of the balance, of the RSUs, the Shares
underlying those accelerated RSUs shall nevertheless be issued at the same time
or times as if such RSUs had vested in accordance with the vesting schedule set
forth in the Restricted Stock Unit Award Notification (whether or not the
Employee remains in Service Provider status as of such date(s)). Accordingly,
there shall be no acceleration of the payment date of the RSUs for which vesting
is accelerated pursuant to this paragraph 4 or the issuance date of the Shares
underlying those vesting-accelerated RSUs.
     5.     Forfeiture upon Termination as Service Provider. Notwithstanding any
contrary provision of this Agreement or the Restricted Stock Unit Award
Notification, if the Employee terminates service as a Service Provider for any
or no reason prior to vesting, the unvested RSUs awarded by this Agreement will
thereupon be forfeited at no cost to the Company and without any payment (in
cash or otherwise) due the Employee.

 

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     6.     Payment upon Vesting. Any RSUs that vest in accordance with
paragraph 3 will be paid to the Employee (or in the event of the Employee’s
death, to his or her estate or designated beneficiaries) in Shares on the date
those RSUs vest in accordance with the vesting schedule set forth in the
Restricted Stock Unit Award Notification or as soon thereafter as practicable,
subject to the tax withholding provisions of paragraph 8. Any RSUs that vest in
accordance with paragraph 4 will be paid in Shares to the Employee (or in the
event of the Employee’s death, to his or her estate or designated beneficiaries)
in accordance with the provisions of such paragraph, subject to tax withholding
provisions of paragraph 8. In the event of any accelerated vesting of the RSUs
pursuant to the provisions of Section 18(c)(ii) of the Plan, the Shares
underlying those accelerated RSUs shall be issued on the accelerated vesting
date or as soon thereafter as administratively practicable, subject to the tax
withholding provisions of paragraph 8. For each RSU that vests, the Employee
will receive one Share. In no event shall the Shares be issued later than the
later of (i) the close of the calendar year in which the Shares vest or (for
vesting-accelerated RSUs under paragraph 4) would have vested in the absence of
such acceleration or (ii) the fifteenth (15th) day of the third (3rd) calendar
month following such actual or deemed vesting date.
     7.     Payments after Death. Any distribution or delivery of Shares to be
made to the Employee in accordance with the provisions of this Agreement will,
if the Employee is then deceased, be made to the administrator or executor of
the Employee’s estate or the designated beneficiary or beneficiaries of the
RSUs. The Shares shall be issued on the issuance date determined in accordance
with the provisions of paragraph 6. Any such administrator, executor or
beneficiary must furnish the Company with (a) written notice of his or her
status as such and (b) evidence satisfactory to the Company to establish the
validity of the transfer and compliance with any laws or regulations pertaining
to said transfer. The Employee may make a beneficiary designation with respect
to the RSUs by filing the appropriate form with the Administrator or its
designate
     8.     Adjustment in Shares. Should any change be made to the Common Stock
by reason of any stock split, stock dividend, spin-off transaction,
extraordinary distribution (whether made in cash, securities or other property),
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Company’s receipt
of consideration, then equitable adjustments shall be made by the Administrator
to the total number and/or class of securities issuable pursuant to this Award.
Such adjustments shall be made in such manner as the Administrator deems
appropriate in order to reflect such change and thereby preclude a dilution or
enlargement of benefits hereunder.
     9.     Withholding of Taxes. When the Shares are issued as payment for
vested RSUs, the Company will withhold a portion of the vested RSUs that have an
aggregate Fair Market Value sufficient to pay the minimum federal, state and
local income, employment and any other applicable taxes required to be withheld
by the Company, unless the Company, in its sole discretion, either requires or
otherwise permits the Employee to make alternate arrangements satisfactory to
the Company for such withholdings in advance of the arising of any withholding
obligations. The number of Shares withheld pursuant to the prior sentence will
be rounded up to the nearest whole Share, with no cash payment due the Employee
for the value of any Share

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withheld in excess of the tax obligation as a result of such rounding.
Notwithstanding any contrary provision of this Agreement, no Shares will be
issued unless and until satisfactory arrangements (as determined by the Company)
have been made by the Employee with respect to the payment of any income and
other taxes which the Company determines must be withheld or collected with
respect to such Shares. In addition and to the maximum extent permitted by law,
the Company (or the employing Subsidiary) has the right to retain without notice
from salary or other amounts payable to the Employee, cash having a sufficient
value to satisfy any tax withholding obligations that the Company determines
cannot be satisfied through the withholding of otherwise deliverable Shares. All
income and other taxes related to the RSU award and any Shares delivered in
payment thereof are the sole responsibility of the Employee. By accepting this
RSU award, the Employee expressly consents to the withholding of Shares and to
any additional cash withholding as provided for in this paragraph 9.
     10.     Rights as Stockholder. Neither the Employee nor any person claiming
under or through the Employee will have any of the rights or privileges of a
stockholder of the Company in respect of any Shares deliverable hereunder unless
and until certificates representing such Shares are issued, recorded on the
records of the Company or its transfer agents or registrars, and delivered to
the Employee or Employee’s broker.
     11.     No Effect on Employment. The Employee’s employment or other Service
Provider status with the Company and its Subsidiaries is on an at-will basis
only. Accordingly, the terms of the Employee’s employment or other Service
Provider status with the Company and its Subsidiaries will be determined from
time to time by the Company or the Subsidiary employing or retaining the
Employee (as the case may be), and the Company or the Subsidiary will have the
right, which is hereby expressly reserved, to terminate or change the terms of
the employment or service relationship of the Employee at any time for any
reason whatsoever, with or without good cause or notice.
     12.     Address for Notices. Any notice to be given to the Company under
the terms of this Agreement must be addressed to the Company at 3 Technology
Drive, Milpitas, California 95035, Attn: Stock Administration, or at such other
address as the Company may hereafter designate in writing or electronically.
     13.     Grant is Not Transferable. Except to the limited extent provided in
paragraph 7, this grant and the rights and privileges conferred hereby will not
be transferred, assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) and will not be subject to sale under execution,
attachment or similar process. Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of this grant, or any right or privilege
conferred hereby, or upon any attempted sale under any execution, attachment or
similar process, this grant and the rights and privileges conferred hereby
immediately will become null and void.
     14.     Restrictions on Sale of Securities. Subject to the provisions of
paragraph 16, the Company shall use its best efforts to assure that the Shares
issued in payment of the vested RSUs are registered under the federal securities
laws or qualify for an available exemption from such registration requirements
and are accordingly freely tradable. However, any sale of the Shares

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will be subject to any market blackout-period that may be imposed by the Company
and must comply with the Company’s insider trading policies, and any other
applicable securities laws.
     15.     Binding Agreement. Subject to the limitation on the transferability
of this grant contained herein, this Agreement will be binding upon and inure to
the benefit of the heirs, legatees, legal representatives, successors and
assigns of the parties hereto.
     16.     Additional Conditions to Issuance of Stock. If at any time the
Company determines, in its discretion, that the listing, registration or
qualification of the Shares upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental regulatory authority
is necessary or desirable as a condition to the issuance of Shares to the
Employee (or his or her estate or beneficiary), such issuance will not occur
unless and until such listing, registration, qualification, consent or approval
have been effected or obtained, free of any conditions not acceptable to the
Company. The Company will make all reasonable efforts to meet the requirements
of any such state or federal law or securities exchange and to obtain any such
consent or approval of any such governmental authority. In no event, however,
shall any Shares be issued in contravention of applicable federal and state
securities laws or other regulatory requirements.
     17.     Plan Governs. This Agreement and the Restricted Stock Unit Award
Notification are subject to all terms and provisions of the Plan. In the event
of a conflict between one or more provisions of this Agreement or the Restricted
Stock Unit Award Notification and one or more provisions of the Plan, the
provisions of the Plan will govern.
     18.     Administrator Authority. The Administrator will have the power to
interpret the Plan and this Agreement and to adopt such rules for the
administration, interpretation and application of the Plan as are consistent
therewith and to interpret or revoke any such rules (including, but not limited
to, the determination of whether or not any RSUs have vested). All actions taken
and all interpretations and determinations made by the Administrator in good
faith will be final and binding upon Employee, the Company and all other
interested persons. No member of the Administrator will be personally liable for
any action, determination or interpretation made in good faith with respect to
the Plan or this Agreement.
     19.     Captions. Captions provided herein are for convenience only and are
not to serve as a basis for interpretation or construction of this Agreement.
     20.     Agreement Severable. In the event that any provision in this
Agreement will be held invalid or unenforceable, such provision will be
severable from, and such invalidity or unenforceability will not be construed to
have any effect on, the remaining provisions of this Agreement.
     21.     Modifications to the Agreement. This Agreement constitutes the
entire understanding of the parties on the subjects covered. The Employee
expressly warrants that he or she is not accepting this Agreement in reliance on
any promises, representations, or inducements other than those contained herein.
Modifications to this Agreement or the Plan can be made only

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in an express written contract executed by a duly authorized officer of the
Company. Notwithstanding anything to the contrary in the Plan or this Agreement,
the Company reserves the right to amend this Agreement as it deems necessary or
advisable, in its sole discretion and without the consent of the Employee, to
comply with Section 409A of the Code or to otherwise avoid imposition of any
additional tax or income recognition under Section 409A of the Code prior to the
actual payment of Shares pursuant to this RSU award.
     22.     Amendment, Suspension or Termination of the Plan. By accepting this
RSU award, the Employee expressly warrants that he or she has received a right
to purchase stock under the Plan, and has received, read and understood a
description of the Plan. The Employee understands that the Plan is discretionary
in nature and may be modified, suspended or terminated by the Company at any
time.
     23.     Electronic Delivery. The Company may, in its sole discretion,
decide to deliver any documents related to RSUs awarded under the Plan or future
RSUs that may be awarded under the Plan by electronic means or request the
Employee’s consent to participate in the Plan by electronic means. By accepting
this RSU award, the Employee hereby consents to receive such documents by
electronic delivery and agrees to participate in the Plan through an on-line or
electronic system established and maintained by the Company or another third
party designated by the Company.
     24.     Notice of Governing Law. This RSU award shall be governed by, and
construed in accordance with, the laws of the State of California without regard
to principles of conflict of laws.

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