Exhibit 10.4

 

STOCK OPTION AGREEMENT

 

This Stock Option Agreement (this “Agreement”) is made as of this 18th day of
May, 2005 by and between ADE Corporation, a Massachusetts corporation (the
“Company”), and Landon T. Clay (the “Optionee”).

 

WITNESSETH THAT:

 

WHEREAS, the Board of Directors of the Company (the “Board”) has granted to the
Optionee a stock option upon the terms and subject to the conditions of this
Agreement; and

 

WHEREAS, the Board has designated this stock option a non-qualified stock
option.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained, the Company and the Optionee agree as follows:

 

1. Definitions. Unless otherwise specified or unless the context otherwise
requires, the following terms, as used in this Agreement, shall have the
following meanings:

 

“Code” means the United States Internal Revenue Code of 1986, as amended from
time to time.

 

“Committee” means the Compensation Committee of the Board or any successor
thereto appointed by the Board, or in the absence of any such Committee, means
the full Board.

 

“Disability” or “Disabled” means permanent or total disability as defined in
Section 22(e)(3) of the Code.

 

“Securities Act” means the Securities Act of 1933, as amended from time to time.

 

“Fair Market Value” means, with respect to a share of Common Stock on a
particular date, the mean between the highest and lowest quoted selling prices
on such date (the “valuation date”) on the securities market where the Common
Stock of the Company is traded, or if there were no sales on the valuation date,
on the next preceding date within a reasonable period (as determined in the sole
discretion of the Committee) on which there were sales. In the event that there
were no sales in such a market within a reasonable period, or in the event the
Common Stock of the Company is not traded on any securities market, the Fair
Market Value shall be as determined in good faith by the Committee in its sole
discretion.

 

“Survivors” means, in the event of the Optionee’s death, the Optionee’s legal
representatives and/or any person or persons who acquired the Optionee’s rights
to the Option by will or by the laws of descent or distribution.

 

2. Grant. Subject to the terms and conditions of this Agreement, the Company may
grant to the Optionee, from time to time, the option (each, an “Option”) to
purchase from the Company, from time to time, the number of shares (the
“Shares”) of Common Stock, $.01 par value per share (the “Common Stock”), of the
Company, as determined by the Committee and specified in one or more schedules
to be delivered to the Optionee in the form attached hereto as Exhibit A (the
“Schedule”).

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

3. Exercise Price and Further Conditions. The exercise price per share of each
Option shall be the Fair Market Value of the Shares on the date of grant and
shall be set forth in each Schedule, subject to adjustment as provided herein.

 

4. Term and Exercisability of Option. The Option shall expire on the expiration
date specified in each Schedule and shall be exercisable in accordance with and
subject to the conditions set forth in Sections 5, 6, 7 and 8 of this Agreement
and those conditions, if any, set forth in each Schedule.

 

5. Termination of Service.

 

(a) Except as otherwise provided in Sections 6, 7 or 8 of this Agreement, if the
Optionee ceases to be a Director of the Company (a “Cessation”) for any reason
other than removal “for cause”, Disability or death before the Optionee has
exercised the Option in full, the Optionee may exercise the Option to the extent
that the Option is exercisable on the date of the Optionee’s Cessation, but only
within a period of not more than three (3) months after the date of such
Cessation or, if earlier, within the originally prescribed term of the Option.

 

(b) The provisions of this Section 5, and not the provisions of Section 7 or 8
of this Agreement, shall apply if the Optionee subsequently becomes disabled or
dies after Cessation; provided, however, that in the case of the Optionee’s
death within three (3) months after Cessation, the Optionee’s Survivors may
exercise the Option within one (1) year after the date of the Optionee’s death,
but in no event after the date of expiration of the term of the Option.

 

(c) Notwithstanding anything herein to the contrary, if subsequent to the
Optionee’s Cessation, but prior to the exercise of the Option, the Committee
determines that, either prior or subsequent to such Cessation, the Optionee
engaged in conduct which would constitute “cause” (as defined in Section 6 of
this Agreement), then the Optionee shall forthwith cease to have any right to
exercise the Option.

 

6. Removal for Cause. In the event the Optionee is removed from office “for
cause,” all outstanding and unexercised Options as of the date the Optionee is
notified of his or her removal from office “for cause” will immediately be
forfeited. For purposes of this Section 6, “cause” shall include (and is not
limited to) dishonesty with respect to the Company, insubordination, substantial
malfeasance or nonfeasance of duty, unauthorized disclosure of confidential
information and conduct substantially prejudicial to the business of the
Company. The determination of the Committee as to the existence of cause will be
conclusive on the Optionee and the Company. “Cause” is not limited to events
which have occurred prior to the Optionee’s removal, nor is it necessary that
the Committee’s finding of “cause” occur prior to removal. If the Committee
determines, subsequent to the Optionee’s removal but prior to the exercise of
the Option, that either prior or subsequent to the Optionee’s removal the
Optionee engaged in conduct which would constitute “cause,” then the right to
exercise the Option shall be forfeited. Any definition in an agreement between
the Optionee and the Company which contains a conflicting definition of “cause”
for removal and which is in effect at the time of such removal shall supersede
the definition in this Agreement with respect to the Optionee.

 

- 2 -

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

7. Cessation for Disability.

 

(a) In the event of Cessation by reason of a Disability, the Optionee may
exercise the Option granted to him or to her to the extent exercisable but not
exercised on the date of the Disability. The Optionee may exercise the Option
only within a period of not more than one (1) year after the date that the
Optionee became Disabled or, if earlier, within the originally prescribed term
of the Option.

 

(b) The Committee shall make the determination both of whether a Disability has
occurred and the date of its occurrence (unless a procedure for such
determination is set forth in another agreement between the Company and the
Optionee, in which case such procedure shall be used for such determination). If
requested, the Optionee shall be examined by a physician selected or approved by
the Committee, the cost of which examination shall be paid for by the Company.

 

8. Death While a Director. In the event of the death of the Optionee while he or
she is a Director of the Company, the Option may be exercised by the Optionee’s
Survivors to the extent exercisable but not exercised on the date of death. The
Option must be exercised within one (1) year after the date of death of the
Optionee.

 

9. Method of Exercise.

 

(a) The Option (or any part or installment thereof) shall be exercised by giving
written notice to the Company, together with provision for payment of the full
purchase price in accordance with this Section 9 for the Shares, and upon
compliance with any other conditions set forth in this Agreement. Such written
notice shall be signed by the Optionee, shall state the number of Shares which
are being exercised and shall contain any representation required by this
Agreement.

 

(b) Payment of the purchase price for the Shares shall be made (i) in United
States dollars in cash or by check, (ii) through delivery of shares of Common
Stock already owned by the Optionee not subject to any restriction under any
plan and having a Fair Market Value equal as of the date of exercise to the cash
exercise price of the Option, (iii) at the discretion of the Committee, by any
other means, including a promissory note of the Optionee, which the Committee
determines to be consistent with the purpose of this Agreement and applicable
law, (iv) at the discretion of the Committee, in accordance with a cashless
exercise program established with a securities brokerage firm and approved by
the Committee or (v) at the discretion of the Committee, by any combination of
(i), (ii), (iii) and (iv) above.

 

(c) The Company shall reasonably promptly deliver the Shares to the Optionee (or
to the Optionee’s Survivors, as the case may be). In determining what
constitutes “reasonably promptly,” it is expressly understood that the delivery
of the Shares may be delayed by the Company in order to comply with any law or
regulation which requires the Company to take any action with respect to the
Shares prior to their issuance. The Shares shall, upon delivery, be fully paid,
non-assessable Shares.

 

10. Nonassignability of the Option. The Option shall not be transferable by the
Optionee other than by will or by the laws of descent and distribution;
provided, however, that the designation of a beneficiary of the Option by the
Optionee shall not be deemed a transfer

 

- 3 -

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

prohibited by this Section 10. The Option shall be exercisable, during the
Optionee’s lifetime, only by the Optionee (or by his or her legal
representative) and shall not be assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process. Any attempted transfer, assignment,
pledge, hypothecation or other disposition of the Option or of any rights
granted hereunder contrary to the provisions of this Section 10, or the levy of
any attachment or similar process upon the Option, shall be null and void.

 

11. Purchase for Investment. Unless the offering and sale of the Shares to be
issued upon the exercise of the Option shall have been effectively registered
under the Securities Act, the Company shall be under no obligation to issue the
Shares covered by such exercise unless and until the following conditions have
been fulfilled:

 

(a) The Optionee shall warrant to the Company, at the time of such exercise or
receipt, as the case may be, that he or she is acquiring the Shares for his or
her own account for investment and not with a view to, or for sale in connection
with, the distribution of any such Shares, in which event the Optionee shall be
bound by the provisions of the following legend which shall be endorsed upon the
certificate evidencing the Shares issued pursuant to such exercise or such
grant:

 

“The shares represented by this certificate have been taken for investment and
they may not be sold or otherwise transferred by any person, including a
pledgee, unless (1) either (a) a Registration Statement with respect to such
shares shall be effective under the Securities Act of 1933, as amended, or
(b) the Company shall have received an opinion of counsel satisfactory to it
that an exemption from registration under such Act is then available, and
(2) there shall have been compliance with all applicable state securities laws.

 

(b) The Company shall have received an opinion of its counsel that the Shares
may be issued upon such exercise in compliance with the Securities Act without
registration thereunder.

 

The Company may delay issuance of the Shares until completion of any action or
obtaining any consent which the Company deems necessary under any applicable law
(including, without limitation, state securities or “blue sky” laws).

 

12. Adjustments. Upon the occurrence of any of the following events, the
Optionee’s rights with respect to the Option granted to him or her hereunder
which has not previously been exercised in full shall be adjusted as hereinafter
provided:

 

(a) Stock Dividends and Stock Splits. If the shares of Common Stock shall be
subdivided or combined into a greater or smaller number of shares or if the
Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, the number of Shares deliverable upon the exercise of
the Option shall be appropriately increased or decreased proportionately, and
appropriate adjustments shall be made in the purchase price per share to reflect
such subdivision, combination or stock dividend.

 

(b) Mergers and Consolidations. If the Company is to be consolidated with or
acquired by another entity in a merger, or in the event of a sale of all or
substantially all of the Company’s assets (an “Acquisition”), the Company may
take such action with respect to the

 

- 4 -

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

Option as the Committee or the Board may deem to be equitable and in the best
interests of the Company and the Optionee under the circumstances, including,
without limitation, (i) giving the Optionee reasonable advance notice of the
pendency of the Acquisition and accelerating the vesting of the Option so that
it becomes exercisable in full immediately prior to the Acquisition, (ii) making
appropriate provision for the continuation of the Option by substituting on an
equitable basis for the Shares then subject to the Option either the
consideration payable with respect to the outstanding shares of Common Stock in
connection with the Acquisition or securities of any successor or acquiring
entity or (iii) giving the Optionee reasonable advance notice of the pendency of
the Acquisition and canceling the Option effective upon the Acquisition if it is
not exercised prior to the Acquisition.

 

(c) Recapitalization or Reorganization. In the event of a recapitalization or
reorganization of the Company (other than a transaction described in paragraph
(b) of this Section 12) pursuant to which securities of the Company or of
another corporation are issued with respect to the outstanding shares of Common
Stock, the Optionee upon exercising the Option shall be entitled to receive for
the purchase price paid upon such exercise the securities he or she would have
received if he or she had exercised the Option prior to such recapitalization or
reorganization.

 

13. Fractional Shares. No fractional share shall be issued under this Agreement,
and the Optionee shall receive from the Company cash in lieu of any such
fractional share equal to the Fair Market Value thereof determined in good faith
by the Board of the Company.

 

14. Rights as Shareholder. The Optionee shall have no rights as a shareholder
with respect to any Shares or other securities covered by the Option, except
after due exercise thereof and tender of the full purchase price for the Shares
being purchased pursuant to such exercise, and registration of the Shares in the
Company’s share register in the name of the Optionee.

 

15. General Provisions.

 

(a) Amendment; Waivers. This Agreement contains the full and complete
understanding and agreement of the parties hereto as to the subject matter
hereof and, except as otherwise permitted by the express terms of this
Agreement, it may not be modified or amended, nor may any provision hereof be
waived, except by a further written agreement duly signed by each of the
parties. The waiver by either of the parties hereto of any provision hereof in
any instance shall not operate as a waiver of any other provision hereof or in
any other instance.

 

(b) Binding Effect. This Agreement shall inure to the benefit of and be binding
upon the parties hereto and, to the extent provided herein, their respective
heirs, executors, administrators, representatives, successors and assigns.

 

(c) Construction. The titles of the sections of this Agreement are included for
convenience only and shall not be construed as modifying or affecting their
provisions. The masculine gender shall include both sexes; the singular shall
include the plural and the plural the singular unless the context otherwise
requires.

 

(d) Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the applicable laws of The Commonwealth of
Massachusetts (other

 

- 5 -

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

than the law governing conflict of law questions) except to the extent the laws
of any other jurisdiction are mandatorily applicable.

 

(e) Notices. Any notice in connection with this Agreement shall be deemed to
have been properly delivered if it is in writing and is delivered by hand or
facsimile or sent by registered mail to the party addressed as follows, unless
another address has been substituted by notice so given:

 

To the Optionee:

  

To his or her address as listed on the books of the Company.

To the Company:

  

ADE Corporation

    

80 Wilson Way

    

Westwood, Massachusetts 02090-1806

    

Attention: Brian James

 

IN WITNESS WHEREOF, the Optionee has executed this Agreement and the Company has
caused this Stock Option Agreement to be executed by its officer thereunto duly
authorized, all as of the date first set forth above.

 

ADE Corporation

/s/ Brian C. James

Title: Treasurer and CFO

/s/ Landon T. Clay

(Signature of Optionee)

 

- 6 -

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

Exhibit A

 

ADE CORPORATION

SCHEDULE EVIDENCING GRANTING OF STOCK OPTION AND

ACKNOWLEDGMENT OF RECEIPT

 

Granted to:

    

Grant Date:

  

Options Granted:

Expiration Date:

  

Exercise Price per Share:

 

Vesting Schedule

 

Shares

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

   Vest On

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

   Shares

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

   Vest On

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

   Shares

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

   Vest On

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

   Shares

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

   Vest On

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

                                                                                
                                                                              
                        

 

ADE Corporation (the “Company”) hereby grants to the Optionee named above, as of
the date set forth above, an option (the “Option”) pursuant to that certain
Stock Option Agreement, dated as of May 18, 2005 (the “Agreement”) to purchase
the number of shares of the Company’s Common Stock, $.01 par value, at the
exercise price and in accordance with the vesting schedule set forth above.

 

The Optionee hereby acknowledges receipt of the Option in accordance with the
terms set forth above. The Optionee further acknowledges that the Option is
subject to the terms and conditions of this Schedule and the Agreement.

 

Without limiting the generality of the foregoing, the Optionee understands and
agrees that:

 

(a) The Option is not transferable by the Optionee otherwise than by operation
of law and is exercisable, during the Optionee’s lifetime, only by him or her.

 

(b) To the extent that any shares of the Company’s Common Stock, owned by the
Optionee and delivered in payment of the exercise price as provided in the
Agreement, were acquired by the Optionee from the Company, said shares shall
have been owned by the Optionee for at least six months prior to the date of
such delivery.

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

At any time when the Optionee wishes to exercise the Option, in whole or in
part, the Optionee shall submit a duly executed Notice of Exercise of Option to
the Company. Copies of such notice are available from the Company.

 

ADE Corporation

     

Optionee

By:                        

(Signature)

Title:                        

(Name)

Date:                        

(Date)

 

Please Return To:

Chris Gallagher

Investor Relations

ADE Corporation

80 Wilson Way

Westwood, MA 02090

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

 

Schedule to Exhibit 10.4

 

The following non-employee Directors are parties to Stock Option Agreements with
the Company which are substantially identical in all material respects to the
representative Stock Option Agreement filed herewith and are dated as of the
respective dates listed below. The other Stock Option Agreements are omitted
pursuant to Instruction 2 to Item 601 of Regulation S-K.

 

Name of Signatory

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

  

Date

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

Harris Clay

  

May 18, 2005

H. Kimball Faulkner

  

May 18, 2005

Kendall Wright

  

May 18, 2005