Exhibit 10.11
EXECUTIVE OFFICER — FORM A
ULTRATECH, INC.
RESTRICTED STOCK UNIT ISSUANCE AGREEMENT
RECITALS
     A. The Board has adopted the Plan for the purpose of retaining the services
of selected Employees and consultants and other independent advisors who provide
services to the Corporation (or any Parent or Subsidiary).
     B. Participant is to render valuable services to the Corporation (or a
Parent or Subsidiary), and this Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection with the
Corporation’s issuance of shares of Common Stock to the Participant under the
Stock Issuance Program.
     C. All capitalized terms in this Agreement shall have the meaning assigned
to them in the attached Appendix A.
NOW, THEREFORE, it is hereby agreed as follows:
          1. Grant of Restricted Stock Units. The Corporation hereby awards to
the Participant, as of the Award Date, Restricted Stock Units under the Plan.
Each Restricted Stock Unit which vests during the Participant’s period of
Service shall entitle the Participant to receive one share of Common Stock on
the specified issuance date. The number of shares of Common Stock subject to the
awarded Restricted Stock Units, the applicable vesting schedule for those
shares, the date on which those vested shares shall become issuable to
Participant and the remaining terms and conditions governing the award (the
“Award”) shall be as set forth in this Agreement.
AWARD SUMMARY

     
Participant:
   
 
   
Award Date:
   
 
   
Number of Shares
Subject to Award:
 
                     shares of Common Stock (the “Shares”)
 
   
Vesting Schedule:
  The Shares shall vest in a series of ___ (___) successive equal annual
installments upon the Participant’s completion of each year of Service over the
___ (___)-year period measured from _________. However, the Shares may vest in
whole or in part on an accelerated basis in accordance with the provisions of
Paragraphs 4 and 6 of this Agreement.

 

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Issuance Schedule
  The Shares in which the Participant vests in accordance with the applicable
provisions of the foregoing Vesting Schedule will become issuable on the date
(the “Issuance Date”) upon which occurs the earliest of the following: (i)
_________, (ii) the date of the Participant’s Separation from Service or
(iii) the closing date of a Qualifying Change in Control. The actual issuance of
the Shares shall be subject to the Corporation’s collection of all applicable
Withholding Taxes and shall be effected on the applicable Issuance Date or as
soon as administratively practicable thereafter, but in no event later than the
close of the calendar year in which such Issuance Date occurs or (if later) the
fifteenth (15th) day of the third calendar month following such Issuance Date,
unless a further deferral is required pursuant to Paragraph 9 of this Agreement.
The procedures pursuant to which the applicable Withholding Taxes are to be
collected are set forth in Paragraph 8 of this Agreement.

          2. Limited Transferability. Prior to actual receipt of the Shares
which vest and become issuable hereunder, the Participant may not transfer any
interest in the Award or the underlying Shares. Any Shares which vest hereunder
but which otherwise remain unissued at the time of the Participant’s death may
be transferred pursuant to the provisions of the Participant’s will or the laws
of inheritance or to the Participant’s designated beneficiary or beneficiaries
of this Award. The Participant may also direct the Corporation to re-issue the
stock certificates for any Shares which in fact vest and become issuable to
Participant under the Award during his lifetime to one or more designated family
members or a trust established for the Participant and/or his family members.
The Participant may make such a beneficiary designation or certificate directive
at any time by filing the appropriate form with the Plan Administrator or its
designee.
          3. Cessation of Service. Except as otherwise provided in Paragraph 4
below, should the Participant cease Service for any reason prior to vesting in
one or more Shares subject to this Award, then the Award will be immediately
cancelled with respect to those unvested Shares, and the number of Restricted
Stock Units will be reduced accordingly. The Participant shall thereupon cease
to have any right or entitlement to receive any Shares under those cancelled
units. Should the Participant’s Service terminate by reason of a Termination for
Cause, then this Award will be immediately cancelled with respect to all the
Restricted Stock Units subject to such Award, whether vested or unvested at the
time, and the Participant shall thereupon cease to have any right or entitlement
to receive any Shares under this Award and the cancelled Restricted Stock Units.
          4. Accelerated Vesting. The following special vesting acceleration
provisions shall be in effect for the Award and shall be in addition to the
vesting acceleration provisions of Paragraph 6 of this Agreement:
               (a) Should the Participant cease Employee status on or after
attainment of age sixty-five (65) by reason of death, Disability or Involuntary
Termination (other than a Termination for Cause), then all the Shares at the
time subject to this Award shall immediately vest.

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               (b) Should the Participant cease Employee status prior to
attainment of age sixty-five (65) by reason of his death, Disability or
Involuntary Termination (other than a Termination for Cause), then the
Participant shall immediately vest in an additional number of Shares (not to
exceed one hundred percent (100%) of the number of unvested Shares at that time)
equal to the greater of (i) twenty-five percent (25%) of the total number of
Shares subject to this Award or (ii) the number of additional Shares (if any) in
which the Participant would have been vested at the time of such cessation of
Employee status had the Shares subject to this Award vested in a series of
___(___) successive equal monthly installments over the duration of the Vesting
Schedule.
               (c) The Shares which vest on an accelerated basis pursuant to
this Paragraph 4, together with any other Shares in which the Participant is at
the time vested, shall be issued on the date of the Participant’s Separation
from Service (the “Issuance Date”) or as soon as administratively practicable
thereafter, subject to the Corporation’s collection of the applicable
Withholding Taxes, but in no event later than the close of the calendar year in
which such Separation from Service occurs or (if later) the fifteenth (15th) day
of the third calendar month following the date of such Separation from Service,
unless a further deferral is required pursuant to Paragraph 9.
          5. Stockholder Rights and Dividend Equivalents
               (a) The holder of this Award shall not have any stockholder
rights, including voting or dividend rights, with respect to the Shares subject
to the Award until the Participant becomes the record holder of those Shares
upon their actual issuance following the Corporation’s collection of the
applicable Withholding Taxes.
               (b) Notwithstanding the foregoing, should any dividend or other
distribution, whether regular or extraordinary and whether payable in cash,
securities or other property (other than shares of Common Stock), be declared
and paid on the outstanding Common Stock while one or more Shares remain subject
to this Award (i.e., those Shares are not otherwise issued and outstanding for
purposes of entitlement to the dividend or distribution), then a special book
account shall be established for the Participant and credited with a phantom
dividend equal to the actual dividend or distribution which would have been paid
on the Shares at the time subject to this Award had those Shares been issued and
outstanding and entitled to that dividend or distribution. The phantom dividend
equivalents so credited shall vest at the same time as the Shares to which they
relate and shall be distributed to the Participant (in the same form the actual
dividend or distribution was paid to the holders of the Common Stock entitled to
that dividend or distribution or in such other form as the Plan Administrator
deems appropriate) concurrently with the issuance of those Shares on the
applicable Issuance Date. However, each such distribution shall be subject to
the Corporation’s collection of the Withholding Taxes applicable to that
distribution.

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          6. Change of Control.
               (a) Any Restricted Stock Units subject to this Award at the time
of a Change in Control will vest immediately prior to the closing of that Change
in Control. The Shares subject to those vested units, together with any other
Shares in which the Participant is at that time vested, will be issued on the
earliest of the following Issuance Dates: (i) _________, (ii) the date of the
Participant’s Separation from Service or (iii) the closing date of a Qualifying
Change in Control, subject to the Corporation’s collection of the applicable
Withholding Taxes pursuant to the provisions of Paragraph 8. Alternatively, the
Shares subject to those vested units shall be converted into the right to
receive the same consideration per share of Common Stock payable to the other
stockholders of the Corporation in consummation of the Change in Control, and
such consideration per Share shall be distributed on the earliest of the
Issuance Dates specified above, subject to the Corporation’s collection of the
applicable Withholding Taxes pursuant to the provisions of Paragraph 8.
               (b) This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
          7. Adjustment in Shares. Should any change be made to the Common Stock
by reason of any stock split, stock dividend, recapitalization, combination of
shares, exchange of shares, spin-off transaction, extraordinary dividend or
distribution or other change affecting the outstanding Common Stock as a class
without the Corporation’s receipt of consideration, or should the value of
outstanding shares of Common Stock be substantially reduced as a result of a
spin-off transaction or an extraordinary dividend or distribution, or should
there occur any merger, consolidation or other reorganization, then equitable
adjustments shall be made by the Plan Administrator to the total number and/or
class of securities issuable pursuant to this Award in order to reflect such
change and thereby prevent a dilution or enlargement of benefits hereunder. In
making such equitable adjustments, the Plan Administrator shall take into
account any amounts credited to the Participant’s book account under Paragraph
5(b) in connection with the transaction. The determination of the Plan
Administrator shall be final, binding and conclusive. In the event of a Change
in Control, the adjustments (if any) shall be made in accordance with the
provisions of Paragraph 6.
          8. Collection of Withholding Taxes.
               (a) The Corporation shall collect the employee portion of the
FICA taxes (Social Security and Medicare) with respect to the Shares at the time
those Shares vest hereunder. The FICA taxes shall be based on the Fair Market
Value of the Shares on their vesting date. The Corporation shall also collect
the employee portion of the FICA taxes with respect to any phantom dividends at
the time those phantom dividends vest hereunder. The FICA taxes shall be based
on the cash amount and the fair market value of any other property underlying
the phantom dividends on the vesting date. Unless the Participant delivers a
separate check payable to the Corporation in the amount of the FICA taxes
required to be withheld from the Participant, the Corporation shall withhold
those taxes from the Participant’s wages.

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However, if the Participant is at the time an executive officer of the
Corporation, then such withholding taxes must be collected from the Participant
through delivery of his or her separate check not later than the vesting date.
               (b) The Corporation shall collect the federal, state and local
income taxes required to be withheld with respect to the distribution of the
phantom dividend equivalents to the Participant by withholding a portion of that
distribution equal to the amount of those taxes, with the cash portion of the
distribution to be the first portion so withheld. Until such time as the
Corporation provides the Participant with notice to the contrary, the
Corporation shall collect the federal, state and local income taxes required to
be withheld with respect to the issuance of the Shares that vest hereunder
through an automatic Share withholding procedure pursuant to which the
Corporation will withhold, at the time of such issuance, a portion of the Shares
with a Fair Market Value (measured as of the issuance date) equal to the amount
of those taxes (the “Share Withholding Method”); provided, however, that the
amount of any Shares so withheld shall not exceed the amount necessary to
satisfy the Corporation‘s required tax withholding obligations using the minimum
statutory withholding rates for federal and state tax purposes that are
applicable to supplemental taxable income. Participant shall be notified in
writing in the event such Share Withholding Method is no longer available.
                (c) Should any Shares be distributed at time the Share
Withholding Method is not available, then the federal, state and local income
taxes required to be withheld with respect to those Shares shall be collected
from the Participant through either of the following alternatives:
                — the Participant’s delivery of his or her separate check
payable to the Corporation in the amount of such Withholding Taxes, or
                — the use of the proceeds from a next-day sale of the Shares
issued to the Participant, provided and only if (i) such a sale is permissible
under the Corporation’s trading policies governing the sale of Common Stock,
(ii) the Participant makes an irrevocable commitment, on or before the Issuance
Date for those Shares, to effect such sale of the Shares and (iii) the
transaction is not otherwise deemed to involve a prohibited loan under
Section 402 of the Sarbanes-Oxley Act of 2002.
               (d) Should any other amounts become distributable to Participant
in consideration for the Shares, then the federal, state and local income taxes
required to be withheld with respect to those amounts shall be collected from
the Participant pursuant to such procedures as the Corporation deems appropriate
under the circumstances, including (without limitation) the Participant’s
delivery of his or her separate check payable to the Corporation in the amount
of such Withholding Taxes.
               (e) Except as otherwise provided in Paragraph 6 and
Paragraph 8(b), the settlement of all Restricted Stock Units which vest under
the Award shall be made solely in shares of Common Stock. In no event, however,
shall any fractional shares be issued. Accordingly, the total number of shares
of Common Stock to be issued pursuant to the Award shall, to the extent
necessary, be rounded down to the next whole share in order to avoid the
issuance of a fractional share.

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          9. Deferred Issue Date. Notwithstanding any provision to the contrary
in this Agreement, no Shares which become issuable by reason of the
Participant’s Separation from Service shall actually be issued to Participant
prior to the earlier of (i) the first day of the seventh (7th) month following
the date of such Separation from Service or (ii) the date of Participant’s
death, if Participant is deemed at the time of such Separation from Service to
be a specified employee under Section 1.409A-1(i) of the Treasury Regulations
issued under Code Section 409A, as determined by the Plan Administrator in
accordance with consistent and uniform standards applied to all other Code
Section 409A arrangements of the Corporation, and such delayed commencement is
otherwise required in order to avoid a prohibited distribution under Code
Section 409A(a)(2). The deferred Shares or other distributable amount shall be
issued or distributed in a lump sum on the first day of the seventh (7th) month
following the date of Participant’s Separation from Service or, if earlier, the
first day of the month immediately following the date the Corporation receives
proof of Participant’s death.
          10. Benefit Limit. In the event the vesting and issuance of the Shares
subject to this Award would otherwise constitute a parachute payment under Code
Section 280G, then the vesting and issuance of those Shares shall be subject to
reduction to the extent necessary to assure that the number of Shares which vest
and are issued under this Award will be limited to the greater of (i)  the
number of Shares which can vest and be issued without triggering a parachute
payment under Code Section 280G or (ii)  the maximum number of Shares which can
vest and be issued under this Award so as to provide the Participant with the
greatest after-tax amount of such vested and issued Shares after taking into
account any excise tax the Participant may incur under Code Section 4999 with
respect to those Shares and any other benefits or payments to which the
Participant may be entitled in connection with any change in control or
ownership of the Corporation or the subsequent termination of the Participant’s
Service.
ALTERNATIVE
          10. Benefit Limit. In the event the vesting and issuance of the Shares
subject to this Award would constitute a parachute payment under Code
Section 280G, the Participant shall become entitled to the tax gross-up payment
in accordance with the terms and provisions of Section ___ of his Employment
Agreement, to the extent such agreement in effect at that time. Otherwise, the
vesting and issuance of those Shares shall be subject to reduction to the extent
necessary to assure that the number of Shares which vest and are issued under
this Award will be limited to the greater of (i)  the number of Shares which can
vest and be issued without triggering a parachute payment under Code
Section 280G or (ii)  the maximum number of Shares which can vest and be issued
under this Award so as to provide the Participant with the greatest after-tax
amount of such vested and issued Shares after taking into account any excise tax
the Participant may incur under Code Section 4999 with respect to those Shares
and any other benefits or payments to which the Participant may be entitled in
connection with any change in control or ownership of the Corporation or the
subsequent termination of the Participant’s Service.

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          11. Compliance with Laws and Regulations. The issuance of shares of
Common Stock pursuant to the Award shall be subject to compliance by the
Corporation and Participant with all applicable requirements of law relating
thereto and with all applicable regulations of any stock exchange (or the Nasdaq
National Market, if applicable) on which the Common Stock may be listed for
trading at the time of such issuance.
          12. Notices. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to be
given or delivered to Participant shall be in writing and addressed to
Participant at the address indicated below Participant’s signature line on this
Agreement. All notices shall be deemed effective upon personal delivery or upon
deposit in the U.S. mail, postage prepaid and properly addressed to the party to
be notified.
          13. Successors and Assigns. Except to the extent otherwise provided in
this Agreement, the provisions of this Agreement shall inure to the benefit of,
and be binding upon, the Corporation and its successors and assigns and
Participant, Participant’s assigns, the legal representatives, heirs and
legatees of Participant’s estate and any beneficiaries of the Award designated
by Participant.
          14. Construction. This Agreement and the Award evidenced hereby are
made and granted pursuant to the Plan and are in all respects limited by and
subject to the terms of the Plan. All decisions of the Plan Administrator with
respect to any question or issue arising under the Plan or this Agreement shall
be conclusive and binding on all persons having an interest in the Award.
          15. Governing Law. The interpretation, performance and enforcement of
this Agreement shall be governed by the laws of the State of California without
resort to that State’s conflict-of-laws rules.
          16. Employment at Will. Nothing in this Agreement or in the Plan shall
confer upon Participant any right to continue in Service for any period of
specific duration or interfere with or otherwise restrict in any way the rights
of the Corporation (or any Parent or Subsidiary employing or retaining
Participant) or of Participant, which rights are hereby expressly reserved by
each, to terminate Participant’s Service at any time for any reason, with or
without cause.

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     IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first indicated above.

                  ULTRATECH, INC.    
 
           
 
  By:        
 
   
 
 
 
  Title:        
 
   
 
   
 
                PARTICIPANT    
 
           
 
  Signature:        
 
   
 
   
 
  Address:        
 
   
 
     
 
     
 
   

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APPENDIX A
DEFINITIONS
     The following definitions shall be in effect under the Agreement:
          A. Agreement shall mean this Restricted Stock Unit Issuance Agreement.
          B. Award shall mean the award of Restricted Stock Units made to the
Participant pursuant to the terms of this Agreement.
          C. Award Date shall mean the date the Restricted Stock Units are
awarded to Participant pursuant to the Agreement and shall be the date indicated
in Paragraph 1 of the Agreement.
          D. Board shall mean the Corporation’s Board of Directors.
          E. Change in Control shall mean a change in ownership or control of
the Corporation effected through any of the following transactions:
          (i) a merger or consolidation in which the Corporation is not the
surviving entity, except for a transaction the principal purpose of which is to
change the state in which the Corporation is incorporated,
          (ii) the sale, transfer or other disposition of all or substantially
all of the assets of the Corporation in complete liquidation or dissolution of
the Corporation, or
          (iii) any reverse merger in which the Corporation is the surviving
entity but in which securities possessing more than fifty percent (50%) of the
total combined voting power of the Corporation’s outstanding securities are
transferred to person or persons different from the persons holding those
securities immediately prior to such merger.
          (iv) the acquisition, directly or indirectly by any person or related
group of persons (other than the Corporation or a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Corporation), of beneficial ownership (within the meaning of Rule 13d-3 of the
1934 Act) of securities possessing more than fifty percent (50%) of the total
combined voting power of the Corporation’s outstanding securities pursuant to a
tender or exchange offer made directly to the Corporation’s stockholders, or

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          (v) 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 cease, by reason of one or more contested elections for Board
membership, 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 the Board approved such election or nomination.
          F. Code shall mean the Internal Revenue Code of 1986, as amended.
          G. Common Stock shall mean shares of the Corporation’s common stock.
          H. Corporation shall mean Ultratech, Inc., a Delaware corporation, and
any successor corporation to all or substantially all of the assets or voting
stock of Ultratech, Inc. which shall by appropriate action adopt the Plan.
          I. Disability shall mean the Participant’s inability, because of
physical or mental illness or injury, to perform his customary duties as an
executive officer of the Corporation, 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
Corporation and the Participant. If the Corporation and the Participant 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.
          J. Employee shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
          K. Employment Agreement shall mean the written employment agreement
(if any) between the Corporation and the Participant in effect on the Award
Date.
          L. Fair Market Value per share of Common Stock on any relevant date
shall be the closing selling price per share on the date in question on the
Stock Exchange on which the Common Stock is at that time primarily traded, as
such price is officially quoted in the composite tape of transactions on such
exchange. If there is no reported sale of Common Stock on such Stock Exchange on
the date in question, then the Fair Market Value shall be the closing selling
price on the exchange on the last preceding date for which such quotation
exists.

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          M. Involuntary Termination shall mean the termination of the
Participant’s Employee status by reason of:
          (i) such individual’s involuntary dismissal or discharge by the
Corporation (or any Parent or Subsidiary) for reasons other than a Termination
for Cause, or
          (ii) such individual’s voluntary resignation following any of the
following events: (A) any reduction in the level of the Participant’s annual
rate of base salary, except a reduction that is part of a program applicable to
all of the Corporation’s officers to reduce expenses; (B) the failure by the
Corporation or any Parent or Subsidiary (or any successor to the Corporation) to
comply with any material terms of the Employment Agreement (if any) or any other
material agreement between the Participant and the Corporation or any Parent or
Subsidiary (or any successor to the Corporation); (C) any material reduction in
the nature or scope of the Participant’s duties, title, function, authority or
responsibilities, subject to any limitations specified in the Employment
Agreement (if any); or (D) a requirement that the Participant relocate his
principal office to a location that is more than sixty (60) miles from the
location of his principal office determined as of the date specified in the
Employment Agreement; provided, however, that none of the events specified above
shall constitute grounds for an Involuntary Termination unless the Participant
shall have notified the Corporation in writing describing the event which
constitute grounds for such Involuntary Termination within sixty (60) days
following the occurrence of such event and the Corporation shall have failed to
cure such event within thirty (30) days after the Corporation’s receipt of such
written notice.
ALTERNATIVE
          (ii) such individual’s voluntary resignation following any of the
following events: (A) any reduction in the level of the Participant’s annual
rate of base salary, except a reduction that is part of a program applicable to
all of the Corporation’s officers to reduce expenses; (B) the failure by the
Corporation or any Parent or Subsidiary (or any successor to the Corporation) to
comply with any material terms of the Employment Agreement or any other material
agreement between the Participant and the Corporation or any Parent or
Subsidiary (or any successor to the Corporation); (C) any material reduction in
the nature or scope of the Participant’s duties, title, function, authority or
responsibilities (including, for example, the Participant’s directly reporting
to anyone other than the Board); or (D) a requirement that the Participant
relocate his principal office to a location that is more than sixty (60) miles
from the location of his principal office determined as of the date specified in
the Employment Agreement; provided, however, that none of the events specified
above shall constitute grounds for an Involuntary Termination unless the
Participant shall have notified the Corporation in writing describing the event

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which constitute grounds for such Involuntary Termination within sixty (60) days
following the occurrence of such event and the Corporation shall have failed to
cure such event within thirty (30) days after the Corporation’s receipt of such
written notice.
          N. 1934 Act shall mean the Securities Exchange Act of 1934, as amended
from time to time.
          O. Participant shall mean the person to whom the Award is made
pursuant to the Agreement.
          P. Parent shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
          Q. Plan shall mean the Corporation’s 1993 Stock Option/Stock Issuance
Plan, as amended and restated.
          R. Plan Administrator shall mean either the Board or a committee of
the Board acting in its capacity as administrator of the Plan.
          S. Qualifying Change in Control shall mean a change in the ownership
of the Corporation, a change in the effective control of the Corporation or a
change in ownership of a substantial portion of the Corporation’s assets, with
each such event to be determined in accordance with the requirements for a
change in control event set forth in Section 1.409A-3(i)((5) of the Treasury
Regulations; provided, however, that a change in the effective control of the
Corporation will only be deemed to occur if there is an acquisition, within the
applicable twelve (12)-month period, of ownership of securities possessing more
than fifty percent (50%) of the total combined voting power of the Corporation’s
outstanding securities.
          T. Restricted Stock Unit shall mean each unit subject to this Award
which shall entitle the Participant to receive one share of Common Stock under
the Plan at a designated time following the vesting of that unit.
          U. Separation from Service shall mean the Participant’s cessation of
Employee status by reason of his death, retirement or termination of employment.
The Participant shall be deemed to have terminated employment for such purpose
at such time as the level of his bona fide services to be performed as an
Employee (or as a consultant or independent contractor) permanently decreases to
a level that is not more than twenty percent (20%) of the average level of
services he rendered as an Employee during the immediately preceding thirty-six
(36) months. Solely for purposes of determining when a Separation from Service
occurs, Participant will be deemed to continue in “Employee” status for so long
as he remains in the employ of one or more members of the Employer Group,
subject to the control and direction of the employer entity as to both the work
to

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be performed and the manner and method of performance. “Employer Group” means
the Corporation and any Parent or Subsidiary and any other corporation or
business controlled by, controlling or under common control with, the
Corporation, as determined in accordance with Sections 414(b) and (c) of the
Code and the Treasury Regulations thereunder, except that in applying
Sections 1563(1), (2) and (3) of the Code for purposes of determining the
controlled group of corporations under Section 414(b), the phrase “at least
50 percent” shall be used instead of “at least 80 percent” each place the latter
phrase appears in such sections, and in applying Section 1.414(c)-2 of the
Treasury Regulations for purposes of determining trades or businesses that are
under common control for purposes of Section 414(c), the phrase “at least
50 percent” shall be used instead of “at least 80 percent” each place the latter
phrase appears in Section 1.4.14(c)-2 of the Treasury Regulations. Any such
determination as to Separation from Service, however, shall be made in
accordance with the applicable standards of the Treasury Regulations issued
under Section 409A of the Code.
          V. Service shall mean Participant’s performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the Board or a consultant or independent advisor.
Participant shall be deemed to cease Service immediately upon the occurrence of
either of the following events: (i) Participant no longer performs services in
any of the foregoing capacities for the Corporation (or any Parent or
Subsidiary) or (ii) the entity for which Participant performs such services
ceases to remain a Parent or Subsidiary of the Corporation, even though
Participant may subsequently continue to perform services for that entity.
Service as an Employee shall not be deemed to cease during a period of military
leave, sick leave or other personal leave approved by the Corporation; provided,
however, that the following special provisions shall be in effect for any such
leave:
          (i) Should the period of such leave (other than a disability leave)
exceed six (6) months, then Participant shall be deemed to incur a Separation
from Service upon the expiration of the initial six (6)-month period of that
leave, unless Participant retains a right to re-employment under applicable law
or by contract with the Corporation (or any Parent or Subsidiary).
          (ii) Should the period of a disability leave exceed twenty-nine
(29) months, then Participant shall be deemed to incur a Separation from Service
upon the expiration of the initial twenty-nine (29)-month period of that leave,
unless Participant retains a right to re-employment under applicable law or by
contract with the Corporation (or any Parent or Subsidiary). For such purpose, a
disability leave shall be a leave of absence due to any medically determinable
physical or mental impairment that can be expected to result in death or to last
for a continuous period of not less than six (6) months and causes Participant
to be unable to perform the duties of his position of employment with the
Corporation (or any Parent or Subsidiary) or any substantially similar position
of employment.

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          (iii) Except to the extent otherwise required by law or expressly
authorized by the Plan Administrator or by the Corporation’s written policy on
leaves of absence, no Service credit shall be given for vesting purposes for any
period Participant is on a leave of absence.
          W. Stock Exchange shall mean the American Stock Exchange, the Nasdaq
Global or Global Select Market or the New York Stock Exchange.
          X. Subsidiary shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain owns,
at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.
          Y. Termination for Cause shall mean the termination of the
Participant’s Service by the Corporation (or any Parent or Subsidiary) for one
or more of the following reasons:
          (i) the Participant’s repeated failure to perform any essential duty
of his or her position other than due to Disability or such illness or injury as
would result in Disability if it continued for the one hundred eighty (180)-day
period specified in the Disability definition above;
          (ii) the Participant’s commission of any act that constitutes gross
misconduct and is injurious to the Corporation or any Parent or Subsidiary or
any successor to the Corporation;
          (iii) the Participant’s conviction of or pleading guilty or nolo
contendere to any felony involving theft, embezzlement, dishonesty or moral
turpitude;
          (iv) the Participant’s commission of any act of fraud against, or the
misappropriation of property belonging to, the Corporation or any Parent or
Subsidiary or any successor to the Corporation;
          (v) the Participant’s commission of any act of dishonesty in
connection with his or her responsibilities as an employee that is intended to
result in his personal enrichment or the personal enrichment of his family or
others;
          (vi) the Participant’s material breach of the Employment Agreement (if
any) he may have at the time with the Corporation or any other agreement between
the Participant and the Corporation or any Parent or Subsidiary or successor to
the Corporation.

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          Z. Withholding Taxes shall mean (i) the employee portion of the
federal, state and local employment taxes required to be withheld by the
Corporation in connection with the vesting of the shares of Common Stock under
the Award and any phantom dividend equivalents relating to those shares and
(ii) the federal, state and local income taxes required to be withheld by the
Corporation in connection with the issuance of those vested shares and the
distribution of any phantom dividend equivalents relating to such shares.

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