EXHIBIT
10.3


 


RESTRICTED
STOCK AGREEMENT


 


AUGUST TECHNOLOGY
CORPORATION


1997 STOCK
INCENTIVE PLAN


(As
Amended and Restated Through February 4, 2004)


 


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


 


W I T N E S S E T H:


 


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


 


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


 


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


 


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


 


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


 


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


 





















 


 


	
  Vesting
  Date

  	
   

  	
  Cumulative Percentage

  of Shares Vested

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


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


 


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


 


3.             Miscellaneous.


 


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


 


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


 


2





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


3





















 


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


 


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


 


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


 


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


 


	
   

  	
  AUGUST TECHNOLOGY CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
  COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PARTICIPANT

  
					



 


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