Filed by Bowne Pure Compliance






Exhibit 10.9




AMENDED AND RESTATED EMPLOYMENT AGREEMENT




     This Amended and Restated Employment Agreement (this “Restated Agreement”) is entered into on
October 14, 2008, by and between Arthur W. Zafiropoulo (the “Executive”) and Ultratech, Inc., a
Delaware corporation (the “Company”) and, except as otherwise provided herein, shall become
effective as of January 1, 2009.



W
I T N E S S E T H:




     WHEREAS,
the Executive is currently serving as the Company’s Chairman of the Board, Chief
Executive Officer and President;



     WHEREAS, the Executive is currently a party to an employment agreement with the Company dated
November 24, 2003 (the “Prior Agreement”); and



     WHEREAS, the Company and the Executive desire to amend and restate the terms and conditions of
the Prior Agreement in order to bring such agreement into documentary compliance with the
applicable requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), and the final Treasury Regulations thereunder and continue Executive’s employment with the
Company upon the terms and conditions of this Restated 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 and Board Membership. The Company does hereby retain, engage and
employ the Executive as its President and Chief Executive Officer, reporting directly to
the Board of Directors of the Company (the “Board”), and the Executive does hereby
accept and agree to such retention, 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 Board. As long as the Executive remains employed by the Company
under this Restated Agreement, the Company shall use its reasonable best efforts to see
that he is elected as a member of the Board and as Chairman of the Board. The
Executive shall serve as a member of the Board and as Chairman of the Board without
any compensation other than provided hereunder for his services as President and Chief
Executive Officer. Upon the Executive’s termination of employment hereunder, he shall
resign from the Board unless requested to continue by a majority of the other members of
the Board.
	 
	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 Restated Agreement by the Executive 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 Restated Agreement and that the execution and
delivery of this Agreement to the Executive and the employment of the 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’ prior written notice to the Executive. The
Executive may terminate his employment with the Company by providing thirty (30) days’
prior written notice to the Company. Notwithstanding the foregoing, the Company may relieve
the Executive of his duties immediately upon, or at any time during the thirty (30)-day
period following, the delivery or receipt of the written termination notice provided by the
Company or the Executive hereunder. No provision of this Restated 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 Base Salary for the 2008 fiscal year shall be at a rate of
$550,000 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. As used in this
Restated Agreement, “Base Salary” shall mean the Executive’s annual rate of Base
Salary as adjusted from time to time.
	 
	3.2	 	Annual Bonus.






	 	3.2.1	 	While employed hereunder, the Executive shall be eligible for an annual
incentive bonus (“Annual Bonus”) of up to 90% of his Base Salary, based upon the
achievement of performance objectives established by the Compensation
Committee of the Board (the “Compensation Committee”) for an annual
performance period coterminous with the Company’s fiscal year.
	 
	 	3.2.2	 	At the time the Compensation Committee establishes the Annual Bonus potential
for the performance period, the Compensation Committee may determine that up
to 50% of the Annual Bonus earned by the Executive for that performance period




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	 	 	 	shall be deferred and shall vest and be paid out in successive equal annual
installments upon the Executive’s completion of each year of continued employment
with the Company over a period of years (not to exceed three years) measured from the
last day of the performance period to which that Annual Bonus relates (the “Deferral
Period”). The deferred portion of each Annual Bonus shall accrue interest at prime,
as such rate is set forth in The Wall Street Journal from time to time,
during the Deferral Period, and the unpaid deferred portion of each Annual Bonus,
together with such accrued interest, shall immediately vest in the event (i) the
Executive terminates employment with Good Reason (as defined in Section 7.2.1) or
(ii) the Executive is terminated by the Company other than for Cause (as defined in
Section 6.1.1) or (iii) the Executive’s employment terminates by reason of death or
Disability (as defined in Section 5.1) or (iv) the Executive’s employment terminates
for any reason following a Change in Control or Corporate Transaction. The deferred
portion of each Annual Bonus shall be forfeited to the extent the Executive’s
employment terminates for any other reason (or under any other circumstances) prior
to vesting in that portion. The deferred portion of each Annual Bonus which vests on
an accelerated basis shall be paid to the Executive following his Separation from
Service, in accordance with the payment provisions of this Restated Agreement
governing the particular circumstances under which Executive incurs such Separation
from Service; provided, however, that any such accelerated vesting and payment of the
deferred portion of each Annual Bonus shall be subject to the Executive’s execution
and delivery of an effective release and non-disparagement agreement as required
under the terms of this Restated Agreement.
	 
	 	3.2.3	 	The Compensation Committee may establish different performance objectives or
different target levels for each Annual Bonus opportunity provided the Executive
hereunder. In addition, the maximum level of such Annual Bonus as a percentage
of Base Salary shall be reviewed annually by the Compensation Committee 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.
	 
	 	3.2.4	 	The portion of any bonus earned by the Executive for a particular fiscal year
performance period and not deferred pursuant to Section 3.2.2 shall be paid by the
15th day of the third calendar month following the close of that fiscal year or as
soon thereafter as administratively practicable, but in no event shall such payment
be made prior to the first day of the fiscal year next succeeding the fiscal year
for
which that bonus is earned or later than the last day of that succeeding fiscal
year.






	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
Executive’s continued employment hereunder. The term, exercise price (if






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	 	 	 	applicable), vesting period, any post-employment provisions (including
post-employment exercise periods) and the remaining provisions of each stock option
or other equity award granted pursuant to this Section 3.3 shall, subject to the
express provisions of this Restated Agreement, be determined by the Compensation
Committee at the time of grant.
	 
	 	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) or (ii) by the Executive with Good Reason (as defined in
Section 7.2.1) or (iii) on account of death or Disability, then each stock option and
other equity award granted on or after July 21, 2003 shall thereupon vest 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 (as defined
in Section 8.1.1) or a Corporate Transaction (as defined in Section 8.1.2), all of the
options or other equity awards described in the preceding sentence shall immediately
vest in full. To the extent that the equity awards described in this Section 3.3.2 are
stock options that have vested in accordance with their normal vesting terms or that
otherwise vest on an accelerated basis in accordance with this Section 3.3.2, the
period for which such stock options shall remain exercisable for the vested option
shares shall be extended until a date at least one year and ninety (90) days after the
termination of the Executive’s employment under the circumstance described in clauses
(i), (ii) or (iii) of this Section 3.3.2 or the termination of the Executive’s
employment under any circumstances following a Change of Control or a Corporate
Transaction (or until 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
ten-year (or shorter) maximum terms. Each of the Executive’s stock options granted
prior to July 21, 2003 shall be amended to add the foregoing extended exercise
provisions at such time, if any, that the Compensation Committee determines, in its
sole discretion, that such amendment and the related accounting charges would not in
any way adversely affect, when relevant, 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.
	 
	4.2	 	Reimbursement of Business and Other Expenses; Perquisites.






	 	4.2.1	 	Expense Reimbursement. The Executive is authorized to incur reasonable
expenses in carrying out his duties and responsibilities under this Restated
Agreement, and the Company shall reimburse him for all business expenses incurred in
connection with carrying out the business of the Company. Such




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	 	 	 	reimbursements shall be subject to the Company’s then-existing policies and
procedures for reimbursement of business expenses, including submission of written
requests for reimbursement, accompanied by supporting documentation and receipts.
The Executive must submit proper documentation for each such expense within sixty
(60) days after the later of (i) the Executive’s incurrence of such expense or (ii)
the Executive’s receipt of the invoice for such expense. If such expense qualifies
hereunder for reimbursement, then the Company will reimburse the Executive for that
expense within fifteen (15) business days thereafter.
	 
	 	4.2.2	 	Perquisites. During the Executive’s employment hereunder, the Executive
shall be entitled to participate in any of the Company’s executive fringe benefit
arrangements provided to its senior level executives generally. In addition, the
Executive shall be entitled to the use of a Company car, which shall be a
Mercedes Benz SL600 or equivalent and which shall be replaced with a new
Mercedes Benz SL600 or equivalent no less frequently than once every three
years.
	 
	 	4.2.3	 	Legal Expenses. The Company shall promptly reimburse the Executive for his
legal expenses, up to a maximum of $3,000, incurred in obtaining advice with
respect to the changes effected by this Restated Agreement. Executive must
submit proper documentation for such legal expenses within sixty (60) days after
the Executive’s receipt of the invoice for such expenses, and the Company will
reimburse the Executive for those expenses within fifteen (15) business days
thereafter.
	 
	 	4.2.4	 	Conditions to Reimbursement. The following conditions shall be applicable to
each expense reimbursable pursuant to the provisions of this Restated Agreement:
(i) no such expense shall be reimbursed later than the close of the calendar year
following the calendar year in which that expense is incurred, (ii) the amounts
eligible for reimbursement in any one calendar year shall not affect the amounts
reimbursable in any other calendar year and (iii) the right to such reimbursement
may not be liquidated or exchanged for any other benefit.






	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.
	 
	4.4	 	Retiree Health Coverage.






	 	4.4.1	 	Notwithstanding anything contained herein to the contrary, the Executive and
his spouse on the date of his termination of employment (his “Spouse”) shall each be
entitled to the retiree health care coverage described herein for the remainder of his
or her life following the termination of the Executive’s employment for any reason.
The retiree health care coverage to be provided by the Company to the Executive and
his Spouse until they become entitled to Medicare coverage shall be comparable to the
health care coverage provided by the Company to the




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	 	 	 	Executive and his Spouse immediately prior to the termination of the Executive’s
employment. Once the Executive or his Spouse becomes covered by Medicare, the Company
shall provide retiree health care coverage that, together with such Medicare coverage, is
comparable to the coverage that the Company provided to him or her immediately prior to
the Executive’s termination of employment.
	 
	 	4.4.2	 	The Executive and his Spouse shall, following his termination of employment with the
Company, elect to continue health care coverage in accordance with the provisions of Section
4980B of the Code and Section 10116.5 of the California
Insurance Code (“COBRA”). For the
period of such COBRA coverage, the retiree health care coverage for the Executive and his
Spouse shall be provided under the Company’s group health plan. Following the expiration of
the applicable period of COBRA coverage, such retiree health care coverage shall continue to
be provided under one or more of the Company’s group health care plans; provided, however,
that to the extent such group health care coverage is not available, the retiree health
coverage for the Executive and his Spouse shall be provided through health insurance policy or
policies acquired by the Executive and/or his Spouse that provides the required level of
health care coverage hereunder, until each of them attains age sixty-five (65) and thereafter
through insurance policy or policies providing Medicare supplemental coverage. The Company
shall reimburse the Executive for the cost of such retiree health care coverage for the
Executive and his Spouse during each applicable period of coverage hereunder as follows:






     (i) For each period the Executive and/or his Spouse are provided post-retirement
health care coverage under the Company’s group health care plan, the Company shall
reimburse the Executive for the monthly cost he incurs to obtain such continued coverage
for himself and his Spouse (the “Coverage Costs”). In order to obtain reimbursement for
his Coverage Costs, the Executive must submit appropriate evidence to the Company of each
periodic payment within sixty (60) days after the payment date, and the Company shall
within thirty (30) days after such submission reimburse the Executive for that payment.




     (ii) To the extent such post retirement health care coverage is provided through
health insurance policies acquired by the Executive and/or his Spouse, the Company shall
reimburse the Executive and/or his Spouse for each premium paid by them for such
coverage. The applicable insurance premiums shall be paid by the Executive and/or the
Spouse on or before each due date, and supporting documentation evidencing such payment
shall be provided to the Company within sixty (60) days following such payment. The
Company shall reimburse the Executive and/or his Spouse for each such insurance premium
payment within thirty (30) business days following receipt of the supporting
documentation for such payment.








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	 	4.4.3	 	During the period such health care coverage remains in effect hereunder, the
following provisions shall govern the arrangement: (a) the amount of health care
Coverage Costs and premium payments eligible for reimbursement in any one
calendar year of such coverage shall not affect the amount of Coverage Costs and
premium payments eligible for reimbursement in any other calendar year for
which health care coverage is to be provided hereunder (ii) no health care
Coverage Costs or premium payments shall be reimbursed after the close of the
calendar year following the calendar year in which those Coverage Costs or
premium payments were incurred; and (iii) the right to reimbursement of such
continued health care Coverage Costs and premium payments cannot be
liquidated or exchanged for any other benefit.
	 
	 	4.4.4	 	If, for any reason, the retiree health coverage provided to the Executive or
his Spouse for any taxable year shall constitute taxable income to the Executive
and/or his Spouse, the Company shall report the reimbursed Coverage Costs or
premium payments as taxable W-2 wages and collect the applicable withholding
taxes. However, the Company shall also pay to the Executive and/or his Spouse
an amount (a “Gross-Up Amount”) that is, after payment of all applicable taxes
on the Gross-Up Amount, equal to the tax liability attributable to such retiree
health coverage. Any such tax gross up payment shall be calculated within fifteen
(15) business days following the close of the taxable year to which it relates.
Subject to the holdback provisions of Section 10.1, the tax gross up payment so
calculated shall be made to or on behalf of the Executive within thirty (30) days
following the completion of such calculation or (if later) at the time the income
taxes to which the tax gross up payment relates are remitted to the appropriate tax
authorities. In no event shall any such tax gross up payment be made later than
the end of the calendar year immediately following the calendar year in which the
related taxes are remitted to the appropriate tax authorities or such other
specified
time or schedule that may be required under Section 409A of the Code.






	5.	 	Death or Disability.
	 
	5.1	 	Definition of Disabled and Disability. For purposes of this Restated 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
Restated 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 and prior to a Change of Control (as defined in Section 8.1.1)
or a Corporate Transaction (as defined in Section 8.1.2), this Restated Agreement and the




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	 	 	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 in accordance
with Section 5.1 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 on the Disability Date or within ten (10)
business days after the date of the Executive’s death, equal to the sum of (A) any
currently earned but unpaid Base Salary as of the date of death or the Disability
Date, (B) any accrued but unpaid vacation pay and (C) any unreimbursed business
expenses due under Section 4.2.1 of this Restated Agreement;
	 
	 	(ii)	 	a lump sum payment, to be made within ten (10) business days after the date of
the Executive’s Separation from Service due to his death or Disability, equal to the
deferred portion of any Annual Bonuses for fiscal years completed prior to the date of
the Executive’s death or the Disability Date which vest on an accelerated basis (in
accordance with Section 3.2.2) by reason of his death or Disability;
	 
	 	(iii)	 	a series of twelve (12) successive monthly payments, each equal to one-twelfth
(1/12th) of the Executive’s annual Base Salary in effect immediately prior to his death
or Disability Date, with the first such payment to be made on the first day of the
month immediately following the month in which the Executive’s Separation from Service
occurs as a result of the Executive’s death or Disability;
	 
	 	(iv)	 	accelerated vesting of a portion of the Executive’s stock options and other
equity awards, and extension of time to exercise each vested stock option, to the
extent provided in Section 3.3.2;
	 
	 	(v)	 	any vested and accrued employee benefits described in Section 4.1 that are by
their terms payable to the Executive or his estate on or after his termination of
employment, with each such benefit to be paid in accordance with the applicable terms
in effect for such payment at the time of the Executive’s death or Disability;
	 
	 	(vi)	 	the retiree health coverage described in Section 4.4; and
	 
	 	(vii)	 	in the case of Disability, continued use of a Company car as provided in
Section 4.2.2 for a period of twelve (12) months following the date of the Executive’s
Separation from Service due to Disability.





     Any other vested compensation deferred on behalf of the Executive at the time of his death or
Disability under any deferred compensation plan shall be paid at the time or times specified for
payment pursuant to the provisions of such plan.



     Any pro-rated Annual Bonus to which the Executive may, in accordance with the provisions
governing that Annual Bonus, become entitled for the fiscal year performance period in which his
death or Disability Date occurs shall be paid to the Executive by the fifteenth (15th)




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day of the third calendar month following the close of that fiscal year or as soon thereafter as
administratively practicable, but in no event shall such payment be made prior to the first day of
the fiscal year next succeeding the fiscal year for which that bonus is earned or later than the
last day of that succeeding fiscal year.





	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 that in the case of the reasons set forth in (i) and (vi) below, only after
written notice by the Board stating the reason for the proposed termination for
Cause and the Executive’s failure to cure the stated reason within ninety (90) days
after 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 Restated Agreement or
other agreement between the Executive and the Company or any subsidiary of the
Company or successor to the Company.






	 	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 that in the case of a
termination for a reason stated in Section 6.1.1 (i) or Section 6.1.1(vi), the
termination shall be effective on the last day of the ninety (90)-day cure period




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	 	 	 	should Executive fail to cure the stated reason within such cure period. In the
event of the termination of the Executive’s employment hereunder due to a
termination by the Company for 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 the
Executive shall be entitled to receive:






	 	(i)	 	a lump sum cash payment, payable on the date of such
termination, equal to the sum of (A) any currently earned but unpaid Base
Salary as of the date of such termination of employment, (B) any accrued but
unpaid vacation pay and (C) any unreimbursed business expenses due under
Section 4.2.1 of this Restated Agreement;
	 
	 	(ii)	 	any vested and accrued employee benefits described in Section
4.1 that are by their terms payable to the Executive on or after his
termination of employment, with each such benefit to be paid in accordance with
the applicable terms in effect for such payment at the time of the Executive’s
termination; and
	 
	 	(iii)	 	the retiree health coverage described in Section 4.4.





     Any other vested compensation deferred on behalf of the Executive at the time of his
termination by the Company for Cause under any deferred compensation plan shall be paid at the
time or times specified for payment pursuant to the provisions of such plan.




	6.2	 	Termination Without Cause.






	 	6.2.1	 	Basic Benefits. 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), Executive shall be
entitled to receive:






(i) a lump sum cash payment, payable on the date of such termination of employment,
equal to the sum of (A) any currently earned but unpaid Base Salary as of the date
of such termination of employment, (B) any accrued but unpaid vacation pay and (C)
any unreimbursed business expenses due under Section 4.2.1 of this Restated
Agreement;




(ii) any vested and accrued employee benefits described in Section 4.1 that are by
their terms payable to the Executive on or after such termination of employment,
with each such benefit to be paid in accordance with the applicable terms governing
such payment at the time of such termination; and




(iii) the retiree health coverage described in Section 4.4.








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	 	6.2.2	 	Additional Benefits. In addition to the benefits to which the Executive may be
entitled pursuant to Section 6..2.1, the Executive shall, subject to (A) his
execution of a release and non-disparagement agreement in a form acceptable to
the Company (the “Release”) within twenty-one (21) days (or within forty-five
(45) days if such longer period is required under applicable law) following such
termination of employment, (B) the Release becoming effective in accordance
with applicable law following the expiration of any applicable revocation period
and (C) his continued compliance with the non-competition covenants set forth in
Section 11, be entitled to receive the following benefits:






(i) a lump sum, payable on the third business day, within the sixty (60)-day period
measured from the date of the Executive’s Separation from Service due to such termination
of employment by the Company without Cause, following the date on which the Release first
becomes effective following the expiration of any applicable revocation period, equal to
the deferred portion of any Annual Bonuses for fiscal years completed prior to the date of
such termination of employment which vest on an accelerated basis (in accordance with
Section 3.2.2) by reason of such termination of employment; provided, however, that such
payment shall in no event be made later than the last day of such sixty (60)-day period on
which the Release is so effective, unless a further deferral is required pursuant to
Section 10 of this Agreement;




(ii) a series of twelve (12) successive monthly payments, each in an amount equal to
one-twelfth (1/12th) of the Executive’s annual Base Salary in effect immediately prior to
such termination of employment, with the first such monthly payment to be made on the
third business day, within the sixty (60)-day period measured from the date of Executive’s
Separation from Service due to such termination, following the date on which the requisite
Release first becomes effective following the expiration of any applicable revocation
period; provided, however, that the first such payment shall in no event be made later
than the last day of such sixty (60)-day period on which the Release is so effective,
unless a further deferral is required pursuant to Section 10 of this Agreement;




(iii) accelerated vesting of a portion of the Executive’s stock options and other equity
awards, and extension of time to exercise each vested stock option, to the extent provided
in Section 3.3.2; and




(iv) continued use of a Company car as provided in Section 4.2.2 for a period of twelve
(12) months following the date of the Executive’s Separation from Service due to such
termination of employment.




	 	6.2.3	 	Deferred and Vested Benefits. Any other vested compensation deferred on
behalf of the Executive at the time of his termination by the Company without
Cause under any deferred compensation plan shall be paid at the time or times
specified for payment pursuant to the provisions of such plan, subject to any
required deferral pursuant to Section 10. Any pro-rated Annual Bonus to which
the Executive may, in accordance with the provisions governing that Annual




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	 	 	 	Bonus, become entitled for the fiscal year performance period in which his
termination by the Company without Cause occurs shall be paid to the Executive by
the fifteenth (15th) day of the third calendar month following the close of that
fiscal year or as soon thereafter as administratively practicable, but in no event
shall such payment be made prior to the first day of the fiscal year next
succeeding the fiscal year for which that bonus is earned or later than the last
day of that succeeding fiscal year.






	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 (30)-day notice period. Upon such termination of employment
without Good Reason prior to a Change of Control (as defined in Section 8.1.1) or a
Corporate Transaction (as defined in Section 8.1.2), 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 Restated Agreement, “Good
Reason” shall mean the occurrence of any of the following events without the
Executive’s written consent:






	 	(i)	 	a reduction in the level of the Executive’s Base Salary, other
than a reduction that is part of a program to reduce expenses applicable to all
of the Company’s officers;
	 
	 	(ii)	 	a material breach by the Company or any subsidiary of the
Company or successor to the Company of the terms of this Restated Agreement or
any other material agreement between the Executive and the Company or any
subsidiary of the Company or successor to the Company;
	 
	 	(iii)	 	any material reduction in the nature or scope of the
Executive’s duties, title, function, authority, responsibilities or reporting
(including, for example, the Executive directly reporting to anyone other than
the Company’s or its successor entity’s Board of Directors or, in the event of
a Change of Control (as defined in Section 8.1.1) or a Corporate Transaction
(as defined in Section 8.1.2), the Executive not being offered a position as
the highest executive officer of the successor entity); or
	 
	 	(iv)	 	a material relocation of Executive’s principal office, with a
relocation that is more than sixty (60) miles from the location of his
principal office on January 1, 2009 to be deemed material for such purpose;





12









 






	 	 	 	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 within thirty (30) days following the
occurrence of such event and the Company shall have 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, as a result of the event identified in his
Section 7.2.1 notice as
grounds for a Good Reason termination, within thirty (30) days following the Company’s
failure to cure that event prior within the applicable cure period, then such
termination shall constitute a termination for Good Reason. Upon such termination of
employment for Good Reason prior to a Change of Control (as defined in Section 8.1) or
a Corporate Transaction (as defined in Section 8.1.2), the Executive’s entitlement to
termination payments and severance benefits shall be governed by the same provisions
set forth in Section 6.2 for a termination by the Company without Cause, including the
necessity of an effective Release and continued compliance with the non-competition
covenants set forth in Section 11 as express conditions for the additional severance
benefits specified in Section 6.2.2.






	8.	 	Change of Control Provisions.
	 
	8.1	 	Definitions.






	 	8.1.1	 	Definition of Change of Control. For purposes of this Restated
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 cease, 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.




13









 












	 	8.1.2	 	Definition of Corporate Transaction. For purposes of this Restated 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
	 
	 	(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, the Executive’s stock options and other equity awards shall
automatically vest in full, and the time to exercise his vested stock options shall be
extended, to the extent provided in Section 3.3.2. Upon the Executive’s termination of
employment for any reason following a Change of Control or Corporate Transaction, Executive
shall be entitled to receive:






	 	(i)	 	a lump sum cash payment, payable on the date of such termination of employment,
equal to the sum of (A) any currently earned but unpaid Base Salary as of the date of
such termination of employment, (B) any accrued but unpaid vacation pay and (C) any
unreimbursed business expenses due under Section 4.2.1 of this Restated Agreement;
	 
	 	(ii)	 	any vested and accrued employee benefits described in Section 4.1 that are by
their terms payable to the Executive on or after such termination of employment, with
each such benefit to be paid in accordance with the applicable terms governing such
payment at the time of such termination; and
	 
	 	(iii)	 	the retiree health coverage described in Section 4.4.






	 	 	In addition, subject to (A) the Executive’s execution of the requisite Release within
twenty-one (21) days (or within forty-five (45) days if such longer period is required
under applicable law) following such termination of employment, (B) the Release becoming
effective in accordance with applicable law following the expiration of any applicable
revocation period and (C) his continued compliance with the non-competition covenants set
forth in Section 11, the Executive shall also be entitled to receive:






	 	(iv)	 	a lump sum, payable on the third business day, within the sixty (60)-day
period measured from the date of the Executive’s Separation from Service due to such
termination of employment, following the date on which the Release first becomes
effective following the expiration of any applicable revocation period,




14









 






	 	 	 	equal to the deferred portion of any Annual Bonuses for fiscal years completed
prior to the date of such termination of employment which vest on an accelerated
basis (in accordance with Section 3.2.2) by reason of such termination of
employment; provided, however, that such payment shall in no event be made later
than the last day of such sixty (60)-day period on which the Release is so
effective, unless a further deferral is required pursuant to Section 10 of this
Agreement;
	 
	 	(v)	 	a series of twenty-four (24) successive monthly payments, each in an amount
equal to one-twelfth (1/12th) of the Executive’s annual Base Salary in effect
immediately prior to such termination of employment or (if greater) his rate of Base
Salary in effect immediately prior to the Change of Control or Corporate Transaction,,
with the first such monthly payment to be made on the third business day, within the
sixty (60)-day period measured from the date of Executive’s Separation from Service due
to such termination, following the date on which the requisite Release first becomes
effective following the expiration of any applicable revocation period; provided,
however, that the first such payment shall in no event be made later than the last day
of such sixty (60)-day period on which the Release is so effective, unless a further
deferral is required pursuant to Section 10 of this Agreement; and
	 
	 	(vi)	 	continued use of a Company car as provided in Section 4.2.2 for a period of
twenty-four (24) months following the date of the Executive’s Separation from Service.





          Any other vested compensation deferred on behalf of the Executive at the time of his
termination by the Company without Cause under any deferred compensation plan shall be paid at the
time or times specified for payment pursuant to the provisions of such plan, subject to any
required deferral pursuant to Section 10.




          Any pro-rated Annual Bonus to which the Executive may, in accordance with the provisions
governing that Annual Bonus, become entitled for the fiscal year performance period in which his
employment terminates following the Change in Control or Corporate Transaction shall be paid to
the Executive by the fifteenth (15th) day of the third calendar month following the close of that
fiscal year or as soon thereafter as administratively practicable, but in no event shall such
payment be made prior to the first day of the fiscal year next succeeding the fiscal year for
which that bonus is earned or later than the last day of that succeeding fiscal year.





	8.3	 	Section 280G Provisions.






	 	8.3.1	 	Notwithstanding anything contained in this Restated Agreement to the
contrary, to the extent that any payment or distribution of any type made to or for
the benefit of the Executive by the Company (or any subsidiary or affiliate of the
Company or any successor to the Company), whether paid or payable or distributed or
distributable pursuant to the terms of this Restated Agreement or otherwise
(including, without limitation, any accelerated vesting of stock options, restricted
stock or restricted stock units granted pursuant to this Restated




15









 






	 	 	 	Agreement or otherwise) (collectively, the “Total Payments”) is or will be subject to the
excise tax (“Excise Tax”) imposed under Section 4999 of the Code (or any successor to such
Section), the Company shall pay to the Executive an additional amount (a “Gross-Up
Payment”) which is, after the imposition of all income, employment, excise and other taxes,
penalties and interest thereon, equal to the sum of (i) the Excise Tax on such Total
Payments plus (ii) any penalty and interest assessments associated with such Excise Tax.
The determination of whether any portion of the Total Payments is subject to an Excise Tax
and, if so, the amount of any Gross-Up Payment pursuant to this Section 8.3 shall be made
by an independent registered public accounting firm (the “Auditor”) jointly selected by the
Executive and the Company, and the fees of such Auditor shall be paid by the Company. If
the Executive and the Company cannot agree on the firm to serve as the Auditor, then they
shall each select one registered public accounting firm, and those two firms shall jointly
select the registered public accounting firm to serve as the Auditor. Unless the Executive
agrees otherwise in writing, the Auditor shall be a nationally recognized United States
registered public accounting firm that has not during the two years preceding the date of
its selection, acted in any way on behalf of the Company.
	 
	 	8.3.2	 	For any parachute payments occurring at the time of the
Change in Control or Corporate Transaction, the relevant calculations shall be completed within ten
(10) business days after the effective date of such Change in Control or Corporate
Transaction, and for any parachute payments attributable to the Executive’s
Separation from Service, the calculations shall be completed within ten (10)
business days after the effective date of such Separation from Service. Such
calculations shall be conclusive and binding on all interested persons. The
additional payment resulting from such calculations shall be made to the
Executive within ten (10) business days following the completion of such
calculations or (if later) at the time the related Excise Tax is remitted to the
appropriate tax authorities.
	 
	 	8.3.3	 	In the event that the Executive’s actual Excise Tax
liability is determined by a Final Determination to be greater than the Excise Tax liability taken into account
for purposes of calculating the Gross-Up Payment initially made to the Executive
pursuant to the preceding provisions of this Section 8.3, then within thirty (30)
days following that Final Determination, the Executive shall notify the Company
of such determination, and a new Excise Tax calculation based on that Final
Determination shall be made by the Auditor within thirty (30) days thereafter.
The Company shall pay the Executive the supplemental Gross-Up Payment
resulting from the Final Determination within ten (10) business days following
the completion of the applicable calculations or (if later) at the time the excess
taxes attributable to the Final Determination are remitted to the appropriate tax
authorities. In the event that the Executive’s actual Excise Tax liability is
determined by a Final Determination to be less than the Excise Tax liability taken
into account for purposes of any Gross-Up Payment made to him pursuant to the
preceding provisions of this Section 8.3, then the Executive shall refund to the
Company, within ten (10) business days following receipt, any federal or state tax




16









 






	 	 	 	refund attributable to the Excise Tax overpayment. For purposes of this Section
8.3.3, a “Final Determination” means an audit adjustment by the Internal Revenue
Service that is either (i) agreed to by both the Executive and the Company (with
such agreement by the Company to be not unreasonably withheld) or (ii) sustained by
a court of competent jurisdiction in a decision with which the Executive and the
Company concur or with respect to which the period within which an appeal may be
filed has lapsed without a notice of appeal being filed.
	 
	 	8.3.4	 	Notwithstanding anything to the contrary in the foregoing provisions of this
Section 8.3, any Gross-Up Payment to be made hereunder (whether as the initial or
supplemental payment) shall be subject to the hold-back provisions of Section 10 of
this Restated Agreement, to the extent those payments relate to any amounts and
benefits provided hereunder that constitute parachute payments attributable to the
Executive’s Separation from Service. In addition, no such Gross-Up Payment shall be
made later than the end of the calendar year that follows the calendar year in which
the related taxes are remitted to the appropriate tax authorities.






	9.	 	Separation from Service.






     For purposes of this Restated Agreement, “Separation from Service” shall mean the
Executive’s cessation of Employee status and shall be deemed to occur at such time as the
level of the bona fide services the Executive is to perform in Employee status (or as a
consultant or other independent contractor) permanently decreases to a level that is not
more than twenty percent (20%) of the average level of services the Executive rendered in
Employee status during the immediately preceding thirty-six (36) months. Any such
determination as to Separation from Service, however, shall be made in accordance with the
applicable standards of the Treasury Regulations issued under Code Section 409A. For
purposes of determining whether the Executive has incurred a Separation from Service, the
Executive 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 be performed and the manner and method of
performance. “Employer Group” means the Company and any other corporation or business
controlled by, controlling or under common control with, the Company as determined in
accordance with Sections 414(b) and (c) of the Code and the Treasury Regulations thereunder,
except that in applying Sections 1563(a)(l), (2) and (3) 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 1.414(c)-2 of the Treasury Regulations. In
addition to the foregoing, a Separation from Service will not be deemed to have occurred
while the Executive is on a sick leave or other bona fide leave of absence if the period of
such leave does not exceed six (6) months or any longer period for which the Executive is
provided with a right to reemployment with the Corporation by either statute or contract;
provided,



17









 







however, that in the event of 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 that causes the Executive to be unable to
perform his duties as an Employee, no Separation from Service shall be deemed to occur
during the first twenty-nine (29) months of such leave. If the period of leave exceeds six
(6) months (or twenty-nine (29) months in the event of disability as indicated above) and
the Executive is not provided with a right to reemployment by either statute or contract,
then the Executive will be deemed to have Separated from Service on the first day
immediately following the expiration of the applicable six (6)-month or twenty-nine
(29)-month period.




	10.	 	Delayed Commencement Date for Payments and Benefits.
	 
	10.1	 	Notwithstanding any provision to the contrary in this Restated Agreement (other than
Section 10.2 below), no payments, benefits or reimbursements to which the Executive
becomes entitled under Sections 4.4.2, 4.4.4, 5.2, 6.1.2, 6.2, 7.1, 7.2.2, 8.2 or 8.3 of
this Restated Agreement in connection with his Separation from Service (other than the
reimbursement of health care coverage costs and premiums payments during the
applicable period of COBRA coverage) shall be made or paid to the Executive prior to
the earlier of (i) the first business day of the seventh month following the date of the
Executive’s Separation from Service with the Company or (ii) the date of the Executive’s
death (the “Hold-Back Period”), if the Executive is deemed at the time of such Separation
from Service a “specified employee” within the meaning of that term under Section 409A
of the Code and such delayed commencement is otherwise required in order to avoid a
prohibited distribution under Code Section 409A(a)(2). Upon the expiration of the
applicable deferral period, all payments and reimbursements deferred pursuant to this
Section 10.1 shall be paid in a lump sum to the Executive, and any remaining payments
and reimbursements due under this Restated Agreement shall be paid in accordance with
the normal payment dates specified for them herein.
	 
	10.2	 	The six month holdback set forth in Section 10.1 above shall not be applicable to the
Executive’s continued use of a Company car under Sections 5.2, 6.2, 7.2.2 or 8.2 during
the Hold-Back Period, to the extent that the aggregate monthly rental value of such
vehicle during that period does not exceed the dollar limit in effect under
Section 402(g)(l)(B) of the Code for the year in which the Executive’s Separation from
Service occurs. To the extent that the aggregate monthly rental value of such vehicle
exceeds that limit during the Hold-Back Period, the Executive shall pay to the Company,
on or before the first day of each month during the Hold-Back Period, a dollar amount
equal to the amount by which the rental value of such car for that month exceeds one-
sixth of the applicable Section 402(g)(l)(B) limit. Upon the expiration of the Hold-Back
Period, all payments made by the Executive to the Company pursuant to this Section 10.1
shall be reimbursed to Executive in a lump sum payment.
	 
	10.3	 	To the extent the payment of any cash amounts, reimbursements or tax gross-ups to
which the Executive becomes entitled under Sections 4.4.2, 4.4.4, 5.2, 6.1.2, 6.2.2, 7.1,
7.2.2, 8.2 or 8.3 of this Restated Agreement is deferred pursuant to the provisions of
Section 10.1, then the Executive shall be entitled to interest on those cash amounts




18









 






	 	 	reimbursement and tax gross-ups, for the period the payment of such amounts is so deferred,
with such interest to accrue at the prime rate in effect from time to time during that
period and to be paid in a lump sum upon the expiration of the applicable Hold-Back Period.
	 
	10.4	 	The cash payments and each of the other benefits to which Executive becomes entitled in
accordance with Section 5.2, 6.2.2, 7.2.2, 8.2 or 8.3 of this Restated Agreement shall be
treated as a right to a series of separate payments and benefits for purposes of Section 409A
of the Code,
	 
	11.	 	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 as Chairman and Chief Executive Officer of 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 entire period that he is
employed by the Company, 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 11 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 Restated 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 Restated 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 Restated
Agreement. The Executive further agrees that his continued compliance with the foregoing
provisions of this Section 11 following his termination of employment with the Company shall
be a condition precedent to his entitlement to certain severance benefits to be provided
under this Restated Agreement. Accordingly, in the event that the Executive breaches the
provisions of this Section 11 following his termination of employment with the Company, the
Executive shall no longer have the right to receive any salary continuation payments under
Section 6.2.2, 7.2.2 or 8.2, whichever is applicable, in excess of the greater of (i) six
(6) months of such salary continuation payments or (ii) the actual salary continuation
payments made to date (with such limited salary continuation payments to serve as the
consideration for his requisite Release), the Executive shall not




19









 






	 	 	be entitled to any further Gross-Up Payments under Section 8.3, any stock options or other
equity awards outstanding at the time of such breach shall, to the extent those options or
awards vested on an accelerated basis pursuant to Section 3.3.2, immediately terminate and
cease to be outstanding or exercisable, and the extension of the post-termination exercise
period provided for the Executive’s outstanding stock options pursuant to Section 3.3.2
shall be immediately cancelled, whether or not those outstanding options vested on an
accelerated basis.
	 
	12.	 	Confidentiality and Treatment of Inventions.
	 
	12.1	 	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 a 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
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.
	 
	12.2	 	Treatment of Inventions.






	 	12.2.1	 	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.
	 
	 	12.2.2	 	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.




20









 






	 	12.2.3	 	Assignment of Inventions. Except as otherwise provided by Section 12.2.4, 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.
	 
	 	12.2.4	 	Inventions not Assigned. Section 12.2.3 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 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.






	13.	 	Antisolicitation.
	 
	 	 	The Executive promises and agrees that, for a period of twelve (12) months following his
termination of employment hereunder, he will not influence or attempt to influence
suppliers or customers of the Company, 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.
	 
	14.	 	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.
	 
	15.	 	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






21












 






and information relevant to the case or helpful to the Company. The Company agrees to
reimburse the Executive promptly for all reasonable costs and expenses he incurs in
connection with his obligations under this Section 15.




	16.	 	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”).
	 
	17.	 	Assignment.
	 
	 	 	This Restated Agreement is personal in its nature and neither of the parties hereto shall,
without the consent of the other, assign or transfer this Restated 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 Restated 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; 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 29.
	 
	18.	 	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 16.
	 
	19.	 	Entire Agreement.
	 
	 	 	This Restated Agreement and the Indemnification Agreement, together with all agreements
evidencing the Executive’s stock options and other stock-based awards from the Company,
represent the entire agreement of the parties hereto respecting the matters within the
scope of this Restated Agreement and the Indemnification Agreement and supersede all prior
agreements of the parties hereto on the subject matter hereof (including, without
limitation, the Prior Agreement). Any prior negotiations, correspondence, other agreements,
proposals or understandings relating to the subject matter hereof (other than the
Indemnification Agreement and the agreements evidencing the Executive’s stock options and
other stock-based awards from the Company) shall be deemed to be merged into this Restated
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.






22









 









	20.	 	Modifications.
	 
	 	 	This Restated 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.
	 
	21.	 	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.
	 
	22.	 	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.
	 
	23.	 	Section Headings.
	 
	 	 	The section headings in this Restated Agreement are for the purpose of convenience only and
shall not limit or otherwise affect any of the terms hereof.
	 
	24.	 	Resolution of Disputes.
	 
	 	 	Any controversy or claim arising out of or relating to the Executive’s employment, this
Restated 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 24; 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.





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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 arbitration. 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 the
arbitrator may award the prevailing party 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.




	25.	 	Severability.
	 
	 	 	In the event that a court of competent jurisdiction or arbitrator determines that any
portion of this Restated Agreement is in violation of any statute or public policy, then
only the portions of this Restated Agreement which violate such statute or public policy
shall be stricken, and all portions of this Restated Agreement which do not violate any
statute or public policy shall continue in full force and effect. Furthermore, any court
order or arbitrator determination striking any portion of this Restated 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 Restated Agreement.
	 
	26.	 	Notices.
	 
	 	 	All notices under this Restated 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:
	 
	 	 	 	Arthur W. Zafiropoulo 

148
Austin Avenue 

Atherton,
CA 94027






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.




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	27.	 	Counterparts.
	 
	 	 	This Restated 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.
	 
	28.	 	Withholding Taxes.
	 
	 	 	The Company shall withhold from any amounts payable under this Restated Agreement such
federal, state and local income, employment, or other taxes required to be withheld from
such payment pursuant to any applicable law or regulation.
	 
	29.	 	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 Restated Agreement to the Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or other legal
representative.
	 
	30.	 	Director’s and Officer’s Insurance.
	 
	 	 	The Company shall provide director’s and officer’s insurance coverage for the Executive to
the extent that the Company provides such coverage for its other senior executive officers.
	 
	31.	 	No Mitigation or Offset.
	 
	 	 	In the event of any termination of employment under this Restated 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 Restated Agreement on account of any remuneration
attributable to any subsequent employment that he may obtain except on account of any claims
the Company may have against the Executive.
	 
	32.	 	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 Restated Agreement.
	 
	33.	 	Section 409A Compliance
	 
	 	 	To the extent there is any ambiguity as to whether any provision of this Restated Agreement
would otherwise contravene one or more requirements or limitations of Code Section 409A,
such provisions shall be interpreted and applied in a manner that does not result in a
violation of the applicable requirements or limitations of Code Section 409A and the
Treasury Regulations thereunder.






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	34.	 	Survival.
	 
	 	 	Upon the termination of this Agreement, the provisions of Sections 4.4, 5, 6, 7, 8, 9, 10,
11, 12, 13,14, 15, 16, 18, 19, 24, 25, 26, 28, 30, 31 and 33 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/ Vincent F. Sollitto
 

Chairman, Compensation Committee of the 

Board
of Directors
	 	 






	 	 	 	 	 
	 

	 	THE EXECUTIVE	 	 
	 
	 	 	 	 
	 

	 	/s/ Arthur W. Zafiropoulo
 

Arthur W. Zafiropoulo
	 	 







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