**Exhibit10.12**

 

**EMPLOYMENTAGREEMENT**

 

This Employment Agreement(this **“Agreement”**)is entered into on November 24, 2003, by and between John E. Denzel (the **“Executive”**)and Ultratech, Inc., a Delaware corporation (the **“Company”**), and shall becomeeffective on January 1, 2004.

 

**WI T N E S S E T H:**

 

**WHEREAS**, the Executive is currentlyemployed as the Company’s Executive Vice President of Operations; and

 

**WHEREAS**, the Company desires that theExecutive continue to be employed by the Company and become its President andChief Operating Officer, effective January 1, 2004 and the Executive iswilling to continue to be employed by the Company and to become its Presidentand Chief Operating Officer, effective January 1, 2004; and

 

**WHEREAS**, the Company and the Executivedesire to set forth the terms and conditions of such continued employment inthis Agreement.

 

**NOW, THEREFORE**, in consideration of themutual promises and covenants contained herein, the Company and the Executiveagree as follows:

 

**1.****                                      Duties**.

 

**1.1****                               *Retention***.  The Company does hereby hire, engage, andemploy the Executive as its President and Chief Operating Officer, reporting tothe Chief Executive Officer of the Company (the **“Chief Executive Officer”**),and the Executive does hereby accept and agree to such hiring, engagement, andemployment.  The Executive shall servethe Company in such positions and shall have the duties, responsibilities andauthorities consistent with such positions as well as any other reasonableduties determined by the Chief Executive Officer.

 

**1.2****                               *No OtherEmployment***.  During theExecutive’s employment by the Company, the Executive shall devote substantiallyall of his business time, energy, and skill to the performance of his dutiesfor the Company.

 

**1.3****                               *No Breach ofContract.***  The Executivehereby represents to the Company that the execution and delivery of thisAgreement by the Executive and the Company and the performance by the Executiveof the Executive’s duties hereunder shall not constitute a breach of, orotherwise contravene, the terms of any employment or other agreement or policyto which the Executive is a party or otherwise bound.  The Company hereby represents to the Executive that it isauthorized to enter into this Agreement and that the execution and delivery ofthis Agreement to the Executive and the employment of the 

 

 

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Executive hereunder shall not constitute a breach of, or otherwisecontravene, the terms of any law, agreement or policy by which it is bound.

 

**2.****                                      At-WillEmployment.**

 

The Executive and theCompany agree that Executive’s employment with the Company is and shall at alltimes during the Executive’s employment hereunder be “at-will” employment.  The Company may terminate the Executive’semployment at any time for any reason, with or without Cause, by providingthirty (30) days’ written notice to the Executive.  The Executive may terminate his employment with the Company byproviding thirty (30) days’ written notice to the Company.  Notwithstanding the foregoing, the Companymay relieve the Executive of his duties immediately or at any time during thethirty-day period following the written termination notice provided by theCompany or the Executive hereunder.  Noprovision of this Agreement shall be construed as conferring upon the Executivea 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 asagreed by the Executive and the Company in writing.

 

**3.****                                      Compensation.**

 

**3.1****                               *Base Salary***.  The Executive’s initial Base Salary shall beat a rate of $276,000 per year, paid in accordance with the Company’s regularpayroll practices in effect from time to time, but not less frequently thanmonthly.  The Executive’s Base Salaryshall be reviewed annually and may be adjusted by the Board of Directors of theCompany (the “**Board**”).  (As used inthis Agreement, “**Base Salary**” shall mean Base Salary as adjusted from time totime.)

 

**3.2****                               *Annual Bonus***.  While employed hereunder, the Executiveshall be considered for an annual incentive bonus (**“Annual Bonus”**) of up to 45%of his annual Base Salary, based upon the achievement of performance objectivesestablished by the Board or the compensation committee of the Board (the **“CompensationCommittee”**).  Payment of upto 50% of the Executive’s Annual Bonus may be deferred and paid out in equalannual installments over a period of no more than three years with interest atprime as set forth in The Wall Street Journal from time to time (the **“DeferralPeriod”**), during which Deferral Period the unpaid portion of thedeferred Annual Bonus may be subject to forfeiture if the Executive terminatesemployment without Good Reason (as defined in Section 7.2.1) or isterminated by the Company for Cause (as defined in Section 6.1.1).  The Executive’s performance objectives andmaximum level of Annual Bonus as a percentage of Base Salary, as well as thepayment terms for the Annual Bonus, shall be reviewed annually and may beadjusted by the Compensation Committee, including, without limitation, anadjustment to increase the maximum level of Annual Bonus as a percentage ofBase Salary.

 

**3.3****                               *EquityCompensation.***

 

**3.3.1****                     *FutureGrants*. **In addition tothe stock options previously granted to the Executive, the Executive shall beeligible for periodic grants of stock options or other equity awards under theCompany’s equity award program, subject to the

 

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Executive’s continued employment hereunder.  The terms, exercise price (if applicable), vesting period, anypost-termination of employment provisions, and other provisions of each stockoption or other equity award granted pursuant to this Section 3.3 shall,subject to the express provisions of this Agreement, be determined by theCompensation Committee at the time of grant of the option or other equityaward.

 

**3.3.2****                     *Accelerationand Extension*. **NotwithstandingSection 3.3.1, if the Executive’s employment is terminated (i) by theCompany for any reason other than for Cause (as defined in Section 6.1.1)prior to a Change of Control (as defined in Section 8.1.1) or a CorporateTransaction (as defined in Section 8.1.2) or (ii) by the Executivewith Good Reason (as defined in Section 7.2.1) prior to a Change ofControl or a Corporate Transaction or (iii) on account of death orDisability, then each stock option or other equity award granted on or afterJuly 21, 2003 shall thereupon become vested as to an additional 25% of theshares of stock subject thereto (or such lesser percentage as to make the award100% vested).  Further, in the event ofa Change of Control or a Corporate Transaction, and within one (1) yearfollowing such Change of Control or Corporate Transaction, either the Executiveterminates his employment with the Company with Good Reason or the Companyterminates his employment for any reason other than for Cause, all of theoptions or other equity awards described in the preceding sentence shallimmediately be fully vested.  To theextent that the equity awards described in this Section 3.3.2 are stockoptions and have become vested by their terms or become vested as describedherein, such stock options shall remain vested and exercisable at least untilthe date that is one year and ninety (90) days after the termination of theExecutive’s employment as described in clauses (i), (ii), or (iii) of thisSection 3.3.2 or the termination of the Executive’s employment following aChange of Control or a Corporate Transaction as described in the precedingsentence (or such later date as may be specified in the award agreement), butin no event will such options be exercisable after the expiration of theiroriginal terms.  Each of the Executive’sstock options granted prior to July 21, 2003, shall be amended to add theforegoing acceleration of vesting and extension of exercise period provisionsat such time, if any, that the Company’s Board of Directors determines, in itssole discretion, that such amendments and the related accounting charges wouldnot adversely affect, when relevant, in any way, the Company’s condition(financial or otherwise), financial statements, earnings, earnings per share orother relevant Company information.

 

**4.****                                      Benefits.**

 

**4.1****                               *Pension andWelfare Plans***.  While theExecutive is employed hereunder, he shall be entitled to participate in allemployee pension and welfare benefit plans and programs made available to theCompany’s senior level executives or to its employees generally, as such plansor programs may be in effect from time to time.

 

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**4.2****                               *Reimbursementof Business and Other Expenses***

 

**4.2.1****                     *ExpenseReimbursement.**** *TheExecutive is authorized to incur reasonable expenses in carrying out his dutiesand responsibilities under this Agreement and the Company shall promptlyreimburse him for all business expenses incurred in connection with carryingout the business of the Company, subject to documentation in accordance withthe Company’s expense reporting policy.

 

**4.2.2****                     *LegalExpenses. ***The Companyshall promptly reimburse the Executive for his legal expenses, up to a maximumof $3,000, incurred in negotiating and documenting this Agreement with theCompany.

 

**4.3****                               *Vacation.***  During the Executive’s employment hereunder,the Executive shall be entitled to vacation in accordance with the Company’svacation policy for its executive officers.

 

**5.****                                      Deathor Disability.**

 

**5.1****                               *Definitionof Disabled and Disability***. For purposes of this Agreement, the terms “**Disabled**” and “**Disability**”shall mean the Executive’s inability, because of physical or mental illness orinjury, to perform his customary duties pursuant to this Agreement, with orwithout reasonable accommodation, and the continuation of such disabledcondition for a period of one hundred eighty (180) continuous days asdetermined by an approved medical doctor. For purposes hereof, an approved medical doctor shall mean a doctorselected by the Company and the Executive. If the Company and the Executive cannot agree on a medical doctor, eachshall select a medical doctor and the two doctors shall select a third whoshall be the approved medical doctor for this purpose.

 

**5.2****                               *TerminationDue to Death or Disability***. If the Executive dies or becomes Disabled while employed hereunder, thisAgreement and the Executive’s employment shall automatically cease andterminate as of the date of the Executive’s death or the date of Disability(which date shall be determined under Section 5.1 above, and referred toas the **“DisabilityDate”**), as the case may be. In the event of the termination of the Executive’s employment due to hisdeath or Disability, the Executive (or, in the event of his death, his estate)shall be entitled to receive:

 

(i)                                     alump sum cash payment, payable within ten (10) business days after the date ofdeath or the Disability Date equal to the sum of (A) any accrued butunpaid Base Salary as of the date of death or the Disability Date, (B) anyearned but unpaid portions of Annual Bonuses in respect of fiscal yearscompleted prior to the date of death or the Disability Date, (C) anycompensation deferred under the provisions of any deferred compensation planand (D) any unreimbursed business expenses due under Section 4.2.1 ofthis Agreement;

 

(ii)                                  amonthly payment payable in each of the twelve (12) months following thedate of the Executive’s death or Disability Date in an amount equal toone-twelfth (1/12th) of the Executive’s annual Base Salary in effectimmediately prior to his death or Disability Date;

 

(iii)                               solely in the event ofthe termination of the Executive’s employment due to his Disability, if theExecutive elects to continue his medical coverage under

 

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COBRA, reimbursement by the Company of such COBRA costs for a period ofup to eighteen (18) months following the termination of his employment;provided, however, that the Company’s obligation under thisSection 5.2(iii) shall be reduced to the extent that comparable medicalcoverage is provided by a subsequent employer;

 

(iv)                              partialacceleration of the vesting of a portion of the Executive’s stock options andother equity awards, and extension of time to exercise any vested stockoptions, as provided in Section 3.3.2; and

 

(v)                                 suchemployee benefits described in Section 4.1 as the Executive or his estatemay be entitled to hereunder or under the employee benefit plans, programs andarrangements of the Company.

 

**6.****                                      Terminationby the Company.**

 

**6.1****                               TerminationFor Cause.**

 

**6.1.1****                     *Definitionof Termination with Cause.**** *Atermination of the Executive’s employment by the Company for cause (**“Cause”**)shall mean the termination of the Executive’s employment by the Board for anyof the reasons listed below, except in the case of the reason set forth in (i)below, only after written notice by the Board stating the reason for theproposed termination for Cause and the Executive’s failure to cure withinninety (90) days of receipt of such notice:

 

(i)                                     theExecutive’s repeated failure to perform any essential duty of his positionother than due to Disability or such illness or injury as described in anddetermined under Section 5.1 that would result in Disability if itcontinued for the period of time prescribed in Section 5.1;

 

(ii)                                  theExecutive’s commitment of an act that constitutes gross misconduct and isinjurious to the Company, any subsidiary of the Company or any successor to theCompany;

 

(iii)                               the Executive’sconviction of or pleading guilty or *nolo contendere* to any  felony involving theft, embezzlement,dishonesty or moral turpitude;

 

(iv)                              theExecutive’s commission of an act of fraud against, or the misappropriation ofproperty belonging to, the Company, any subsidiary of the Company or anysuccessor to the Company;

 

(v)                                 theExecutive’s commitment of an act of dishonesty in connection with his responsibilitiesas an employee that is intended to result in his personal enrichment or thepersonal enrichment of his family or others; or

 

(vi)                              theExecutive’s material breach of this Agreement or other agreement between theExecutive and the Company or any subsidiary of or successor to the Company.

 

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**6.1.2****                     *EntitlementsUpon a Termination for Cause.*** If the Executive’s employment is terminated for Cause, the terminationshall be effective on the date the Company gives the Executive written noticeof termination, except in the case of a termination for the reason described inSection 6.1.1(i), in which case the termination shall be effective on thelast day of the ninety-day cure period. In the event of the termination of the Executive’s employment hereunderdue to a termination by the Company for Cause, then the Executive shall beentitled to receive:

 

(i)                                     alump sum cash payment, payable within ten (10) business days after the date oftermination of the Executive’s employment, equal to the sum of (A) anyaccrued but unpaid Base Salary as of the date of such termination, (B) anyearned and vested but unpaid portions of Annual Bonuses in respect of fiscalyears completed prior to the date of such termination, (C) anycompensation deferred under the provisions of any deferred compensation plan,(D) any unreimbursed business expenses that are due underSection 4.2.1 of this Agreement and (E) any unpaid vacation.

 

(ii)                                  suchemployee benefits described in Section 4.1 as the Executive or his estatemay be entitled to hereunder or under the employee benefit plans, programs andarrangements of the Company.

 

**6.2****                               *TerminationWithout Cause***.  If theExecutive’s employment is terminated by the Company without Cause, the terminationshall be effective on the thirtieth (30th) day following writtennotice of such termination to the Executive. In the event of such termination without Cause prior to a Change ofControl (as defined in Section 8.1.1) or a Corporate Transaction (asdefined in Section 8.1.2), then, subject to the Executive’s execution of arelease and non-disparagement agreement in a form acceptable to the Company,the Executive shall be entitled to:

 

(i)                                     alump sum cash payment, payable within ten (10) business days after the date oftermination of the Executive’s employment, equal to the sum of (A) anyaccrued but unpaid Base Salary as of the date of such termination, (B) anyearned but unpaid portions of Annual Bonuses in respect of fiscal years completedprior to the date of such termination, (C) any compensation deferred underany deferred compensation plan and (D) any unreimbursed business expensesdue under Section 4.2.1 of this Agreement;

 

(ii)                                  amonthly severance payment payable in each of the twelve (12) monthsfollowing the date of termination of the Executive’s employment in an amountequal to one-twelfth (1/12th) of the Executive’s annual Base Salaryin effect immediately prior to such termination;

 

(iii)                               if the Executive electsto continue his medical coverage under COBRA, reimbursement by the Company ofsuch COBRA costs for a period of up to eighteen (18) months following thetermination of his employment; provided, however, that the Company’s obligationunder this Section 6.2(iii) shall be

 

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reduced to the extent that comparable medical coverage is provided by asubsequent employer;

 

(iv)                              partialacceleration of the vesting of a portion of the Executive’s outstanding stockoptions and other equity awards, and extension of time to exercise any vestedstock options, as provided in Section 3.3.2;  and

 

(v)                                 suchemployee benefits described in Section 4.1 as the Executive or his estatemay be entitled to hereunder or under the employee benefit plans, programs andarrangements of the Company.

 

**7.****                                      Terminationby the Executive.**

 

**7.1****                               *TerminationWithout Good Reason***.  Ifthe Executive voluntarily terminates his employment with the Company withoutGood Reason, the termination shall be effective at the end of the thirty-daynotice period.  Upon such termination ofemployment without Good Reason, the Executive shall have the same entitlementsas provided in Section 6.1.2 in the case of a termination by the Companyfor Cause.

 

**7.2****                               *TerminationWith Good Reason***.

 

**7.2.1****                     *Definitionof Good Reason***.  Forpurposes of this Agreement, **“Good Reason”** shall mean the occurrence ofany of the following events without the Executive’s written consent:

 

(i)                                     anyreduction in the aggregate level of the Executive’s Base Salary except a reductionthat is part of a program applicable to all of the Company’s officers to reduceexpenses;

 

(ii)                                  thefailure by the Company or any subsidiary of or successor to the Company tocomply with any material terms of this Agreement or any other material agreementbetween the Executive and the Company or any subsidiary of or successor to theCompany;

 

(iii)                               any material reductionin the nature or scope of the Executive’s duties, title, function, authority orresponsibilities, which reduction shall not be deemed to have occurred if theExecutive has a title of “Vice President” or a more senior title with theCompany or any surviving or successor entity of the Company; or

 

(iv)                              arequirement that the Executive relocate his principal office to a location thatis more than sixty (60) miles from the location of his principal office onJanuary 1, 2004;

 

provided,however, that none of the events specified above shall constitute GoodReason unless the Executive shall have notified the Company in writingdescribing the events which constitute Good Reason and the Company shall have

 

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failed to cure such eventwithin thirty (30) days after the Company’s receipt of such written notice.

 

**7.2.2****                     *EntitlementsUpon a Termination with Good Reason.***  If the Executive terminates his employment with Good Reason, thetermination shall be effective at the end of the thirty-day cure period.  Upon such termination of his employment withGood Reason in accordance with Section 7.2.1 hereof prior to Change ofControl (as defined in Section 8.1.1) or a Corporate Transaction (asdefined in Section 8.1.2), the Executive shall, subject to the Executive’sexecution of a release and non-disparagement agreement in a form acceptable tothe Company, have the same entitlements as provided under Section 6.2 fora termination by the Company without Cause.

 

**8.****                                      Changeof Control Provisions.**

 

**8.1****                               *Definitions***.

 

**8.1.1****                     *Definitionof Change of Control***. For purposes of this Agreement, “**Change of Control**” shall mean either of thefollowing events:

 

(i)                                     anyperson or related group of persons (other than the Company or a person thatdirectly or indirectly controls, is controlled by, or is under common controlwith, the Company) directly or indirectly acquires beneficial ownership (withinthe meaning of Rule 13d-3 of the Securities Exchange Act of 1934, asamended) of securities possessing more than fifty percent (50%) of the totalcombined voting power of the Company’s outstanding securities pursuant to atender or exchange offer made directly to the Company’s stockholders; or

 

(ii)                                  thereis 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 ceases, byreason of one or more proxy contests for the election of Board members to becomprised of individuals who either (A) have been Board memberscontinuously since the beginning of such period or (B) have been electedor nominated for election as Board members during such period by at least amajority of the Board members described in clause (A) who were still in officeat the time such election or nomination was approved by the Board.

 

**8.1.2****                     *Definitionof Corporate Transaction***. For purposes of this Agreement, “**Corporate Transaction**” shall mean any ofthe following stockholder approved transactions to which the Company is aparty:

 

(i)                                     amerger or consolidation in which the Company is not the surviving entity,except for a transaction the principal purpose of which is to change the statein which the Company is incorporated,

 

(ii)                                  thesale, transfer or other disposition of all or substantially all of the assetsof the Company in complete liquidation or dissolution of the Company, or

 

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(iii)                               any reverse merger inwhich the Company is the surviving entity but in which securities possessingmore than fifty percent (50%) of the total combined voting power of theCompany’s outstanding securities are transferred to person or persons differentfrom the persons holding those securities immediately prior to such merger.

 

**8.2****                               *Effect ofChange of Control or Corporate Transaction***.  In the event of a Change of Control or aCorporate Transaction, and within one (1) year following such Change of Controlor Corporate Transaction, either the Executive terminates his employment withthe Company with Good Reason or the Company terminates his employment for anyreason other than for Cause, then, subject to the Executive’s execution of arelease and non-disparagement agreement in a form acceptable to the Company,the Executive shall be entitled to the following in lieu of, and not inaddition to, the entitlements described in Sections 6.2 and 7.2.2:

 

(i)                                     alump sum cash payment, payable within ten (10) days after the date of thetermination of the Executive’s employment equal to the sum of (A) anyaccrued but unpaid Base Salary as of the date of such termination, (B) anyearned but unpaid portions of Annual Bonuses in respect of fiscal yearscompleted prior to the date of the termination of the Executive’s employment,(C) any compensation deferred under any deferred compensation plan and(D) any unreimbursed business expenses due under Section 4.2.1 ofthis Agreement;

 

(ii)                                  amonthly payment in each of the twenty four (24) months following the date ofthe termination of the Executive’s employment in an amount equal to one-twelfth(1/12th) of the Executive’s annual Base Salary in effect immediatelyprior to such termination (or, if greater, his annual Base Salary in effectimmediately prior to the Change of Control or Corporate Transaction);

 

(iii)                               if the Executive electsto continue his medical coverage under COBRA, reimbursement by the Company ofsuch COBRA costs for a period of up to eighteen (18) months following thetermination of his employment; provided, however, that the Company’s obligationunder this Section 8.2(iii) shall be reduced to the extent that comparablemedical coverage is provided by a subsequent employer;

 

(iv)                              accelerationof the vesting of the Executive’s stock options and other equity awards, andextension of time to exercise any vested stock options, as provided inSection 3.3.2; and

 

(v)                                 suchemployee benefits described in Section 4.1 as the Executive or his estatemay be entitled to hereunder or under the employee benefit plans, programs andarrangements of the Company.

 

**8.3****                               *Option toRefuse Payments***.  TheExecutive shall be entitled to refuse all or any portion of any payments orbenefits under this Agreement if the Executive determines that receipt of suchpayment or benefit may result in adverse tax consequences to him under

 

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Section 4999 of the Code or otherwise.  The Company shall be totally and permanently relieved of anyobligation to pay any amounts or to provide any benefits that the Executivespecifically so refuses in writing.

 

**9.****                                      Non-Competition.**

 

The Executiveacknowledges and recognizes the highly competitive nature of the businesses ofthe Company, the amount of sensitive and confidential information involved inthe discharge of the Executive’s position with the Company, and the harm to theCompany****thatwould result if such knowledge or expertise was disclosed or made available toa competitor, and accordingly agrees that during the period that he isreceiving any payments under this Agreement, he shall not, directly orindirectly in any manner or capacity (e.g., as an advisor, principal, agent,partner, officer, director, shareholder, employee, member of any association orotherwise) engage in, work for, consult, provide advice or assistance orotherwise participate in any activity that is competitive with the business ofthe Company.  The Executive furtheragrees that during such period he will not assist or encourage any other personin carrying out any activity that would be prohibited by the foregoingprovisions of this Section if such activity were carried out by theExecutive and, in particular, the Executive agrees that he will not induce anyemployee of the Company to carry out any such activity; provided, however,that the “beneficial ownership” by the Executive, either individually or as amember of a “group,” as such terms are used in Rule 13d of the General Rulesand Regulations under the Exchange Act, of not more than one percent (1%) ofthe voting stock of any publicly held corporation shall not be a violation ofthis Agreement.  It is further expresslyagreed that the Company will or would suffer irreparable injury if the Executivewere to compete with the Company or any subsidiary or affiliate of the Companyin violation of this Agreement and that the Company would by reason of suchcompetition be entitled to injunctive relief in a court of appropriatejurisdiction, and the Executive further consents and stipulates to the entry ofsuch injunctive relief in such a court prohibiting the Executive from competingwith the Company or any subsidiary or affiliate of the Company in violation ofthis Agreement.  In the event that theExecutive breaches the provisions of this Section 9, the severancebenefits under Sections 6.2, 7.2.2 or 8.2, whichever is applicable, shallimmediately terminate, the Executive shall cease to be entitled to anyadditional payments under this Agreement, and all stock options shall cease tobe exercisable.

 

**10.****                               Confidentialityand Treatment of Inventions.**

 

**10.1****                        *Confidentiality.***  The Executive will not at any time (whetherduring or after his employment with the Company), other than in the course ofhis duties hereunder or unless compelled by lawful process, disclose or use forhis own benefit or purposes or the benefit or purposes of any other person,firm, partnership, joint venture, association, corporation or other businessorganization, entity or enterprise other than an entity within the Company orany subsidiary or affiliate of the Company, any trade secrets, or otherconfidential data or information relating to customers, development programs,costs, marketing, trading, investment, sales activities, promotion, credit andfinancial data, financing methods, or plans of any entity within the Company orany subsidiary or

 

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affiliate of the Company; provided that the foregoing shall notapply to information that is generally known to the industry or the publicother than as a result of the Executive’s breach of this covenant.  The Executive agrees that upon terminationof his employment with the Company for any reason, he will return to theCompany immediately all memoranda, books, papers, software, plans, information,letters and other data, and all copies thereof or therefrom, in any wayrelating to the business of any entity within the Company or any subsidiary oraffiliate of the Company, except that he may retain personal notes, notebooksand diaries that do not contain confidential information of the type describedin the preceding sentence.  TheExecutive further agrees that he will not retain or use for his account at anytime any trade names, trademark or other proprietary business designation usedor owned in connection with the business of any entity within the Company orany subsidiary or affiliate of the Company.

 

**10.2****                        *Treatment ofInventions.***

 

**10.2.1****              *PriorInventions***.  TheExecutive understands and acknowledges that he does not have any right or claimto 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**”), includingwithout limitation any Invention made prior to his employment with theCompany.  The Executive furtherunderstands and acknowledges that he has had the opportunity to disclose anyInvention to the Company, and has voluntarily and knowingly waived and declinedsuch opportunity because he has no Invention to disclose.

 

**10.2.2****              *SubsequentInvention Disclosure***. The Executive hereby agrees to disclose to the Company in a promptmanner any Invention that he develops at any time prior to the six-monthanniversary of his termination of employment with the Company.

 

**10.2.3****              *Assignmentof Inventions***.  Except asotherwise provided by Section 10.2.4, the Executive hereby assigns andagrees 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 solelyor jointly, develops prior to the six-month anniversary of his termination ofemployment with the Company, with the use of time, material, equipment,supplies, facilities or trade secret information of the Company or anysubsidiary or affiliate of the Company, whether or not during workinghours.  The Executive further agrees tocooperate with the Company and to perform all acts deemed necessary ordesirable by the Company to permit and to assist the Company, at the Company’sexpense, in obtaining and enforcing the full benefits, enjoyment, rights andtitle (whether domestic or foreign) to any Invention hereby assigned by theExecutive to the Company.

 

**10.2.4****              *Inventionsnot Assigned***. Section 10.2.3 shall not apply to an Invention that the Executivedeveloped entirely on his own time without using the Company’s or any of itssubsidiaries’ or affiliates’ time, material, equipment, supplies, facilities ortrade secret information, except for any Invention that either (i) relatesat the time of conception or reduction to practice of the Invention to

 

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the Company’s or a subsidiary’s or affiliate’s business, or actual ordemonstrably anticipated research development of the Company or a subsidiary oraffiliate of the Company or (ii) results from the Executive’s work withthe Company or a subsidiary or affiliate of the Company, whether or not duringnormal working hours.

 

**11.****                               Antisolicitation.**

 

The Executive promises andagrees that, for a period of twelve (12) months following his termination ofemployment, he will not influence or attempt to influence suppliers orcustomers of the Company hereunder, either directly or indirectly, to diverttheir business away from the Company to any individual, partnership, firm,corporation or other entity then in competition with the Company or anysubsidiary of successor to the Company.

 

**12.****                               SolicitingEmployees.**

 

The Executive promisesand agrees that, for a period of twelve (12) months following termination ofhis employment hereunder, he will not directly or indirectly solicit any personwho is then, or at any time within six months prior thereto was, an employee ofthe Company to leave the employ of the Company to work for any business,individual, partnership, firm, corporation, or other entity then in competitionwith the business of the Company or any subsidiary of or successor to theCompany.

 

**13.****                               Cooperationin Litigation.**

 

The Executive agrees thathe will reasonably cooperate with the Company in any litigation that arises outof events occurring prior to the termination of his employment, including butnot limited to, serving as a witness or consultant and producing documents andinformation relevant to the case or helpful to the Company.  The Company agrees to reimburse theExecutive for all reasonable costs and expenses he incurs in connection withhis obligations under this Section 13.

 

**14.****                               Indemnification.**

 

Indemnification shall beprovided to the Executive as set forth in the indemnification agreement enteredinto between the Company and the Executive prior to the date hereof and/or anysubsequent indemnification agreement between the Company and the Executive (the“**IndemnificationAgreement**”).

 

**15.****                               Assignment.**

 

This Agreement ispersonal in its nature and neither of the parties hereto shall, without theconsent of the other, assign or transfer this Agreement or any rights orobligations hereunder; provided, however, that, in the event of amerger, consolidation, or transfer or sale of all or substantially all of theassets of the Company with or to any other individual(s) or entity, thisAgreement shall, subject to the provisions hereof, be binding upon and inure tothe benefit of such successor and such successor shall discharge and performall the promises, covenants, duties, and obligations of the Company hereunder, 

 

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and; provided, further,that the Executive may assign his rights to compensation and benefits by willor by operation of law or pursuant to Section 27.

 

**16.****                               GoverningLaw.**

 

This Agreement and thelegal relations hereby created between the parties hereto shall be governed byand construed under and in accordance with the internal laws of the State ofCalifornia, without regard to conflicts of laws principles thereof, except asprovided in Section 14.

 

**17.****                               EntireAgreement.**

 

This Agreement and theIndemnification Agreement represent the entire agreement of the parties heretorespecting the matters within the scope of this Agreement and theIndemnification Agreement and supersede all prior agreements of the partieshereto on the subject matter hereof. Any prior negotiations, correspondence, other agreements, proposals orunderstandings relating to the subject matter hereof shall he deemed to bemerged into this Agreement and to the extent inconsistent herewith, suchnegotiations, correspondence, agreements, proposals, or understandings shall bedeemed to be of no force or effect. There are no representations, warranties, or agreements, whether expressor implied, or oral or written, with respect to the subject matter hereof,except as set forth herein.

 

**18.****                               Modifications.**

 

This Agreement shall notbe modified by any oral agreement, either express or implied, and allmodifications hereof shall be in writing and signed by the parties hereto.

 

**19.****                               Waiver.**

 

Failure to insist uponstrict compliance with any of the terms, covenants, or conditions hereof shallnot be deemed a waiver of such term, covenant, or condition, nor shall anywaiver 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 orrelinquishment of such right or power at any other time or times.

 

**20.****                               Numberand Gender.**

 

Where the contextrequires, the singular shall include the plural, the plural shall include thesingular, and any gender shall include all other genders.

 

**21.****                               Section Headings.**

 

The section headingsin this Agreement are for the purpose of convenience only and shall not limitor otherwise affect any of the terms hereof.

 

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**22.****                               Resolutionof Disputes.**

 

Any controversy or claimarising out of or relating to the Executive’s employment, this Agreement, itsenforcement, arbitrability, or interpretation, or because of an alleged breach,default, or misrepresentation in connection with any of its provisions, shallbe submitted to arbitration in Santa Clara County, California, before a singlearbitrator, in accordance with the National Rules for the Resolution ofEmployment Disputes then in effect of the American Arbitration Association (“**AAA**”)as modified by the terms and conditions of this Section 22; provided,however, that provisional injunctive relief may, but need not, be soughtin a court of law while arbitration proceedings are pending, and anyprovisional injunctive relief granted by such court shall remain effectiveuntil the matter is finally determined by the arbitrator.  The arbitrator shall be selected by mutualagreement of the parties or, if the parties cannot agree, by striking from alist 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 througharbitration may include any remedy or relief which the arbitrator deems justand equitable.  Any award or relief grantedby the arbitrator hereunder shall be final and binding on the parties heretoand may be enforced by any court of competent jurisdiction.

 

The parties acknowledgethat they are hereby waiving any rights to trial by jury in any action,proceeding or counterclaim brought by either of the parties against the otherin connection with any matter whatsoever arising out of or in any way connectedwith this Agreement or the Executive’s employment.

 

The Company shall pay thearbitrator’s fees and arbitration expenses and any other costs associated withthe arbitration or arbitration hearing that are unique to artibration.  The Company and the Executive each shallseparately pay its or his own deposition, witness, expert and attorneys’ feesand other expenses as and to the same extent as if the matter were being heldin court unless otherwise provided by law; provided, however,that if the Executive prevails, the arbitrator may award the Executivereasonable attorneys’ fees.  Thearbitrator shall resolve any dispute as to reasonableness of any fee or cost.  The arbitrator shall have the sole andexclusive power and authority to decide any and all issues of or related toarbitrability.

 

**23.****                               Severability.**

 

In the event that a courtof competent jurisdiction determines that any portion of this Agreement is inviolation of any statute or public policy, then only the portions of thisAgreement which violate such statute or public policy shall be stricken, andall portions of this Agreement which do not violate any statute or publicpolicy shall continue in full force and effect.  Furthermore, any court order striking any portion of thisAgreement shall modify the stricken terms as narrowly as possible to give asmuch effect as possible to the intentions of the parties under this Agreement.

 

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**24.****                               Notices.**

 

All notices under thisAgreement shall be in writing and shall be either personally delivered ormailed postage prepaid, by certified mail, return receipt requested:

 

(i)                                     ifto the Company:

 

Ultratech, Inc.

3050 Zanker Road

San Jose, California  95134

Attention: Chair,Compensation Committee of the Board of Directors

 

(ii)                                  ifto the Executive:

 

John E. Denzel

3371 Shady Spring Lane

Mountain View, CA 94040

 

Either party may changeits address set forth above by written notice given to the other party inaccordance with the foregoing.  Anynotice shall be effective when personally delivered, or five (5) business daysafter being mailed in accordance with the foregoing.

 

**25.****                               Counterparts.**

 

This Agreement may beexecuted in any number of counterparts, each of which shall be deemed anoriginal and all of which together shall constitute one and the sameinstrument.

 

**26.****                               WithholdingTaxes.**

 

The Company may withholdfrom any amounts payable under this Agreement such federal, state and localincome, employment, or other taxes as may be required to be withheld pursuantto any applicable law or regulation.

 

**27.****                               Beneficiaries.**

 

The Executive shall beentitled, to the extent permitted under any applicable law and to the extentpermitted under any benefit plan or program maintained by the Company, toselect and change a beneficiary or beneficiaries to receive any compensation orbenefit hereunder following the Executive’s death by giving the Company writtennotice thereof in accordance with the terms of such plan or program.  In the event of the Executive’s death or ajudicial determination of his incompetence, reference in this Agreement to theExecutive shall be deemed, where appropriate, to refer to his beneficiary,estate or other legal representative.

 

**28.****                               Director’sand Officer’s Insurance.**

 

The Company shall providedirector’s and officer’s insurance coverage for the Executive to the extent theCompany provides such coverage for its other senior executive officers.

 

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**29.****                               NoMitigation or Offset.**

 

In theevent of any termination of employment under this Agreement, the Executiveshall be under no obligation to seek other employment and there shall be nooffset against amounts due the Executive under this Agreement on account of anyremuneration attributable to any subsequent employment that he may obtainexcept (i) as specifically provided in Sections 5.2(iii), 6.2(iii) and 8.2(iii)of this Agreement, or (ii) on account of any claims the Company may haveagainst the Executive.

 

**30.****                               Rightto Advice of Counsel.**

 

The Executiveacknowledges that he has had the right to consult with counsel and is fullyaware of his rights and obligations under this Agreement.  O’Melveny & Myers, LLP has served as theCompany’s counsel with respect to this Agreement.

 

**31.****                               Survival.**

 

Uponthe termination of this Agreement, the provisions of Sections 5, 6, 7, 8, 9,10, 11, 12, 13, 14, 16, 22, 23, 24, 26, 28 and 29 shall survive.

 

**IN WITNESS WHEREOF**, the Company and theExecutive have executed this Employment Agreement as of the date first abovewritten.

 
|   | **THE COMPANY**        |
|--------|------------------------|
|   |                   |
|   | **Ultratech, Inc.,**   |
|   | a Delaware corporation |
|   |                   |
|   |                   |
|   | By:                    | /s/ Nicholas Konidaris |   |
|   |                   | Nicholas Konidaris |
|   |                   | Chairman, Compensation  Committee of the  Board of Directors |
|   |                   |   |
|   |                   |   |
|   | **THE EXECUTIVE**      |
|   |                   |   |
|   |                   |
|   | John E. Denzel         |   |
|   | John E. Denzel         |
|        |                        |  |  |  |  |

 

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