**Exhibit10.4**

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**ULTRATECH,INC.**

 

**RESTRICTEDSTOCK UNIT ISSUANCE AGREEMENT**

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**RECITALS**

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A.            The Board has adoptedthe Plan for the purpose of retaining the services of selected Employees andconsultants and other independent advisors who provide services to the Corporation(or any Parent or Subsidiary).

 

B.            Participant is torender valuable services to the Corporation (or a Parent or Subsidiary), andthis Agreement is executed pursuant to, and is intended to carry out thepurposes of, the Plan in connection with the Corporation’s issuance of sharesof Common Stock to the Participant under the Stock Issuance Program.

 

C.            All capitalized termsin this Agreement shall have the meaning assigned to them in the attached Appendix A.

 

**NOW,THEREFORE**, it is hereby agreed as follows:

 

1.             **Grant ofRestricted Stock Units**. The Corporation hereby awards to theParticipant, as of the Award Date, Restricted Stock Units under the Plan. EachRestricted Stock Unit which vests during the Participant’s period of Serviceshall entitle the Participant to receive one share of Common Stock on the specifiedissuance date. The number of shares of Common Stock subject to the awardedRestricted Stock Units, the applicable vesting schedule for those shares, thedate on which those vested shares shall become issuable to Participant and theremaining terms and conditions governing the award (the “Award”) shall be asset forth in this Agreement.

 

**AWARD SUMMARY**

 
| Award Date: |                        ,  200     |
|-------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 
| Number of Shares  Subject to Award: |  

                 shares of Common Stock (the “Shares”) |
|-------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

 
| Vesting  Schedule: | The Shares shall vest in a series of           (    ) successive equal           installments upon the Participant’s completion of each           of Service over the          (    )-year  period measured from         , 20    .  However, the Shares may be subject to accelerated vesting in whole or in part  in accordance with the provisions of Paragraphs 4 and 6 of this Agreement. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

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| Issuance Schedule | The Shares in which the Participant vests in  accordance with the foregoing Vesting Schedule will become issuable on the  date (the “Issue Date”) upon which occurs the ***earliest***of the following dates or events: (i)          20    , (ii) the date of the Participant’s Separation from  Service or (iii) the closing date of a Change in Control. The actual issuance  of the Shares shall be subject to the Corporation’s collection of all applicable  Withholding Taxes and shall be effected on the applicable Issue Date or as  soon as administratively practicable thereafter, but in no event later than  the close of the calendar year in which such Issue Date occurs or (if later)  the fifteenth (15th) day of the third calendar month following such Issue  Date. The procedures pursuant to which the applicable Withholding Taxes are  to be collected are set forth in Paragraph 8 of this Agreement. |
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2.             **LimitedTransferability**. Prior to actual receipt of the Shares whichvest and become issuable hereunder, the Participant may not transfer anyinterest in the Award or the underlying Shares. Any Shares which vest hereunderbut which otherwise remain unissued at the time of the Participant’s death maybe transferred pursuant to the provisions of the Participant’s will or the lawsof inheritance or to the Participant’s designated beneficiary or beneficiariesof this Award. The Participant may also direct the Corporation to issue thestock certificates for any Shares which in fact vest and become issuable underthe Award during his or her lifetime to one or more designated family membersor a trust established for the Participant and/or his or her family members.The Participant may make such a beneficiary designation or certificatedirective at any time by filing the appropriate form with the PlanAdministrator or its designee.

 

3.             **Cessation ofService**. Except as otherwise provided in Paragraph 4 below,should the Participant cease Service for any reason prior to vesting in one ormore Shares subject to this Award, then the Award will be immediately cancelledwith respect to those unvested Shares, and the number of Restricted Stock Unitswill be reduced accordingly. The Participant shall thereupon cease to have anyright or entitlement to receive any Shares under those cancelled units. Shouldthe Participant’s Service terminate by reason of a Termination for Cause, thenthis Award will be immediately cancelled with respect to all the RestrictedStock Units subject to such Award, whether vested or unvested at the time, andthe Participant shall thereupon cease to have any right or entitlement toreceive any Shares under this Award and the cancelled Restricted Stock Units.

 

4.             **AcceleratedVesting**. The following special vesting acceleration provisionsshall be in effect for the Award and shall be in addition to the vestingacceleration provisions of Paragraph 6 of this Agreement:

 

(a)           Should the Participantterminate Service by reason of Retirement or should the Participant’s Serviceterminate at or after attainment of age sixty-five (65) by reason of death, PermanentDisability or Involuntary Termination (other than a Termination for Cause), thenall the Shares at the time subject to this Award shall immediately vest.

 

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(b)           Should the Participant’sService terminate prior to attainment of age sixty-five (65) by reason of hisor her death, Permanent Disability or Involuntary Termination (other than aTermination for Cause), then the Participant shall immediately vest in theadditional number of Shares (if any) in which the Participant would have beenvested at the time of such termination had the Shares subject to this Awardvested in a series of                (    ) successive equal           installments over the duration of the Vesting Schedule.

 

(c)           The Shares which veston an accelerated basis pursuant to this Paragraph 4, together with any otherShares in which the Participant is at the time vested, shall be issued on thedate of the Participant’s Separation from Service or as soon asadministratively practicable thereafter, subject to the Corporation’scollection of the applicable Withholding Taxes, but in no event later than theclose of the calendar year in which such Separation from Service occurs or (iflater) the fifteenth (15th) day of the third calendar month following the dateof such Separation from Service.

 

5.             **StockholderRights and Dividend Equivalents**

 

(a)           The holder of thisAward shall not have any stockholder rights, including voting or dividendrights, with respect to the Shares subject to the Award until the Participant becomesthe record holder of those Shares following their actual issuance upon theCorporation’s collection of the applicable Withholding Taxes.

 

(b)           Notwithstanding theforegoing, should any dividend or other distribution, whether regular orextraordinary and whether payable in cash, securities or other property, bedeclared and paid on the outstanding Common Stock while one or more Sharesremain subject to this Award (i.e., those Shares are not otherwise issued andoutstanding for purposes of entitlement to the dividend or distribution), thena special book account shall be established for the Participant and creditedwith a phantom dividend equal to the actual dividend or distribution whichwould have been paid on the Shares at the time subject to this Award had thoseShares been issued and outstanding and entitled to that dividend ordistribution. The phantom dividend equivalents so credited shall vest at thesame time as the Shares to which they relate and shall be distributed to theParticipant (in the same form the actual dividend or distribution was paid tothe holders of the Common Stock entitled to that dividend or distribution)concurrently with the issuance of those Shares on the applicable Issue Date. However,each such distribution shall be subject to the Corporation’s collection of theWithholding Taxes applicable to that distribution.

 

6.             **Change of Control**.

 

(a)           Any Restricted StockUnits subject to this Award at the time of a Change in Control will vestimmediately prior to the closing of that Change in Control. The Shares subjectto those vested units, together with any other Shares in which the Participantis at that time vested, will be issued on the Issue Date triggered by theChange in Control (or otherwise converted into the right to receive the sameconsideration per share of Common Stock 

 

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payable to the otherstockholders of the Corporation in consummation of that Change in Control anddistributed at the same time as such stockholder payments), subject to theCorporation’s collection of the applicable Withholding Taxes pursuant to theprovisions of Paragraph 8.

(b)           This Agreement shallnot in any way affect the right of the Corporation to adjust, reclassify,reorganize or otherwise change its capital or business structure or to merge,consolidate, dissolve, liquidate or sell or transfer all or any part of itsbusiness or assets.

 

7.             **Adjustment inShares**. Should any change be made to the Common Stock by reasonof any stock split, stock dividend, recapitalization, combination of shares,exchange of shares or other change affecting the outstanding Common Stock as aclass without the Corporation’s receipt of consideration, appropriateadjustments shall be made to the total number and/or class of securitiesissuable pursuant to this Award in order to reflect such change and therebypreclude a dilution or enlargement of benefits hereunder.

 

8.             **Collection ofWithholding Taxes**.

 

(a)           The Corporation shallcollect the employee portion of the FICA taxes (Social Security and Medicare) withrespect to the Shares at the time those Shares vest hereunder. The FICA taxesshall be based on the Fair Market Value of the Shares on their vesting date. TheCorporation shall also collect the employee portion of the FICA taxes withrespect to any phantom dividends at the time those phantom dividends vesthereunder. The FICA taxes shall be based on the cash amount and the fair marketvalue of any other property underlying the phantom dividends on the vestingdate. Unless the Participant delivers a separate check payable to theCorporation in the amount of the FICA taxes required to be withheld from theParticipant, the Corporation shall withhold those taxes from the Participant’swages. However, if the Participant is at the time an executive officer of theCorporation, then such withholding taxes must be collected from the Participantthrough delivery of his or her separate check not later than the vesting date.

 

(b)           The Corporation shallcollect the federal, state and local income taxes required to be withheld withrespect to the distribution of the phantom dividend equivalents to theParticipant by withholding a portion of that distribution equal to the amountof those taxes, with the cash portion of the distribution to be the firstportion so withheld. Until such time as the Corporation provides theParticipant with notice to the contrary, the Corporation shall collect the federal,state and local income taxes required to be withheld with respect to the issuanceof the vested Shares hereunder through an automatic Share withholding procedurepursuant to which the Corporation will withhold, at the time of such issuance, aportion of the Shares with a Fair Market Value (measured as of the issuance date)equal to the amount of those taxes (the “Share Withholding Method”); ***provided, however***, that the amount of any Shares sowithheld shall not exceed the amount necessary to satisfy the Corporation’srequired tax withholding obligations using the minimum statutory withholdingrates for federal and state tax purposes that are applicable to supplementaltaxable income. Participant shall be notified in writing in the event suchShare Withholding Method is no longer available.

 

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(c)           Should any Shares bedistributed at time the Share Withholding Method is not available, then the federal,state and local income taxes required to be withheld with respect to thoseShares shall be collected from the Participant through either of the followingalternatives:

 

•              theParticipant’s delivery of his or her separate check payable to the Corporationin the amount of such Withholding Taxes, or

 

•              theuse of the proceeds from a next-day sale of the Shares issued to theParticipant, provided and only if (i) such a sale is permissible under theCorporation’s trading policies governing the sale of Common Stock, (ii) theParticipant makes an irrevocable commitment, on or before the Issue Date forthose Shares, to effect such sale of the Shares and (iii) the transaction isnot otherwise deemed to constitute a prohibited loan under Section 402 of theSarbanes-Oxley Act of 2002.

 

(d)           Except as otherwiseprovided in Paragraph 6 and Paragraph 8(b), the settlement of all RestrictedStock Units which vest under the Award shall be made solely in shares of CommonStock. In no event, however, shall any fractional shares be issued. Accordingly,the total number of shares of Common Stock to be issued pursuant to the Awardshall, to the extent necessary, be rounded down to the next whole share inorder to avoid the issuance of a fractional share.

 

9.             **Deferred Issue Date.**Notwithstanding any provision to the contrary in this Agreement, no Shareswhich become issuable by reason of the Participant’s Separation from Serviceshall actually be issued to a Participant prior to the ***earlier***of (i) the expiration of the six (6)-month period measured from the date of hisor her Separation from Service or (ii) the date of his or her death, if theParticipant is deemed at the time of such Separation from Service to be a “keyemployee” within the meaning of that term under Code Section 416(i) ***and*** such delayed issuance isotherwise required in order to avoid a prohibited distribution under CodeSection 409A(a)(2). Upon the expiration of the applicable Code Section409A(a)(2) deferral period, all Shares deferred pursuant to this Paragraph 9shall be issued in a lump sum to the Participant.

 

10.           **BenefitLimit.****In the event the vesting andissuance of the Shares subject to this Award would otherwise constitute aparachute payment under Code Section 280G, then the vesting and issuance ofthose Shares shall be subject to reduction to the extent necessary to assurethat the number of Shares which vest and are issued under this Award will belimited to the ***greater*** of (i)  thenumber of Shares which can vest and be issued without triggering a parachutepayment under Code Section 280G or (ii)  the maximum number of Shareswhich can vest and be issued under this Award so as to provide the Participantwith the greatest after-tax amount of such vested and issued Shares aftertaking into account any excise tax the Participant may incur under Code Section4999 with respect to those Shares and any other benefits or payments to whichthe Participant may be entitled in connection with any change in control orownership of the Corporation or the subsequent termination of the Participant’sService.

 

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11.           **Compliance withLaws and Regulations**. The issuance of shares of Common Stockpursuant to the Award shall be subject to compliance by the Corporation andParticipant with all applicable requirements of law relating thereto and withall applicable regulations of any stock exchange (or the Nasdaq NationalMarket, if applicable) on which the Common Stock may be listed for trading atthe time of such issuance.

 

12.           **Notices**.Any notice required to be given or delivered to the Corporation under the termsof this Agreement shall be in writing and addressed to the Corporation at itsprincipal corporate offices. Any notice required to be given or delivered toParticipant shall be in writing and addressed to Participant at the addressindicated below Participant’s signature line on this Agreement. All noticesshall be deemed effective upon personal delivery or upon deposit in the U.S.mail, postage prepaid and properly addressed to the party to be notified.

 

13.           **Successors andAssigns**. Except to the extent otherwise provided in thisAgreement, the provisions of this Agreement shall inure to the benefit of, andbe binding upon, the Corporation and its successors and assigns andParticipant, Participant’s assigns, the legal representatives, heirs andlegatees of Participant’s estate and any beneficiaries of the Award designatedby Participant.

 

14.           **Construction**.This Agreement and the Award evidenced hereby are made and granted pursuant tothe Plan and are in all respects limited by and subject to the terms of thePlan. All decisions of the Plan Administrator with respect to any question orissue arising under the Plan or this Agreement shall be conclusive and bindingon all persons having an interest in the Award.

 

15.           **Governing Law**.The interpretation, performance and enforcement of this Agreement shall begoverned by the laws of the State of California without resort to that State’sconflict-of-laws rules.

 

16.           **Employment atWill**. Nothing in this Agreement or in the Plan shall confer uponParticipant any right to continue in Service for any period of specificduration or interfere with or otherwise restrict in any way the rights of theCorporation (or any Parent or Subsidiary employing or retaining Participant) orof Participant, which rights are hereby expressly reserved by each, toterminate Participant’s Service at any time for any reason, with or withoutcause.

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

 
| ** ** | **ULTRATECH, INC.** |
|------------|---------------------|
|       |                |
|       |                |
|       | By:                 |   |
|       |                |
|       | Title:              |   |
|       |                |
|       |                |
|       | **PARTICIPANT**     |
|       |                |
|       |                |
|       | Signature:          |   |
|       |                |   |
|       | Address:            |   |
|       |                |   |
|       |                |   |

 

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**APPENDIXA**

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**DEFINITIONS**

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The following definitions shall be in effect under the Agreement:

 

A.            **Agreement**shall mean this Restricted Stock Unit Issuance Agreement.

 

B.            **Award**shall mean the award of Restricted Stock Units made to the Participant pursuantto the terms of this Agreement.

 

C.            **Award Date**shall mean the date the Restricted Stock Units are awarded to Participantpursuant to the Agreement and shall be the date indicated in Paragraph 1 of theAgreement.

 

D.            **Board**shall mean the Corporation’s Board of Directors.

 

E.             **Change in Control**shall mean a change in ownership or control of the Corporation effected throughany of the following transactions:

 

(i)            a merger orconsolidation in which the Corporation is not the surviving entity and in whichsecurities possessing more than fifty percent (50%) of the total combinedvoting power of the Corporation’s outstanding securities are transferred toperson or persons different from the persons holding those securitiesimmediately prior to such merger or consolidation,

 

(ii)           the sale, transfer orother disposition of all or substantially all of the assets of the Corporationin complete liquidation or dissolution of the Corporation, or

 

(iii)          any reverse merger inwhich the Corporation is the surviving entity but in which securitiespossessing more than fifty percent (50%) of the total combined voting power ofthe Corporation’s outstanding securities are transferred to person or personsdifferent from the persons holding those securities immediately prior to suchmerger.

 

(iv)          the acquisition,directly or indirectly by any person or related group of persons (other thanthe Corporation or a person that directly or indirectly controls, is controlledby, or is under common control with, the Corporation), of beneficial ownership(within the meaning of Rule 13d-3 of the 1934 Act) of securities possessingmore than fifty percent (50%) of the total combined voting power of the Corporation’soutstanding securities pursuant to a tender or exchange offer made directly tothe Corporation’s stockholders, or

 

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(v)           a change in thecomposition of the Board over a period of twelve (12) consecutive months orless such that a majority of the Board members ceases, by reason of one or morecontested elections for Board membership, to be comprised of individuals whoeither (A) have been Board members continuously since the beginning of such periodor (B) have been elected or nominated for election as Board members during suchperiod by at least a majority of the Board members described in clause (A) whowere still in office at the time the Board approved such election ornomination.

 

F.             **Code**shall mean the Internal Revenue Code of 1986, as amended.

 

G.            **Common Stock**shall mean shares of the Corporation’s common stock.

 

H.            **Corporation**shall mean Ultratech, Inc., a Delaware corporation, and any successorcorporation to all or substantially all of the assets or voting stock of Ultratech,Inc. which shall by appropriate action adopt the Plan.

 

I.              **Employee**shall mean an individual who is in the employ of the Corporation (or any Parentor Subsidiary), subject to the control and direction of the employer entity asto both the work to be performed and the manner and method of performance.

 

J.             **Fair Market Value**per share of Common Stock on any relevant date shall be determined inaccordance with the following provisions:

 

(i)            If the Common Stock isnot at the time listed or admitted to trading on any Stock Exchange but istraded on the Nasdaq National Market, the Fair Market Value shall be theclosing selling price per share on the date in question, as such price isreported by the National Association of Securities Dealers on the NasdaqNational Market or any successor system. If there is no reported closingselling price for the Common Stock on the date in question, then the closingselling price on the last preceding date for which such quotation exists shallbe determinative of Fair Market Value.

 

(ii)           If the Common Stock isat the time listed or admitted to trading on any Stock Exchange, then the FairMarket Value shall be the closing selling price per share on the date inquestion on that Stock Exchange, as such price is officially quoted in thecomposite tape of transactions on such exchange. If there is no reported saleof Common Stock on such Stock Exchange on the date in question, then the FairMarket Value shall be the closing selling price on the exchange on the lastpreceding date for which such quotation exists.

 

K.            **InvoluntaryTermination**shall mean the termination of the Participant’sService which occurs by reason of:

 

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(i)            such individual’sinvoluntary dismissal or discharge by the Corporation (or any Parent orSubsidiary) for reasons other than a Termination for Cause, or

 

(ii)           such individual’svoluntary resignation following (A) a change in his or her position with theCorporation (or any Parent or Subsidiary) which materially reduces his or herduties and responsibilities or the level of management to which he or shereports, (B) a reduction in his or her rate of base salary or target bonusunder any corporate-performance based bonus or incentive programs by more thanfifteen percent (15%) or (C) a relocation of such individual’s place ofemployment by more than sixty (60) miles, provided and only if such change,reduction or relocation is effected by the Corporation (or any Parent orSubsidiary) without the individual’s consent.

 

L.             **1934 Act******shall mean the Securities Exchange Act of 1934, asamended from time to time.

 

M.           **Participant**shall mean the person to whom the Award is made pursuant to the Agreement.

 

N.            **Parent**shall mean any corporation (other than the Corporation) in an unbroken chain ofcorporations ending with the Corporation, provided each corporation in theunbroken chain (other than the Corporation) owns, at the time of thedetermination, stock possessing fifty percent (50%) or more of the totalcombined voting power of all classes of stock in one of the other corporationsin such chain.

 

O.            **PermanentDisability**shall mean the Participant’s inability to engage inany substantial gainful activity by reason of any medically determinablephysical or mental impairment expected to result in death or to be ofcontinuous duration of twelve (12) months or more.

 

P.             **Plan**shall mean the Corporation’s 1993 Stock Option/Stock Issuance Plan, as amendedand restated.

 

Q.            **PlanAdministrator** shall mean either the Board or a committee of theBoard acting in its capacity as administrator of the Plan.

 

R.            **RestrictedStock Unit** shall mean each unit subject to this Award whichshall entitle the Participant to receive one share of Common Stock under thePlan at a designated time following the vesting of that unit.

 

S.             **Retirement**shall mean the Participant’s voluntary termination from Service on or after hisor her attainment of age sixty five (65) other than in connection with aTermination for Cause event

 

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T.            **Separationfrom Service** shall mean the Participant’s termination of Serviceunder circumstances which are deemed to constitute a separation from servicewithin the meaning of Code Section 409A and the applicable Treasury Regulationsthereunder.

 

U.            **Service**shall mean the Participant’s performance of services for the Corporation (orany Parent or Subsidiary) in the capacity of an Employee, a non-employee memberof the board of directors or a consultant or independent advisor. For purposesof this Agreement, Participant shall be deemed to cease Service immediatelyupon the occurrence of the either of the following events: (i) Participant nolonger performs services in any of the foregoing capacities for the Corporation(or any Parent or Subsidiary) or (ii) the entity for which Participant performssuch services ceases to remain a Parent or Subsidiary of the Corporation, eventhough Participant may subsequently continue to perform services for thatentity. Service shall not be deemed to cease during a period of military leave,sick leave or other personal leave approved by the Corporation; ***provided, however***, that except to the extent otherwiserequired by law or expressly authorized by the Plan Administrator or theCorporation’s written leave of absence policy, no Service credit shall be givenfor vesting purposes for any period the Participant is on a leave of absence.

 

V.            **Stock Exchange**shall mean the American Stock Exchange or the New York Stock Exchange.

 

W.           **Subsidiary**shall mean any corporation (other than the Corporation) in an unbroken chain ofcorporations beginning with the Corporation, provided each corporation (otherthan the last corporation) in the unbroken chain owns, at the time of thedetermination, stock possessing fifty percent (50%) or more of the totalcombined voting power of all classes of stock in one of the other corporationsin such chain.

 

X.            **Termination for Cause**shall mean the termination of the Participant’s Service by the Corporation (orany Parent or Subsidiary) for one or more of the following reasons:

 

(i)            the Participant’srepeated failure to perform any essential duty of his or her position otherthan due to Permanent Disability;

 

(ii)           the Participant’scommission of any act that constitutes gross misconduct and is injurious to theCorporation or any Parent or Subsidiary or any successor to the Corporation;

 

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

 

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(iv)          the Participant’scommission of any act of fraud against, or the misappropriation of propertybelonging to, the Corporation or any Parent or Subsidiary or any successor tothe Corporation;

 

(v)           the Participant’scommission of any act of dishonesty in connection with his or her responsibilitiesas an employee that is intended to result in his or her personal enrichment orthe personal enrichment of his or her family or others;

 

(vi)          any other intentionalmisconduct by the Participant adversely affecting the business or affairs ofthe Corporation in a material manner; or

 

(vii)         the Participant’smaterial breach of any employment agreement he or she may have at the time withthe Corporation or any other agreement between the Participant and theCorporation or any Parent or Subsidiary or successor to the Corporation.

 

Y.            **Withholding Taxes**shall mean (i) the employee portion of the federal, state and local employmenttaxes required to be withheld by the Corporation in connection with the vestingof the shares of Common Stock under the Award and any phantom dividendequivalents relating to those shares and (ii) the federal, state and localincome taxes required to be withheld by the Corporation in connection with theissuance of those vested shares and the distribution of any phantom dividendequivalents relating to such shares.

 

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