Document:

exv10w1

 

Exhibit 10.1

ULTRATECH, INC.

1993 STOCK OPTION/STOCK ISSUANCE PLAN

(Amended and Restated as of January 30, 2007)

ARTICLE ONE

GENERAL

     I. PURPOSE OF THE PLAN

          This 1993 Stock Option/Stock Issuance Plan (“Plan”) is intended to promote the interests of
Ultratech, Inc., a Delaware corporation (the “Corporation”), by providing (i) key employees
(including officers) of the Corporation (or its parent or subsidiary corporations) who are
responsible for the management, growth and financial success of the Corporation (or its parent or
subsidiary corporations), (ii) the non-employee members of the Corporation’s Board of Directors and
(iii) independent consultants and other advisors who provide valuable services to the Corporation
(or its parent or subsidiary corporations) with the opportunity to acquire a proprietary interest,
or otherwise increase their proprietary interest, in the Corporation as an incentive for them to
remain in the service of the Corporation (or its parent or subsidiary corporations).

          A. The Plan became effective on September 29, 1993, the date on which the shares of the
Corporation’s Common Stock were registered under Section 12(g) of the Securities Exchange Act of
1934, as amended (the “1934 Act”). Such date is hereby designated as the Effective Date for the
Plan.

          B. This Plan shall serve as the successor to the Corporation’s existing 1993 Stock Option and
1993 Stock Issuance Plans (the “Predecessor Plans”), and no further option grants or share
issuances shall be made under the Predecessor Plans from and after the Effective Date of this Plan.
All outstanding stock options and unvested share issuances under the Predecessor Plans on the
Effective Date are hereby incorporated into this Plan and shall accordingly be treated as
outstanding stock options and unvested share issuances under this Plan. However, each outstanding
option grant and unvested share issuance so incorporated shall continue to be governed solely by
the express terms and conditions of the instrument evidencing such grant or issuance, and no
provision of this Plan shall be deemed to affect or otherwise modify the rights or obligations of
the holders of such incorporated options with respect to their acquisition of shares of Common
Stock thereunder. All unvested shares of Common Stock outstanding under the Predecessor Plans on
the Effective Date shall continue to be governed solely by the express terms and conditions of the
instruments evidencing such issuances, and no provision of this Plan shall be deemed to affect or
modify the rights or obligations of the holders of such unvested shares.

 

 

     II. DEFINITIONS

          A. For purposes of the Plan, the following definitions shall be in effect:

          Board: the Corporation’s Board of Directors.

          Code: the Internal Revenue Code of 1986, as amended.

          Committee: the committee of two (2) or more non-employee Board members appointed by the Board
to administer the Plan.

          Common Stock: shares of the Corporation’s common stock.

          Change in Control: a change in ownership or control of the Corporation effected through
either of the following transactions:

               a. any person or related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common control with, the
Corporation) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3
of the 1934 Act) of securities possessing more than fifty percent (50%) of the total combined
voting power of the Corporation’s outstanding securities pursuant to a tender or exchange offer
made directly to the Corporation’s stockholders; or

               b. 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 ceases, 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.

          Corporate Transaction: any of the following stockholder-approved transactions to which the
Corporation is a party:

               a. a merger or consolidation in which the Corporation is not the surviving entity, except for
a transaction the principal purpose of which is to change the State in which the Corporation is
incorporated,

               b. the sale, transfer or other disposition of all or substantially all of the assets of the
Corporation in complete liquidation or dissolution of the Corporation, or

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

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          Employee: an individual who performs services while in the employ of the Corporation or one
or more parent or subsidiary corporations, subject to the control and direction of the employer
entity not only as to the work to be performed but also as to the manner and method of performance.

          Fair Market Value: the Fair Market Value per share of Common Stock determined in accordance
with the following provisions:

               a. If the Common Stock is at the time listed or admitted to trading on the Nasdaq Global or
Global Select Market, the Fair Market Value shall be the closing selling price per share on the
date in question, as such price is reported by the National Association of Securities Dealers on
such exchange. If there is no reported closing selling price for the Common Stock on the date in
question, then the closing selling price on the last preceding date for which such quotation exists
shall be determinative of Fair Market Value.

               b. If the Common Stock is at the time listed or admitted to trading on any other national
stock exchange, then the Fair Market Value shall be the closing selling price per share on the date
in question on the exchange determined by the Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape of transactions on such
exchange. If there is no reported sale of Common Stock on such exchange on the date in question,
then the Fair Market Value shall be the closing selling price on the exchange on the last preceding
date for which such quotation exists.

          Optionee: any person to whom an option or stock appreciation right is granted under the
Discretionary Grant Program in effect under the Plan.

          Participant: any person who receives a direct issuance of Common Stock under the Stock
Issuance Program in effect under the Plan or a restricted stock unit award under the Automatic
Grant Program.

          Plan Administrator: the Committee in its capacity as the administrator of the Plan.

          Permanent Disability or Permanently Disabled: the inability of the Optionee or the
Participant to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment expected to result in death or to be of continuous duration of twelve
(12) months or more.

          Service: the performance of services on a periodic basis to the Corporation (or any parent or
subsidiary corporation) in the capacity of an Employee, a non-employee member of the board of
directors or an independent consultant or advisor, except to the extent otherwise specifically
provided in the applicable stock option or stock issuance agreement. For purposes of the Plan, an
Optionee or Participant shall be deemed to cease Service immediately upon the occurrence of the
either of the following events: (i) the Optionee or Participant no longer performs services in any
of the foregoing capacities for the Corporation or any Parent or Subsidiary or (ii) the entity for
which the Optionee or Participant is performing such services

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ceases to remain a Parent or Subsidiary of the Corporation, even though the Optionee or
Participant may subsequently continue to perform services for that entity. 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 otherwise required by law or
expressly authorized by the Plan Administrator or the Corporation’s written leave of absence
policy, no Service credit shall be given for vesting purposes for any period the Optionee or
Participant is on a leave of absence.

          B. The following provisions shall be applicable in determining the parent and subsidiary
corporations of the Corporation:

          Any corporation (other than the Corporation) in an unbroken chain of corporations ending with
the Corporation shall be considered to be a parent of the Corporation, provided each such
corporation in the unbroken chain (other than the Corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.

          Each corporation (other than the Corporation) in an unbroken chain of corporations which
begins with the Corporation shall be considered to be a subsidiary of the Corporation, provided
each such corporation (other than the last corporation) in the unbroken chain owns, at the time of
the determination, stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.

     III. STRUCTURE OF THE PLAN

          A. Stock Programs. The Plan shall be divided into three separate components: the
Discretionary Grant Program specified in Article Two, the Automatic Grant Program specified in
Article Three and the Stock Issuance Program specified in Article Four. Under the Discretionary
Grant Program, eligible individuals may, at the discretion of the Plan Administrator in accordance
with the provisions of Article Two, be granted options to purchase shares of Common Stock or stock
appreciation rights tied to the value of such Common Stock. Under the Automatic Grant Program,
non-employee Board members will receive a series of automatic restricted stock unit awards over
their period of continued Board service in accordance with the provisions of Article Three. Under
the Stock Issuance Program, eligible individuals may, at the discretion of the Plan Administrator,
be issued shares of Common Stock pursuant to restricted stock awards, restricted stock units or
other share right awards which vest upon the completion of a designated service period or the
attainment of pre-established performance milestones, or such shares of Common Stock may be issued
through direct purchase or as a bonus for services rendered the Corporation (or any Parent or
Subsidiary) or the Corporation’s attainment of financial objectives.

          B. General Provisions. Unless the context clearly indicates otherwise, the provisions
of Articles One and Five shall apply to the Discretionary Grant Program, the Automatic Grant
Program and the Stock Issuance Program and shall accordingly govern the interests of all
individuals under the Plan.

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     IV. ADMINISTRATION OF THE PLAN

          A. Both the Discretionary Grant Program and the Stock Issuance Program shall be administered
by a committee (“Committee”) of two or more non-employee Board members. Members of the Committee
shall serve for such period of time as the Board may determine and shall be subject to removal by
the Board at any time.

          B. The Committee as Plan Administrator shall have full power and authority (subject to the
express provisions of the Plan) to establish rules and regulations for the proper administration of
the Discretionary Grant and Stock Issuance Programs and to make such determinations under, and
issue such interpretations of, the provisions of such programs and any outstanding option grants,
stock issuances or other stock-based awards thereunder as it may deem necessary or advisable.
Decisions of the Plan Administrator shall be final and binding on all parties who have an interest
in the Discretionary Grant or Stock Issuance Program or any outstanding stock option, stock
appreciation right, share issuance or other stock-based award thereunder.

          C. Administration of the Automatic Grant Program shall be self-executing in accordance with
the express terms and conditions of Article Three, and the Committee as Plan Administrator shall
exercise no discretionary functions with respect to restricted stock unit awards made pursuant to
that program.

     V. DISCRETIONARY GRANTS AND STOCK ISSUANCES

          A. The persons eligible to participate in the Discretionary Grant Program under Article Two or
the Stock Issuance Program under Article Four shall be limited to the following:

               1. officers and other key employees of the Corporation (or its parent or subsidiary
corporations) who render services which contribute to the management, growth and financial success
of the Corporation (or its parent or subsidiary corporations);

               2. non-employee members of the Board; and

               3. those independent consultants or other advisors who provide valuable services to the
Corporation (or its parent or subsidiary corporations).

          B. The Plan Administrator shall have full authority to determine, (I) with respect to the
grant of stock options or stock appreciation rights under the Discretionary Grant Program, which
eligible individuals are to receive such grants, the time or time when those grants are to be made,
the number of shares to be covered by each such grant, the time or times at which each option or
stock appreciation right is to vest and become exercisable, the status of a granted stock option as
either an incentive stock option (“Incentive Option”) which satisfies the requirements of Section
422 of the Code or a non-statutory stock option not intended to meet such requirements, and the
maximum term for which the granted stock option or stock

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appreciation right may remain outstanding and (II) with respect to stock issuances or other
stock-based awards under the Stock Issuance Program, which eligible persons are to receive such
issuances or awards, the time or times when the issuances or awards are to be made, the number of
shares subject to each such issuance or award, the vesting schedule (if any) applicable to the
shares which are the subject of such issuance or award and the consideration for those shares.

     VI. STOCK SUBJECT TO THE PLAN

          A. Shares of Common Stock shall be available for issuance under the Plan and shall be drawn
from either the Corporation’s authorized but unissued shares of Common Stock or from reacquired
shares of Common Stock, including shares repurchased by the Corporation on the open market.
Subject to the automatic share increase provisions of Section VI. B. of this Article One, the
maximum number of shares of Common Stock reserved for issuance over the term of the Plan shall be
limited to 10,776,779 shares1. Such share reserve includes (i) the initial number of
shares incorporated into this Plan from the Predecessor Plans on the Effective Date, (ii) an
additional 600,000-share increase authorized by the Board on March 21, 1996 and approved by the
stockholders at the 1996 Annual Stockholders Meeting, (iii) an additional 277,239 shares
attributable to the automatic annual share increase for fiscal 1996 which was effected on January
2, 1996, (iv) an additional 284,346 shares attributable to the automatic annual share increase for
fiscal 1997 which was effected on January 2, 1997, (v) an additional 450,000 shares authorized by
the Board on March 18, 1997 and approved by the stockholders at the 1997 Annual Meeting, (vi) an
additional 291,008 shares attributable to the automatic annual share increase for fiscal 1998 which
was effected on January 2, 1998, (vii) an additional 295,480 shares attributable to the automatic
annual share increase for fiscal 1999 which was effected on January 4, 1999, (viii) an additional
299,490 shares attributable to the automatic annual share increase for fiscal 2000 which was
effected on January 3, 2000, (ix) an additional 898,045 shares of Common Stock added to the share
reserve on January 2, 2002 by reason of the automatic increase provision of Section VI.B of this
Article One, (x) an additional 905,088 shares of Common Stock added to the share reserve on January
2, 2003 by reason of the automatic increase provision of Section VI.B of this Article One, (xi) an
additional 943,285 shares of Common Stock added to the share reserve on January 2, 2004 by reason
of the automatic increase provision of Section VI.B of this Article One, (xii) an additional
954,141 shares of Common Stock added to the share reserve on January 2, 2005 by reason of the
automatic increase provision of Section VI.B of this Article One and (xiii) an additional 949,991
shares of Common Stock added to the share reserve on January 3, 2006 by reason of the automatic
increase provision of Section VI.B of this Article One. The share reserve in effect from time to
time under the Plan shall be subject to periodic adjustment in accordance with the provisions of
this Section VI. To the extent one or more outstanding options under the Predecessor Plans which
have been incorporated into this Plan are subsequently exercised, the number of shares issued with
respect to each such option shall reduce, on a share-for-share basis, the number of shares
available for issuance under this Plan.

 

			
	1	 	All figures have been adjusted to reflect the 2:1
stock split the Corporation effected May 10, 1995.

 6.

 

          B. The number of shares of Common Stock available for issuance under the Plan shall automatically
increase on the first trading day of January of each calendar year, beginning with calendar year
2002 and continuing through calendar year 2006, by an amount equal to four percent (4%) of the
total number of shares of Common Stock outstanding on the last trading day of the calendar year
immediately preceding the calendar year of each such share increase, but in no event shall any such
annual increase exceed 1,700,000 shares.

          C. In no event may the aggregate number of shares of Common Stock for which any one individual
participating in the Plan may be granted stock options, stand-alone stock appreciation rights,
direct stock issuances (whether vested or unvested) or other stock-based awards (whether in the
form of restricted stock units or other share-right awards) exceed 400,000 shares per fiscal year,
beginning with the 1995 fiscal year. However, for the fiscal year in which an individual receives
his or her initial stock option or stock appreciation right, direct stock issuance or other
stock-based award under the Plan, the limit shall be increased to 600,000 shares. Such limitations
shall be subject to adjustment from time to time in accordance with the provisions of this Section
VI.

          D. Shares of Common Stock subject to outstanding options (including options transferred to
this Plan from the Predecessor Plan) or other awards made under the Plan shall be available for
subsequent issuance under the Plan to the extent those options or awards expire or terminate for
any reason (including, without limitation, the cancellation of one or more options in accordance
with the cancellation-regrant provisions of Section IV of Article Two of the Plan) prior to the
issuance of the shares of Common Stock subject to those options or awards. Unvested shares issued
under the Plan and subsequently repurchased by the Corporation, at the original exercise or issue
price paid per share, pursuant to the Corporation’s repurchase rights under the Plan shall be added
back to the number of shares of Common Stock reserved for issuance under the Plan and shall
accordingly be available for reissuance through one or more subsequent option grants or direct
stock issuances under the Plan. Shares subject to any stock appreciation rights exercised in
accordance with Section V of Article Two shall reduce on a share-for-share basis the number of
shares of Common Stock available for subsequent issuance under the Plan. In addition, should the
exercise price of an outstanding option under the Plan (including any option incorporated from the
Predecessor Plans) be paid with shares of Common Stock or should shares of Common Stock otherwise
issuable under the Plan be withheld by the Corporation in satisfaction of the withholding taxes
incurred in connection with the exercise of an outstanding option under the Plan or the issuance of
vested shares pursuant to a stock or stock-based award made under the Plan, then the number of
shares of Common Stock available for issuance under the Plan shall be reduced by the gross number
of shares for which the option is exercised or for which the stock or stock-based award was made,
and not by the net number of shares of Common Stock actually issued to the holder of such option or
award.

          E. In the event any change is made to the outstanding shares of Common Stock by reason of any
stock split, stock dividend, recapitalization, combination of shares, exchange of shares, spin-off
transaction or other change affecting the outstanding Common Stock as a class effected without the
Corporation’s receipt of consideration or should the value of the outstanding shares of Common
Stock be substantially reduced by reason of a spin-off transaction or extraordinary dividend or
distribution, equitable adjustments shall be made to (i) the maximum number and/or class of
securities issuable under the Plan, (ii) the maximum

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number and/or class of securities for which any one person may be granted stock options,
stand-alone stock appreciation rights, direct stock issuances and other stock-based awards under
this Plan per calendar year, (iii) the number and/or class of securities for which restricted stock
unit awards are to be subsequently made per eligible non-employee Board member under the Automatic
Grant Program, (iv) the number and/or class of securities and exercise price per share in effect
under each stock option or stock appreciation right outstanding under the Discretionary Grant
Program or Automatic Grant Program, (v) the number and/or class of securities subject to each
outstanding restricted stock unit or other stock-based award under the Plan and the issue price (if
any) payable per share and (vi) the number and/or class of securities and price per share in effect
under each outstanding option incorporated into this Plan from the Predecessor Plans. Such
adjustments to the outstanding options and other stock-based awards are to be effected in a manner
which shall preclude the enlargement or dilution of rights and benefits under those outstanding
options, stock appreciation rights and other awards. The adjustments determined by the Plan
Administrator shall be final, binding and conclusive.

 8.

 

ARTICLE TWO

DISCRETIONARY GRANT PROGRAM

     I. TERMS AND CONDITIONS OF OPTIONS

          Options granted pursuant to the Discretionary Grant Program shall be authorized by action of
the Plan Administrator and may, at the Plan Administrator’s discretion, be either Incentive Options
or non-statutory options. Individuals who are not Employees of the Corporation or its parent or
subsidiary corporations may only be granted non-statutory options. Each granted option shall be
evidenced by one or more instruments in the form approved by the Plan Administrator; provided,
however, that each such instrument shall comply with the terms and conditions specified below.
Each instrument evidencing an Incentive Option shall, in addition, be subject to the applicable
provisions of Section II of this Article Two.

          A. Option Price.

               1. The option price per share shall be fixed by the Plan Administrator and shall in no event
be less than one hundred percent (100%) of the fair market value of such Common Stock on the grant
date.

               2. The option price shall become immediately due upon exercise of the option and, subject to
the provisions of Section I of Article Four and the instrument evidencing the grant, shall be
payable in one of the following alternative forms specified below:

               - full payment in cash or check drawn to the Corporation’s order; or

               - full payment in shares of Common Stock held for the requisite period
necessary to avoid a charge to the Corporation’s earnings for financial reporting
purposes and valued at Fair Market Value on the Exercise Date (as such term is
defined below); or

               - full payment in a combination of shares of Common Stock held for the
requisite period necessary to avoid a charge to the Corporation’s earnings for
financial reporting purposes and valued at Fair Market Value on the Exercise Date
and cash or check drawn to the Corporation’s order; or

               - full payment through a broker-dealer sale and remittance procedure pursuant
to which the Optionee (I) shall provide irrevocable written instructions to a
Corporation-designated brokerage firm to effect the immediate sale of the purchased
 shares and remit to the Corporation, out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate option price payable for
the purchased shares plus all applicable

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Federal and State income and employment taxes required to be withheld by the
Corporation in connection with such purchase and (II) shall provide written
directives to the Corporation to deliver the certificates for the purchased shares
directly to such brokerage firm in order to complete the sale transaction.

          For purposes of this subparagraph (2), the Exercise Date shall be the date on which written
notice of the option exercise is delivered to the Corporation. Except to the extent the sale and
remittance procedure is utilized in connection with the exercise of the option, payment of the
option price for the purchased shares must accompany such notice.

          B. Term and Exercise of Options. Each option granted under this Discretionary Grant
Program shall be exercisable at such time or times and during such period as is determined by the
Plan Administrator and set forth in the instrument evidencing the grant. No such option, however,
shall have a maximum term in excess of ten (10) years from the grant date.

          C. Limited Transferability. During the lifetime of the Optionee, Incentive Options
shall be exercisable only by the Optionee and shall not be assignable or transferable other than by
will or by the laws of descent and distribution following the Optionee’s death. However,
non-statutory options may, in connection with the Optionee’s estate plan, be assigned in whole or
in part during the Optionee’s lifetime to one or more members of the Optionee’s immediate family or
to a trust established exclusively for the Optionee or one or more such family members. The
assigned portion may only be exercised by the person or persons who acquire a proprietary interest
in the option pursuant to the assignment. The terms applicable to the assigned portion shall be
the same as those in effect for the option immediately prior to such assignment and shall be set
forth in such documents issued to the assignee as the Plan Administrator may deem appropriate.

          D. Termination of Service.

               1. The following provisions shall govern the exercise period applicable to any outstanding
options held by the Optionee at the time of cessation of Service or death.

               - Should an Optionee cease Service for any reason (including death or Permanent
Disability) while holding one or more outstanding options under this Article Two,
then none of those options shall (except to the extent otherwise provided pursuant
to subparagraph D.(3) below) remain exercisable for more than a thirty-six
(36)-month period (or such shorter period determined by the Plan Administrator and
set forth in the instrument evidencing the grant) measured from the date of such
cessation of Service.

               - Any option held by the Optionee under this Article Two and exercisable in
whole or in part on the date of his or her death may be subsequently exercised by
the personal representative of the Optionee’s estate or by the person or persons to
whom the option is transferred pursuant to the Optionee’s will or in accordance with
the laws of descent and distribution. Such

 10.

 

exercise, however, must occur prior to the earlier of (i) the first anniversary
of the date of the Optionee’s death or (ii) the specified expiration date of the
option term. Upon the occurrence of the earlier event, the option shall terminate.

               - Under no circumstances shall any such option be exercisable after the
specified expiration date of the option term.

               - During the applicable post-Service exercise period, the option may not be
exercised in the aggregate for more than the number of shares (if any) in which the
Optionee is vested at the time of his or her cessation of Service. Upon the
expiration of the limited post-Service exercise period or (if earlier) upon the
specified expiration date of the option term, each such option shall terminate and
cease to be outstanding with respect to any vested shares for which the option has
not otherwise been exercised. However, each outstanding option shall, immediately
upon the Optionee’s cessation of Service for any reason, terminate and cease to be
outstanding with respect to any shares for which the option is not otherwise at that
time exercisable or in which the Optionee is not otherwise at that time vested.

               - Should (i) the Optionee’s Service be terminated for misconduct (including,
but not limited to, any act of dishonesty, willful misconduct, fraud or
embezzlement) or (ii) the Optionee make any unauthorized use or disclosure of
confidential information or trade secrets of the Corporation or its parent or
subsidiary corporations, then in any such event all outstanding options held by the
Optionee under this Article Two shall terminate immediately and cease to be
outstanding.

          2. The Plan Administrator shall have complete discretion, exercisable either at the time the
option is granted or at any time while the option remains outstanding, to permit one or more
options held by the Optionee under this Article Two to be exercised, during the limited
post-Service exercise period applicable under subparagraph (1) above, not only with respect to the
number of vested shares of Common Stock for which each such option is exercisable at the time of
the Optionee’s cessation of Service but also with respect to one or more subsequent installments of
the option shares in which the Optionee would have otherwise vested had such cessation of Service
not occurred.

          3. The Plan Administrator shall also have full power and authority to extend the period of
time for which the option is to remain exercisable following the Optionee’s cessation of Service or
death from the limited period in effect under subparagraph (1) above to such greater period of time
as the Plan Administrator shall deem appropriate. In no event, however, shall such option be
exercisable after the specified expiration date of the option term.

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          E. Stockholder Rights.

          An Optionee shall have no stockholder rights with respect to any shares covered by the option
until such individual shall have exercised the option and paid the option price for the purchased
shares.

          F. Repurchase Rights.

          The shares of Common Stock acquired upon the exercise of any Article Two option grant may be
subject to repurchase by the Corporation in accordance with the following provisions:

               (a) The Plan Administrator shall have the discretion to authorize the issuance of unvested
shares of Common Stock under this Article Two. Should the Optionee cease Service while holding
such unvested shares, the Corporation shall have the right to repurchase any or all of those
unvested shares at the option price paid per share. The terms and conditions upon which such
repurchase right shall be exercisable (including the period and procedure for exercise and the
appropriate vesting schedule for the purchased shares) shall be established by the Plan
Administrator and set forth in the instrument evidencing such repurchase right.

               (b) All of the Corporation’s outstanding repurchase rights under this Article Two shall
automatically terminate, and all shares subject to such terminated rights shall immediately vest in
full, upon the occurrence of a Corporate Transaction, except to the extent: (i) any such
repurchase right is expressly assigned to the successor corporation (or parent thereof) in
connection with the Corporate Transaction or (ii) such accelerated vesting is precluded by other
limitations imposed by the Plan Administrator at the time the repurchase right is issued.

               (c) The Plan Administrator shall have the discretionary authority, exercisable either before
or after the Optionee’s cessation of Service, to cancel the Corporation’s outstanding repurchase
rights with respect to one or more shares purchased or purchasable by the Optionee under this
Option Grant Program and thereby accelerate the vesting of such shares in whole or in part at any
time.

     II. INCENTIVE OPTIONS

          The terms and conditions specified below shall be applicable to all Incentive Options granted
under this Article Two. Incentive Options may only be granted to individuals who are Employees of
the Corporation. Options which are specifically designated as “non-statutory” options when issued
under the Plan shall not be subject to such terms and conditions.

          A. Dollar Limitation. The aggregate fair market value (determined as of the
respective date or dates of grant) of the Common Stock for which one or more options granted to any
Employee after December 31, 1986 under this Plan (or any other option plan of the Corporation or
its parent or subsidiary corporations) may for the first time become exercisable as incentive stock
options under the Federal tax laws during any one calendar year shall not exceed the sum of One
Hundred Thousand Dollars ($100,000). To the extent the Employee holds two

 12.

 

(2) or more such options which become exercisable for the first time in the same calendar
year, then for purposes of the foregoing limitations on the exercisability of such options as
incentive stock options under the Federal tax laws, each of those other options shall be deemed to
become first exercisable in that calendar year on the basis of the chronological order in which
they were granted, except to the extent otherwise provided under applicable law or regulation.
Should the number of shares of Common Stock for which any Incentive Option first becomes
exercisable in any calendar year exceed the applicable One Hundred Thousand Dollar ($100,000)
limitation, then that option may nevertheless be exercised in that calendar year for the excess
number of shares as a non-statutory option under the Federal tax laws.

          B. 10% Stockholder. If any individual to whom an Incentive Option is granted is the
owner of stock (as determined under Section 424(d) of the Code) possessing ten percent (10%) or
more of the total combined voting power of all classes of stock of the Corporation or any one of
its parent or subsidiary corporations, then the option price per share shall not be less than one
hundred and ten percent (110%) of the fair market value per share of Common Stock on the grant
date, and the option term shall not exceed five (5) years, measured from the grant date.

          Except as modified by the preceding provisions of this Section II, the provisions of Articles
One, Two and Five of the Plan shall apply to all Incentive Options granted hereunder.

     III. CORPORATE TRANSACTIONS/CHANGES IN CONTROL

          A. In the event of any Corporate Transaction, each option or stock appreciation right which is
at the time outstanding under this Article Two shall automatically accelerate so that each such
option or stock appreciation right shall, immediately prior to the specified effective date for
the Corporate Transaction, become fully exercisable with respect to the total number of shares of
Common Stock at the time subject to such option or stock appreciation right and may be exercised as
to all or any portion of such shares as fully-vested shares. However, an outstanding option or
stock appreciation right under this Article Two shall not so accelerate if and to the extent: (i)
such option or stock appreciation right is, in connection with the Corporate Transaction, either to
be assumed by the successor corporation or parent thereof or to be replaced with a comparable
option or stock appreciation right relating to shares of the capital stock of the successor
corporation or parent thereof, (ii) such option or stock appreciation right is to be replaced with
a cash incentive program of the successor corporation which preserves the spread existing on that
option or stock appreciation right at the time of the Corporate Transaction and provides for
subsequent payout in accordance with the same vesting schedule applicable to such option or stock
appreciation right, or (iii) the acceleration of such option or stock appreciation right is subject
to other limitations imposed by the Plan Administrator at the time of the grant of such option or
stock appreciation right. The determination of the comparability of the replacement option or
stock appreciation right under clause (i) above shall be made by the Plan Administrator, and its
determination shall be final, binding and conclusive.

 13.

 

          B. Immediately following the consummation of the Corporate Transaction, all outstanding options
or stock appreciation right under this Article Two shall terminate and cease to be outstanding,
except to the extent assumed by the successor corporation or its parent company.

          C. Each outstanding option under this Article Two which is assumed in connection with the
Corporate Transaction or is otherwise to continue in effect shall be appropriately adjusted,
immediately after such Corporate Transaction, to apply and pertain to the number and class of
securities which would have been issued to the option holder, in consummation of such Corporate
Transaction, had such person exercised the option immediately prior to such Corporate Transaction.
Appropriate adjustments shall also be made to the option price payable per share, provided
the aggregate option price payable for such securities shall remain the same. In addition,
appropriate adjustments to reflect the Corporate Transaction shall be made to (i) the class and
number of securities available for issuance over the remaining term of the Plan, (ii) the maximum
number and/or class of securities for which any one person may be granted stock options,
stand-alone stock appreciation rights, direct stock issuances (whether vested or unvested) or other
stock-based awards (whether in the form of restricted stock units or other share-right awards)
under this Plan per calendar year and (iii) the maximum number and/or class of securities which may
be issued pursuant to Incentive Options granted under the Plan.

          D. The Plan Administrator shall have the discretion, exercisable either at the time the
option or stock appreciation right is granted or at any time while the option or stock appreciation
right remains outstanding, to provide (upon such terms as it may deem appropriate) for the
automatic acceleration of one or more outstanding options or stock appreciation rights which are
assumed or replaced in the Corporate Transaction and do not otherwise accelerate at that time, in
the event the Optionee’s Service should subsequently terminate within a designated period following
the effective date of such Corporate Transaction.

          E. The grant of options or stock appreciation rights under this Article Two shall in no way
affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its
capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.

          F. The Plan Administrator shall have the discretionary authority, exercisable either at the
time the option or stock appreciation right is granted or at any time while the option or stock
appreciation right remains outstanding, to provide for the automatic acceleration of one or more
outstanding options or stock appreciation rights under this Article Two (and the termination of one
or more of the Corporation’s outstanding repurchase rights under this Article Two) upon the
occurrence of any Change in Control. The Plan Administrator shall also have full power and
authority to condition any such acceleration of outstanding options or stock appreciation rights
(and the termination of any outstanding repurchase rights) upon the subsequent termination of the
Optionee’s Service within a specified period following the Change in Control.

          G. Any option or stock appreciation right accelerated in connection with the Change in Control
shall remain fully exercisable until the expiration or sooner termination of the term of that
option or stock appreciation right.

 14.

 

          H. The exercisability as incentive stock options under the Federal tax laws of any options
accelerated under this Section III in connection with a Corporate Transaction or Change in Control
shall remain subject to the dollar limitation of Section II of this Article Two. To the extent
such dollar limitation is exceeded, the accelerated option shall be exercisable as a non-statutory
option under the Federal tax laws.

     IV. CANCELLATION AND REGRANT OF OPTIONS

          The Plan Administrator shall have the authority to effect, at any time and from time to time,
with the consent of the affected optionees, the cancellation of any or all outstanding options
under this Article Two (including outstanding options under the Predecessor Plans incorporated into
this Plan) and to grant in substitution new options under the Plan covering the same or different
numbers of shares of Common Stock but with an option price per share not less than the Fair Market
Value of the Common Stock on the new grant date.

     V. STOCK APPRECIATION RIGHTS

          A. Authority. The Plan Administrator shall have full power and authority, exercisable
in its sole discretion, to grant tandem stock appreciation rights in accordance with this Section V
to selected Optionees or other individuals eligible to receive option grants under the
Discretionary Grant Program.

          B. Tandem Rights. The following terms and conditions shall govern the grant and
exercise of Tandem Rights.

               1. One or more Optionees may be granted a Tandem Right, exercisable upon such terms and
conditions as the Plan Administrator may establish, to elect between the exercise of the underlying
stock option for shares of Common Stock or the surrender of that option in exchange for a
distribution from the Corporation in an amount equal to the excess of (i) the Fair Market Value (on
the option surrender date) of the number of shares in which the Optionee is at the time vested
under the surrendered option (or surrendered portion thereof) over (ii) the aggregate exercise
price payable for such vested shares.

               2. No such option surrender shall be effective unless it is approved by the Plan
Administrator, either at the time of the actual option surrender or at any earlier time. If the
surrender is so approved, then the distribution to which the Optionee shall accordingly become
entitled under this Section V shall be made in shares of Common Stock valued at Fair Market Value
on the option surrender date.

               3. If the surrender of an option is not approved by the Plan Administrator, then the Optionee
shall retain whatever rights the Optionee had under the surrendered option (or surrendered portion
thereof) on the option surrender date and may exercise such rights at any time prior to the later
of (i) five (5) business days after the receipt of the rejection notice or (ii) the last day on
which the option is otherwise exercisable in accordance with the terms of the instrument evidencing
such option, but in no event may such rights be exercised more than ten (10) years after the date
of the option grant.

 15.

 

          C.
Share Counting. Upon the exercise of any Tandem Right under this Section V, the
share reserve under Section VI of Article One shall be reduced by the gross number of shares as to
which such Tandem Right is exercised.

 16.

 

ARTICLE THREE

AUTOMATIC GRANT PROGRAM

     I. AWARD TERMS

          A. Automatic Grants. The provisions of the Automatic Grant Program were revised,
effective January 30, 2007, to amend the automatic option grant program to eliminate the periodic
option grant program and to implement in its place a new program of periodic restricted stock unit
awards for the eligible Board members. The revised program is subject to stockholder approval at
the 2007 Annual Meeting. Accordingly, if such stockholder approval is obtained, the awards to be
made pursuant to the Automatic Grant Program on and after the date of the 2007 Annual Meeting shall
be as follows:

               1. Each individual who is first elected or appointed as a non-employee Board member at any
time on or after the date of the 2007 Annual Meeting shall automatically be granted, on the date of
such initial election or appointment, restricted stock units covering 7,500 shares of Common Stock,
provided such individual has not previously been in the employ of the Corporation or any Parent or
Subsidiary (the “Initial Grant”).

               2. On the date of each annual stockholders meeting, beginning with the 2007 Annual Meeting,
each individual who is to continue to serve as a non-employee Board member, whether or not such
individual is standing for re-election to the Board at that particular annual meeting, shall
automatically be granted restricted stock units covering 5,000 shares of Common Stock, provided
that such individual has served as a non-employee Board member for a period of at least six (6)
months (the “Annual Grant”). There shall be no limit on the number of such Annual Grants any one
continuing non-employee Board member may receive over his or her period of Board service, and
non-employee Board members who have previously been in the employ of the Corporation (or any Parent
or Subsidiary) shall be eligible to receive one or more such Annual Grants over their period of
continued Board service.

               3. Each restricted unit awarded under this Article Three shall entitle the non-employee Board
member to one share of Common Stock on the applicable issuance date following the vesting of that
unit.

          B. Vesting of Awards and Issuance of Shares.

               1. The shares of Common Stock subject to each Initial Grant shall vest as follows: fifty
percent (50%) of the shares shall vest upon the non-employee Board member’s completion of one (1)
year of Board service measured from the date of the award, and the remaining shares shall vest in
three (3) successive equal annual installments upon the non-employee Board member’s completion of
each of the next three (3) years of Board service thereafter.

 17.

 

               2. The shares of Common Stock subject to each Annual Grant shall vest upon earlier of (i) the
non-employee Board member’s completion of one (1) year of Board service measured from the date of
the award or (ii) the non-employee Board member’s continuation in Board service through the day
immediately preceding the date of the first annual stockholders meeting following the award date.

               3. Notwithstanding Paragraphs B.1 and B.2, should a non-employee Board member cease Board
service by reason of death or Permanent Disability, then each Initial and Annual Grant made to such
individual under this Article Three and outstanding at the time of such cessation of Board service
shall vest in full.

               4. The shares of Common Stock underlying each Initial or Annual Grant which vest in accordance
with the foregoing vesting provisions shall be issued as they vest; provided, however, that the
Plan Administrator may structure one or more Grants so that the issuance of the shares of Common
Stock which vest under those award is deferred, in accordance with the applicable requirements of
Code Section 409A and the regulations thereunder, beyond the vesting date to a designated date or
the occurrence of any earlier event such as cessation of Board service or a Change in Control.

          C. Dividend Equivalent Rights. Each restricted stock unit awarded under this Article
Three shall include a dividend equivalent right pursuant to which a book account shall be
established for the non-employee Board member and credited from time to time with each dividend or
distribution, whether in cash, securities or other property (other than shares of Common Stock)
which is made per issued and outstanding share of Common Stock during the period the share of
Common Stock underlying that restricted stock unit remains unissued. The amount credited to the
book account with respect to such restricted stock unit shall be paid to the non-employee Board
member concurrently with the issuance of the share of Common Stock underlying that unit, subject to
the Corporation’s collection of any applicable withholding taxes.

     II. CORPORATE TRANSACTION/CHANGE IN CONTROL

          Should the non-employee Board member continue in Board service until the effective date of an
actual Corporate Transaction or Change in Control, then the shares of Common Stock subject to each
outstanding Initial and Annual Grant made to such Board member shall, immediately prior to the
effective date of that Corporate Transaction or Change in Control, vest in full and shall be issued
to him or her as soon as administratively practicable thereafter, but in no event more than fifteen
(15) business days after such effective date, or shall otherwise be converted into the right to
receive the same consideration per share of Common Stock payable to the other stockholders in the
Corporate Transaction or Change in Control and distributed at the same time as such stockholder
payments, but in no event shall the distribution to the non-employee Board member be completed
later than the later of (i) the close of the calendar year in which the Corporate Transaction or
Change in Control is effected or (ii) the fifteenth (15th) day of the third (3rd) calendar month
following such effective date.

 18.

 

ARTICLE FOUR

STOCK ISSUANCE PROGRAM

     I. TERMS AND CONDITIONS OF STOCK ISSUANCES

          Shares may be issued under the Stock Issuance Program through direct and immediate purchases
without any intervening stock option grants. The issued shares shall be evidenced by a Stock
Issuance Agreement (“Issuance Agreement”) that complies with the terms and conditions of this
Article Four. Shares of Common Stock may also be issued under the Stock Issuance Program pursuant
to share right awards or restricted stock units which entitle the recipients to receive the shares
underlying those awards or units upon the attainment of designated performance goals or the
satisfaction of specified Service requirements or upon the expiration of a designated time period
following the vesting of those awards or units.

          A. Consideration.

               1. Shares of Common Stock drawn from the Corporation’s authorized but unissued shares of
Common Stock (“Newly Issued Shares”) shall be issued under the Stock Issuance Program for one or
more of the following items of consideration which the Plan Administrator may deem appropriate in
each individual instance:

                    (i) cash or cash equivalents (such as a personal check or bank draft) paid the Corporation;

                    (ii) a promissory note payable to the Corporation’s order in one or more installments, which
may be subject to cancellation in whole or in part upon terms and conditions established by the
Plan Administrator;

                    (iii) past services rendered to the Corporation or any parent or subsidiary corporation; or

                    (iv) any other valid consideration under the Delaware General Corporation Law.

               2. Shares of Common Stock reacquired by the Corporation and held as treasury shares (“Treasury
Shares”) may be issued under the Stock Issuance Program for such consideration (including one or
more of the items of consideration specified in subparagraph 1. above) as the Plan Administrator
may deem appropriate. Treasury Shares may, in lieu of any cash consideration, be issued subject to
such vesting requirements tied to the Participant’s period of future Service or the Corporation’s
attainment of specified performance objectives as the Plan Administrator may establish at the time
of issuance.

               3. The consideration for any Newly Issued Shares or Treasury Shares issued under this Stock
Issuance Program shall have a value determined by the Plan Administrator to be not less than
one-hundred percent (100%) of the Fair Market Value of those shares at the time of issuance.

 19.

 

          B. Vesting Provisions.

               1. Shares of Common Stock issued under the Stock Issuance Program may, in the absolute
discretion of the Plan Administrator, be fully and immediately vested upon issuance or may vest in
one or more installments over the Participant’s period of Service. The elements of the vesting
schedule applicable to any unvested shares of Common Stock issued under the Stock Issuance Program,
namely:

                    (i) the Service period to be completed by the Participant or the performance objectives to be
achieved by the Corporation,

                    (ii) the number of installments in which the shares are to vest,

                    (iii) the interval or intervals (if any) which are to lapse between installments, and

                    (iv) the effect which death, Permanent Disability or other event designated by the Plan
Administrator is to have upon the vesting schedule,

shall be determined by the Plan Administrator and incorporated into the Issuance Agreement executed
by the Corporation and the Participant at the time such unvested shares are issued. Shares of
Common Stock may also be issued under the Stock Issuance Program pursuant to share right awards or
restricted stock units which entitle the recipients to receive the shares underlying those awards
or units upon the attainment of designated performance goals or the satisfaction of specified
Service requirements or upon the expiration of a designated time period following the vesting of
those awards or units, including (without limitation) a deferred distribution date following the
termination of the Participant’s Service.

               2. The Participant shall have full stockholder rights with respect to any shares of Common
Stock issued to him or her under the Plan, whether or not his or her interest in those shares is
vested. Accordingly, the Participant shall have the right to vote such shares and to receive any
regular cash dividends paid on such shares. Any new, additional or different shares of stock or
other property (including money paid other than as a regular cash dividend) which the Participant
may have the right to receive with respect to his or her unvested shares by reason of any stock
dividend, stock split, reclassification of Common Stock or other similar change in the
Corporation’s capital structure or by reason of any Corporate Transaction shall be issued, subject
to (i) the same vesting requirements applicable to his or her unvested shares and (ii) such escrow
arrangements as the Plan Administrator shall deem appropriate.

               3. Should the Participant cease to remain in Service while holding one or more unvested shares
of Common Stock under the Plan, then those shares shall be immediately surrendered to the
Corporation for cancellation, and the Participant shall have no further stockholder rights with
respect to those shares. To the extent the surrendered shares were previously issued to the
Participant for consideration paid in cash or cash equivalent (including the Participant’s
purchase-money promissory note), the Corporation shall repay to the Participant the cash
consideration paid for the surrendered shares and shall cancel the unpaid principal

 20.

 

balance of any outstanding purchase-money note of the Participant attributable to such
surrendered shares. The surrendered shares may, at the Plan Administrator’s discretion, be
retained by the Corporation as Treasury Shares or may be retired to authorized but unissued share
status.

               4. The Participant shall not have any stockholder rights with respect to the shares of Common
Stock subject to a restricted stock unit or share right award until that award vests and the shares
of Common Stock are actually issued thereunder. However, dividend-equivalent units may be paid or
credited, either in cash or in actual or phantom shares of Common Stock, on outstanding restricted
stock unit or share right awards, subject to such terms and conditions as the Plan Administrator
may deem appropriate.

               5. The Plan Administrator may in its discretion elect to waive the surrender and cancellation
of one or more unvested shares of Common Stock (or other assets attributable thereto) which would
otherwise occur upon the non-completion of the vesting schedule applicable to such shares. Such
waiver shall result in the immediate vesting of the Participant’s interest in the shares of Common
Stock as to which the waiver applies. Such waiver may be effected at any time, whether before or
after the Participant’s cessation of Service or the attainment or non-attainment of the applicable
performance objectives.

               6. Outstanding share right awards or restricted stock units under the Stock Issuance Program
shall automatically terminate, and no shares of Common Stock shall actually be issued in
satisfaction of those awards or units, if the performance goals or Service requirements established
for such awards or units are not attained or satisfied. The Plan Administrator, however, shall have
the discretionary authority to issue vested shares of Common Stock under one or more outstanding
share right awards or restricted stock units as to which the designated performance goals or
Service requirements have not been attained or satisfied.

     II. CORPORATE TRANSACTIONS/CHANGE IN CONTROL

          A. Upon the occurrence of any Corporate Transaction, all unvested shares of Common Stock at
the time outstanding under the Stock Issuance Program shall immediately vest in full, except to the
extent the Plan Administrator imposes limitations in the Issuance Agreement which preclude such
accelerated vesting in whole or in part.

          B. The Plan Administrator shall have the discretionary authority, exercisable either in
advance of any actually-anticipated Change in Control or at the time of an actual Change in
Control, to provide for the immediate and automatic vesting of one or more unvested shares
outstanding under the Stock Issuance Program at the time of such Change in Control. The Plan
Administrator shall also have full power and authority to condition any such accelerated vesting
upon the subsequent termination of the Participant’s Service within a specified period following
the Change in Control.

          C. Each outstanding restricted stock unit or share right award assumed in connection with a
Corporate Transaction or Change in Control or otherwise continued in effect shall be adjusted
immediately after the consummation of that Corporate Transaction or Change in Control so as to
apply to the number and class of securities into which the shares of Common

 21.

 

Stock subject to the award immediately prior to the Corporate Transaction or Change in Control
would have been converted in consummation of such Corporate Transaction or Change in Control had
those shares actually been outstanding at that time. If any such restricted stock unit or share
right award is not so assumed or otherwise continued in effect or replaced with a cash incentive
program of the successor corporation which preserves the Fair Market Value of the underlying shares
of Common Stock at the time of the Change in Control and provides for the subsequent payout of that
value in accordance with the same vesting schedule applicable to those shares, then such unit or
award shall vest, and the shares of Common Stock subject to that unit or award shall be issued as
fully-vested shares, immediately prior to the consummation of the Corporate Transaction or Change
in Control.

          D. The Plan Administrator shall have the discretionary authority to structure one or more
restricted stock unit or other share right awards under the Stock Issuance Program so that the
shares of Common Stock subject to those awards shall automatically vest and become issuable in
whole or in part immediately upon the occurrence of a Corporate Transaction or Change in Control or
upon the subsequent termination of the Participant’s Service by reason of an Involuntary
Termination within a designated period following the effective date of that Corporate Transaction
or Change in Control.

     III. TRANSFER RESTRICTIONS/SHARE ESCROW

          A. Unvested shares may, in the Plan Administrator’s discretion, be held in escrow by the
Corporation until the Participant’s interest in such shares vests or may be issued directly to the
Participant with restrictive legends on the certificates evidencing such unvested shares. To the
extent an escrow arrangement is utilized, the unvested shares and any securities or other assets
issued with respect to such shares (other than regular cash dividends) shall be delivered in escrow
to the Corporation to be held until the Participant’s interest in such shares (or other securities
or assets) vests. Alternatively, if the unvested shares are issued directly to the Participant,
the restrictive legend on the certificates for such shares shall read substantially as follows:

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE UNVESTED AND ARE ACCORDINGLY SUBJECT
TO (I) CERTAIN TRANSFER RESTRICTIONS AND (II) CANCELLATION OR REPURCHASE IN THE
EVENT THE REGISTERED HOLDER (OR HIS/HER PREDECESSOR IN INTEREST) CEASES TO REMAIN IN
THE CORPORATION’S SERVICE. SUCH TRANSFER RESTRICTIONS AND THE TERMS AND CONDITIONS
OF SUCH CANCELLATION OR REPURCHASE ARE SET FORTH IN A STOCK ISSUANCE AGREEMENT
BETWEEN THE CORPORATION AND THE REGISTERED HOLDER (OR HIS/HER PREDECESSOR IN
INTEREST) DATED ___, 20___, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL
OFFICE OF THE CORPORATION.”

          B. The Participant shall have no right to transfer any unvested shares of Common Stock issued
to him or her under the Stock Issuance Program. For purposes of this restriction, the term
“transfer” shall include (without limitation) any sale, pledge, assignment, encumbrance, gift, or
other disposition of such shares, whether voluntary or involuntary. Upon

 22.

 

any such attempted transfer, the unvested shares shall immediately be cancelled, and neither
the Participant nor the proposed transferee shall have any rights with respect to those shares.
However, the Participant shall have the right to make a gift of unvested shares acquired under the
Stock Issuance Program to his or her spouse or issue, including adopted children, or to a trust
established for such spouse or issue, provided the donee of such shares delivers to the Corporation
a written agreement to be bound by all the provisions of the Stock Issuance Program and the
Issuance Agreement applicable to the gifted shares.

 23.

 

ARTICLE FIVE

MISCELLANEOUS

     I. LOANS OR INSTALLMENT PAYMENTS

          The Plan Administrator may, in its discretion, assist any Optionee or Participant (other than
an Optionee or Participant who is an executive officer of the Corporation or any Parent or
Subsidiary subject to the loan prohibition provisions of the Sarbanes-Oxley Act of 2002) in the
exercise of one or more options granted to such Optionee under the Discretionary Grant Program or
the purchase of one or more shares issued to such Participant under the Stock Issuance Program,
including the satisfaction of any Federal and State income and employment tax obligations arising
therefrom, by (i) authorizing the extension of a loan from the Corporation to such Optionee or
Participant or (ii) permitting the Optionee or Participant to pay the option price or purchase
price for the purchased Common Stock in installments over a period of years. Any such loan or
installment method of payment (including the interest rate and terms of repayment) shall be upon
such terms as the Plan Administrator specifies in the applicable option or issuance agreement or
otherwise deems appropriate under the circumstances; provided, however, that all such terms shall
be in compliance with applicable laws and regulations. Loans or installment payments may be
authorized with or without security or collateral. However, the maximum credit available to the
Optionee or Participant may not exceed the option or purchase price of the acquired shares plus any
Federal and State income and employment tax liability incurred by the Optionee or Participant in
connection with the acquisition of such shares.

     II. AMENDMENT OF THE PLAN AND AWARDS

          A. The Board shall have complete and exclusive power and authority to amend or modify the Plan
(or any component thereof) in any or all respects. However, no such amendment or modification
shall adversely affect the rights and obligations with respect to stock options, stock appreciation
rights, unvested stock issuances or other stock-based awards at the time outstanding under the Plan
unless the Optionee or the Participant consents to such amendment or modification. In addition,
amendments to the Plan will be subject to stockholder approval to the extent required under
applicable law or regulation or pursuant to the listing standards of the stock exchange (or the
Nasdaq National Market) on which the Common Stock is at the time primarily traded.

          B. Options and stock appreciation rights may be granted under the Discretionary Program and
stock-based awards may be made under the Stock Issuance Program that in each instance involve
shares of Common Stock in excess of the number of shares then available for issuance under the
Plan, provided no shares shall actually be issued pursuant to those grants or awards until the
number of shares of Common Stock available for issuance under the Plan is sufficiently increased
either by (1) the automatic annual share increase provisions of Section VI.B. of Article One or (2)
the stockholder approval of an amendment of the Plan sufficiently increasing the share reserve. If
stockholder approval is required and is not obtained

 24.

 

within twelve (12) months after the date the first excess grant or award made against such
contingent increase, then any options, stock appreciation rights or other stock-based awards
granted on the basis of such excess shares shall terminate and cease to be outstanding.

     III. TAX WITHHOLDING

          A. The Corporation’s obligation to deliver shares of Common Stock upon the exercise of stock
options or stock appreciation rights or upon the issuance or vesting of such shares under the Plan
shall be subject to the satisfaction of all applicable Federal, State and local income tax and
employment tax withholding requirements.

          B. The Plan Administrator may, in its discretion, provide any or all holders of non-statutory
stock options, stock appreciation rights, restricted stock units (other than the restricted stock
units or stock option grants awarded under the Automatic Grant Program) or any other share right
awards pursuant to which vested shares of Common Stock are to be issued under the Plan and any or
all Participants to whom vested or unvested shares of Common Stock are issued in a direct issuance
under the Stock Issuance Program with the right to use shares of Common Stock in satisfaction of
all or part of the Withholding Taxes to which such holders may become subject in connection with
the exercise of their options or stock appreciation rights, the issuance to them of vested shares
or the subsequent vesting of unvested shares issued to them. Such right may be provided to any
such holder in either or both of the following formats:

               Stock Withholding: The election to have the Corporation withhold, from the shares of
Common Stock otherwise issuable upon the exercise of such non-statutory option or stock
appreciation right or upon the issuance of fully-vested shares, a portion of those shares with an
aggregate Fair Market Value equal to the percentage of the Withholding Taxes (not to exceed one
hundred percent (100%)) designated by the holder.

               Stock Delivery: The election to deliver to the Corporation, at the time the
non-statutory option or stock appreciation right is exercised, the vested shares are issued or the
unvested shares subsequently vest, one or more shares of Common Stock previously acquired by such
holder (other than in connection with the exercise, share issuance or share vesting triggering the
Withholding Taxes) with an aggregate Fair Market Value equal to the percentage of the Withholding
Taxes (not to exceed one hundred percent (100%)) designated by the holder. The shares of Common
Stock so delivered shall not be added to the shares of Common Stock authorized for issuance under
the Plan.

     IV. EFFECTIVE DATE AND TERM OF PLAN

          A. The Plan was adopted by the Board on July 23, 1993, and was approved by the stockholders on
the same date. The Plan became effective on September 29, 1993, the date on which the shares of
the Corporation’s Common Stock were first registered under the 1934 Act. No further option grants
or stock issuances shall be made under the Predecessor Plans from and after the Effective Date.

 25.

 

          B. Each stock option grant outstanding under the Predecessor Plans immediately prior to the
Effective Date of the Discretionary Grant Program shall be incorporated into this Plan and treated
as an outstanding option under this Plan, but each such option shall continue to be governed solely
by the terms and conditions of the instrument evidencing such grant, and nothing in this Plan shall
be deemed to affect or otherwise modify the rights or obligations of the holders of such options
with respect to their acquisition of shares of Common Stock thereunder. Each unvested share of
Common Stock outstanding under the Predecessor Plans on the Effective Date of the Stock Issuance
Program shall continue to be governed solely by the terms and conditions of the instrument
evidencing such share issuance, and nothing in this Plan shall be deemed to affect or otherwise
modify the rights or obligations of the holder of such unvested shares.

          C. The option/vesting acceleration provisions of Section III of Article Two and Section II of
Article Four relating to Corporate Transactions and Changes in Control may, in the Plan
Administrator’s discretion, be extended to one or more stock options or unvested share issuances
which are outstanding under the Predecessor Plans on the Effective Date of the Discretionary Option
Grant and Stock Issuance Programs but which do not otherwise provide for such acceleration.

          D. On March 16, 1995, the Board adopted an amendment to the Plan which (i) increased the
number of shares of Common Stock available for issuance under the Plan by an additional 600,000
shares (as adjusted for the May 1995 stock split), (ii) provided for an automatic annual increase
to the existing share reserve on the first trading day in each of the next five (5) fiscal years,
beginning with the 1996 fiscal year and continuing through fiscal year 2000, equal to 1.4% of the
total number of shares of Common Stock outstanding on the last trading day of the fiscal year
immediately preceding the fiscal year of each such share increase and (iii) imposed certain
limitations required under applicable Federal tax laws with respect to Incentive Option grants.
The amendment was approved by the stockholders at the 1995 Annual Meeting on May 17, 1995.

          E. On March 21, 1996, the Board adopted an amendment to the Plan which (i) increased the
number of shares of Common Stock available for issuance under the Plan by an additional 600,000
shares, (ii) increased the limit on the maximum number of shares of Common Stock issuable under the
1993 Plan prior to the required cessation of further Incentive Option grants to 3,780,000 shares
plus an additional increase of 277,000 shares per fiscal year over each of the next four (4) fiscal
years, beginning with the 1997 fiscal year, (iii) revised the Automatic Option Grant Program to
eliminate the special one-time option grant for 28,800 shares of Common Stock to each newly-elected
or newly-appointed non-employee Board member and implement a new option grant program pursuant to
which all eligible non-employee Board members will receive a series of automatic option grants over
their period of continued Board service. The amendment was approved by the stockholders at the
1996 Annual Meeting.

          F. On March 18, 1997, the Board adopted a series of amendments to the Plan which (i) increased
the number of shares of Common Stock reserved for issuance over the term of the Plan by an
additional 450,000 shares, (ii) rendered all non-employee Board members eligible to receive option
grants and direct stock issuances under the Discretionary Option Grant and Stock Issuance Programs,
(iii) allowed unvested shares issued under the Plan and

 26.

 

subsequently repurchased by the Corporation at the option exercise price or direct issue price
paid per share to be reissued under the Plan, (iv) eliminated the plan limitation which precluded
the grant of additional Incentive Options once the number of shares of Common Stock issued under
the Plan, whether as vested or unvested shares, exceeded a certain level, (v) removed certain
restrictions on the eligibility of non-employee Board members to serve as Plan Administrator, and
(vi) effected a series of additional changes to the provisions of the Plan (including the
stockholder approval requirements) in order to take advantage of the recent amendments to Rule
16b-3 of the 1934 Act which exempts certain officer and director transactions under the Plan from
the short-swing liability provisions of the federal securities laws. The March 18, 1997 amendments
were approved by the stockholders at the 1997 Annual Meeting.

          G. On March 14, 2001, the Board adopted an amendment to the Plan which (i) established an
automatic share increase feature pursuant to which the share reserve under the Plan will
automatically increase on the first trading day in January of each of the next five (5) calendar
years, beginning with the 2002 calendar year and continuing through the 2006 calendar year, by an
amount equal to 4% of the total number of shares of Common Stock outstanding on the last trading
day of the calendar year immediately preceding the calendar year of each such share increase and
(ii) extended the termination date of the Plan from June 30, 2003 to February 28, 2011. The March
14, 2001 amendment was approved by the stockholders at the 2001 Annual Meeting.

          H. On July 16, 2002, the Board adopted an amendment to the Plan which revised the Automatic
Option Grant Program to increase the size of the annual option grant to be received by all eligible
non-employee Board members over their period of continued Board service from 4,000 to 8,000 shares
of Common Stock. This amendment is subject to stockholder approval at the 2003 Annual Meeting.

          I. On January 30, 2006, the Board amended and restated the Plan in order to effect the
following changes: (i) expand the scope of the Stock Issuance Program to include restricted stock
units and other stock-based awards which vest and become payable upon the attainment of designated
performance goals or the satisfaction of specified service requirements or upon the expiration of a
designated time period following such vesting events, (ii) eliminate the limited stock appreciation
right provisions of the Plan so that no grants made on or after January 1, 2006 under the
Discretionary Grant Program or the Automatic Option Grant Program shall contain those limited
cash-out rights, (iii) bring the provisions of the Plan into compliance with recent changes in the
Nasdaq requirements for listed companies and the final federal tax regulations applicable to
incentive stock options, (iv) specifically incorporate the prohibition of the Sarbanes-Oxley Act of
2002 against loans to executive officer and (v) effect a series of additional revisions to
facilitate plan administration.

          J. On January 30, 2007, the Board amended and restated the Plan, subject to stockholder
approval at the 2007 Annual Meeting, to revise the Automatic Grant Program to substitute restricted
stock unit awards for the stock option grants the non-employee Board member would otherwise receive
under the terms of the then-existing automatic stock option

 27.

 

grant program. Each restricted stock unit will cover one share of Common Stock, and the
substitution is accordingly effected at the rate of one restricted stock unit for every 1.6 shares
of Common Stock which would otherwise have been the subject of an automatic option grant made under
the automatic stock option grant program. The January 30, 2007 amendment also effected certain
technical revisions to the Plan relating to changes in capital structure.

          K. The Plan shall terminate upon the earlier of (i) February 28, 2011 or (ii) the date
on which all shares available for issuance under the Plan shall have been issued as vested shares
or cancelled pursuant to the exercise of stock appreciation or other cash-out rights granted under
the Plan. If the date of the plan termination is determined under clause (i) above, then all
option grants and unvested share issuances outstanding on such date shall thereafter continue to
have force and effect in accordance with the provisions of the instruments evidencing such grants
or issuances.

     V. USE OF PROCEEDS

          Any cash proceeds received by the Corporation from the sale of shares pursuant to option
grants or share issuances under the Plan shall be used for general corporate purposes.

     VI. REGULATORY APPROVALS

          A. The implementation of the Plan, the granting of any option under the Plan, the issuance of
any shares under the Stock Issuance Program, and the issuance of Common Stock upon the exercise or
surrender of the option grants made hereunder shall be subject to the Corporation’s procurement of
all approvals and permits required by regulatory authorities having jurisdiction over the Plan, the
options granted under it, and the Common Stock issued pursuant to it.

          B. No shares of Common Stock or other assets shall be issued or delivered under this Plan
unless and until there shall have been compliance with all applicable requirements of Federal and
State securities laws, including the filing and effectiveness of the Form S-8 registration
statement for the shares of Common Stock issuable under the Plan, and all applicable listing
requirements of any securities exchange (or the Nasdaq National Market, if applicable) on which
shares of the Common Stock are then listed for trading.

     VII. NO EMPLOYMENT/SERVICE RIGHTS

          Neither the action of the Corporation in establishing the Plan, nor any action taken by the
Plan Administrator hereunder, nor any provision of the Plan shall be construed so as to grant any
individual the right to remain in the employ or service of the Corporation (or any parent or
subsidiary corporation) for any period of specific duration, and the Corporation (or any parent or
subsidiary corporation retaining the services of such individual) may terminate such individual’s
employment or service at any time and for any reason, with or without cause.

     VIII. MISCELLANEOUS PROVISIONS

          A. The right to acquire Common Stock or other assets under the Plan may not be assigned,
encumbered or otherwise transferred by any Optionee or Participant.

 28.

 

          B. The provisions of the Plan relating to the exercise of options and the vesting of shares
shall be governed by the laws of the State of California, as such laws are applied to contracts
entered into and performed in such State.

          C. The provisions of the Plan shall inure to the benefit of, and be binding upon, the
Corporation and its successors or assigns, whether by Corporate Transaction or otherwise, and the
Participants and Optionees and the legal representatives, heirs or legatees of their respective
estates.

 29.exv10w2

 

Exhibit 10.2

NON-EMPLOYEE DIRECTOR ANNUAL GRANT

ULTRATECH, INC.

RESTRICTED STOCK UNIT ISSUANCE AGREEMENT

RECITALS

     A. The Corporation has implemented an automatic award program under the Plan pursuant to which
eligible non-employee Board members will automatically receive special awards of restricted stock
units at periodic intervals over their period of Board service in order to provide such individuals
with a meaningful incentive to continue to serve as members of the Board.

     B. Participant is an eligible non-employee Board member, and this Agreement is executed
pursuant to, and is intended to carry out the purposes of, the Plan in connection with the award of
restricted stock units under the Automatic Grant Program.

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

NOW, THEREFORE, it is hereby agreed as follows:

     1. Grant of Restricted Stock Units. The Corporation hereby awards to the Participant,
as of the Award Date, Restricted Stock Units under the Automatic Grant Program. Each Restricted
Stock Unit which vests hereunder shall entitle the Participant to receive one share of Common Stock
on the specified issuance date. The number of shares of Common Stock subject to the awarded
Restricted Stock Units, the applicable vesting schedule for those shares, the date or dates on
which those vested shares shall become issuable to Participant and the remaining terms and
conditions governing the award (the “Award”) shall be as set forth in this Agreement.

AWARD SUMMARY

	 	 	 
	Award Date:

	 	____________, 200___
	 
	 	 
	Number of Shares Subject
to Award:

	 	5,000 shares of Common Stock (the “Shares”)
	 
	 	 
	Vesting Schedule:

	 	The Shares shall vest upon the earlier of (i)
the Participant’s completion of one (1) year of
Board service measured from the Award Date or
the (ii) the Participant’s continuation in
Board service through the day immediately prior
to the next Annual Stockholders Meeting.
However, the Shares may vest on an accelerated
basis in accordance with the provisions of
Paragraphs 3 and 5 of this Agreement.

 

 

	 	 	 
	Issuance Schedule

	 	Each Share which vests in accordance with the
foregoing Vesting Schedule shall be issued on
the date that Share vests (the “Issuance Date”)
or as soon thereafter as administratively
practicable, but in no event later than the
later of (i) the close of the calendar year in
which that Share vests or (ii) the fifteenth
day of the third calendar month following such
vesting date.

     2. Limited Transferability. Prior to the actual issuance of the Shares which vest and
become issuable hereunder, the Participant may not transfer any interest in the Award or the
underlying Shares. Any Shares which vest hereunder but which otherwise remain unissued at the time
of the Participant’s death may be transferred pursuant to the provisions of the Participant’s will
or the laws of inheritance or to the Participant’s designated beneficiary or beneficiaries of this
Award. The Participant may also direct the Corporation to issue the stock certificates for any
Shares which in fact vest and become issuable under the Award during his or her lifetime to one or
more designated Family Members or a trust established for the Participant and/or his or her Family
Members. The Participant may make such a beneficiary designation or certificate directive at any
time by filing the appropriate form with the Plan Administrator or its designee.

     3. Cessation of Service.

          (a) The Restricted Stock Units subject to this Award shall immediately vest in full upon the
Participant’s cessation of Board service by reason of death or Permanent Disability. The Shares
subject those vested units shall be issued on the date of Participant’s cessation of Board service
or as soon thereafter as administratively practicable, but in no event later than the later of (i)
the close of the calendar year in which Participant ceases Board service or (ii) the fifteenth day
of the third calendar month following such cessation of Board service.

          (b) Should Participant ease Board service for any other reason prior to vesting in all the
Shares subject to this Award, then the Award will be immediately cancelled with respect to those
unvested Shares, and the number of restricted stock units will be reduced accordingly. Participant
shall thereupon cease to have any right or entitlement to receive any Shares under those cancelled
units.

     4. Stockholder Rights and Dividend Equivalents

          (a) The holder of this Award shall not have any stockholder rights, including voting, dividend
or liquidation rights, with respect to the Shares subject to the Award until the Participant
becomes the record holder of those Shares following their actual issuance.

          (b) Notwithstanding the foregoing, should any dividend or other distribution, whether regular
or extraordinary and whether payable in cash, securities or other property, be declared and paid on
the outstanding Common Stock while one or more Shares remain subject to this Award (i.e., those
Shares are not otherwise issued and outstanding for purposes of entitlement to the dividend or
distribution), then a special book account shall be established for the Participant and credited
with a phantom dividend equal to the actual dividend or distribution which would have been paid on
the Shares at the time subject to this Award had

2

 

those Shares been issued and outstanding and entitled to that dividend or distribution. The
phantom dividend equivalents so credited shall vest at the same time as the Shares to which they
relate and shall be distributed to the Participant (in the same form the actual dividend or
distribution was paid to the holders of the Common Stock entitled to that dividend or distribution)
concurrently with the issuance of those vested Shares. 

     5. Change of Control.

          (a) The Restricted Stock Units subject to this Award shall immediately vest in full upon the
Participant’s continuation in Board service until the effective date of any Change in Control
transaction. The vested Shares shall be issued immediately upon such effective date or as soon as
administratively practicable thereafter, but in no event more than fifteen (15) business days after
such effective date, or will otherwise be converted into the right to receive the same
consideration per share of Common Stock payable to the other shareholders of the Corporation in
consummation of the Change in Control and distributed at the same time as such stockholder
payments, but in no event shall the distribution to Participant be completed later than the later
of (i) the close of the calendar year in which the Change in Control is effected or (ii) the
fifteenth day of the third calendar month following such effective date.

          (b) This Agreement shall not in any way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

     6. Adjustment in Shares. Should any change be made to the Common Stock by reason of
any stock split, stock dividend, recapitalization, combination of shares, exchange of shares,
spin-off transaction or other change affecting the outstanding Common Stock as a class without the
Corporation’s receipt of consideration, or should the value of outstanding shares of Common Stock
be substantially reduced as a result of a spin-off transaction or an extraordinary dividend or
distribution, or should there occur any merger, consolidation or other reorganization, then
equitable adjustments shall be made by the Plan Administrator to the total number and/or class of
securities issuable pursuant to this Award in order to reflect such change and thereby prevent a
dilution or enlargement of benefits hereunder. In making such equitable adjustments, the Plan
Administrator shall take into account any amounts to be credited to Participant’s book account
under Paragraph 4(b) in connection with the transaction, and the determination of the Plan
Administrator shall be final, binding and conclusive.

     7. Issuance of Shares of Common Stock.

          (a) Except as otherwise provided in Paragraph 5, on the applicable Issuance Date under
Paragraph 1, the Corporation shall issue to or on behalf of Participant a certificate (which may be
in electronic form) for the vested shares of Common Stock to be issued on that date.

3

 

          (b) Except as otherwise provided in Paragraph 5, the settlement of all Restricted Stock Units
which vest under this Award shall be made solely in shares of Common Stock. In no event, however,
shall any fractional shares be issued. Accordingly, the total number of shares of Common Stock to
be issued at the time the Award vests shall, to the extent necessary, be rounded down to the next
whole share in order to avoid the issuance of a fractional share.

     8. Compliance with Laws and Regulations. The issuance of shares of Common Stock
pursuant to the Award shall be subject to compliance by the Corporation and Participant with all
applicable requirements of law relating thereto and with all applicable regulations of any stock
exchange on which the Common Stock may be listed for trading at the time of such issuance.

     9. Notices. Any notice required to be given or delivered to the Corporation under the
terms of this Agreement shall be in writing and addressed to the Corporation at its principal
corporate offices. Any notice required to be given or delivered to Participant shall be in writing
and addressed to Participant at the address indicated below Participant’s signature line on this
Agreement. All notices shall be deemed effective upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.

     10. Successors and Assigns. Except to the extent otherwise provided in this
Agreement, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the
Corporation and its successors and assigns and Participant, Participant’s assigns, the legal
representatives, heirs and legatees of Participant’s estate and any beneficiaries of the Award
designated by Participant.

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

     12. Governing Law. The interpretation, performance and enforcement of this Agreement
shall be governed by the laws of the State of California without resort to that State’s
conflict-of-laws rules.

     13. No Impairment of Rights. This Agreement shall not in any way affect the right of
the Corporation or its stockholders to remove Participant from the Board at any time in accordance
with the provisions of applicable law.

4

 

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

	 	 	 	 	 	 	 
	 	 	ULTRATECH, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	PARTICIPANT	 	 
	 
	 	 	 	 	 	 
	 

	 	Signature:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

5

 

APPENDIX A

DEFINITIONS

     The following definitions shall be in effect under the Agreement:

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

     B. Automatic Grant Program shall mean the automatic grant program in effect for
non-employee Board members under the Plan.

     C. Award shall mean the award of Restricted Stock Units made to the
Participant pursuant to the terms of this Agreement.

     D. Award Date shall mean the date the Restricted Stock Units are awarded to
Participant pursuant to the Agreement and shall be the date indicated in Paragraph 1 of the
Agreement.

     E. Board shall mean the Corporation’s Board of Directors.

     F. Change in Control shall mean a change in ownership or control of the
Corporation effected through any of the following transactions:

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

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

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

          (iv) the acquisition, directly or indirectly by any person or related group of
persons (other than the Corporation or a person that directly or indirectly
controls, is controlled by, or is under common control with, the Corporation), of
beneficial ownership (within the meaning of Rule 13d-3 of the

A-1

 

1934 Act) of securities possessing more than fifty percent (50%) of the total
combined voting power of the Corporation’s outstanding securities pursuant to a
tender or exchange offer made directly to the Corporation’s stockholders, or

          (v) a change in the composition of the Board over a period of twelve (12)
consecutive months or less such that a majority of the Board members ceases, by
reason of one or more contested elections for Board membership, to be comprised of
individuals who either (A) have been Board members continuously since the beginning
of such period or (B) have been elected or nominated for election as Board members
during such period by at least a majority of the Board members described in clause
(A) who were still in office at the time the Board approved such election or
nomination.

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

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

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

          J. Family Members shall mean, with respect to the Participant, any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law.

          K. 1934 Act shall mean the Securities Exchange Act of 1934, as amended from
time to time.

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

          M. Permanent Disability shall mean the Participant’s inability to perform his
or her usual duties as a Board member by reason of any medically determinable physical or
mental impairment expected to result in death or to be of continuous duration of twelve
(12) months or more.

          N. Plan shall mean the Corporation’s 1993 Stock Option/Stock Issuance Plan, as
amended and restated.

          O. Plan Administrator shall mean either the Board or a committee of the Board
acting in its capacity as administrator of the Plan.

          P. Restricted Stock Unit shall mean each unit subject to this Award which
shall entitle the Participant to receive one share of Common Stock under the Plan upon the
vesting of that unit.

A-2

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