Document:

exhibit103pbrsuawardagre

                                                                     EXHIBIT 10.3                              BLUELINX HOLDINGS, INC.              2016 AMENDED AND RESTATED LONG-TERM INCENTIVE PLAN                                   (AS AMENDED)        2019 PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD AGREEMENT                                  EMPLOYEE NAME                     Number of Shares Subject to Award:  __________                                Grant Date:  __________   Pursuant to the BlueLinx Holdings, Inc. 2016 Amended and Restated Long-Term Incentive Plan,  as amended (the “Plan”), BlueLinx Holdings, Inc., a Delaware corporation (the “Company”), has  granted the above-named participant (“Participant”) Restricted Stock Units (the “RSUs” or the  “Award”) entitling Participant to receive such number of shares of Company common stock (the  “Shares”) as is set forth above on the terms and conditions set forth in this agreement (this  “Agreement”) and the Plan.  Capitalized terms used in this Agreement and not defined herein  shall have the meanings set forth in the Plan.          1.    Grant Date.  The Award is granted to Participant on the Grant Date set forth above   (the “Grant Date”).          2.    Vesting.  Except as otherwise set forth herein, (a) if Participant remains employed   by the Company and the performance measure set forth on Exhibit A (the “Performance  Measure”) is met at least at the threshold level, the RSUs and the right to the Shares shall vest  on the date the Committee determines the level of achievement of the Performance Measure (the  “Vesting Date”), and (b) if the Performance Measure has not been achieved at least at the  threshold level on or prior to the Vesting Date or if Participant is not employed by the Company  on the Vesting Date, the RSUs shall be forfeited as of the Vesting Date, and no amount shall be  payable under this Agreement.          3.    Forfeiture of RSUs.                (a)  Termination of Employment.  Prior to the Vesting Date, except as otherwise   provided herein, any unvested RSUs shall be immediately forfeited upon Participant’s termination  of employment with the Company for any reason whatsoever; provided, that the Committee  reserves the right, in its sole discretion, to waive or amend this provision, in whole or in part.  For  purposes of this Agreement, employment with any Subsidiary of the Company shall be considered  employment with the Company and a termination of employment shall mean a termination of  employment with the Company and each Subsidiary by which Participant is employed.                (b)  Restrictive Covenants.  The grant of this Award is contingent upon   Participant signing or having signed a restrictive covenants agreement or, to the extent applicable,  an amendment to an existing employment or restrictive covenants agreement, in either case in   the form provided by the Company on or prior to the date that Participant signs this Agreement.   Notwithstanding any provision of this Agreement, if Participant breaches or otherwise fails to  comply with such restrictive covenants agreement or any other non-compete, non-solicitation or  similar agreement with the Company or a Subsidiary, in addition to all rights the Company or its 

 

 Subsidiary has under such agreement, at law or in equity, RSUs that have not become vested   and settled before such breach or failure to comply shall expire at that time, shall not become   vested or settled after such time and shall be forfeited at such time without any payment therefor.          4.    Transfer of Vested Shares.  Stock certificates representing the vested Shares (or   appropriate evidence of ownership including certificateless book-entry issuance), if any, will be   delivered to Participant (or, if permitted by the Company in its sole discretion, to a party designated   by Participant) on or as soon as practicable after (but no later than 30 days after) the Vesting  Date, or if applicable under Section 14(a), the date of a Change in Control, subject, as applicable,  to delay under Section 21.          5.    Non-Transferability of Award.  The RSUs and the Shares issuable hereunder   and the rights and privileges conferred hereby may not be sold, transferred, pledged, assigned,   or otherwise alienated or hypothecated by operation of law or otherwise (except as permitted by   the Plan).  Any attempt to do so contrary to the provisions hereof shall be null and void.          6.    Conditions to Issuance of Shares.  The Shares deliverable to Participant   hereunder may be either previously authorized but unissued Shares or issued Shares which have   been reacquired by the Company.  The Company shall not be required to issue or deliver any   Shares prior to fulfillment of all of the following conditions: (a) the admission of such Shares to   listing on all stock exchanges on which such class of stock is then listed; (b) the completion of   any registration or other qualification of such Shares under any state or federal law or under the   rulings and regulations of the Securities and Exchange Commission (“SEC”) or any other   governmental regulatory body, which the Committee shall, in its discretion, deem necessary or   advisable; and (c) the obtaining of any approval or other clearance from any state or federal   governmental agency, which the Committee shall, in its discretion, determine to be necessary or   advisable.          7.    No Rights as Stockholder.  Except as provided in Section 10, Participant shall   not have voting, dividend or any other rights as a stockholder of the Company with respect to the   unvested Shares subject to the RSUs.  Upon settlement of the Award into Shares, Participant will  obtain full voting and other rights as a stockholder of the Company with respect to such Shares.          8.    Administration.  The Committee shall have the power to interpret the Plan and   this Agreement and to adopt such rules for the administration, interpretation, and application of   the Plan as are consistent therewith and to interpret or revoke any such rules.  All actions taken   and all interpretations and determinations made by the Committee shall be final and binding upon   Participant, the Company, and all other interested persons.  No member of the Committee shall   be personally liable for any action, determination, or interpretation made in good faith with respect   to the Plan or this Agreement.          9.    Fractional Shares.  Fractional shares will not be issued, and when any provision   of this Agreement otherwise would entitle Participant to receive a fractional share, that fraction   will be disregarded.          10.  Adjustments in Capital Structure.  In the event of a change in corporate   capitalization as described in Sections 4.4 and 18.2 of the Plan, the Committee shall make  appropriate adjustments to the number and class of Shares or other stock or securities subject to  the Award.  The Committee’s adjustments shall be effective and final, binding and conclusive for  all purposes of this Agreement.                                           2 

 

       11.  Taxes.                (a)  Upon the vesting and delivery of Shares subject to this Award, Participant  shall pay or make adequate arrangements satisfactory to the Company and/or the employing  Subsidiary to withhold all applicable federal, state and local income and employment taxes (“Tax  Withholding Amounts”) payable with respect to this Award from Participant’s wages or other cash  compensation paid to Participant by the Company and/or the Subsidiary or from proceeds of the  sale of Shares.  Alternatively, or in addition, if permissible under local law, to the extent not  prohibited by the Committee, the Company may, in its sole discretion, (i) sell or arrange for sale  of Shares that Participant acquires to meet the tax withholding obligations, and/or (ii) satisfy such  tax obligations by withholding and cancelling a number of Shares having a market value equal to  the Tax Withholding Amounts, provided that the amount to be withheld may not exceed the tax  withholding obligations associated with the Award to the extent needed for the Company to treat  the Award as an equity award for accounting purposes and to comply with applicable tax  withholding laws.               (b)   Participant acknowledges and agrees that the ultimate liability for all taxes  legally due by him or her is and remains Participant’s responsibility and that the Company and/or  the Subsidiary: (i) make no representations nor undertakings regarding the treatment of any taxes  in connection with any aspect of this Award, including the grant or vesting of the Shares subject  to this Award or the subsequent sale of Shares acquired pursuant to such vesting; and (ii) do not  commit to structure the terms of the grant or any aspect of this Award to reduce or eliminate  Participant’s liability for taxes.  In addition, Participant shall pay the Company or the Subsidiary  any amount of Tax Withholding Amounts that the Company or the Subsidiary may be required to  withhold as a result of Participant’s participation in the Plan that cannot be satisfied by the means  previously described.  The Company may refuse to deliver the Shares if Participant fails to comply  with Participant’s obligations in connection with the Tax Withholding Amounts.          12.  Participant Acknowledgments and Agreements.  By accepting the grant of this   Award, Participant acknowledges and agrees that: (a) the Plan is established voluntarily by the   Company, it is discretionary in nature and may be modified, amended, suspended or terminated   by the Company at any time unless otherwise provided in the Plan or this Agreement; (b) the   grant of this Award is voluntary and occasional and does not create any contractual or other right   to receive future grants of Shares, or benefits in lieu of Shares, even if Shares have been granted   repeatedly in the past; (c) all decisions with respect to future grants, if any, will be at the sole  discretion of the Company and the Committee; (d) Participant’s participation in the Plan shall not  create a right of future employment with the Company and shall not interfere with the ability of the  Company to terminate Participant’s employment relationship at any time with or without cause  and it is expressly agreed and understood that employment is terminable at the will of either party,  insofar as permitted by law; (e) Participant is participating voluntarily in the Plan; (f) this Award is  an extraordinary item that is outside the scope of Participant’s employment contract, if any; (g)  this Award is not part of Participant’s normal or expected compensation or salary for any  purposes, including but not limited to calculating any severance, resignation, termination,  redundancy, end of service payments, bonuses, long-service awards, pension or retirement  benefits or similar payments; (h) in the event Participant is not an employee of the Company, this  Award will not be interpreted to form an employment contract or relationship with the Company;  (i) the value of the Shares may increase or decrease in value and the future value of the underlying  Shares cannot be predicted; and (j) except as otherwise set forth herein, in the event of any  termination of employment (whether or not in breach of local labor laws), Participant’s right to vest  in the Award and receive any Shares will terminate effective as of the date that Participant is no  longer employed and will not be extended by any notice period mandated under local statute,                                          3 

 

 contract or common law; the Committee shall have the exclusive discretion to determine when   Participant is no longer employed for purposes of this Award.          13.  Plan Information.  Participant agrees to receive copies of the Plan, the Plan   prospectus and other Plan information from the Company’s intranet and shareholder information,   including copies of any annual report, proxy statement, Form 10-K, Form 10-Q, Form 8-K and   other information filed with the SEC, from the investor relations section of the Company’s website   at www.BlueLinxCo.com.  Participant acknowledges that copies of the Plan, Plan prospectus,   Plan information and shareholder information are available upon written or telephonic request to   the Company’s Corporate Secretary.          14   Change in Control; Retirement.                (a)  Change in Control.  Upon a Change in Control, if the surviving entity in such   Change in Control does not assume or replace the Award, then unvested Shares subject to the   Award shall immediately become vested and nonforfeitable and subject to settlement and transfer   of Shares under Section 4 as of the date on which the Change in Control occurs based on the   greater of the target performance or the actual performance through the date of the Change in   Control. Payments of the Shares shall be made as provided in Section 4; provided, however, if   the Award is subject to Code Section 409A and the Treasury Regulations and other guidance  promulgated or issued thereunder (“Section 409A”), and if the Change in Control does not   constitute a change in the ownership or effective control of the Company or a change in the   ownership of a substantial portion of the assets of the Company as provided under Section 409A,   the right to the Shares subject to the Award as calculated above shall vest and be nonforfeitable   as of the date of the Change of Control but the settlement and transfer of the Shares (or cash in   lieu of Shares) under Section 4 shall not occur until each Vesting Date or other payment date   under Section 4.  If the surviving entity in the Change in Control assumes or replaces the Award,   and Participant’s employment is subsequently terminated by the Company (or its successor in   the Change in Control) other than for Cause (as defined in Participant’s then-current written   employment agreement, or if no such agreement exists, in any applicable policy or plan of the   Company in existence prior to the date on which the Change in Control occurs), or Participant’s   employment is subsequently terminated for Good Reason (as defined in Participant’s then-current   written employment agreement, or if no such agreement exists, in any applicable policy or plan of   the Company in existence prior to the date on which the Change in Control occurs), in either case   within twenty-four (24) calendar months following the Change in Control, then unvested Shares   subject to the Award shall immediately become vested and nonforfeitable and subject to   settlement and transfer of Shares under Section 4 as of the date on which the termination of   employment occurs, calculated based on the greater of the target performance or the actual   performance through the date of the termination of employment.                (b)  Retirement.  Upon Participant’s Retirement (as defined below), subject to   approval of the Company’s Chief Executive Officer for Participants who are not executive officers,   a pro-rata portion of the Award will become vested, effective as of the Vesting Date and subject   to the achievement of the Performance Measure, with such pro-rata portion being determined by   multiplying (i) the number of Shares subject to the Award, by (ii) a fraction, the numerator of which   is the number of days of employment that the Participant completed during the period beginning   on the Grant Date and ending on the date of Retirement, and the denominator of which is the   number of days beginning on the Grant Date and ending on the third anniversary of the Grant   Date.  The remaining portion of the Award will be forfeited effective as of the date of Retirement.    On the Vesting Date, assuming Participant continues to meet the requirements of Retirement, the   pro-rata portion of the Shares vesting on such Vesting Date will become vested and nonforfeitable                                          4 

 

 and subject to transfer in accordance with Section 4.  For purposes of this Agreement,   “Retirement” means the termination of Participant’s employment by Participant or the Company   when the Company does not have Cause for termination of Participant’s employment (with Cause   as defined in Participant’s then-current written employment agreement, or if no such agreement   exists, in any applicable policy or plan of the Company in existence prior to the date on which the   termination occurs), in or following Participant’s 60th year of life, following the second anniversary   of the Grant Date, when Participant has completed at least seven years of continuous service   with the Company, and under circumstances in which Participant (i) retires from full-time active   employment, and (ii) continues to comply with the provisions of Section 3(b) hereof.  If, prior to   the Vesting Date, the Committee determines that Participant’s retirement no longer constitutes a   Retirement, all then-unvested Shares shall be immediately forfeited.          15.  Clawback Policy.  This Award shall be subject to: (a) the terms and conditions of   any applicable policy of recoupment or recovery of compensation adopted by the Company from   time to time (as such policy may be amended); (b) terms and conditions regarding recoupment or   recovery of compensation in any agreement between the Company or any Subsidiary and   Participant; and (c) the requirements of any applicable law or regulation with respect to the   recoupment or recovery of incentive compensation.  Participant hereby agrees to be bound by   the requirements of this Section 15.  The recoupment or recovery of any portion of the Award (or   vested Shares) that is permitted by any such policy, agreement, law or regulation may be made   by the Company or the Subsidiary that employed Participant.          16.  Complete Agreement.   The Plan and this Agreement constitute the entire   agreement of the parties with respect to the subject matter hereof and supersede in their entirety   all prior undertakings and agreements of the Company and Participant with respect to the subject   matter hereof.  The terms of this Agreement control over any contrary provision in the Plan,   in Participant’s employment agreement with the Company or in any severance plan or   other agreement that applies to Participant.  If Participant is a party to an employment   agreement or severance plan or agreement with the Company and such plan or agreement   includes one or more provisions that specifically applies to equity awards such as this   Award, such provisions of such plan or agreement are hereby superseded and shall not to   apply to this Award.  Acceptance of this Agreement shall be deemed an amendment or   modification of such other plan or agreement solely with respect to this Award.  If provisions   of the Plan and this Agreement conflict, the Plan provisions will govern.          17.  Modification of Agreement.  No provision of this Agreement may be materially   amended or waived unless agreed to in writing and signed by the Committee (or its designee).   Any such amendment to this Agreement that is materially adverse to Participant shall not be  effective unless and until Participant consents, in writing, to such amendment (provided that any  amendment that is required to comply with Code Section 409A shall be effective without consent  unless Participant expressly denies consent to such amendment in writing).  The failure to  exercise, or any delay in exercising, any right, power or remedy under this Agreement shall not  waive any right, power or remedy which the Company has under this Agreement.          18.  Participant Bound by Plan; Successors.  Participant acknowledges receiving,   or being provided with access to, a prospectus describing the material terms of the Plan, and   agrees to be bound by all the terms and conditions of the Plan.  Except as limited by the Plan or   this Agreement, this Agreement is binding on and extends to the legatees, distributees and   personal representatives of Participant and the successors of the Company.                                           5 

 

      19.  Governing Law.  This Agreement has been made in and shall be construed under  and in accordance with the laws of the State of Georgia, without regard to conflict of law  provisions.         20.  Severability.  The provisions of this Agreement are severable and if any one or  more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the  remaining provisions shall nevertheless be binding and enforceable.         21.  Section 409A.               (a)  General.  It is intended that payments under this Agreement will not be  considered nonqualified deferred compensation subject to Section 409A and that such payments  will satisfy the exemption from Section 409A for “short-term deferrals.”  Notwithstanding the  foregoing, if any payment is considered nonqualified deferred compensation, this Agreement and  the payments hereunder will be administered and interpreted to comply with Section 409A,  including, as necessary, by requiring a six-month delay in accordance with Section 21.14 of the  Plan.  For purposes of Section 409A, each payment under this Agreement shall be treated as a  separate payment.  If any payment considered nonqualified deferred compensation is payable  upon a termination of employment, such payment shall be made only if the termination of  employment constitutes a “separation from service” as defined under Section 409A.               (b)  No Representations as to Section 409A Compliance.  Notwithstanding the  foregoing, the Company makes no representation to Participant that the Award and any Shares  issued pursuant to this Agreement are exempt from, or satisfy, the requirements of Section 409A,  and the Company shall have no liability or other obligation to indemnify or hold harmless  Participant or any beneficiary for any tax, additional tax, interest or penalties that Participant or  any beneficiary may incur in the event that any provision of this Agreement, or any amendment  or modification thereof or any other action taken with respect thereto is deemed to violate any of  the requirements of Section 409A.         22.  Consent for Accumulation and Transfer of Data.  Participant consents to the  accumulation and transfer of data concerning him or her and the Award to and from the Company  (and its Subsidiaries) and such other agent as may administer the Plan on behalf of the Company  from time to time. In addition, Participant understands that the Company and its Subsidiaries hold  certain personal information about Participant, including but not limited to his or her name, home  address, telephone number, date of birth, social security number, salary, nationality, job title, and  details of all grants or awards, vested, unvested, or expired (the “personal data”).  Certain  personal data may also constitute “sensitive personal data” within the meaning of applicable local  law. Such data include but are not limited to information described above and any changes thereto  and other appropriate personal and financial data about Participant.  Participant hereby provides  explicit consent to the Company and its Subsidiaries to process any such personal data and  sensitive personal data.  Participant also hereby provides explicit consent to the Company and its  Subsidiaries to transfer any such personal data and sensitive personal data outside the country  in which Participant is employed, and to the United States or other jurisdictions.  The legal persons  for whom such personal data are intended are the Company and its Subsidiaries, any third party  stock plan administrator, and any company providing services to the Company in connection with  compensation planning purposes or the administration of the Plan.         24.  Effectiveness of Agreement.  This Agreement shall not be effective unless and  until Participant and the Company shall have executed this Agreement, as indicated under their  respective signatures set forth on the signature page hereto.                                                    6 

 

 BLUELINX HOLDINGS INC.                                                      _____________   By:                                       Date   Title:                                       By signing below or by accepting this Award as evidenced by electronic means acceptable to the   Committee, Participant hereby (i) acknowledges that a copy of the Plan, the Plan Prospectus and   the Company’s latest annual report to stockholders or annual report on Form 10-K are available  from the Company’s intranet site or upon request, (ii) represents that he or she is familiar with the  terms and provisions of this Agreement and the Plan, and (iii) accepts the award of RSUs subject  to all the terms and provisions of this Agreement and the Plan.  Participant hereby agrees to  accept as binding, conclusive and final all decisions or interpretations of the Committee regarding  any questions arising under the Plan.  Participant authorizes the Company to withhold from any  compensation payable to him including by withholding Shares, in accordance with applicable law,  any taxes required to be withheld by federal, state or local law as a result of the grant or vesting  of the RSUs.                                                                  (Signature)                                  Date                                       (Printed Name)                                                                     7 

 

                         Exhibit A – Performance Measure        The performance measure for the RSUs in the attached Award Agreement is the Company’s   three-year cumulative Adjusted EBITDA (“Performance Measure”).  The RSUs will be earned   based upon the achievement of the Company’s three-year cumulative Adjusted EBITDA target of   $360 million (the “Target Performance”).  The Target Performance will be assessed over the  three-year performance period from the beginning of the Company’s third fiscal quarter of 2019  through the end of the Company’s second fiscal quarter of 2022 (the “Performance Period”).    Upon completion of the Performance Period, the number of Shares subject to the RSUs that are   earned and delivered will be based on the Company’s actual three-year cumulative Adjusted   EBITDA versus the Target Performance for the Performance Period as follows:                                                 Threshold   Target  Maximum       3-year cumulative Adjusted EBITDA ($MM)   $320      $360      $400       % of Target                               89%       100%      111%       Payout % of Target Shares                 50%       100%      125%         1. Payouts will be interpolated for results between the levels shown above.           2. No Shares will be earned if the actual three-year cumulative Adjusted EBITDA is less           than $320 million.    “Adjusted EBITDA” shall mean the Company’s net income plus interest expense and all interest   expense related items, income taxes, depreciation and amortization, and further adjusted to   exclude certain non-cash items and other adjustments to its consolidated net income, as regularly   reported by the Company on a non-GAAP basis. Such non-cash items and adjustments may   include, without limitation, extraordinary compensation expense, and one-time charges   associated with acquisitions or divestitures or restructuring activities.    The Company’s Principal Accounting Officer (“PAO”) shall determine if the Performance Measure   is achieved and at what level of payout within a reasonable period following the end of the   Performance Period. If the PAO determines the Performance Measure is achieved, the   achievement of the Performance Measure and the level of payout shall then be presented to the   Committee for certification.    The Committee shall have discretion to adjust the Performance Measure or to adjust the   calculations of Adjusted EBITDA for unexpected, extraordinary, unusual and/or non-recurring   items, including, without limitation, any acquisitions or divestitures by the Company.                                           8onto-ex101_6.htm

 

Exhibit 10.1

ONTO INNOVATION INC.

INDEMNITY AGREEMENT 

This Indemnity Agreement (this “Agreement”) dated as of _______________ ___, 20___ is made by and between Onto Innovation Inc., a Delaware corporation (the “Company”), and ____________, a director or officer of the Company or one of the Company’s subsidiaries (“Indemnitee”). 

RECITALS 

A.The Company is aware that competent and experienced persons are increasingly reluctant to serve as representatives of corporations unless they are protected by comprehensive liability insurance and indemnification, due to increased exposure to litigation costs and risks resulting from their service to such corporations, and due to the fact that the exposure frequently bears no relationship to the compensation of such representatives; 

B.The members of the Board of Directors of the Company (the “Board”) have concluded that to retain and attract talented and experienced individuals to serve as representatives of the Company and its Subsidiaries and Affiliates and to encourage such individuals to take the business risks necessary for the success of the Company and its Subsidiaries and Affiliates, it is necessary for the Company to contractually indemnify certain of its representatives and the representatives of its Subsidiaries and Affiliates, and to assume for itself maximum liability for Expenses and Other Liabilities in connection with claims against such representatives in connection with their service to the Company and its Subsidiaries and Affiliates; 

C.Section 145 of the Delaware General Corporation Law (“GCL”) empowers the Company to indemnify by agreement its officers, directors, employees and agents, and persons who serve, at the request of the Company, as directors, officers, employees or agents of other corporations, partnerships, joint ventures, trusts or other enterprises, and expressly provides that the indemnification provided thereby is not exclusive; and 

D.The Company desires and has requested Indemnitee to serve or continue to serve as a representative of the Company and/or the Subsidiaries or Affiliates of the Company free from undue concern about inappropriate claims for damages arising out of or related to such services to the Company and/or the Subsidiaries or Affiliates of the Company. 

AGREEMENT 

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows: 

1.Definitions. 

(a)Affiliate. For purposes of this Agreement, “Affiliate” of the Company means any corporation, partnership, limited liability company, joint venture, trust or other 

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enterprise in respect of which Indemnitee is or was or will be serving as a director, officer, trustee, manager, member, partner, employee, agent, attorney, consultant, member of the entity’s governing body (whether constituted as a board of directors, board of managers, general partner or otherwise), fiduciary, or in any other similar capacity at the request, election or direction of the Company, and including, but not limited to, any employee benefit plan of the Company or a Subsidiary or Affiliate of the Company. 

(b)Change in Control. For purposes of this Agreement, “Change in Control” means (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than a Subsidiary or a trustee or other fiduciary holding securities under an employee benefit plan of the Company or Subsidiary, is or becomes the “Beneficial Owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing 20% or more of the total voting power represented by the Company’s then outstanding capital stock, or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board and any new director whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof, or (iii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation that would result in the outstanding capital stock of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into capital stock of the surviving entity) at least 80% of the total voting power represented by the capital stock of the Company or such surviving entity outstanding immediately after such merger or consolidation, or the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company (in one transaction or a series of transactions) of all or substantially all of the Company’s assets. 

(c)Expenses. For purposes of this Agreement, “Expenses” means all direct and indirect costs of any type or nature whatsoever (including, without limitation, all attorneys’ fees and related disbursements, and other out-of-pocket costs), paid or incurred by Indemnitee in connection with either the investigation, defense or appeal of, or being a witness, affiant or deponent in a Proceeding (as defined below), or establishing or enforcing a right to indemnification under this Agreement, Section 145 of the GCL or otherwise; provided, however, that Expenses shall not include any judgments, fines, ERISA excise taxes or penalties or amounts paid in settlement of a Proceeding. 

(d)Indemnifiable Event. For purposes of this Agreement, “Indemnifiable Event” means any event or occurrence related to Indemnitee’s service for the Company or any Subsidiary or Affiliate as an Indemnifiable Person (as defined below), or by reason of anything done or not done, or any act or omission, by Indemnitee in any such capacity. 

(e)Indemnifiable Person. For the purposes of this Agreement, “Indemnifiable Person” means any person who is or was a director, officer, employee, attorney, trustee, manager, member, partner, consultant, member of an entity’s governing body (whether 

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constituted as a board of directors, board of managers, general partner or otherwise) or other agent or fiduciary of the Company or a Subsidiary or Affiliate of the Company. 

(f)Independent Counsel. For purposes of this Agreement, “Independent Counsel” means legal counsel that has not performed services for the Company or Indemnitee in the five years preceding the time in question and that would not, under applicable standards of professional conduct, have a conflict of interest in representing either the Company or Indemnitee. 

(g)Other Liabilities. For purposes of this Agreement, “Other Liabilities” means any and all liabilities of any type whatsoever (including, but not limited to, judgments, fines, penalties, ERISA (or other benefit plan related) excise taxes or penalties, and amounts paid in settlement and all interest, taxes, assessments and other charges paid or payable in connection with or in respect of any such judgments, fines, ERISA (or other benefit plan related) excise taxes or penalties, or amounts paid in settlement). 

(h)Proceeding. For the purposes of this Agreement, “Proceeding” means any threatened, pending, or completed action, suit or other proceeding, whether civil, criminal, administrative, investigative, legislative or any other type whatsoever, preliminary, informal or formal, including any arbitration or other alternative dispute resolution and including any appeal of any of the foregoing. 

(i)Subsidiary. For purposes of this Agreement, “Subsidiary” means any entity of which more than 50% of the outstanding voting securities is owned directly or indirectly by the Company. 

2.Agreement to Serve. Indemnitee agrees to serve and/or continue to serve as an Indemnifiable Person in the capacity or capacities in which Indemnitee currently serves the Company as an Indemnifiable Person, and any additional capacity in which Indemnitee may agree to serve, until such time as Indemnitee’s service in a particular capacity shall end according to the terms of an agreement, the Company’s Certificate of Incorporation or Bylaws, governing law, or otherwise. Nothing contained in this Agreement is intended to create any right to continued employment or other form of service for the Company or a Subsidiary or Affiliate of the Company by Indemnitee. 

3.Mandatory Indemnification. 

(a)Agreement to Indemnify. In the event Indemnitee is a person who was or is a party to or witness, affiant or deponent in or is threatened to be made a party to or witness, affiant or deponent in any Proceeding by reason of an Indemnifiable Event, the Company shall indemnify Indemnitee from and against any and all Expenses and Other Liabilities incurred by Indemnitee in connection with (including in preparation for) such Proceeding to the fullest extent not prohibited by the provisions of the Company’s Certificate of Incorporation or Bylaws and the GCL, as the same may be amended from time to time (but only to the extent that such amendment permits the Company to provide broader indemnification rights than the Company’s Certificate of Incorporation or Bylaws or the GCL permitted prior to the adoption of such amendment). 

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(b)Exception for Amounts Covered by Insurance and Other Sources. Notwithstanding the foregoing, the Company shall not be obligated to indemnify Indemnitee for Expenses or Other Liabilities of any type whatsoever (including, but not limited to judgments, fines, penalties, ERISA excise taxes or penalties and amounts paid in settlement) to the extent such have been paid directly to Indemnitee (or paid directly to a third party on Indemnitee’s behalf) by any directors and officers, or other type, of insurance maintained by the Company or other indemnity arrangements with third parties. 

4.Partial Indemnification and Contribution. 

(a)Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of any Expenses or Other Liabilities but not entitled, however, to indemnification for the total amount of such Expenses or Other Liabilities, the Company shall nevertheless indemnify Indemnitee for such total amount except as to the portion thereof for which indemnification is prohibited by the provisions of the Company’s Certificate of Incorporation or Bylaws or the GCL. In any review or Proceeding to determine the extent of indemnification, the Company shall bear the burden to establish, by clear and convincing evidence, the lack of a successful resolution of a particular claim, issue or matter and which amounts sought in indemnity are allocable to claims, issues or matters which were not successfully resolved. 

(b)Contribution. If Indemnitee is not entitled to the indemnification provided in Section 3 above for any reason other than the statutory limitations set forth in the GCL, then in respect of any threatened, pending or completed Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), the Company shall contribute to the amount of Expenses and Other Liabilities incurred by Indemnitee in such proportion as is appropriate to reflect (i) the relative benefits received by the Company on the one hand and Indemnitee on the other hand from the transaction from which such Proceeding arose and (ii) the relative fault of the Company on the one hand and of Indemnitee on the other hand in connection with the events which resulted in such Expenses and Other Liabilities, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of Indemnitee on the other hand shall be determined by reference to, among other things, the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent the circumstances resulting in such expenses, judgments, fines or settlement amounts. The Company agrees that it would not be just and equitable if contribution pursuant to this Section 4 were determined by pro rata allocation or any other method of allocation that does not take account of the foregoing equitable considerations. 

5.Liability Insurance. So long as Indemnitee shall continue to serve the Company or a Subsidiary or Affiliate of the Company as an Indemnifiable Person and thereafter so long as Indemnitee shall be subject to any possible claim or threatened, pending or completed Proceeding as a result of an Indemnifiable Event, the Company shall maintain in full force and effect for the benefit of Indemnitee as an insured (i) liability insurance issued by one or more reputable insurers and having the policy amount and deductible deemed appropriate by the Board and providing in all respects coverage at least comparable to and in the same amount as that provided to the Chairman of the Board or the Chief Executive Officer of the Company and (ii) any replacement or substitute policies issued by one or more reputable insurers providing in 

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all respects coverage at least comparable to and in the same amount as that being provided to the Chairman of the Board or the Chief Executive Officer of the Company. Without limitation of the foregoing, in the event of a Change in Control, the Company or its successor shall maintain, for an aggregate period of six years from the effective date of the Change in Control, a directors and officers liability insurance policy (or single premium tail coverage with respect to such insurance) for the benefit of the Indemnitee that provides coverage for events occurring prior to the Change in Control that is at least comparable to and in the same amount as the policy existing prior to the Change in Control. The purchase, establishment and maintenance of any such insurance or other arrangements shall not in any way limit or affect the rights and obligations of the Company or of Indemnitee under this Agreement except as expressly provided herein, and the execution and delivery of this Agreement by the Company and Indemnitee shall not in any way limit or affect the rights and obligations of the Company or the other party or parties thereto under any such insurance or other arrangement.

6.Mandatory Advancement of Expenses. If requested by Indemnitee, the Company shall advance prior to the final disposition of the Proceeding all Expenses incurred by Indemnitee in connection with (including in preparation for) a Proceeding related to an Indemnifiable Event. Indemnitee hereby undertakes to repay such amounts advanced if, and only if and to the extent that, it shall ultimately be determined that Indemnitee is not entitled to be indemnified by the Company under the provisions of this Agreement, the Company’s Certificate of Incorporation or Bylaws or the GCL. The advances to be made hereunder shall be paid by the Company to Indemnitee or directly to a third party designated by Indemnitee within ten (10) days following delivery of a written request therefor by Indemnitee to the Company. Indemnitee’s undertaking to repay any Expenses advanced to Indemnitee hereunder shall be unsecured and shall not be subject to the accrual or payment of any interest thereon. 

7.Notice and Other Indemnification Procedures. 

(a)Notification. Promptly after receipt by Indemnitee of notice of the commencement of or the threat of commencement of any Proceeding, Indemnitee shall, if Indemnitee believes that indemnification or advancement of Expenses with respect thereto may be sought from the Company under this Agreement, notify the Company of the commencement or threat of commencement thereof. However, a failure so to notify the Company promptly following Indemnitee’s receipt of such notice shall not relieve the Company from any liability that it may have to Indemnitee except to the extent that the Company is materially prejudiced in its defense of such Proceeding as a result of such failure. 

(b)Insurance and Other Matters. If, at the time of the receipt of a notice of the commencement of a Proceeding pursuant to Section 7(a) above, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such Proceeding to the issuers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all reasonable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such insurance policies. 

(c)Assumption of Defense. In the event the Company shall be obligated to advance the Expenses for any Proceeding against Indemnitee, the Company, if deemed 

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appropriate by the Company, shall be entitled to assume the defense of such Proceeding as provided herein. Following delivery of written notice to Indemnitee of the Company’s election to assume the defense of such Proceeding, the approval by Indemnitee (which approval shall not be unreasonably withheld) of counsel designated by the Company and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees and expenses of counsel subsequently incurred by Indemnitee with respect to the same Proceeding, provided that Indemnitee shall have the right to employ his or her own counsel in connection with any such Proceeding, at the expense of Indemnitee, if such counsel serves in a review, observer, advice and counseling capacity and does not otherwise materially control or participate in the defense of such Proceeding. If (A) the employment of counsel by Indemnitee has been previously authorized by the Company, (B) Indemnitee shall have notified the Board in writing that Indemnitee has reasonably concluded that there may be a conflict of interest between the Company and Indemnitee in the conduct of any such defense, or (C) the Company fails to employ counsel to assume the defense of such Proceeding, the fees and expenses of Indemnitee’s counsel shall be subject to indemnification and/or advancement pursuant to the terms of this Agreement. Nothing herein shall prevent Indemnitee from employing counsel for any such Proceeding at Indemnitee’s expense. 

(d)Settlement. The Company shall not be liable to indemnify Indemnitee under this Agreement or otherwise for any amounts paid in settlement of any Proceeding effected without the Company’s written consent; provided, however, that if a Change in Control has occurred, the Company shall be liable for indemnification of Indemnitee for amounts paid in settlement if the Independent Counsel has approved the settlement. Neither the Company nor any Subsidiary or Affiliate of the Company shall enter into a settlement of any Proceeding that might result in the imposition of any Expense, Other Liability, penalty, limitation or detriment on Indemnitee, whether indemnifiable under this Agreement or otherwise, without Indemnitee’s written consent. Neither the Company nor Indemnitee shall unreasonably withhold consent from any settlement of any Proceeding. 

8.Determination of Right to Indemnification. 

(a)Success on the Merits or Otherwise. To the extent that Indemnitee has been successful on the merits or otherwise in defense of any Proceeding referred to in Section 3(a) above or in the defense of any claim, issue or matter described therein, the Company shall indemnify Indemnitee against Expenses actually incurred in connection therewith. 

(b)Indemnification in Other Situations. In the event that Section 8(a) is inapplicable, the Company shall also indemnify Indemnitee unless the Company shall prove by clear and convincing evidence to a forum listed in Section 8(c) below that the Indemnitee has failed to meet the applicable standard of conduct for indemnification. 

(c)Forum. Indemnitee shall be entitled to select the forum in which determination of whether or not Indemnitee has met the applicable standard of conduct shall be decided, and such election will be made from among the following: 

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(i)Those members of the Board who are not parties to the Proceeding for which a claim is made under this Agreement (“Independent Directors”) even though less than a quorum; 

(ii)A committee of Independent Directors designated by a majority vote of Independent Directors, even though less than a quorum; 

(iii)Independent Counsel selected by Indemnitee and approved by the Board, which approval may not be unreasonably withheld, which counsel shall make such determination in a written opinion; or 

(iv)A panel of three arbitrators, one of whom is elected by the Company, another of whom is selected by Indemnitee and the last of whom is selected by the first two arbitrators so selected. 

The selected forum shall be referred to herein as the “Reviewing Party”. 

(d)As soon as practicable, and in no event later than thirty (30) days after receipt by the Company of written notice of Indemnitee’s choice of forum pursuant to Section 8(c) above, the Company and Indemnitee shall each submit to the Reviewing Party such information as they believe is appropriate for the Reviewing Party to consider. The Reviewing Party shall arrive at its decision within a reasonable period of time following the receipt of all such information from the Company and Indemnitee, but in no event later than thirty (30) days following the receipt of all such information, provided that the time by which the Reviewing Party must reach a decision may be extended by mutual agreement of the Company and Indemnitee. All Expenses associated with the process set forth in this Section 8(d), including but not limited to the Expenses of the Reviewing Party, shall be paid by the Company. 

(e)Delaware Court of Chancery. Notwithstanding a final determination by any Reviewing Party that Indemnitee is not entitled to indemnification with respect to a specific Proceeding, Indemnitee shall have the right to apply to the Court of Chancery, for the purpose of enforcing Indemnitee’s right to indemnification pursuant to this Agreement. 

(f)Expenses. The Company shall indemnify Indemnitee against all Expenses incurred by Indemnitee in connection with any hearing or Proceeding under this Section 8 involving Indemnitee and against all Expenses and Other Liabilities incurred by Indemnitee in connection with any other Proceeding between the Company and Indemnitee involving the interpretation or enforcement of the rights of Indemnitee under this Agreement unless a court of competent jurisdiction finds that each of the material claims of Indemnitee in any such Proceeding was frivolous or made in bad faith. 

9.Exceptions. Any other provision herein to the contrary notwithstanding, 

(a)Claims Initiated by Indemnitee. The Company shall not be obligated pursuant to the terms of this Agreement to indemnify or advance Expenses to Indemnitee with respect to Proceedings or claims initiated or brought voluntarily by Indemnitee and not by way of defense, except (1) with respect to Proceedings brought to establish or enforce a right to indemnification under this Agreement, any other statute or law, as permitted under Section 145 

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of the GCL, or otherwise, (2) where the Board has consented to the initiation of such Proceeding, or (3) with respect to Proceedings brought to discharge Indemnitee’s fiduciary responsibilities, whether under ERISA or otherwise, but such indemnification or advancement of Expenses may be provided by the Company in specific cases if the Board finds it to be appropriate; or 

(b)Section 16(b) Actions. The Company shall not be obligated pursuant to the terms of this Agreement to indemnify Indemnitee on account of any suit in which judgment is rendered against Indemnitee for an accounting of profits made from the purchase or sale by Indemnitee of securities of the Company pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any federal, state or local statutory law; or 

(c)Unlawful Indemnification. The Company shall not be obligated pursuant to the terms of this Agreement to indemnify Indemnitee for Other Liabilities if a final decision by a court having competent jurisdiction in the matter shall determine that such indemnification is not lawful. 

10.Non-exclusivity. The provisions for indemnification and advancement of Expenses set forth in this Agreement shall not be deemed exclusive of any other rights which Indemnitee may have under any provision of law, the Company’s Certificate of Incorporation or Bylaws, the vote of the Company’s stockholders or disinterested directors, other agreements, or otherwise, both as to acts or omissions in his or her official capacity and to acts or omissions in another capacity while serving the Company or a Subsidiary or Affiliate of the Company as an Indemnifiable Person and Indemnitee’s rights hereunder shall continue after Indemnitee has ceased serving the Company or a Subsidiary or Affiliate of the Company as an Indemnifiable Person and shall inure to the benefit of the heirs, executors and administrators of Indemnitee. 

11.Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever, (i) the validity, legality and enforceability of the remaining provisions of the Agreement (including, without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby, and (ii) to the fullest extent possible, the provisions of this Agreement (including, without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. 

12.Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar) and except as expressly provided herein, no such waiver shall constitute a continuing waiver. 

13.Successors and Assigns. The terms of this Agreement shall bind, and shall inure to the benefit of, the successors and assigns of the parties hereto. 

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14.Notice. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed duly given (i) if delivered by hand and a receipt is provided by the party to whom such communication is delivered, (ii) if mailed by certified or registered mail with postage prepaid, return receipt requested, on the signing by the recipient of an acknowledgement of receipt form accompanying delivery through the U.S. mail, (iii) personal service by a process server, or (iv) delivery to the recipient’s address by overnight delivery (e.g., FedEx, UPS or DHL) or other commercial delivery service. Addresses for notice to either party are as shown on the signature page of this Agreement, or as subsequently modified by written notice complying with the provisions of this Section 14. Delivery of communications to the Company with respect to this Agreement shall be sent to the attention of the Company’s General Counsel. 

15.No Presumptions. For purposes of this Agreement, the termination of any Proceeding, by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law or otherwise. In addition, neither the failure of the Company or a Reviewing Party to have made a determination as to whether Indemnitee has met any particular standard of conduct or had any particular belief, nor an actual determination by the Company or a Reviewing Party that Indemnitee has not met such standard of conduct or did not have such belief, prior to the commencement of Proceedings by Indemnitee to secure a judicial determination by exercising Indemnitee’s rights under Section 8(e) of this Agreement shall be a defense to Indemnitee’s claim or create a presumption that Indemnitee has failed to meet any particular standard of conduct or did not have any particular belief or is not entitled to indemnification under applicable law or otherwise. 

16.Survival of Rights. The rights conferred on Indemnitee by this Agreement shall continue after Indemnitee has ceased to serve the Company or a Subsidiary or Affiliate of the Company as an Indemnifiable Person and shall inure to the benefit of Indemnitee’s heirs, executors and administrators. 

17.Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights. 

18.Specific Performance, Etc. The parties recognize that if any provision of this Agreement is violated by the Company, Indemnitee may be without an adequate remedy at law. Accordingly, in the event of any such violation, Indemnitee shall be entitled, if Indemnitee so elects, to institute Proceedings, either in law or at equity, to obtain damages, to enforce specific performance, to enjoin such violation, or to obtain any relief or any combination of the foregoing as Indemnitee may elect to pursue. 

19.Counterparts. This Agreement may be executed in counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one 

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and the same agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement. 

20.Headings. The headings of the sections and paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction or interpretation thereof. 

21.Governing Law. This Agreement shall be governed exclusively by and construed according to the laws of the State of Delaware, as applied to contracts between Delaware residents entered into and to be performed entirely with Delaware. 

22.Consent to Jurisdiction. The Company and Indemnitee each hereby irrevocably consent to the jurisdiction of the courts of the State of Delaware for all purposes in connection with any Proceeding which arises out of or relates to this Agreement. 

23.Interpretation of Agreement. It is understood that the parties hereto intend this Agreement to be interpreted and enforced so as to provide indemnification and advancement of expenses to Indemnitee to the fullest extent now or hereafter permitted by law, except as expressly limited herein. 

24.Integration and Entire Agreement. This Agreement sets forth the entire understanding between the parties hereto and supersedes and merges all previous written and oral negotiations, commitments, understandings and agreements relating to the subject matter hereof between the parties hereto. The parties’ entry into this Agreement shall be deemed to amend and restate any other indemnification agreement providing for indemnification of Indemnitee by the Company to read in its entirety as, and to be superseded by, this Agreement. 

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The parties hereto have entered into this Indemnity Agreement effective as of the date first above written. 

 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
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ONTO INNOVATION INC.,

a Delaware Corporation
	
 
	
 
	
 
	
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[SIGNATURE PAGE TO Onto Innovation Inc. INDEMNITY AGREEMENT]

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