FORM OF NEWPORT CORPORATION RESTRICTED STOCK UNIT AWARD AGREEMENT
Exhibit 10.1
This Restricted Stock Unit Award Agreement (the “Agreement”) is entered into as of [GRANT
DATE] (the “Grant Date”), by and between Newport Corporation, a Nevada corporation (the “Company”),
and [GRANTEE NAME] (the “Grantee”), pursuant to the Company’s 2006 Performance-Based Stock
Incentive Plan (the “Plan”). Any capitalized term not defined herein shall have the same meaning
ascribed to it in the Plan.
RECITALS
A. Grantee is an employee, director, consultant or other Service Provider, and in connection
therewith has rendered services for and on behalf of the Company.
B. The Company desires to award Restricted Stock Units to Grantee to provide an incentive for
Grantee to remain a Service Provider of the Company and to exert added effort towards its growth
and success.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, and for other
good and valuable consideration, the parties agree as follows:
1. Award and Acceptance of Restricted Stock Units.
(a) Award and Acceptance. The Company hereby awards to Grantee an aggregate of [NUMBER OF
RESTRICTED STOCK UNITS] Restricted Stock Units (the “Restricted Stock Units”) on and subject to the
terms and conditions set forth in this Agreement and in the Plan. Grantee accepts the Restricted
Stock Units and acknowledges that he or she has read and understands and agrees to be bound by the
terms and conditions of this Agreement and the Plan.
(b) Restricted Stock Units. One (1) Restricted Stock Unit represents the conditional right to
receive one (1) share of the Company’s Common Stock and shall be used solely as a device for the
determination of any issuance of shares of Common Stock to be made to the Grantee if and when
Restricted Stock Units vest pursuant to the conditions set forth in this Agreement and the Plan.
The Restricted Stock Units create no fiduciary duty of the Company to the Grantee, and this
Agreement creates only a contractual obligation on the part of the Company to deliver shares of the
Company’s Common Stock, subject to vesting and the other terms and conditions hereof, as provided
in Section 5 below. The Restricted Stock Units shall not be treated as property or as a trust fund
of any kind. No assets have been secured or set aside by the Company with respect to the
Restricted Stock Units and, if amounts become payable to the Grantee pursuant to this Agreement,
the Grantee’s rights with respect to such amounts shall be no greater than the rights of any
general unsecured creditor of the Company.
2. Vesting of Units.
(a) Vesting Schedule. Subject to the provisions of Sections 3 and 4 below, the Restricted
Stock Units evidenced by this Agreement shall vest in installments as set forth in Exhibit A
attached hereto and incorporated herein by reference (each a “Vesting Date”), subject to the
achievement of specified performance goals established by the Committee (as defined in the Plan)
with respect to the Performance Criteria (as defined in the Plan) set forth in Exhibit A (each, a
“Performance Condition”) for the fiscal year(s) or other fiscal period(s) or specific event(s) set
forth in Exhibit A (each, a “Performance Period”), in accordance with the provisions set forth in
Exhibit A of this Agreement, and the other terms and conditions set forth herein.
(b) Performance Determination Date. For each Performance Condition, the Committee shall
determine, in its sole discretion, and certify in writing whether and the extent to which such
Performance Condition was achieved for a Performance Period. Except as otherwise set forth in
Exhibit A, such determination and written certification will be made following completion of the
external audit of the Company’s financial statements for the applicable Performance Period (the
“Performance Determination Date”).
3. Continuous Service.
(a) Definition of Continuous Service. For purposes of this Agreement, the term “Continuous
Service” means: (1) employment of the Grantee by either the Company or any Affiliated Company (as
defined in the Plan), or by any successor entity following a Change in Control (as defined in the
Plan), which is uninterrupted other than by vacations, illness (except for permanent disability, as
defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the “Code”)), or
leaves of absence which are approved in writing by the Company or any Affiliated Company, if
applicable; (2) service as a member of the Board of Directors of the Company until Grantee resigns,
is removed from office, or Grantee’s term of office expires and he or she is not reelected; or (3)
so long as Grantee is engaged as a Service Provider (as defined in the Plan) to the Company or an
Affiliated Company. Changes in Grantee’s status among the alternatives set forth in the foregoing
clauses (1), (2) and/or (3) shall not be deemed to terminate Grantee’s Continuous Service. For
purposes of this Agreement, the length of the previous employment of Grantee by any entity, or
relating to any business, that has been acquired by the Company or any Affiliated Company shall be
included for purposes of calculating the number of years of Grantee’s Continuous Service.
(b) Termination of Continuous Service. In the event of any termination of Grantee’s
Continuous Service, notwithstanding Section 2(a) above, vesting of the Restricted Stock Units shall
cease immediately upon a termination of Grantee’s Continuous Service. Service for only a portion
of the vesting period, even if a substantial portion, will not entitle the Grantee to any
proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a
termination of Continuous Service. Any Restricted Stock Units subject to this Agreement, to the
extent not vested as of the date of termination of Grantee’s Continuous Service, shall be
automatically
forfeited by Grantee as of such date (regardless of the reason for such termination,
including, without limitation, a termination due to death or permanent disability), and the Grantee
shall have no further rights with respect to such Restricted Stock Units.
4. Change in Control. Notwithstanding Section 2(a) above, in the event there occurs a Change
in Control (as defined in the Plan) of the Company, then, except as provided herein, the portion of
the Restricted Stock Units that is outstanding and unvested immediately prior to such occurrence
shall accelerate and become fully vested (100% achievement of all applicable Performance Conditions
shall be deemed to have occurred) upon (or, as may be necessary to effect such acceleration,
immediately prior to) the consummation of the Change in Control. If, however, this Agreement is
assigned by the Company and assumed by the acquiring or successor entity (or parent thereof), or if
new restricted stock units under a new stock incentive program are to be issued in exchange
therefor, in connection with such Change in Control transaction (as such events are more
particularly described in the Plan), then vesting of the Restricted Stock Units shall not
accelerate and the time-based vesting schedule shall continue to apply, but 100% achievement of all
applicable Performance Conditions shall be deemed to have occurred.
5. Timing and Manner of Settlement of Restricted Stock Units. In the event that Restricted
Stock Units subject to this Agreement vest in accordance with the conditions set forth in this
Agreement, the shares of the Company’s Common Stock which Grantee is entitled to receive upon such
vesting shall be issued in book-entry form, registered in Grantee’s name or in the name of
Grantee’s legal representatives, beneficiaries or heirs, as the case may be, promptly or as soon as
practicable after the Vesting Date of such Restricted Stock Units, in settlement of such vested
whole Restricted Stock Units, unless such settlement is deferred in accordance with the terms and
conditions of the Company’s nonqualified compensation deferral plans and in compliance with Section
409A of the Code. Such delivery of shares shall be subject to the tax withholding provisions of
Section 6(b) and subject to adjustment as provided in Section 7, and shall be nonassessable and in
complete satisfaction of such vested Restricted Stock Units. The Grantee shall deliver to the
Company any representations or other documents or assurances required pursuant to Section 11.
6. Tax Matters.
(a) Compliance with Tax Laws. In order to comply with all applicable federal or state income
tax laws or regulations, the Company may take such action as it deems appropriate to ensure that
all applicable federal or state payroll, withholding, income or other taxes, which are the sole and
absolute responsibility of Grantee, are withheld or collected from Grantee.
(b) Tax Withholding. The Company shall reasonably determine the amount of any federal, state,
local or other income, employment, or other taxes which the Company or any Affiliated Company may
reasonably be obligated to withhold with respect to the grant, vesting, or other event with respect
to the Restricted Stock Units. The Company may, in its sole discretion, withhold a sufficient
number of shares of Common Stock in connection with the vesting of the Restricted Stock Units at
the Fair Market Value (as defined in the Plan) of the Common Stock (determined as of the date of
measurement of the amount of income subject to such withholding) to satisfy the amount of any such
withholding obligations that arise with respect to the vesting of such Restricted Stock Units. The
Company may take such action(s) without notice to the Grantee and shall remit to the Grantee the
balance of any proceeds from withholding such shares in excess of the amount reasonably determined
to be necessary to satisfy such withholding obligations. The Grantee shall have no discretion as
to the satisfaction of tax withholding obligations in such manner. If, however, any withholding
event occurs with respect to the Restricted Stock Units other than upon the vesting of such
Restricted Stock Units, or if the Company for any reason does not satisfy the withholding
obligations with respect to the vesting of the Restricted Stock Units as provided above in this
Section 6(b), the Company shall be entitled to require a cash payment by or on behalf of the
Grantee and/or to deduct from other compensation payable to the Grantee the amount of any such
withholding obligations.
(c) Tax Treatment. The Restricted Stock Units evidenced by this Agreement, and the issuance
of shares of Common Stock to the Grantee in settlement of vested Restricted Stock Units, are
intended to be taxed under the provisions of Section 83 of the Code, and are not intended to
provide and do not provide for the deferral of compensation within the meaning of Section 409A(d)
of the Code. Therefore, the Company intends to report as includible in the Grantee’s gross income
for any taxable year an amount equal to the Fair Market Value of the shares of Common Stock covered
by the Restricted Stock Units that vest (if any) during such taxable year, determined as of the
date such Restricted Stock Units are settled and the shares are delivered to the Grantee. The
Company reserves the right to amend this Agreement, without the Grantee’s consent, to the extent it
reasonably determines from time to time that such amendment is necessary in order to achieve the
purposes of this Section.
7. Adjustments Upon Specified Events.
(a) Adjustment in Number and Kind. In the event that the outstanding shares of the Company’s
Common Stock are hereafter increased or decreased or changed into or exchanged for a different
number or kind of shares or other securities of the Company by reason of a recapitalization, stock
split, reverse stock split, reclassification, stock dividend, or other change in the capital
structure of the Company, then the Company shall make appropriate adjustments to the number of
Restricted Stock Units subject to this Agreement and to the number and kind of securities that may
be issued in respect of such Restricted Stock Units, in order to preserve, as nearly as practical,
but not to increase, the benefits to the Grantee.
(b) Adjustment to Performance Measures. With respect to any Performance Condition, the
Company shall adjust the performance measures, performance goals, relative weights of the measures,
and other provisions of this Agreement to the extent (if any) it determines, in its sole
discretion, that the adjustment is necessary or advisable to preserve the intended incentives and
benefits to reflect (1) any stock split, reverse stock split, stock dividend, material change in
corporate capitalization, any material corporate transaction (such as a reorganization,
combination, separation, merger, acquisition, or any combination of the foregoing), or any complete
or partial liquidation of the Company, (2) any change in accounting policies or practices, (3) the
effects of any special charges to the Company’s earnings, or (4) any other similar special
circumstances.
8. No Stockholder Rights. The Grantee shall have no rights as a stockholder of the Company,
no dividend rights and no voting rights with respect to the Restricted Stock Units or any shares of
Common Stock issuable in respect of such Restricted Stock Units, until
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shares of Common Stock are
actually issued to and held of record by the Grantee. No adjustments will be made for dividends or
other rights of a holder for which the record date is prior to the date of issuance of the shares
of Common Stock, except as provided in Section 7 hereof.
9. Restrictions on Transfer. Until shares of the Company’s Common Stock have been issued free
of restrictions in settlement of vested Restricted Stock Units, neither the Restricted Stock Units
nor any interest therein or amount payable in respect thereof may be sold, assigned, transferred,
pledged or otherwise disposed of, alienated or encumbered by the Grantee, either voluntarily or
involuntarily, except by will, the laws of descent and distribution or pursuant to a DRO entered by
a court in settlement of marital property rights or except as authorized by the Administrator of
the Plan in its sole discretion. The transfer restrictions set forth in this Section 9 shall not
apply to transfers to the Company. Notwithstanding the foregoing, upon the issuance of shares of
the Company’s Common Stock in settlement of vested Restricted Stock Units, the restrictions set
forth in this Section 9 shall continue to apply to such issued shares until such time as the
Grantee has satisfied all holding period requirements applicable to the Grantee based on his or her
position with the Company under any Company policy.
10. Adverse Activity. The Company may cancel, rescind, suspend, withhold or otherwise limit
or restrict all or any portion of the Restricted Stock Units at any time if the Grantee is not in
compliance with all applicable provisions of this Agreement and the Plan, or if the Grantee engages
in any “Adverse Activity.” For purposes of this Section 10, “Adverse Activity” shall include: (a)
the rendering of services for any organization or engaging directly or indirectly in any business
which is or becomes competitive with the Company, or which organization or business, or the
rendering of services to such organization or business, is or becomes otherwise prejudicial to or
in conflict with the interests of the Company; (b) the disclosure to anyone outside the Company, or
the use in other than the Company’s business, without prior written authorization from the Company,
of any confidential information or material relating to the business of the Company, acquired by
the Grantee either during or after employment or other engagement with the Company; (c) the failure
or refusal to disclose promptly and to assign to the Company (in accordance with the Company’s
policies and any agreement in effect between the Company and the Grantee pertaining to
confidentiality and/or ownership of intellectual property) all right, title and interest in any
invention or idea, patentable or not, made or conceived by the Grantee during employment by the
Company, utilizing any Company property, during Grantee’s working time, or relating in any manner
to the actual or anticipated business, research or development work of the Company; (d) activity
that results in termination of the Grantee’s employment for cause; (e) a material violation of any
rules, policies, procedures or guidelines of the Company; or (f) any attempt directly or indirectly
to induce any employee of the Company to be employed or perform services elsewhere or any attempt
directly or indirectly to solicit the trade or business of any current or prospective customer,
supplier or partner of the Company.
11. Compliance with Laws. The award of Restricted Stock Units and the offer, issuance and
delivery of securities under this Agreement are subject to compliance with all applicable federal
and state laws, rules and regulations (including but not limited to state and federal securities
laws) and to such approvals by any listing, regulatory or governmental authority as may, in the
opinion of counsel for the Company, be necessary or advisable in connection therewith. The Grantee
will, if requested by the Company, provide such assurances and representations to the Company as
the Company may deem necessary or desirable to assure compliance with all applicable legal
requirements. The Company will cause such action to be taken, and such filings to be made, so that
the grant hereunder shall comply with the rules of the Nasdaq National Market or the principal
stock exchange on which shares of the Company’s Common Stock are then listed for trading.
12. Limitation of Company’s Liability for Nonissuance; Unpermitted Transfers. The Company
agrees to use its reasonable best efforts to obtain from any applicable regulatory agency such
authority or approval as may be required in order to issue and sell the shares of the Company’s
Common Stock to Grantee pursuant to this Agreement. The inability of the Company to obtain, from
any such regulatory agency, authority or approval deemed by the Company’s counsel to be necessary
for the lawful issuance and sale of the shares hereunder and under the Plan shall relieve the
Company of any liability in respect of the nonissuance or sale of such shares as to which such
requisite authority or approval shall not have been obtained. The Company shall not be required
to: (a) transfer on its books any Restricted Stock Units or any shares issued in respect thereof
which shall have been sold or transferred in violation of any of the provisions set forth in this
Agreement, or (b) treat as owner of such issued shares or to accord the right to vote as such owner
or to pay dividends to any transferee to whom such issued shares shall have been so transferred.
13. Legends. In the event, and only in the event, that, at the time any Restricted Stock
Units are to be settled in shares of Common Stock pursuant to this Agreement, the Company does not
have an effective Form S-8 Registration Statement on file with the Securities and Exchange
Commission with respect to the offer and sale of shares of Common Stock covered by this Agreement,
the certificates, if any, representing the shares of Common Stock so paid will bear a legend in
substantially the following form:
“THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER ANY
APPLICABLE STATE LAW. THEY MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR PLEDGED
WITHOUT (1) REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE LAW,
OR (2) AN OPINION (SATISFACTORY TO THE COMPANY) OF COUNSEL (SATISFACTORY TO THE COMPANY)
THAT REGISTRATION IS NOT REQUIRED.”
14. “Market Stand-Off” Agreement. Grantee agrees that, if requested by the Company or the
managing underwriter of any proposed public offering of the Company’s securities (including any
acquisition transaction where Company securities will be used as all or part of the purchase
price), Grantee will not sell or otherwise transfer or dispose of any shares of Common Stock held
by Grantee that were issued upon the settlement of the Restricted Stock Units without the prior
written consent of the Company or such underwriter, as the case may be, during such period of time,
not to exceed 180 days following the effective date of the registration statement filed by the
Company with respect to such offering, as the Company or the underwriter may specify.
15. No Agreement to Employ. Nothing contained in this Agreement constitutes an employment
commitment by the Company or any Affiliated Company, confers upon the Grantee any right to remain
employed by the Company or any Affiliated Company, or interferes in any way with the right of the
Company or any Affiliated Company at any time to terminate such employment. Nothing in this
paragraph,
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however, is intended to adversely affect any independent contractual right of the
Grantee under any written agreement with the Company or any Affiliated Company.
16. General.
(a) Section Headings; Number and Gender. The section headings of, and titles of paragraphs
and subparagraphs contained in, this Agreement are for the purpose of convenience only, and they
neither form a part of this Agreement nor are they to be used in the construction or interpretation
thereof. Where the context requires, the singular shall include the plural, the plural shall
include the singular, and any gender shall include all other genders.
(b) Governing Law; Attorneys’ Fees. The validity, construction, interpretation, and effect of
this Agreement shall be governed by and determined in accordance with the laws of the State of
California except for matters related to corporate law, in which case the provisions of the Nevada
corporation law shall govern. If any party shall bring an action in law or equity against another
to enforce or interpret any of the terms, covenants and provisions of this Agreement, the
prevailing party in such action shall be entitled to recover from the other party reasonable
attorneys’ fees and costs.
(c) Severability. If any provision of this Agreement or the application thereof is held to be
invalid, the invalidity shall not affect other provisions or applications of this Agreement which
can be given effect without the invalid provisions or applications, and to this end the provisions
of this Agreement are declared to be severable.
(d) Entire Agreement. This Agreement, including Exhibit A hereto, embodies the entire
agreement of the parties hereto respecting the matters within the scope of this Agreement and
supersedes all prior and contemporaneous agreements of the parties hereto that directly or
indirectly bears upon the subject matter hereof, except as otherwise set forth in Section 15
hereof. Any such prior negotiations, correspondence, agreements, proposals or understandings
relating to the subject matter hereof shall be deemed to have been merged into this Agreement, and
to the extent inconsistent herewith, such negotiations, correspondence, agreements, proposals, or
understandings shall be deemed to be of no force or effect. There are no representations,
warranties, or agreements, whether express or implied, or oral or written, with respect to the
subject matter hereof, except as expressly set forth herein. This Agreement is an integrated
Agreement as to the subject matter hereof.
(e) Interpretation. The terms contained in the Plan are incorporated into and made a part of
this Agreement and this Agreement shall be governed by and construed in accordance with the Plan,
and shall in all respects be interpreted in accordance therewith. In the event of any actual or
alleged conflict between the provisions of the Plan and the provisions of this Agreement, the
provisions of the Plan shall be controlling and determinative. The Administrator shall interpret
and construe this Agreement and the Plan, and any action, decision, interpretation or determination
made in good faith by the Administrator shall be final and binding on the Company and the Grantee.
(f) Modifications. This Agreement may not be amended, modified or changed (in whole or in
part), except by a written agreement expressly referring to this Agreement, which agreement is
executed by both of the parties hereto. Notwithstanding the foregoing, amendments made pursuant to
Section 6(c) or 7(b) hereof may be effectuated solely by the Company.
(g) Successors and Assigns. This Agreement shall inure to the benefit of the successors and
assigns of the Company and be binding upon the Grantee and his heirs, executors, administrators,
successors and permitted assigns.
(h) Waiver. Neither the failure nor any delay on the part of a party to exercise any right,
remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any right, remedy, power or privilege, nor shall any waiver of any
right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such
right, remedy, power or privilege with respect to any other occurrence. No waiver shall be
effective unless it is in writing and is signed by the party asserted to have granted such waiver.
(i) Notices. Any notice, demand or request required or permitted to be given under this
Agreement shall be in writing and shall be deemed given when delivered personally or three (3) days
after being deposited in the United States mail, as certified or registered mail, with postage
prepaid, (or by such other method as the Administrator may from time to time deem appropriate), and
addressed, if to the Company, at its principal place of business, Attention: General Counsel, and
if to the Grantee, at his or her most recent address as shown in the employment or stock records of
the Company.
(j) Counterparts. This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original as against any party whose signature appears thereon, and all of which
together shall constitute one and the same instrument. This Agreement shall become binding when
one or more counterparts hereof, individually or taken together, shall bear the signatures of all
of the parties reflected hereon as the signatories. Copies of such signed counterparts may be used
in lieu of the originals for any purpose.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
| NEWPORT CORPORATION | GRANTEE: | |||||
| By: | ||||||
| Name: | [GRANTEE NAME] | |||||
| Title: | ||||||
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EXHIBIT A
VESTING SCHEDULE
Grant Date: Grantee Name: Aggregate Number of Restricted Stock Units: |
[GRANT DATE] [GRANTEE NAME] [NUMBER OF RESTRICTED STOCK UNITS] |
Vesting Schedule:
The vesting of all Restricted Stock Units evidenced by this Agreement will be conditioned upon the
achievement by the Company of the following financial performance goal(s):
| Target | ||||||
| Performance Measure | Level | |||||
If the financial performance goal set forth above is achieved by the Company, the Restricted Stock
Units will vest in equal annual installments on the first [NUMBER OF VESTING YEARS] anniversaries
of the Grant Date. If such financial performance goal is not achieved, all Restricted Stock Units
will be forfeited effective as of the Performance Determination Date.
A-1
