ULTRATECH, INC. RESTRICTED STOCK UNIT ISSUANCE AGREEMENT
Exhibit
10.11
EXECUTIVE
OFFICER — FORM A
ULTRATECH, INC.
RECITALS
A. The Board has adopted the Plan for the purpose of retaining the services of selected
Employees and consultants and other independent advisors who provide services to the Corporation
(or any Parent or Subsidiary).
B. Participant is to render valuable services to the Corporation (or a Parent or Subsidiary),
and this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan
in connection with the Corporation’s issuance of shares of Common Stock to the Participant under
the Stock Issuance 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 Plan. Each Restricted Stock Unit which vests
during the Participant’s period of Service 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 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
Participant: |
||
Award Date: |
||
Number of Shares
Subject to Award: |
shares of Common Stock (the “Shares”) |
|
Vesting Schedule:
|
The Shares shall vest in a series of ___ (___) successive equal annual installments upon the Participant’s completion of each year of Service over the ___ (___)-year period measured from _________. However, the Shares may vest in whole or in part on an accelerated basis in accordance with the provisions of Paragraphs 4 and 6 of this Agreement. |
Issuance Schedule
|
The Shares in which the Participant vests in accordance with the applicable provisions of the foregoing Vesting Schedule will become issuable on the date (the “Issuance Date”) upon which occurs the earliest of the following: (i) _________, (ii) the date of the Participant’s Separation from Service or (iii) the closing date of a Qualifying Change in Control. The actual issuance of the Shares shall be subject to the Corporation’s collection of all applicable Withholding Taxes and shall be effected on the applicable Issuance Date or as soon as administratively practicable thereafter, but in no event later than the close of the calendar year in which such Issuance Date occurs or (if later) the fifteenth (15th) day of the third calendar month following such Issuance Date, unless a further deferral is required pursuant to Paragraph 9 of this Agreement. The procedures pursuant to which the applicable Withholding Taxes are to be collected are set forth in Paragraph 8 of this Agreement. |
2. Limited Transferability. Prior to actual receipt 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 re-issue the stock certificates for any
Shares which in fact vest and become issuable to Participant under the Award during his lifetime
to one or more designated family members or a trust established for the Participant and/or his
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. Except as otherwise provided in Paragraph 4 below, should
the Participant cease Service for any reason prior to vesting in one or more 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. The Participant shall thereupon
cease to have any right or entitlement to receive any Shares under those cancelled units. Should
the Participant’s Service terminate by reason of a Termination for Cause, then this Award will be
immediately cancelled with respect to all the Restricted Stock Units subject to such Award, whether
vested or unvested at the time, and the Participant shall thereupon cease to have any right or
entitlement to receive any Shares under this Award and the cancelled Restricted Stock Units.
4. Accelerated Vesting. The following special vesting acceleration provisions shall be
in effect for the Award and shall be in addition to the vesting acceleration provisions of
Paragraph 6 of this Agreement:
(a) Should the Participant cease Employee status on or after attainment of age sixty-five (65)
by reason of death, Disability or Involuntary Termination (other than a Termination for Cause),
then all the Shares at the time subject to this Award shall immediately vest.
2
(b) Should the Participant cease Employee status prior to attainment of age sixty-five (65) by
reason of his death, Disability or Involuntary Termination (other than a Termination for Cause),
then the Participant shall immediately vest in an additional number of Shares (not to exceed one
hundred percent (100%) of the number of unvested Shares at that time) equal to the greater of (i)
twenty-five percent (25%) of the total number of Shares subject to this Award or (ii) the number of
additional Shares (if any) in which the Participant would have been vested at the time of such
cessation of Employee status had the Shares subject to this Award vested in a series of
___(___) successive equal monthly installments over the duration of the Vesting Schedule.
(c) The Shares which vest on an accelerated basis pursuant to this Paragraph 4, together with
any other Shares in which the Participant is at the time vested, shall be issued on the date of the
Participant’s Separation from Service (the “Issuance Date”) or as soon as administratively
practicable thereafter, subject to the Corporation’s collection of the applicable Withholding
Taxes, but in no event later than the close of the calendar year in which such Separation from
Service occurs or (if later) the fifteenth (15th) day of the third calendar month following the
date of such Separation from Service, unless a further deferral is required pursuant to Paragraph
9.
5. Stockholder Rights and Dividend Equivalents
(a) The holder of this Award shall not have any stockholder rights, including voting or
dividend rights, with respect to the Shares subject to the Award until the Participant becomes the
record holder of those Shares upon their actual issuance following the Corporation’s collection of
the applicable Withholding Taxes.
(b) Notwithstanding the foregoing, should any dividend or other distribution, whether regular
or extraordinary and whether payable in cash, securities or other property (other than shares of
Common Stock), 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 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 or in such other form as
the Plan Administrator deems appropriate) concurrently with the issuance of those Shares on the
applicable Issuance Date. However, each such distribution shall be subject to the Corporation’s
collection of the Withholding Taxes applicable to that distribution.
3
6. Change of Control.
(a) Any Restricted Stock Units subject to this Award at the time of a Change in Control will
vest immediately prior to the closing of that Change in Control. The Shares subject to those
vested units, together with any other Shares in which the Participant is at that time vested, will
be issued on the earliest of the following Issuance Dates: (i) _________, (ii) the date of the
Participant’s Separation from Service or (iii) the closing date of a Qualifying Change in Control,
subject to the Corporation’s collection of the applicable Withholding Taxes pursuant to the
provisions of Paragraph 8. Alternatively, the Shares subject to those vested units shall be
converted into the right to receive the same consideration per share of Common Stock payable to the
other stockholders of the Corporation in consummation of the Change in Control, and such
consideration per Share shall be distributed on the earliest of the Issuance Dates specified above,
subject to the Corporation’s collection of the applicable Withholding Taxes pursuant to the
provisions of Paragraph 8.
(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.
7. 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, extraordinary dividend or distribution 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
credited to the Participant’s book account under Paragraph 5(b) in connection with the transaction.
The determination of the Plan Administrator shall be final, binding and conclusive. In the event
of a Change in Control, the adjustments (if any) shall be made in accordance with the provisions of
Paragraph 6.
8. Collection of Withholding Taxes.
(a) The Corporation shall collect the employee portion of the FICA taxes (Social Security and
Medicare) with respect to the Shares at the time those Shares vest hereunder. The FICA taxes shall
be based on the Fair Market Value of the Shares on their vesting date. The Corporation shall also
collect the employee portion of the FICA taxes with respect to any phantom dividends at the time
those phantom dividends vest hereunder. The FICA taxes shall be based on the cash amount and the
fair market value of any other property underlying the phantom dividends on the vesting date.
Unless the Participant delivers a separate check payable to the Corporation in the amount of the
FICA taxes required to be withheld from the Participant, the Corporation shall withhold those taxes
from the Participant’s wages.
4
However, if the Participant is at the time an executive officer of the Corporation, then such
withholding taxes must be collected from the Participant through delivery of his or her separate
check not later than the vesting date.
(b) The Corporation shall collect the federal, state and local income taxes required to be
withheld with respect to the distribution of the phantom dividend equivalents to the Participant by
withholding a portion of that distribution equal to the amount of those taxes, with the cash
portion of the distribution to be the first portion so withheld. Until such time as the
Corporation provides the Participant with notice to the contrary, the Corporation shall collect the
federal, state and local income taxes required to be withheld with respect to the issuance of the
Shares that vest hereunder through an automatic Share withholding procedure pursuant to which the
Corporation will withhold, at the time of such issuance, a portion of the Shares with a Fair
Market Value (measured as of the issuance date) equal to the amount of those taxes (the “Share
Withholding Method”); provided, however, that the amount of any Shares so withheld shall not exceed
the amount necessary to satisfy the Corporation‘s required tax withholding obligations using the
minimum statutory withholding rates for federal and state tax purposes that are applicable to
supplemental taxable income. Participant shall be notified in writing in the event such Share
Withholding Method is no longer available.
(c) Should any Shares be distributed at time the Share Withholding Method is not available,
then the federal, state and local income taxes required to be withheld with respect to those Shares
shall be collected from the Participant through either of the following alternatives:
— the Participant’s delivery of his or her separate check payable to the Corporation in
the amount of such Withholding Taxes, or
— the use of the proceeds from a next-day sale of the Shares issued to the Participant,
provided and only if (i) such a sale is permissible under the Corporation’s trading policies
governing the sale of Common Stock, (ii) the Participant makes an irrevocable commitment, on
or before the Issuance Date for those Shares, to effect such sale of the Shares and (iii)
the transaction is not otherwise deemed to involve a prohibited loan under Section 402 of
the Xxxxxxxx-Xxxxx Act of 2002.
(d) Should any other amounts become distributable to Participant in consideration for the
Shares, then the federal, state and local income taxes required to be withheld with respect to
those amounts shall be collected from the Participant pursuant to such procedures as the
Corporation deems appropriate under the circumstances, including (without limitation) the
Participant’s delivery of his or her separate check payable to the Corporation in the amount of
such Withholding Taxes.
(e) Except as otherwise provided in Paragraph 6 and Paragraph 8(b), the settlement of all
Restricted Stock Units which vest under the 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 pursuant to the Award shall, to the extent necessary, be
rounded down to the next whole share in order to avoid the issuance of a fractional share.
5
9. Deferred Issue Date. Notwithstanding any provision to the contrary in this
Agreement, no Shares which become issuable by reason of the Participant’s Separation from Service
shall actually be issued to Participant prior to the earlier of (i) the first day of the seventh
(7th) month following the date of such Separation from Service or (ii) the date of Participant’s
death, if Participant is deemed at the time of such Separation from Service to be a specified
employee under Section 1.409A-1(i) of the Treasury Regulations issued under Code Section 409A, as
determined by the Plan Administrator in accordance with consistent and uniform standards applied to
all other Code Section 409A arrangements of the Corporation, and such delayed commencement is
otherwise required in order to avoid a prohibited distribution under Code Section 409A(a)(2). The
deferred Shares or other distributable amount shall be issued or distributed in a lump sum on the
first day of the seventh (7th) month following the date of Participant’s Separation from Service
or, if earlier, the first day of the month immediately following the date the Corporation receives
proof of Participant’s death.
10. Benefit Limit. In the event the vesting and issuance of the Shares subject to
this Award would otherwise constitute a parachute payment under Code Section 280G, then the vesting
and issuance of those Shares shall be subject to reduction to the extent necessary to assure that
the number of Shares which vest and are issued under this Award will be limited to the greater of
(i) the number of Shares which can vest and be issued without triggering a parachute payment under
Code Section 280G or (ii) the maximum number of Shares which can vest and be issued under this
Award so as to provide the Participant with the greatest after-tax amount of such vested and issued
Shares after taking into account any excise tax the Participant may incur under Code Section 4999
with respect to those Shares and any other benefits or payments to which the Participant may be
entitled in connection with any change in control or ownership of the Corporation or the subsequent
termination of the Participant’s Service.
ALTERNATIVE
10. Benefit Limit. In the event the vesting and issuance of the Shares subject to
this Award would constitute a parachute payment under Code Section 280G, the Participant shall
become entitled to the tax gross-up payment in accordance with the terms and provisions of Section
___ of his Employment Agreement, to the extent such agreement in effect at that time. Otherwise,
the vesting and issuance of those Shares shall be subject to reduction to the extent necessary to
assure that the number of Shares which vest and are issued under this Award will be limited to the
greater of (i) the number of Shares which can vest and be issued without triggering a parachute
payment under Code Section 280G or (ii) the maximum number of Shares which can vest and be issued
under this Award so as to provide the Participant with the greatest after-tax amount of such vested
and issued Shares after taking into account any excise tax the Participant may incur under Code
Section 4999 with respect to those Shares and any other benefits or payments to which the
Participant may be entitled in connection with any change in control or ownership of the
Corporation or the subsequent termination of the Participant’s Service.
6
11. 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 (or
the Nasdaq National Market, if applicable) on which the Common Stock may be listed for trading at
the time of such issuance.
12. 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.
13. 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.
14. 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.
15. 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.
16. Employment at Will. Nothing in this Agreement or in the Plan shall confer upon
Participant any right to continue in Service for any period of specific duration or interfere with
or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary
employing or retaining Participant) or of Participant, which rights are hereby expressly reserved
by each, to terminate Participant’s Service at any time for any reason, with or without cause.
7
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first
indicated above.
| ULTRATECH, INC. | ||||||
| By: | ||||||
| Title: | ||||||
| PARTICIPANT | ||||||
| Signature: | ||||||
| Address: | ||||||
8
APPENDIX A
DEFINITIONS
The following definitions shall be in effect under the Agreement:
A. Agreement shall mean this Restricted Stock Unit Issuance Agreement.
B. Award shall mean the award of Restricted Stock Units made to the
Participant pursuant to the terms of this Agreement.
C. 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.
D. Board shall mean the Corporation’s Board of Directors.
E. Change in Control shall mean a change in ownership or control of the
Corporation effected through any of the following transactions:
(i) 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,
(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 0000 Xxx) 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
A-1
(v) 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 cease, 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.
F. Code shall mean the Internal Revenue Code of 1986, as amended.
G. Common Stock shall mean shares of the Corporation’s common stock.
H. Corporation shall mean Ultratech, Inc., a Delaware corporation, and any
successor corporation to all or substantially all of the assets or voting stock of
Ultratech, Inc. which shall by appropriate action adopt the Plan.
I. Disability shall mean the Participant’s inability, because of physical or
mental illness or injury, to perform his customary duties as an executive officer of the
Corporation, with or without reasonable accommodation, and the continuation of such
disabled condition for a period of one hundred eighty (180) continuous days as determined
by an approved medical doctor. For purposes hereof, an approved medical doctor shall mean
a doctor selected by the Corporation and the Participant. If the Corporation and the
Participant cannot agree on a medical doctor, each shall select a medical doctor and the
two doctors shall select a third who shall be the approved medical doctor for this purpose.
J. Employee shall mean an individual who is in the employ of the Corporation
(or any Parent or Subsidiary), subject to the control and direction of the employer entity
as to both the work to be performed and the manner and method of performance.
K. Employment Agreement shall mean the written employment agreement (if any)
between the Corporation and the Participant in effect on the Award Date.
L. Fair Market Value per share of Common Stock on any relevant date shall be
the closing selling price per share on the date in question on the Stock Exchange on which
the Common Stock is at that time primarily traded, 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 Stock 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.
A-2
M. Involuntary Termination shall mean the termination of the Participant’s
Employee status by reason of:
(i) such individual’s involuntary dismissal or discharge by the Corporation (or
any Parent or Subsidiary) for reasons other than a Termination for Cause, or
(ii) such individual’s voluntary resignation following any of the following
events: (A) any reduction in the level of the Participant’s annual rate of base
salary, except a reduction that is part of a program applicable to all of the
Corporation’s officers to reduce expenses; (B) the failure by the Corporation or any
Parent or Subsidiary (or any successor to the Corporation) to comply with any
material terms of the Employment Agreement (if any) or any other material agreement
between the Participant and the Corporation or any Parent or Subsidiary (or any
successor to the Corporation); (C) any material reduction in the nature or scope of
the Participant’s duties, title, function, authority or responsibilities, subject to
any limitations specified in the Employment Agreement (if any); or (D) a requirement
that the Participant relocate his principal office to a location that is more than
sixty (60) miles from the location of his principal office determined as of the date
specified in the Employment Agreement; provided, however, that none of the events
specified above shall constitute grounds for an Involuntary Termination unless the
Participant shall have notified the Corporation in writing describing the event
which constitute grounds for such Involuntary Termination within sixty (60) days
following the occurrence of such event and the Corporation shall have failed to cure
such event within thirty (30) days after the Corporation’s receipt of such written
notice.
ALTERNATIVE
(ii) such individual’s voluntary resignation following any of the following
events: (A) any reduction in the level of the Participant’s annual rate of base
salary, except a reduction that is part of a program applicable to all of the
Corporation’s officers to reduce expenses; (B) the failure by the Corporation or any
Parent or Subsidiary (or any successor to the Corporation) to comply with any
material terms of the Employment Agreement or any other material agreement between
the Participant and the Corporation or any Parent or Subsidiary (or any successor to
the Corporation); (C) any material reduction in the nature or scope of the
Participant’s duties, title, function, authority or responsibilities (including, for
example, the Participant’s directly reporting to anyone other than the Board); or
(D) a requirement that the Participant relocate his principal office to a location
that is more than sixty (60) miles from the location of his principal office
determined as of the date specified in the Employment Agreement; provided, however,
that none of the events specified above shall constitute grounds for an Involuntary
Termination unless the Participant shall have notified the Corporation in writing
describing the event
A-3
which constitute grounds for such Involuntary Termination within sixty (60)
days following the occurrence of such event and the Corporation shall have failed to
cure such event within thirty (30) days after the Corporation’s receipt of such
written notice.
N. 1934 Act shall mean the Securities Exchange Act of 1934, as amended from
time to time.
O. Participant shall mean the person to whom the Award is made pursuant to the
Agreement.
P. Parent shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each 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.
Q. Plan shall mean the Corporation’s 1993 Stock Option/Stock Issuance Plan, as
amended and restated.
R. Plan Administrator shall mean either the Board or a committee of the Board
acting in its capacity as administrator of the Plan.
S. Qualifying Change in Control shall mean a change in the ownership of the
Corporation, a change in the effective control of the Corporation or a change in ownership
of a substantial portion of the Corporation’s assets, with each such event to be determined
in accordance with the requirements for a change in control event set forth in Section
1.409A-3(i)((5) of the Treasury Regulations; provided, however, that a change in the
effective control of the Corporation will only be deemed to occur if there is an
acquisition, within the applicable twelve (12)-month period, of ownership of securities
possessing more than fifty percent (50%) of the total combined voting power of the
Corporation’s outstanding securities.
T. 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 at a
designated time following the vesting of that unit.
U. Separation from Service shall mean the Participant’s cessation of Employee
status by reason of his death, retirement or termination of employment. The Participant
shall be deemed to have terminated employment for such purpose at such time as the level of
his bona fide services to be performed as an Employee (or as a consultant or independent
contractor) permanently decreases to a level that is not more than twenty percent (20%) of
the average level of services he rendered as an Employee during the immediately preceding
thirty-six (36) months. Solely for purposes of determining when a Separation from Service
occurs, Participant will be deemed to continue in “Employee” status for so long as he
remains in the employ of one or more members of the Employer Group, subject to the control
and direction of the employer entity as to both the work to
A-4
be performed and the manner and method of performance. “Employer Group” means the
Corporation and any Parent or Subsidiary and any other corporation or business controlled
by, controlling or under common control with, the Corporation, as determined in accordance
with Sections 414(b) and (c) of the Code and the Treasury Regulations thereunder, except
that in applying Sections 1563(1), (2) and (3) of the Code for purposes of determining the
controlled group of corporations under Section 414(b), the phrase “at least 50 percent”
shall be used instead of “at least 80 percent” each place the latter phrase appears in such
sections, and in applying Section 1.414(c)-2 of the Treasury Regulations for purposes of
determining trades or businesses that are under common control for purposes of Section
414(c), the phrase “at least 50 percent” shall be used instead of “at least 80 percent”
each place the latter phrase appears in Section 1.4.14(c)-2 of the Treasury Regulations.
Any such determination as to Separation from Service, however, shall be made in accordance
with the applicable standards of the Treasury Regulations issued under Section 409A of the
Code.
V. Service shall mean Participant’s performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a non-employee
member of the Board or a consultant or independent advisor. Participant shall be deemed to
cease Service immediately upon the occurrence of either of the following events: (i)
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 Participant performs
such services ceases to remain a Parent or Subsidiary of the Corporation, even though
Participant may subsequently continue to perform services for that entity. Service as an
Employee 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 the following
special provisions shall be in effect for any such leave:
(i) Should the period of such leave (other than a disability leave) exceed six
(6) months, then Participant shall be deemed to incur a Separation from Service upon
the expiration of the initial six (6)-month period of that leave, unless Participant
retains a right to re-employment under applicable law or by contract with the
Corporation (or any Parent or Subsidiary).
(ii) Should the period of a disability leave exceed twenty-nine (29) months,
then Participant shall be deemed to incur a Separation from Service upon the
expiration of the initial twenty-nine (29)-month period of that leave, unless
Participant retains a right to re-employment under applicable law or by contract
with the Corporation (or any Parent or Subsidiary). For such purpose, a disability
leave shall be a leave of absence due to any medically determinable physical or
mental impairment that can be expected to result in death or to last for a
continuous period of not less than six (6) months and causes Participant to be
unable to perform the duties of his position of employment with the Corporation (or
any Parent or Subsidiary) or any substantially similar position of employment.
A-5
(iii) Except to the extent otherwise required by law or expressly authorized by the
Plan Administrator or by the Corporation’s written policy on leaves of absence, no
Service credit shall be given for vesting purposes for any period Participant is on
a leave of absence.
W. Stock Exchange shall mean the American Stock Exchange, the Nasdaq Global or
Global Select Market or the New York Stock Exchange.
X. Subsidiary shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations beginning with the Corporation, provided each 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.
Y. Termination for Cause shall mean the termination of the Participant’s
Service by the Corporation (or any Parent or Subsidiary) for one or more of the following
reasons:
(i) the Participant’s repeated failure to perform any essential duty of his or
her position other than due to Disability or such illness or injury as would result
in Disability if it continued for the one hundred eighty (180)-day period specified
in the Disability definition above;
(ii) the Participant’s commission of any act that constitutes gross misconduct
and is injurious to the Corporation or any Parent or Subsidiary or any successor to
the Corporation;
(iii) the Participant’s conviction of or pleading guilty or nolo contendere to
any felony involving theft, embezzlement, dishonesty or moral turpitude;
(iv) the Participant’s commission of any act of fraud against, or the
misappropriation of property belonging to, the Corporation or any Parent or
Subsidiary or any successor to the Corporation;
(v) the Participant’s commission of any act of dishonesty in connection with
his or her responsibilities as an employee that is intended to result in his
personal enrichment or the personal enrichment of his family or others;
(vi) the Participant’s material breach of the Employment Agreement (if any) he
may have at the time with the Corporation or any other agreement between the
Participant and the Corporation or any Parent or Subsidiary or successor to the
Corporation.
A-6
Z. Withholding Taxes shall mean (i) the employee portion of the federal, state
and local employment taxes required to be withheld by the Corporation in connection with
the vesting of the shares of Common Stock under the Award and any phantom dividend
equivalents relating to those shares and (ii) the federal, state and local income taxes
required to be withheld by the Corporation in connection with the issuance of those vested
shares and the distribution of any phantom dividend equivalents relating to such shares.
A-7
