KEY TECHNOLOGY, INC. RESTRICTED STOCK AGREEMENT FISCAL 2010 AWARD (Continued Employment Vesting)
Exhibit
10.11
KEY
TECHNOLOGY, INC.
FISCAL
2010 AWARD
(Continued
Employment Vesting)
This Restricted Stock Agreement
("Agreement") is made between Key Technology, Inc.., an
Oregon corporation (the "Company"), and _________________ (the
"Participant") under the Company's Restated Employees' Stock Incentive Plan (the
"Plan"). Capitalized Terms not otherwise defined shall have the
meanings ascribed in the Definitions section of this Agreement.
SECTION
1.
ACQUISITION
OF SHARES
(a) Transfer. On the
terms and conditions set forth in this Agreement, the Company agrees to issue to
the Participant _________ shares of common stock of the Company (the
"Shares"). The fair market value per Share at the date of the award
based on the Nasdaq closing price on __________ is $____, as
determined in accordance with the Plan. The issuance will occur
following the date of execution of this Agreement in coordination with the
Company's Registrar and Transfer Agent.
(b) Stock Plan and Defined
Terms. Ownership of the Shares is subject to the Plan, a copy
of which the Participant acknowledges having received. The provisions
of the Plan are incorporated into this Agreement by this
reference. Capitalized terms not elsewhere defined are defined in SECTION 10 of this Agreement.
(c) Withholding
Taxes. In the event that the Company determines that it is
required to withhold any tax as a result of the issuance of Shares pursuant to
this Agreement, the Participant, as a condition to the receipt of such Shares,
shall make arrangements satisfactory to the Company to enable it to satisfy all
withholding requirements.
SECTION
2. VESTING
AND FORFEITURE
(a) Restriction on Transfer of Restricted
Shares. All of the Shares initially shall be subject to
forfeiture in the event Participant's employment with the Company terminates
prior to the specified Vesting Period as defined below. During the
period of forfeiture, the shares are referred to herein as Restricted
Shares. The Participant shall not transfer, assign, encumber or
otherwise dispose of any Restricted Shares, except as provided in the following
sentence. The Participant may transfer Restricted Shares (i) by
beneficiary designation, will or intestate succession or (ii) to the
Participant's spouse, children or grandchildren or to a trust established by the
Participant for the benefit of the Participant or the Participant's spouse,
children or grandchildren, provided in either case that the Transferee agrees in
writing on a form prescribed by the Company to be bound by all provisions of
this Agreement. If the Participant transfers any Restricted Share,
then this
SECTION 2 shall apply to the Transferee to the same
extent as to the Participant. A purported transfer of any Restricted
Shares not in compliance with this SECTION 2(a) shall be void and of no effect.
(b) Vesting. The
Restricted Shares shall become fully vested based upon the Participant's
continued employment with the Company through the period ended ____________ (the "Vesting
Period"). If the Participant's employment with the Company terminates
prior to ___________ , all Restricted Shares will be forfeited; if
employment terminates after __________ but before __________ 75% of
the Restricted Shares will be forfeited; if employment terminates after
___________ but before _________ 50% of the Restricted Shares
will be forfeited. Once vested, Shares shall no longer be Restricted
Shares or subject to forfeiture, and the transfer restrictions in SECTION 2(a) shall no
longer apply. Notwithstanding any other provision of this
Agreement to the contrary, the Compensation Committee of the Board of Directors
may in its discretion determine to provide for accelerated vesting with respect
to some or all of the Restricted Shares in the event that during the period that
the shares are restricted a Change of Control event occurs with respect to the
Company, on such terms or subject to such conditions as the Committee may
determine.
(c) Additional Shares or Substituted
Securities. In the event of the declaration of a stock
dividend, a spin-off, a stock split, an adjustment in conversion ratio, a
recapitalization or a similar transaction affecting the Company's outstanding
securities without receipt of consideration, any new, substituted or additional
securities or other property which are by reason of such transaction distributed
with respect to any Restricted Shares or into which such Restricted Shares
thereby become convertible shall immediately be subject to this
Agreement. Appropriate adjustments to reflect the distribution of
such securities or property shall be made to the number and/or class of the
Restricted Shares.
(d) Termination of Rights as
Stockholder. If any Restricted Shares are forfeited in
accordance with this SECTION 2, then after the date
of forfeiture the Participant shall no longer have any rights as a holder of
such Restricted Shares. Such Restricted Shares shall be deemed to
have been forfeited in accordance with the applicable provisions hereof, whether
or not the certificate(s) therefor have been delivered as required by this
Agreement.
(e) Evidence of
Ownership. The
Restricted Shares issued pursuant to this Agreement may or may not be
represented by stock certificates. During the period that the shares
are restricted, the Company may appoint one or more agents to serve as custodian
for the Restricted Shares and to provide related services, all pursuant to such
documentation as may be approved by the Company. Any new, substituted
or additional securities or other property described in SECTION 2(c) above shall
be retained by the Company or delivered to any such custodian during the period
that the shares are restricted. Any cash dividends declared with
respect to Restricted Shares will be paid directly to the
Participant.
(f) Forfeiture of Shares for Certain
Activities. If, at any time during Participant's employment
with the Company or within two years thereafter Participant engages in any
activity, whether directly or on behalf of another person or entity, in
competition with the Company or contrary or harmful to the interests of the
Company as determined by the Company's Board of Directors, including, but not
limited to: (i) conduct related to Participant's employment for
which
either
criminal or civil penalties may be sought, (ii) violation of Company
policies, including, without limitation, any Company xxxxxxx xxxxxxx policy,
(iii) accepting employment with or serving as a consultant, advisor or in
any other capacity to an employer that is in competition with or acting against
the interests of the Company, including employing or recruiting any present,
former or future employee of the Company, or (iv) disclosing or misusing
any confidential information or material concerning the Company, then
(i) all Shares issued hereunder whether restricted or vested then held by
the Participant shall be immediately forfeited and (ii) an amount equal to
all gross proceeds realized by Participant from prior sales of any of the Shares
whether before or after they have vested shall become immediately payable by
Participant to the Company.
SECTION
3.
OTHER
RESTRICTIONS ON TRANSFER
(a) Participant
Representations. In connection with the issuance and
acquisition of Shares under this Agreement, the Participant hereby represents
and warrants to the Company as follows:
(i) The
Participant is acquiring and will hold the Shares for investment for his account
only and not with a view to, or for resale in connection with, any
"distribution" thereof within the meaning of the Securities Act.
(ii) The
Participant understands that the Shares have not been registered under the
Securities Act by reason of a specific exemption therefrom and that the Shares
must be held indefinitely, unless they are subsequently registered under the
Securities Act or the Participant obtains an opinion of counsel, in form and
substance satisfactory to the Company and its counsel, that such registration is
not required. The Participant further acknowledges and understands
that the Company is under no obligation to register the Shares.
(iii) The
Participant is aware of the adoption of Rule 144 by the Securities and
Exchange Commission under the Securities Act, which permits limited public
resales of securities acquired in a non-public offering, subject to the
satisfaction of certain conditions, including (without limitation) the
availability of certain current public information about the issuer, the resale
occurring only after the holding period required by Rule 144 has been
satisfied, the sale occurring through an unsolicited "broker's transaction," and
the amount of securities being sold during any three-month period not exceeding
specified limitations.
(iv) The
Participant will not sell, transfer or otherwise dispose of the Shares in
violation of the Securities Act, the Securities Exchange Act of 1934, or the
rules promulgated thereunder, including Rule 144 under the Securities
Act. The Participant agrees that the Participant will not dispose of
the Shares unless and until the Participant has complied with all requirements
of this Agreement applicable to the disposition of Shares and the Participant
has provided the Company with written assurances, in substance and form
satisfactory to the Company, that the proposed disposition does not require
registration of the Shares under the Securities Act or that all appropriate
action necessary for compliance with the registration requirements of the
Securities Act or with any exemption from registration available under the
Securities Act (including Rule 144) has been taken.
(v) The
Participant has been furnished with, and has had access to, such information as
the Participant considers necessary or appropriate for deciding whether to
invest in the Shares, and the Participant has had an opportunity to ask
questions and receive answers from the Company regarding the terms and
conditions of the issuance of the Shares.
(b) Securities Law
Restrictions. Depending upon Participant's status with the
Company at the time, the Company at its discretion may impose restrictions upon
the sale, pledge or other transfer of the Shares (including the placement of
appropriate legends on stock certificates or the imposition of stop-transfer
instructions) if, in the judgment of the Company, such restrictions are
necessary or desirable in order to achieve compliance with the Securities Act,
the securities laws of any state or any other law.
(c) Market
Stand-Off. In connection with any underwritten public offering
by the Company of its equity securities pursuant to an effective registration
statement filed under the Securities Act, the Participant shall enter into such
agreements as the Company may request with respect to temporary restrictions on
transfer of any Shares acquired hereunder. Such restrictions (the
"Market Stand-Off") shall be in effect for such period of time as may be
directed by the Company or its underwriters. In order to enforce the
Market Stand-Off, the Company may impose stop-transfer instructions with respect
to the Shares until the end of the applicable stand-off period. The
Company's underwriters shall be beneficiaries of the agreement set forth in this
subsection (c).
(d) Rights of the
Company. The Company shall not be required to
(i) transfer on its books any Shares that have been sold or transferred in
contravention of this Agreement or (ii) treat as the owner of Shares, or
otherwise to accord voting, dividend or liquidation rights to, any transferee to
whom Shares have been transferred in contravention of this
Agreement.
(e) Restriction under Stock Ownership
Policy. All Shares issued hereby are further subject to the
Company's policy for targeted stock ownership by senior executives, and
restrictions on transfer may be placed on vested shares issued pursuant to this
Agreement by the Company's Chief Executive Officer or Chief Financial Officer
pursuant to and in furtherance of that policy. Initially, the
Participant will be required to retain not less than 50% of the shares that vest
under the terms of this Agreement for a period of three years after they have
vested.
SECTION
4. SUCCESSORS
AND ASSIGNS
Except as otherwise expressly provided
to the contrary, the provisions of this Agreement shall inure to the benefit of,
and be binding upon, the Company and its successors and assigns and be binding
upon the Participant and the Participant's legal representatives, heirs,
legatees, distributees, assigns and transferees by operation of law, whether or
not any such person has become a party to this Agreement or has agreed in
writing to join herein and to be bound by the terms, conditions and restrictions
hereof.
SECTION
5. NO
RETENTION RIGHTS
Nothing in this Agreement or in the
Plan shall confer upon the Participant any right to continue employment with the
Company for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Company (or any Parent or Subsidiary
employing or
retaining
the Participant) or of the Participant, which rights are hereby expressly
reserved by each, to terminate employment at any time and for any reason, with
or without cause.
SECTION
6. TAX
ELECTION
The acquisition of the Shares following
the Vesting Period and the then existing value of the unrestricted Shares may
result in adverse tax consequences to the Participant that may be mitigated by
declaring current taxable income and filing an election under Code Section
83(b). Such election may be filed only within 30 days after the
date of acquisition of the Shares. The form for making the Code
Section 83(b) election is attached to this Agreement as an
Exhibit. The
Participant should consult with the Participant's tax advisor to determine the
tax consequences of acquiring the Shares and the advantages and disadvantages of
filing the Code Section 83(b) election. The Participant acknowledges
that it is the Participant's sole responsibility, and not the Company's, to make
and file a timely election under Code Section 83(b) if the Participant
determines that it is in the best interest of the Participant to do
so.
SECTION
7. LEGENDS
All certificates evidencing Restricted
Shares shall bear the following legends:
THE
SHARES REPRESENTED HEREBY ARE RESTRICTED AND MAY NOT BE SOLD, ASSIGNED,
TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH
THE TERMS OF A WRITTEN AGREEMENT ON FILE WITH THE SECRETARY OF THE
COMPANY.
THE
SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF
COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED.
SECTION
8. NOTICE
Any notice required by the terms of
this Agreement shall be given in writing and shall be deemed effective upon
personal delivery or upon deposit with the United States Postal Service, by
registered or certified mail, with postage and fees prepaid. Notice
shall be addressed to the Company at its principal executive office and to the
Participant at the address that he or she most recently provided to the
Company.
SECTION
9. ENTIRE
AGREEMENT
This Agreement and the Plan constitute
the entire contract between the parties hereto with regard to the subject matter
hereof. They supersede any other agreements, representations
or
understandings
(whether oral or written and whether express or implied) which relate to the
subject matter hereof.
SECTION
10. DEFINITIONS
Capitalized terms not otherwise defined
or below herein shall have the meanings as defined in the Plan.
(a) "Change of Control" shall mean
the occurrence of any of the following:
(i) The
acquisition by any individual, entity or group (within the meaning of section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of beneficial ownership (within the meaning of
Rule 13d–3 promulgated under the Exchange Act) of 50% or more of the stock of
any class or classes having by the terms thereof ordinary voting power to elect
a majority of the directors of the Company (irrespective of whether at the time
stock of any class or classes of the Company shall have or might have voting
power by reason of the happening of any contingency); provided, however, that
the following acquisitions will not constitute a Change of
Control: (1) any acquisition of voting stock directly from the
Company; (2) any acquisition of voting stock by the Company or a subsidiary
of the Company; or (3) any acquisition of voting stock by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company.
(ii) The
consummation of a merger or consolidation involving the Company if the
stockholders owning the voting shares of the Company immediately before such
merger or consolidation do not, as a result of such merger or
consolidation, own, directly or indirectly, more than 50% of the combined
voting power of the Company, or the entity resulting from such merger or
consolidation, in substantially the same proportion as immediately before
such merger or consolidation.
(iii) The
sale or other disposition of all or substantially all of the assets of the
Company.
[Remainder
of Page Intentionally Left Blank; Signature Page Follows]
(b) "Securities Act" shall mean
the Securities Act of 1933, as amended.
(c) "Transferee" shall mean the
individual to whom Restricted Shares have been transferred in accordance with SECTION 2(a).
IN WITNESS WHEREOF, the
parties have executed this Agreement as of the _________ day of
_____________.
COMPANY: KEY
TECHNOLOGY, INC.
By ______________________________
PARTICIPANT:
________________________________
