TEGAL CORPORATION STOCK OPTION GRANT NOTICE AND STOCK OPTION AGREEMENT
TEGAL
CORPORATION
2007 INCENTIVE AWARD PLAN
STOCK
OPTION GRANT NOTICE AND
Tegal
Corporation, a Delaware corporation (the “Company”),
pursuant to its 2007 Incentive Award Plan (the
“Plan”), hereby grants to the holder listed below
(“Participant”), an option to purchase the number of
shares of the Company’s common stock, par value $0.01
(“Stock”), set forth below (the
“Option”). This Option is subject
to all of
the terms and conditions set forth herein and in the Stock Option Agreement
attached hereto as Exhibit A (the “Stock Option
Agreement”) and the Plan, which are incorporated herein by
reference. Unless otherwise defined herein, the terms defined in the
Plan shall have the same defined meanings in this Grant Notice and the Stock
Option Agreement.
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Participant:
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Grant
Date:
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Vesting
Commencement Date:
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Exercise
Price per Share:
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$
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Total
Exercise Price:
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$
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Total
Number of Shares Subject to the Option:
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Expiration
Date:
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Type
of
Option:
o Incentive
Stock
Option x Non-Qualified
Stock Option
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Vesting
Schedule: [The Option shall vest with respect to twenty-five
percent (25%) of the total number of Shares subject to the Option
on each
of the first and second anniversaries of the Vesting Commencement
Date,
and with respect to an additional 1/48th of the total number of Shares
subject to the Option on the last day of each month thereafter, subject
to
Participant’s continued status as a service provider as an Employee,
Director or Consultant on each applicable vesting date, such that
all
Shares subject to the Option shall be fully vested on the fourth
anniversary of the Vesting Commencement
Date.]
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By
his or
her signature, the Participant agrees to be bound by the terms and conditions
of
the Plan, the Stock Option Agreement and this Grant Notice. The
Participant has reviewed the Stock Option Agreement, the Plan and this Grant
Notice in their entirety, has had an opportunity to obtain the advice of counsel
prior to executing this Grant Notice and fully understands all provisions of
this Grant Notice, the Stock Option Agreement and the
Plan. Participant hereby agrees to accept as binding, conclusive and
final all decisions or interpretations of the Committee upon any questions
arising under the Plan or relating to the Option.
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TEGAL
CORPORATION
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PARTICIPANT
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By:
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By:
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Print
Name:
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Print
Name:
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Title:
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Address:
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Address:
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EXHIBIT
A
TO
STOCK OPTION GRANT NOTICE
Pursuant
to the Stock Option Grant Notice (the “Grant Notice”)
to which this Stock Option Agreement (this
“Agreement”) is attached, Tegal Corporation, a
Delaware corporation (the “Company”), has granted to
the Participant an option under the Company’s 2007 Incentive Award Plan (the
“Plan”) to purchase the number of shares of Stock
indicated in the Grant Notice.
ARTICLE
I.
GENERAL
1.1 Defined
Terms. Wherever the following terms are used in this Agreement
they shall have the meanings specified below, unless the context clearly
indicates otherwise. Capitalized terms not specifically defined
herein shall have the meanings specified in the Plan and the Grant
Notice.
(a) “Administrator”
shall mean the Board or the Committee responsible for conducting the general
administration of the Plan in accordance with Article 13 of the Plan; provided
that if the Participant is an Independent Director, “Administrator” shall mean
the Board.
(b) “Termination
of Consultancy” shall mean the time when the engagement of the
Participant as a Consultant to the Company or a Subsidiary is terminated for
any
reason, with or without cause, including, but not by way of limitation, by
resignation, discharge, death or retirement, but excluding: (a)
terminations where there is a simultaneous employment or continuing employment
of the Participant by the Company or any Subsidiary, and (b) terminations where
there is a simultaneous re-establishment of a consulting relationship or
continuing consulting relationship between the Participant and the Company
or
any Subsidiary. The Administrator, in its absolute discretion, shall
determine the effect of all matters and questions relating to Termination of
Consultancy, including, but not by way of limitation, the question of whether
a
particular leave of absence constitutes a Termination of
Consultancy. Notwithstanding any other provision of the Plan, the
Company or any Subsidiary has an absolute and unrestricted right to terminate
a
Consultant’s service at any time for any reason whatsoever, with or without
cause, except to the extent expressly provided otherwise in
writing.
(c) “Termination
of Directorship” shall mean the time when the Participant, if he
or she is or becomes an Independent Director, ceases to be a Director for any
reason, including, but not by way of limitation, a termination by resignation,
failure to be elected, death or retirement. The Board, in its sole
and absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Directorship with respect to Independent
Directors.
(d) “Termination
of Employment” shall mean the time when the employee-employer
relationship between the Participant and the Company or any Subsidiary is
terminated for any reason, with or without cause, including, but not by way
of
limitation, a termination by resignation, discharge, death, disability or
retirement; but excluding: (a) terminations where there is a
simultaneous reemployment or continuing employment of the Participant by the
Company or any Subsidiary, and (b) terminations where there is a simultaneous
establishment of a consulting relationship or continuing consulting relationship
between the Participant and the Company or any Subsidiary. The
Administrator, in its absolute discretion, shall determine the effect of all
matters and questions relating to Termination of Employment, including, but
not
by way of limitation, the question of whether a particular leave of absence
constitutes a Termination of Employment.
(e) “Termination
of Services” shall mean the last to
occur of a Participant’s Termination of Consultancy, Termination of Directorship
or Termination of Employment, as applicable. A Participant shall not
be deemed to have a Termination of Services merely because of a change in the
capacity in which the Participant renders service to the Company or any
Subsidiary (i.e., a Participant who is an Employee becomes a Consultant) or
a
change in the entity for which the Participant renders such service (i.e.,
an
Employee of the Company becomes an Employee of a Subsidiary), unless following
such change in capacity or service the Participant is no longer serving as
an
Employee, Director or Consultant of the Company or any Subsidiary.
1.2 Incorporation
of Terms of Plan. The Option is subject to the terms and
conditions of the Plan which are incorporated herein by reference. In
the event of any inconsistency between the Plan and this Agreement, the terms
of
the Plan shall control.
ARTICLE
II.
GRANT
OF OPTION
2.1 Grant
of Option. In consideration of the Participant’s past and/or
continued employment with or service to the Company or a Subsidiary and for
other good and valuable consideration, effective as of the Grant Date set forth
in the Grant Notice (the “Grant Date”), the Company
irrevocably grants to the Participant the Option to purchase any part or all
of
an aggregate of the number of shares of Stock set forth in the Grant Notice,
upon the terms and conditions set forth in the Plan and this
Agreement. Unless designated as a Non-Qualified Stock Option in the
Grant Notice, the Option shall be an Incentive Stock Option to the maximum
extent permitted by law.
2.2 Exercise
Price. The exercise price of the shares of Stock subject to the
Option shall be as set forth in the Grant Notice, without commission or other
charge; provided, however, that the price per share of the
shares of Stock subject to the Option shall not be less than 100% of the Fair
Market Value of a share of Stock on the Grant Date. Notwithstanding
the foregoing, if this Option is designated as an Incentive Stock Option and
the
Participant owns (within the meaning of Section 424(d) of the Code) more than
10% of the total combined voting power of all classes of stock of the Company
or
any “subsidiary corporation” of the Company or any “parent corporation” of the
Company (each within the meaning of Section 424 of the Code), the price per
share of the shares of Stock subject to the Option shall not be less than 110%
of the Fair Market Value of a share of Stock on the Grant Date.
2.3 Consideration
to the Company. In consideration of the grant of the Option by
the Company, the Participant agrees to render faithful and efficient
services to the Company or any Subsidiary. Nothing in the Plan or
this Agreement shall confer upon the Participant any right to continue in the
employ or service of the Company or any Subsidiary or shall interfere with
or
restrict in any way the rights of the Company and its Subsidiaries, which rights
are hereby expressly reserved, to discharge or terminate the services of the
Participant at any time for any reason whatsoever, with or without cause, except
to the extent expressly provided otherwise in a written agreement between the
Company or a Subsidiary and the Participant.
ARTICLE
III.
PERIOD
OF EXERCISABILITY
3.1 Commencement
of Exercisability.
(a) Subject
to Sections 3.2, 3.3, 5.8 and 5.10 hereof, the Option shall become vested and
exercisable in such amounts and at such times as are set forth in the Grant
Notice.
(b) No
portion of the Option which has not become vested and exercisable at the date
of
the Participant’s Termination of Service shall thereafter become vested and
exercisable, except as may be otherwise provided in this Agreement, by the
Administrator or as set forth in a written agreement between the Company and
the
Participant.
(c) Notwithstanding
anything in this Sections 3.1, pursuant to Section 12.2 of the Plan, the Option
shall become fully vested and exercisable in the event of a Change in Control,
in connection with which the successor corporation does not assume the Option
or
substitute an equivalent right for the Option. Should the successor
corporation assume the Option or substitute an equivalent right, then no such
acceleration shall apply.
3.2 Duration
of Exercisability. The installments provided for in the vesting
schedule set forth in the Grant Notice are cumulative. Each such
installment which becomes vested and exercisable pursuant to the vesting
schedule set forth in the Grant Notice shall remain vested and exercisable
until
it becomes unexercisable under Section 3.3 hereof.
3.3 Expiration
of Option. The Option may not be exercised to any extent by
anyone after the first to occur of the following events:
(a) The
expiration of ten years from the Grant Date;
(b) If
this
Option is designated as an Incentive Stock Option and the Participant owned
(within the meaning of Section 424(d) of the Code), at the time the Option
was granted, more than 10% of the total combined voting power of all classes
of
stock of the Company or any “subsidiary corporation” of the Company or any
“parent corporation” of the Company (each within the meaning of Section 424 of
the Code), the expiration of five years from the Grant Date;
(c) The
expiration of three months from the date of the Participant’s Termination of
Services, unless such termination occurs by reason of the Participant’s death or
Disability; or
(d) The
expiration of one year from the date of the Participant’s Termination of
Services by reason of the Participant’s death or Disability.
The
Participant acknowledges that an Incentive Stock Option exercised more that
three months after the Participant’s Termination of Employment, other than by
reason of death or Disability, will be taxed as a Non-Qualified Stock
Option.
3.4 Special
Tax Consequences. The Participant acknowledges that, to the
extent that the aggregate Fair Market Value (determined as of the time the
Option is granted) of all shares of Stock with respect to which Incentive Stock
Options, including the Option, are exercisable for the first time by the
Participant in any calendar year exceeds $100,000, the Option and such other
options shall be Non-Qualified Stock Options to the extent necessary to comply
with the limitations imposed by Section 422(d) of the Code. The
Participant further acknowledges that the rule set forth in the preceding
sentence shall be applied by taking the Option and other “incentive stock
options” into account in the order in which they were granted, as determined
under Section 422(d) of the Code and the Treasury Regulations
thereunder.
ARTICLE
IV.
EXERCISE
OF OPTION
4.1 Person
Eligible to Exercise. Except as provided in Sections 5.2(b) and
5.2(c) hereof, during the lifetime of the Participant, only the Participant
may
exercise the Option or any portion thereof. After the death of the
Participant, any exercisable portion of the Option may, prior to the time when
the Option becomes unexercisable under Section 3.3 hereof, be exercised by
the
Participant’s personal representative or by any person empowered to do so under
the deceased the Participant’s will or under the then applicable laws of descent
and distribution.
4.2 Partial
Exercise. Any exercisable portion of the Option or the entire
Option, if then wholly exercisable, may be exercised in whole or in part at
any
time prior to the time when the Option or portion thereof becomes unexercisable
under Section 3.3 hereof.
4.3 Manner
of Exercise. The Option, or any exercisable portion thereof, may
be exercised solely by delivery to the Secretary of the Company (or any third
party administrator or other person or entity designated by the Company) of
all
of the following prior to the time when the Option or such portion thereof
becomes unexercisable under Section 3.3 hereof:
(a) An
Exercise Notice in a form specified by the Administrator, stating that the
Option or portion thereof is thereby exercised, such notice complying with
all
applicable rules established by the Administrator;
(b) The
receipt by the Company of full payment for the shares of Stock with respect
to
which the Option or portion thereof is exercised, including payment of any
applicable withholding tax, which may be in one or more of the forms of
consideration permitted under Section 4.4 hereof;
(c) Any
other
written representations as may be required in the Administrator’s reasonable
discretion to evidence compliance with the Securities Act or any other
applicable law rule, or regulation; and
(d) In
the
event the Option or portion thereof shall be exercised pursuant to
Section 4.1 hereof by any person or persons other than the Participant,
appropriate proof of the right of such person or persons to exercise the
Option.
Notwithstanding
any of the foregoing, the Company shall have the right to specify all conditions
of the manner of exercise, which conditions may vary by country and which may
be
subject to change from time to time.
4.4 Method
of Payment. Payment of the exercise price shall be by any of the
following, or a combination thereof, at the election of the
Participant:
(a) Cash;
(b) Check;
(c) Delivery
of a notice that the Participant has placed a market sell order with a broker
with respect to shares of Stock then issuable upon exercise of the Option,
and
that the broker has been directed to pay a sufficient portion of the net
proceeds of the sale to the Company in satisfaction of the aggregate exercise
price; provided, that payment of such proceeds is then made to the
Company upon settlement of such sale;
(d) With
the
consent of the Administrator, surrender of other shares of Stock which (A)
in
the case of shares of Stock acquired from the Company, have been owned by the
Participant for more than six (6) months on the date of surrender, and (B)
have
a Fair Market Value on the date of surrender equal to the aggregate exercise
price of the shares of Stock with respect to which the Option or portion thereof
is being exercised;
(e) With
the
consent of the Administrator, surrendered shares of Stock issuable upon the
exercise of the Option having a Fair Market Value on the date of exercise equal
to the aggregate exercise price of the shares of Stock with respect to which
the
Option or portion thereof is being exercised; or
(f) With
the
consent of the Administrator, property of any kind which constitutes good and
valuable consideration.
4.5 Conditions
to Issuance of Stock Certificates. The shares of Stock
deliverable upon the exercise of the Option, or any portion thereof, may be
either previously authorized but unissued shares of Stock or issued shares
of
Stock which have then been reacquired by the Company. Such shares of
Stock shall be fully paid and nonassessable. The Company shall not be
required to issue or deliver any shares of Stock purchased upon the exercise
of
the Option or portion thereof prior to fulfillment of all of the following
conditions:
(a) The
admission of such shares of Stock to listing on all stock exchanges on which
such Stock is then listed;
(b) The
completion of any registration or other qualification of such shares of Stock
under any state or federal law or under rulings or regulations of the Securities
and Exchange Commission or of any other governmental regulatory body, which
the
Administrator shall, in its absolute discretion, deem necessary or
advisable;
(c) The
obtaining of any approval or other clearance from any state or federal
governmental agency which the Administrator shall, in its absolute discretion,
determine to be necessary or advisable;
(d) The
receipt by the Company of full payment for such shares of Stock, including
payment of any applicable withholding tax, which may be in one or more of the
forms of consideration permitted under Section 4.4 hereof; and
(e) The
lapse
of such reasonable period of time following the exercise of the Option as the
Administrator may from time to time establish for reasons of administrative
convenience.
4.6 Rights
as Stockholder. The holder of the Option shall not be, nor have
any of the rights or privileges of, a stockholder of the Company in respect
of
any shares of Stock purchasable upon the exercise of any part of the Option
unless and until such shares of Stock shall have been issued by the Company
to
such holder (as evidenced by the appropriate entry on the books of the Company
or of a duly authorized transfer agent of the Company). No adjustment
will be made for a dividend or other right for which the record date is prior
to
the date the shares of Stock are issued, except as provided in Section 12.1
of
the Plan.
ARTICLE
V.
OTHER
PROVISIONS
5.1 Administration. The
Administrator 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, amend or revoke any
such
rules. All actions taken and all interpretations and determinations
made by the Administrator in good faith shall be final and binding upon
Participant, the Company and all other interested persons. No member
of the Committee or the Board shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan,
this Agreement or the Option.
5.2 Option
Not Transferable.
(a) Subject
to Section 5.2(b) hereof, the Option
may
not be sold, pledged, assigned or transferred in any manner other than by will
or the laws of descent and distribution, unless and until the shares of Stock
underlying the Option have been issued, and all restrictions applicable to
such
shares of Stock have lapsed. Neither the Option nor any interest or
right therein shall be liable for the debts, contracts or engagements of
Participant or his or her successors in interest or shall be subject to
disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition be voluntary or
involuntary or by operation of law by judgment, levy, attachment, garnishment
or
any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except
to
the extent that such disposition is permitted by the preceding
sentence.
(b) Notwithstanding
any other provision in this Agreement, with the consent of the Administrator
and
to the extent the Option is not intended to qualify as an Incentive Stock
Option, the Participant may transfer the Option (or any portion thereof) to
any
one or more Permitted Transferees (as defined below), subject to the following
terms and conditions: (i) any portion of the Option transferred to a
Permitted Transferee shall not be assignable or transferable by the Permitted
Transferee other than by will or the laws of descent and distribution or to
another Permitted Transferee; (ii) any portion of the Option which is
transferred to a Permitted Transferee shall continue to be subject to all the
terms and conditions of the Option as applicable to the Participant (other
than
the ability to further transfer the Option); and (iii) the Participant and
the
Permitted Transferee shall execute any and all documents requested by the
Administrator, including, without limitation documents to (A) confirm the status
of the transferee as a Permitted Transferee, (B) satisfy any requirements for
an
exemption for the transfer under applicable federal and state securities laws
and (C) evidence the transfer. For purposes of this Section 5.2(b),
“Permitted Transferee” shall mean, with respect to a
Participant, any child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships, any person sharing the Participant’s household (other
than a tenant or employee), a trust in which these persons (or the Participant)
control the management of assets, and any other entity in which these persons
(or the Participant) own more than fifty percent of the voting interests, or
any
other transferee specifically approved by the Administrator after taking into
account any state or federal tax or securities laws applicable to transferable
Options.
(c) Unless
transferred to a Permitted Transferee in accordance with Section 5.2(b) hereof,
during the lifetime of Participant, only Participant may exercise the Option
or
any portion thereof. Subject to such conditions and procedures as the
Administrator may require, a Permitted Transferee may exercise the Option or
any
portion thereof during Participant’s lifetime. After the death of
Participant, any exercisable portion of the Option may, prior to the time when
the Option becomes unexercisable under Section 3.3 hereof, be exercised by
Participant’s personal representative or by any person empowered to do so under
the deceased Participant’s will or under the then applicable laws of descent and
distribution.
5.3 Adjustments. The
Participant acknowledges that the Option is subject to modification and
termination in certain events as provided in this Agreement and Article 12
of
the Plan.
5.4 Notices. Any
notice to be given under the terms of this Agreement to the Company shall be
addressed to the Company in care of the Secretary of the Company at the
address given beneath the signature of the Company’s authorized officer on the
Grant Notice, and any notice to be given to Participant shall be addressed
to
Participant at the address given beneath Participant’s signature on the Grant
Notice. By a notice given pursuant to this Section 5.4, either party
may hereafter designate a different address for notices to be given to that
party. Any notice which is required to be given to Participant shall,
if Participant is then deceased, be given to the person entitled to exercise
his
or her Option pursuant to Section 4.1 hereof by written notice under this
Section 5.4. Any notice shall be deemed duly given when sent via
email or when sent by certified mail (return receipt requested) and deposited
(with postage prepaid) in a post office or branch post office regularly
maintained by the United States Postal Service.
5.5 Titles. Titles
are provided herein for convenience only and are not to serve as a basis for
interpretation or construction of this Agreement.
5.6 Governing
Law; Severability. The laws of the State of Delaware shall govern
the interpretation, validity, administration, enforcement and performance of
the
terms of this Agreement regardless of the law that might be applied under
principles of conflicts of laws.
5.7 Conformity
to Securities Laws. The Participant acknowledges that the Plan
and this Agreement are intended to conform to the extent necessary with all
provisions of the Securities Act and the Exchange Act and any and all
regulations and rules promulgated by the Securities and Exchange Commission
thereunder, and state securities laws and regulations. Notwithstanding
anything herein to the contrary, the Plan shall be administered, and the Option
is granted and may be exercised, only in such a manner as to conform to such
laws, rules and regulations. To the extent permitted by applicable law,
the Plan and this Agreement shall be deemed amended to the extent necessary
to
conform to such laws, rules and regulations.
5.8 Amendments, Suspension
and Termination. To the extent permitted by the Plan,
this Agreement may be wholly or partially amended or otherwise modified,
suspended or terminated at any time or from time to time by the Committee or
the
Board, provided, that, except as may otherwise be provided by the Plan,
no amendment, modification, suspension or termination of this Agreement shall
adversely effect the Option in any material way without the prior written
consent of the Participant.
5.9 Successors
and Assigns. The Company may assign any of its rights under this
Agreement to single or multiple assignees, and this Agreement shall inure to
the
benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth in Section 5.2 hereof, this Agreement
shall be binding upon Participant and his or her heirs, executors,
administrators, successors and assigns.
5.10 Notification
of Disposition. If this Option is designated as an Incentive
Stock Option, Participant shall give prompt notice to the Company of any
disposition or other transfer of any shares of Stock acquired under this
Agreement if such disposition or transfer is made (a) within two years from
the
Grant Date with respect to such shares of Stock or (b) within one year after
the
transfer of such shares of Stock to the Participant. Such notice
shall specify the date of such disposition or other transfer and the amount
realized, in cash, other property, assumption of indebtedness or other
consideration, by Participant in such disposition or other
transfer.
5.11 Limitations
Applicable to Section 16 Persons. Notwithstanding any other
provision of the Plan or this Agreement, if Participant is subject to Section
16
of the Exchange Act, the Plan, the Option and this Agreement shall be subject
to
any additional limitations set forth in any applicable exemptive rule under
Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the
Exchange Act) that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, this Agreement shall
be deemed amended to the extent necessary to conform to such applicable
exemptive rule.
5.12 Not
a
Contract of Employment. Nothing in this Agreement or in the Plan
shall confer upon the Participant any right to continue to serve as an employee
or other service provider of the Company or any of its
Subsidiaries.
5.13 Entire
Agreement. The Plan, the Grant Notice and this Agreement
(including all Exhibits thereto) constitute the entire agreement of the parties
and supersede in their entirety all prior undertakings and agreements of the
Company and Participant with respect to the subject matter hereof.
5.14 Section
409A. Notwithstanding any other provision of the Plan,
this Agreement or the Grant Notice, the Plan, this Agreement and
the Grant Notice shall be interpreted in accordance with, and incorporate
the terms and conditions required by, Section 409A of the U.S. Internal Revenue
Code of 1986, as amended (together with any Department of Treasury regulations
and other interpretive guidance issued thereunder, including without limitation
any such regulations or other guidance that may be issued after the date hereof,
“Section 409A”). The Committee may, in its
discretion, adopt such amendments to the Plan, this Agreement or
the Grant Notice or adopt other policies and procedures (including
amendments, policies and procedures with retroactive effect), or take any other
actions, as the Committee determines are necessary or appropriate to comply
with
the requirements of Section 409A.