KLA-Tencor Corporation
2004 EQUITY INCENTIVE PLAN
RESTRICTED STOCK UNIT AGREEMENT
FOR NON-U.S. EMPLOYEES
Prior to the relevant taxable event, the Company will withhold a portion of the vested RSUs that have an aggregate Fair Market Value sufficient to pay the Tax-Related Items. The number of Shares withheld pursuant to the prior sentence will be rounded up to the nearest whole Share, with no cash payment due the Employee for the value of any Share withheld in excess of the Tax-Related Items as a result of such rounding. If the date of the relevant taxable event (e.g., the date upon which the RSUs vest, in whole or in part) occurs on a day on which the established stock exchange on which the Company's Common Stock is traded (including without limitation the NASDAQ Global Select Market or the NASDAQ Global Market) is not open for trading, the Fair Market Value for purposes of calculating the portion of the vested RSUs to be withheld pursuant to this paragraph 9 (i.e., the deemed Fair Market Value of the Company's Common Stock on the date of such taxable event) shall be equal to the closing sales price for the Company's Common Stock as quoted on such stock exchange on the market trading day immediately prior to such taxable event. Alternatively, the Company, in its sole discretion, may require or otherwise permit the Employee to make alternate arrangements satisfactory to the Company for such Tax-Related Items. In addition, the Company and/or the Employer has the right to satisfy any Tax-Related Items that the Company determines cannot be satisfied through the withholding of otherwise deliverable Shares by one or a combination of the following: (i) retaining without notice from salary or other amounts payable to the Employee, cash having a sufficient value to satisfy any Tax-Related Items; or (ii) arranging for the sale of Shares otherwise deliverable to the Employee (on the Employee's behalf and at the Employee's direction pursuant to this authorization).
To avoid negative accounting treatment, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding amounts or other applicable withholding rates. If the obligation for Tax-Related Items is satisfied by withholding a number of Shares as described herein, the Employee shall be deemed, for tax purposes, to have been issued the full number of Shares subject to the vested portion of the Award, notwithstanding that a number of Shares are held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of the Award. By accepting this RSU award, the Employee expressly consents to the withholding or sale of Shares and to any additional cash withholding as provided for in this paragraph 9. Notwithstanding any contrary provision of this Agreement, no Shares will be issued unless and until satisfactory arrangements (as determined by the Company) have been made by the Employee with respect to the payment of any Tax-Related Items.
For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this RSU award or this Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of California and agree that such litigation shall be conducted only in the courts of Santa Clara County, California, or the federal courts for the United States for the Northern District of California, and no other courts, where this RSU award is made and/or to be performed.
The Employee understands that the Company and the Employer may hold certain personal information about him or her, including, but not limited to the Employee's name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all RSUs or any other entitlement to shares of stock awarded, canceled, vested, unvested or outstanding in the Employee's favor, for the exclusive purpose of implementing, administering and managing the Plan ("Data").
The Employee understands that Data will be transferred to any third parties assisting the Company with the implementation, administration and management of the Plan. The Employee understands the recipients of the Data may be located in his or her country, in the United States or elsewhere, and that the recipients' country may have different data privacy laws and protections than his or her country. The Employee understands that he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. The Employee authorizes the Company and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing the Employee's participation in the Plan. The Employee understands that Data will be held only as long as is necessary to implement, administer and manage his or her participation in the Plan. The Employee understands that he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative. The Employee understands, however, that refusing or withdrawing such consent may affect his or her ability to participate in the Plan. For more information on the consequences of his or her refusal to consent or withdrawal of consent, the Employee understands that he or she may contact his or her local human resources representative.
APPENDIX
KLA-TENCOR CORPORATION
2004 EQUITY INCENTIVE PLAN
RESTRICTED STOCK UNIT AGREEMENT
FOR NON-U.S. EMPLOYEES
This Appendix includes special terms and conditions that govern the RSUs granted to the Employee if the Employee resides in the countries contained herein at the time of grant, the time of vesting, or any other applicable date. Capitalized terms used but not defined herein shall have the meanings assigned to them in the Restricted Stock Unit Award Notification, the Agreement (of which this Appendix is a part) and the Plan.
This Appendix may also include information regarding exchange controls and certain other issues of which the Employee should be aware with respect to the Employee's participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective countries as of June 2008. Such laws are often complex and change frequently. As a result, the Company strongly recommends that the Employee not rely on the information noted herein as the only source of information relating to the consequences of the Employee's participation in the Plan because the information may be out of date at the time the Employee acquires Shares or sells Shares he or she acquires under the Plan.
In addition, the information is general in nature and may not apply to the Employee's particular situation, and the Company is not in a position to assure the Employee of any particular result. Accordingly, the Employee is strongly advised to seek appropriate professional advice as to how the relevant laws in the Employee's country apply to his or her specific situation.
If the Employee is a citizen or resident of another country, or is considered a resident of another country for local law purposes, the information contained in this Appendix may not be applicable to him or her.
Belgium
No country-specific terms apply.
China
Exchange Control Notice
The Employee understands and agrees that, due to exchange control laws in China, he or she may be required to immediately repatriate the proceeds from the sale of Shares and any dividends received in relation to the Shares to China. The Employee further understands that such repatriation of proceeds and dividends may need to be effected through a special foreign exchange account established by the Company or a Subsidiary and the Employee hereby consents and agrees that the proceeds from the sale of Shares and any dividends received may be transferred to such special account prior to being delivered to his or her personal account.
Furthermore, to facilitate compliance with any applicable laws or regulations in China, the Employee agrees and acknowledges that, if on any vesting date of RSUs issued hereunder the Company determines (in its sole discretion) that it is not feasible under applicable Chinese exchange control laws for the Company to issue shares of the Company's common stock to employees residing in China, the Company (or a brokerage firm instructed by the Company) is entitled to immediately sell all Shares issuable to the Employee upon such vesting date (on the Employee's behalf and at the Employee's direction pursuant to this authorization). In this event, the proceeds of the sale of such Shares, less any Tax-Related Items and broker's fees or commissions, will be remitted to the Employee in accordance with applicable exchange control laws and regulations.
In addition, please note that exchange control restrictions may limit the Employee's ability to access and/or convert funds received under the Plan, particularly if these amounts exceed U.S. $50,000. The Employee should confirm the procedures and requirements for withdrawals and conversions of foreign currency with his or her local bank prior to the vesting of the RSUs/sale of the Shares.
Germany
No country-specific terms apply.
Hong Kong
Securities Law Notice
The grant of RSUs and the Shares issued upon vesting of the RSUs do not constitute a public offer of securities and are available only to Employees.
Please be aware that the contents of the Agreement, including this Appendix, and the Plan have not been reviewed by any regulatory authority in Hong Kong. The Employee is advised to exercise caution in relation to the RSU award. If the Employee is in any doubt about any of the contents of this Agreement, including this Appendix, or the Plan, the Employee should obtain independent professional advice.
India
Fringe Benefit Tax
By accepting the grant of RSUs, the Employee consents and agrees to assume any and all liability for fringe benefit tax that may be payable by the Company and/or the Employer in connection with the Plan at the discretion of the Company or the Employer. The Employee further understands that the grant of RSUs is contingent upon his or her agreement to assume liability for fringe benefit tax payable on the RSUs.
Further, by accepting the grant of the RSUs, the Employee agrees that the Company and/or the Employer may collect the fringe benefit tax from him or her by any of the means set forth in the Withholding of Taxes paragraph of the Agreement or any other reasonable method established by the Company. The Employee also agrees to execute any other consents or elections required to accomplish the foregoing, promptly upon request by the Company or the Employer.
Exchange Control Notice
To the extent required by law, the Employee must repatriate to India foreign exchange which is due or has accrued (either by way of dividend or sales proceeds) and convert such amounts to local currency within a reasonable period of time (but not later than 90 days after receipt). If required by law, the Employee must also obtain evidence of the repatriation of funds in the form of a foreign inward remittance certificate ("FIRC") from the bank where the Employee deposited the foreign currency and the Employee must deliver a copy of the FIRC to his or her employer.
Since exchange control regulations can change frequently and without notice, the Employee should consult his or her personal legal advisor before selling Shares to ensure compliance with current regulations. It is the Employee's responsibility to comply with exchange control laws in India, and neither the Company nor the Employer will be liable for any fines or penalties resulting from the Employee's failure to comply with applicable local laws.
Ireland
Restriction on Type of Shares Issued to Directors
If the Employee is a director or shadow director of an Irish Subsidiary, his or her RSUs will be paid in newly issued Shares only. In no event will the RSUs be settled in treasury Shares.
Director Notification Requirement
If the Employee is a director, shadow director or secretary of an Irish Subsidiary, he or she must notify the Irish Subsidiary in writing within five business days of receiving or disposing of an interest in the Company or any Subsidiary (e.g., RSUs, Shares, etc.), or within five business days of becoming aware of the event giving rise to the notification requirement, or within five business days of becoming a director or secretary if such an interest exists at the time. This notification requirement also applies with respect to the interests of a spouse or minor children (whose interests will be attributed to the director, shadow director or secretary).
Israel
Sales through Trustee
To facilitate compliance with tax withholding obligations in Israel, the Employee agrees and acknowledges that the Company (or a brokerage firm instructed by the Company) is entitled to immediately transfer all Shares issued to the Employee at vesting (on the Employee's behalf and at the Employee's direction pursuant to this authorization) to a Trustee in Israel. The Trustee in Israel will withhold taxes (to the extent applicable) on the sale of Shares issued to the Employee from vested RSUs. Further, upon any sale of the Shares issued to the Employee (which Shares shall be sold through the Trustee), the proceeds of such sale of the Shares, less any Tax-Related Items and broker's fees or commissions, will be remitted to the Employee.
Italy
Data Privacy
The following paragraphs replace in its entirety paragraph 26 of the Agreement:
26. Data Privacy. The Employee hereby explicitly and unambiguously consents to the collection, use, processing and transfer, in electronic or other form, of the Employee's personal data as described in this section of the Appendix by and among, as applicable, the Employer, the Company and its Subsidiaries for the exclusive purpose of implementing, administering and managing the Employee's participation in the Plan.
The Employee understands that the Company and the Employer may hold certain personal information about the Employee, including, but not limited to, the Employee's name, home address and telephone number, date of birth, social insurance or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all RSUs or any other entitlement to shares of stock awarded, canceled, vested, unvested or outstanding in the Employee's favor, for the exclusive purpose of implementing, managing and administering the Plan ("Data").
The Employee also understands that providing the Company with Data is necessary for the performance of the Plan and that the Employee's refusal to provide such Data would make it impossible for the Company to perform its contractual obligations and may affect the Employee's ability to participate in the Plan. The Controller of personal data processing is KLA-Tencor Corporation, 160 Rio Robles, San Jose, California 95134, and, pursuant to Legislative Decree no. 196/2003, its representative in Italy is KLA-Tencor Italy S.R.L.
The Employee understands that Data will not be publicized, but it may be transferred to banks, other financial institutions or brokers involved in the management and administration of the Plan. The Employee further understands that KLA-Tencor Corporation and/or any Subsidiary will transfer Data among themselves as necessary for the purpose of implementing, administering and managing the Employee's participation in the Plan, and that the Company may further transfer Data to third parties assisting the Company in the implementation, administration and management of the Plan, including any requisite transfer of Data to a broker or other third party with whom the Employee may elect to deposit any Shares acquired under the Plan. Such recipients may receive, possess, use, retain and transfer Data in electronic or other form, for the purposes of implementing, administering and managing the Employee's participation in the Plan. The Employee understands that these recipients may be located in or outside the European Economic Area, such as in the United States or elsewhere. Should the Company exercise its discretion in suspending all necessary legal obligations connected with the management and administration of the Plan, it will delete Data as soon as it has accomplished all the necessary legal obligations connected with the management and administration of the Plan.
The Employee understands that Data processing related to the purposes specified above shall take place under automated or non-automated conditions, anonymously when possible, that comply with the purposes for which Data is collected and with confidentiality and security provisions as set forth by applicable laws and regulations, with specific reference to Legislative Decree no. 196/2003.
The processing activity, including communication, the transfer of Data abroad, including outside of the European Economic Area, as herein specified and pursuant to applicable laws and regulations, does not require the Employee's consent thereto as the processing is necessary to performance of contractual obligations related to implementation, administration and management of the Plan. The Employee understands that, pursuant to Section 7 of the Legislative Decree no. 196/2003, the Employee has the right to, including but not limited to, access, delete, update, correct or stop, for legitimate reason, the Data processing. Furthermore, the Employee is aware that Data will not be used for direct marketing purposes. In addition, Data provided can be reviewed and questions or complaints can be addressed by contacting the Employee's local human resources representative.
Plan Document Acknowledgment
In accepting the RSU award, the Employee acknowledges that he or she has received a copy of the Plan and the Agreement and has reviewed the Plan and the Agreement, including this Appendix, in their entirety and fully understands and accepts all provisions of the Plan and the Agreement, including this Appendix.
The Employee further acknowledges that he or she has read and specifically and expressly approves the following paragraphs of the Agreement: Withholding of Taxes; No Effect on Employment; Notice of Governing Law and Venue; Acknowledgment of Nature of Plan and Award; Language; and the Data Privacy section included in this Appendix.
Japan
No country-specific terms apply.
Korea
Exchange Control Notice
If the Employee realizes U.S. $500,000 or more from the sale of Shares, the Employee must repatriate the proceeds to Korea within eighteen months of the sale.
Malaysia
Notification Requirements
If the Employee is a director of a Subsidiary or other related company in Malaysia, the Employee is subject to certain notification requirements under the Malaysian Companies Act, 1965. Among these requirements is an obligation to notify the Malaysian Subsidiary in writing when the Employee receives an interest (e.g., RSUs, Shares) in the Company or any related companies. In addition, the Employee must notify the Malaysian Subsidiary when the Employee sells Shares of the Company or any related company (including when the Employee sells Shares acquired under the Plan). These notifications must be made within fourteen days of acquiring or disposing of any interest in the Company or any related company.
Netherlands
Securities Law Notice
The Employee should be aware of Dutch insider trading rules which may impact the sale of Shares acquired under the Plan. In particular, the Employee may be prohibited from effecting certain transactions if he or she has insider information regarding the Company.
By accepting the RSU award, the Employee acknowledges having read and understood this Securities Law Notice and the Employee further acknowledges that it is the Employee's responsibility to comply with the following Dutch insider trading rules.
Under Article 46 of the Act on the Supervision of the Securities Trade 1995, anyone who has "insider information" related to an issuing company is prohibited from effectuating a transaction in securities in or from the Netherlands. "Inside information" is defined as knowledge of details concerning the issuing company to which the securities relate that is not public and which, if published, would reasonably be expected to affect the stock price, regardless of the development of the price. The insider could be any Employee of the Company or any Subsidiary in the Netherlands who has inside information as described herein.
Given the broad scope of the definition of inside information, certain Employees of the Company working at a Subsidiary in the Netherlands (including an Employee pursuant to the Plan) may have inside information and, thus, would be prohibited from effectuating a transaction in securities in the Netherlands at a time when the Employee had such inside information.
Singapore
Securities Law Notice
The grant of the RSUs is being made on a private basis and is, therefore, exempt from registration in Singapore.
Director Notification
If the Employee is a director, associate director or shadow director of a Singapore Subsidiary, the Employee is subject to certain notification requirements under the Singapore Companies Act, regardless of whether the Employee is a Singapore resident or employed in Singapore. Among these requirements is the obligation to notify the Singapore Subsidiary in writing when the Employee receives an interest (e.g., RSUs, Shares) in the Company or its Subsidiaries. In addition, the Employee must notify the Singapore Subsidiary when the Employee sells shares of the Company or any Subsidiary (including when the Employee sells Shares acquired under the Plan). These notifications must be made within two days of acquiring or disposing of any interest in the Company or any Subsidiary. In addition, a notification must be made of the Employee's interests in the Company or any Subsidiary within two days of becoming a director, associate director or shadow director.
Taiwan
Exchange Control Notice
If the Employee is a resident of Taiwan (including an expatriate holding an Alien Resident Certificate), he or she may acquire foreign currency and remit the same out of or into Taiwan up to U.S. $5,000,000 per year without justification. If the Employee is an expatriate employee who does not have an Alien Resident Certificate, he or she may remit into Taiwan and convert to local currency up to U.S. $100,000 at each remittance with no annual limitation.
United Kingdom
Withholding of Taxes
The following paragraphs replace in its entirety paragraph 9 of the Agreement:
9. Withholding of Taxes. Regardless of any action the Company and/or the Subsidiary employing or retaining the Employee (the "Employer") take with respect to any or all income tax, primary and secondary Class 1 National Insurance contributions, payroll tax or other tax-related withholding attributable to or payable in connection with the Employee's participation in the Plan and legally applicable to the Employee or deemed by the Company or the Employer to be an appropriate charge to the Employee even if technically due by the Company of the Employer ("Tax-Related Items"), the Employee acknowledges that the ultimate liability for all Tax-Related Items is and remains the Employee's responsibility and may exceed the amount actually withheld by the Company or the Employer. The Employee further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including the grant or vesting of the RSUs, the subsequent sale of any Shares acquired upon vesting and the receipt of any dividends or dividend equivalents; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Award to reduce or eliminate the Employee's liability for Tax-Related Items or to achieve any particular tax result. Further, if the Employee becomes subject to tax in more than one jurisdiction between the date of grant and the date of any relevant taxable event, the Employee acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction. The Company and/or the Employer hereby reserve the right to calculate the Tax-Related Items to be withheld or accounted for in accordance with this Paragraph 9 by reference to the applicable rates in any jurisdiction without prejudice to any right the Employee may have to recover any overpayment from the relevant tax authorities.
As a condition of the issuance of Shares upon vesting of the RSUs, the Company and/or the Employer shall be entitled to withhold and the Employee agrees to pay, or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy, all obligations of the Company and/or the Employer to account to HM Revenue & Customs ("HMRC") for any Tax-Related Items. In this regard, the Company will withhold a portion of the vested RSUs that have an aggregate Fair Market Value sufficient to pay the Tax-Related Items. The number of Shares withheld pursuant to the prior sentence will be rounded up to the nearest whole Share, with no cash payment due the Employee for the value of any Share withheld in excess of the Tax-Related Items as a result of such rounding. If the date of the relevant taxable event (e.g., the date upon which the RSUs vest, in whole or in part) occurs on a day on which the established stock exchange on which the Company's Common Stock is traded (including without limitation the NASDAQ Global Select Market or the NASDAQ Global Market) is not open for trading, the Fair Market Value for purposes of calculating the portion of the vested RSUs to be withheld pursuant to this paragraph 9 (i.e., the deemed Fair Market Value of the Company's Common Stock on the date of such taxable event) shall be equal to the closing sales price for the Company's Common Stock as quoted on such stock exchange on the market trading day immediately prior to such taxable event. Alternatively, the Company, in its sole discretion, may require or otherwise permit the Employee to make alternate arrangements satisfactory to the Company for such Tax-Related Items. In addition, the Company and/or the Employer has the right to satisfy any Tax-Related Items that the Company determines cannot be satisfied through the withholding of otherwise deliverable Shares by one or a combination of the following: (i) retaining without notice from salary or other amounts payable to the Employee, cash having a sufficient value to satisfy any Tax-Related Items; or (ii) arranging for the sale of Shares otherwise deliverable to the Employee (on the Employee's behalf and at the Employee's direction pursuant to this authorization).
To avoid negative accounting treatment, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding amounts or other applicable withholding rates. If the obligation for Tax-Related Items is satisfied by withholding a number of Shares as described herein, the Employee shall be deemed, for tax purposes, to have been issued the full number of Shares subject to the vested portion of the Award, notwithstanding that a number of Shares are held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of the Award. By accepting this RSU award, the Employee expressly consents to the withholding or sale of Shares and to any additional cash withholding as provided for in this paragraph 9.
The Employee shall pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to account to HMRC with respect to the event giving rise to the Tax-Related Items (the "Chargeable Event") that cannot be satisfied by the means previously described. If payment or withholding is not made within 90 days of the Chargeable Event or such other period as required under U.K. law (the "Due Date"), the Employee agrees that the amount of any uncollected Tax-Related Items shall (assuming the Employee is not a director or executive officer of the Company (within the meaning of Section 13(k) of the U.S. Securities and Exchange Act of 1934, as amended)), constitute a loan owed by the Employee to the Employer, effective on the Due Date. The Employee agrees that the loan will bear interest at the then-current HMRC Official Rate and it will be immediately due and repayable, and the Company and/or the Employer may recover it at any time thereafter by any of the means referred to above. If any of the foregoing methods of collection are not allowed under applicable laws or if the Employee fails to comply with the Employee's obligations in connection with the Tax-Related Items as described in this paragraph 9, the Company may refuse to deliver the Shares acquired under the Plan.
Joint Election
As a condition of the Employee's participation in the Plan and the vesting of the RSUs, the Employee agrees to accept any liability for secondary Class 1 national insurance contributions (the "Employer's Liability") which may be payable by the Company and/or the Employer in connection with the RSUs and any event giving rise to Tax-Related Items. To accomplish the foregoing, the Employee agrees to execute a joint election with the Company (the "Election"), the form of such Election being formally approved by HMRC, and any other consent or elections required to accomplish the transfer of the Employer's Liability to the Employee. The Employee further agrees to execute such other joint elections as may be required between the Employee and any successor to the Company and/or the Employer. If the Employee does not enter into the Election prior to the vest date of the RSU award, or if the Election is revoked at any time by HMRC, the RSUs will cease vesting and become null and void, and no Shares will be acquired under the Plan, without any liability to the Company, the Employer and/or any Subsidiary. The Employee further agrees that the Company and/or the Employer may collect the Employer's Liability by any of the means set forth in the Withholding of Taxes section of this Appendix.