Exhibit 10.1

AXT, INC.

EXECUTIVE INCENTIVE PLAN

1. Purposes of the Plan. The Plan is intended to increase shareholder value and
the success of the Company by motivating Employees to (a) perform to the best of
their abilities, and (b) achieve the Company’s objectives.

2. Definitions.

(a) “Actual Award”  means as to any Performance Period, the actual award (if
any) payable to a Participant for the Performance Period, subject to the
Committee’s authority under Section 3(d) to modify the award.

(b) “Affiliate” means any corporation or other entity (including, but not
limited to, partnerships and joint ventures) controlled by the Company.

(c) “Board” means the Board of Directors of the Company. 

(d) “Bonus Pool” means the pool of funds available for distribution to
Participants.  Subject to the terms of the Plan, the Committee establishes the
Bonus Pool for each Performance Period.

(e) “Code” means the Internal Revenue Code of 1986, as amended.  Reference to a
specific section of the Code or regulation thereunder will include such section
or regulation, any valid regulation promulgated thereunder, and any comparable
provision of any future legislation or regulation amending, supplementing or
superseding such section or regulation.

(f) “Committee” means the committee appointed by the Board (pursuant to
Section 5) to administer the Plan.  Unless and until the Board otherwise
determines, the Board’s Compensation Committee will administer the Plan and be
considered the Committee for purposes of the Plan. 

(g) “Company” means AXT, Inc., a Delaware corporation, or any successor thereto.

(h) “Employee” means any executive, officer, or key employee of the Company or
of an Affiliate, whether such individual is so employed at the time the Plan is
adopted or becomes so employed subsequent to the adoption of the Plan.

(i) “Fiscal Year” means the fiscal year of the Company.

(j) “Participant” means as to any Performance Period, an Employee who has been
selected by the Committee for participation in the Plan for that Performance
Period.

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(k) “Performance Period” means the period of time for the measurement of the
performance criteria that must be met to receive an Actual Award, as determined
by the Committee in its sole discretion.  A Performance Period may be divided
into one or more shorter periods if, for example, but not by way of limitation,
the Committee desires to measure some performance criteria over 12 months and
other criteria over three months.

(l) “Plan” means this Executive Incentive Plan, as set forth in this instrument
(including any appendix attached hereto) and as hereafter amended from time to
time.

(m) “Target Award” means the target award, at 100% target level of achievement,
payable under the Plan to a Participant for the Performance Period, as
determined by the Committee in accordance with Section 3(b).

3. Selection of Participants and Determination of Awards.  

(a) Selection of Participants.  The Committee, in its sole discretion, will
select the Employees who will be Participants for any Performance
Period.  Participation in the Plan is in the sole discretion of the Committee,
on a Performance Period by Performance Period basis.  Accordingly, an Employee
who is a Participant for a given Performance Period in no way is guaranteed or
assured of being selected for participation in any subsequent Performance Period
or Periods. 

(b) Determination of Target Awards.  The Committee, in its sole discretion, will
establish a Target Award for each Participant, which may be a percentage of a
Participant’s annual base salary as of the beginning or end of the Performance
Period, a fixed dollar amount, or such other amount or based on such other
formula as the Committee determines. 

(c) Bonus Pool.  Each Performance Period, the Committee, in its sole discretion,
will establish a Bonus Pool, which pool may be established before, during or
after the applicable Performance Period.  Actual Awards will be paid from the
Bonus Pool. 

(d) Discretion to Modify Awards.  Notwithstanding any contrary provision of the
Plan, the Committee may, in its sole discretion and at any time, (i) increase,
reduce or eliminate a Participant’s Actual Award, and/or (ii) increase, reduce
or eliminate the amount allocated to the Bonus Pool.  The Actual Award may be
below, at or above the Target Award, in the Committee’s discretion.  The
Committee may determine the amount of any increase, reduction, or elimination on
the basis of such factors as it deems relevant, and will not be required to
establish any allocation or weighting with respect to the factors it considers. 

(e) Discretion to Determine Criteria.  Notwithstanding any contrary provision of
the Plan, the Committee will, in its sole discretion, determine the performance
goals applicable to any Target Award which may include, without limitation:
(i) attainment of research and development milestones, (ii) bookings,
(iii) business divestitures and acquisitions, (iv) cash flow, (v) cash position,
(vi) contract awards or backlog, (vii) customer quality and support;
(viii) customer-related measures, (ix) customer retention rates from an acquired
company, business unit or division, (x) earnings (which may include earnings
before interest, taxes, depreciation and

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amortization, earnings before taxes and net earnings), (xi) earnings per share,
(xii) expenses, (xiii) gross margin, (xiv) gross profit, (xv) growth in
stockholder value relative to the moving average of the Nasdaq Composite Index
or another index, (xvi) internal rate of return, (xvii) inventory turns,
(xviii) inventory levels, (xix) market share, (xx)  net income, (xxi) net
profit, (xxii) net sales, (xxiii) new product development, (xxiv) new product
invention or innovation, (xxv) number of customers, (xxvi) operating cash flow,
(xxvii) operating expenses, (xxviii) operating income, (xxix) operating margin,
(xxx) overhead or other expense reduction, (xxxi) product defect measures,
(xxxii) product innovation, (xxxiii) product release timelines, (xxxiv) product
quality, (xxxv) productivity, (xxxvi) profit, (xxxvii) return on assets,
(xxxviii) return on capital, (xxxix) return on equity, (xl) return on
investment, (xli) return on sales, (xlii)  revenue, (xliii) revenue growth,
(xliv) sales results, (xlv) sales growth, (xlvi) stock price, (xlvii) time to
market, (xlviii) total stockholder return, (xlix) working capital, and
(l) individual objectives such as MBOs, peer reviews or other subjective or
objective criteria.  As determined by the Committee, the performance goals may
be based on generally accepted accounting principles (“GAAP”) or non-GAAP
results and any actual results may be adjusted by the Committee for one-time
items, unbudgeted or unexpected items and/or payments of Actual Awards under the
Plan when determining whether the performance goals have been met.  The goals
may be on the basis of any factors the Committee determines to be relevant, and
may be on an individual, divisional, business unit or Company-wide basis.  The
performance goals may differ from Participant to Participant and from award to
award.  Failure to meet the goals will result in a failure to earn the Target
Award, except as provided in Section 3(d). 

4. Payment of Awards.

(a) Right to Receive Payment.  Each Actual Award will be paid solely from the
general assets of the Company.  Nothing in this Plan will be construed to create
a trust or to establish or evidence any Participant’s claim of any right other
than as an unsecured general creditor with respect to any payment to which he or
she may be entitled. 

(b) Timing of Payment.  Payment of each Actual Award shall be made as soon as
practicable after the end of the Performance Period to which the Actual Award
relates and after the Actual Award is approved by the Committee, but in no event
later than (i) the 15th day of the third month of the Fiscal Year immediately
following the Fiscal Year in which the Participant’s Actual Award for any
Performance Period is first no longer is subject to a substantial risk of
forfeiture, and (ii) March 15 of the calendar year immediately following the
calendar year in which the Participant’s Actual Award for any Performance Period
is first no longer is subject to a substantial risk of forfeiture.  Unless
otherwise determined by the Committee, to earn an Actual Award a Participant
must be employed by the Company or any Affiliate on the date the Actual Award is
paid. 

It is the intent that this Plan be exempt from, or comply with, the requirements
of Code Section 409A so that none of the payments to be provided hereunder will
be subject to the additional tax imposed under Code Section 409A, and any
ambiguities herein will be interpreted to be so exempt or so comply. Each
payment under this Plan is intended to constitute a separate payment for
purposes of Treasury Regulation Section 1.409A-2(b)(2).

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(c) Form of Payment.  Each Actual Award will be paid in cash (or its
equivalent) in a single lump sum.  The Committee reserves the right, in its sole
discretion, to settle an Actual Award with a grant of an equity award under the
Company’s then-current equity compensation plan.

5. Plan Administration.

(a) Committee is the Administrator.  The Plan will be administered by the
Committee.  The Committee will consist of not less than two (2) members of the
Board.  The members of the Committee will be appointed from time to time by, and
serve at the pleasure of, the Board.

(b) Committee Authority.  It will be the duty of the Committee to administer the
Plan in accordance with the Plan’s provisions.  The Committee will have all
powers and discretion necessary or appropriate to administer the Plan and to
control its operation, including, but not limited to, the power to (i) determine
which Employees will be granted awards, (ii) prescribe the terms and conditions
of awards, (iii) interpret the Plan and the awards, (iv) adopt such procedures
and sub-plans as are necessary or appropriate to permit participation in the
Plan by Employees who are foreign nationals or employed outside of the United
States, (v) adopt rules for the administration, interpretation and application
of the Plan as are consistent therewith, and (vi) interpret, amend or revoke any
such rules. 

(c) Decisions Binding.  All determinations and decisions made by the Committee,
the Board, and any delegate of the Committee pursuant to the provisions of the
Plan will be final, conclusive, and binding on all persons, and will be given
the maximum deference permitted by law. 

(d) Delegation by Committee.  The Committee, in its sole discretion and on such
terms and conditions as it may provide, may delegate all or part of its
authority and powers under the Plan to one or more directors and/or officers of
the Company. 

(e) Indemnification.  Each person who is or will have been a member of the
Committee will be indemnified and held harmless by the Company against and from
(i) any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Plan or
any award, and (ii) any and all amounts paid by him or her in settlement
thereof, with the Company’s approval, or paid by him or her in satisfaction of
any judgment in any such claim, action, suit, or proceeding against him or her,
provided he or she will give the Company an opportunity, at its own expense, to
handle and defend the same before he or she undertakes to handle and defend it
on his or her own behalf. The foregoing right of indemnification will not be
exclusive of any other rights of indemnification to which such persons may be
entitled under the Company’s Certificate of Incorporation or Bylaws, by
contract, as a matter of law, or otherwise, or under any power that the Company
may have to indemnify them or hold them harmless.

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6. General Provisions.  

(a) Tax Withholding.  The Company will withhold all applicable taxes from any
Actual Award, including any federal, state and local taxes (including, but not
limited to, the Participant’s FICA and SDI obligations). 

(b) No Effect on Employment or Service.  Nothing in the Plan will interfere with
or limit in any way the right of the Company to terminate any Participant’s
employment or service at any time, with or without cause.  Employment with the
Company and its Affiliates is on an at-will basis only.  The Company expressly
reserves the right, which may be exercised at any time and without regard to
when during a Performance Period such exercise occurs, to terminate any
individual’s employment with or without cause, and to treat him or her without
regard to the effect that such treatment might have upon him or her as a
Participant. 

(c) Participation.  No Employee will have the right to be selected to receive an
award under this Plan, or, having been so selected, to be selected to receive a
future award. 

(d) Successors.  All obligations of the Company under the Plan, with respect to
awards granted hereunder, will be binding on any successor to the Company,
whether the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation, or otherwise, of all or substantially all of
the business or assets of the Company. 

(e) Nontransferability of Awards.  No award granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will, by the laws of descent and distribution.  All rights with respect
to an award granted to a Participant will be available during his or her
lifetime only to the Participant. 

7. Amendment, Termination, and Duration.

(a) Amendment, Suspension, or Termination.  The Board and/or the Committee, in
its sole discretion, may amend or terminate the Plan, or any part thereof, at
any time and for any reason. The amendment, suspension or termination of the
Plan will not, without the consent of the Participant, alter or impair any
rights or obligations under any Actual Award theretofore earned by such
Participant.  No award may be granted during any period of suspension or after
termination of the Plan. 

(b) Duration of Plan.  The Plan will commence on the date first adopted by the
Board or the Compensation Committee of the Board, and subject to Section 7(a)
(regarding the Board’s and/or Committee’s right to amend or terminate the Plan),
will remain in effect thereafter until terminated.

8. Legal Construction. 

(a) Gender and Number.  Except where otherwise indicated by the context, any
masculine term used herein also will include the feminine; the plural will
include the singular and the singular will include the plural. 

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(b) Severability.  In the event any provision of the Plan will be held illegal
or invalid for any reason, the illegality or invalidity will not affect the
remaining parts of the Plan, and the Plan will be construed and enforced as if
the illegal or invalid provision had not been included. 

(c) Requirements of Law.  The granting of awards under the Plan will be subject
to all applicable laws, rules and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required. 

(d) Governing Law.  The Plan and all awards will be construed in accordance with
and governed by the laws of the State of California, but without regard to its
conflict of law provisions. 

(e) Bonus Plan.  The Plan is intended to be a “bonus program” as defined under
U.S. Department of Labor regulation 2510.3-2(c) and will be construed and
administered in accordance with such intention. 

(f) Captions.  Captions are provided herein for convenience only, and will not
serve as a basis for interpretation or construction of the Plan.

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