Exhibit 10.1

 

AXCELIS TECHNOLOGIES, INC.

 

EXECUTIVE SEPARATION AGREEMENT

 

THIS EXECUTIVE SEPARATION AGREEMENT, dated as of July 17, 2013, is made by and
between Axcelis Technologies, Inc. (hereinafter referred to as the “Company”)
and Jay Zager (hereinafter referred to as “Executive”).  In consideration of the
mutual covenants contained herein, the parties agree as follows:

 

1.             Separation Date.   Executive’s employment with the Company will
terminate on August 23, 2013 (the “Termination Date”).  As described in
Section 2, Executive will receive the separation pay and benefits under this
Agreement.  Prior to the Termination Date, the Executive shall cooperate with
the reasonable requests of the Company to support the transition of the
Executive’s duties to other Company personnel.

 

2.             Separation Compensation.

 

2.1.     Accrued Obligations.  Executive has been or will be as of the
Termination Date paid in full for any and all wages, including accrued but
unused vacation time.

 

2.2.     Separation Pay.  Beginning on the first payroll date following the
Termination Date, the Company will make payments of Executive’s base pay at the
weekly rate of $6,730.76 for 31 weeks (7 months), less legally required payroll
taxes, payable bi-weekly in accordance with the Company’s usual payroll cycle.

 

2.3.     Axcelis Time Management (ATM).  After the Termination Date, Executive
will receive a lump sum amount for his accrued ATM balance, if any.  Overdrawn
ATM time will be deducted from Executive’s final paycheck.

 

2.4.     COBRA Payments.  If Executive elects to continue health coverage under
the Company’s health plan in accordance with COBRA, the Company will pay for the
full cost of such coverage until the earlier of (i) the date Executive begins
full-time employment or full-time self-employment; or (ii) the end of the
seventh month after the Termination Date (March 31, 2014).

 

2.5.     Benefits.  Detailed information on the impact of Executive’s separation
on Company-provided benefits is set forth on Attachment A which is attached
hereto and incorporated herein.

 

2.6.     Transition Assistance.  During the period (the “Transition Period”)
from the Termination Date until December 28, 2013 (the date 4 (four) months
after the Termination Date), the following provisions will apply:

 

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(a)           Laptop Computer.  After the Company has an opportunity to back up
and clean files, the Company will allow the Executive to use his laptop during
the Transition Period, if desired, subject to the return obligation in
Section 5.1 below.

 

(b)           Email.  The Company agrees to allow Executive to maintain webmail
access to the Executive’s Axcelis email account until the earlier of the end of
the Transition Period or the date on which Executive commences other employment.

 

(c)           Cell Phone.  In addition to assisting with the transfer of the
Executive’s cell phone account to a personal account, the Company will pay the
Executive a lump sum amount to cover four months’ of cell phone premiums at the
Executive’s plan level (but not more than $99 per month).

 

(d)           Outplacement.  At the request of Executive, the Company will pay
up to $12,500 for an outplacement service for services rendered in assisting
Executive in locating other employment, provided such payments are contingent
upon Executive’s cooperation with the outplacement service and upon active
efforts by Executive to locate another position.   As an alternative to
outplacement services, at Executive’s option, expense reimbursements up to
$12,500 will be approved prior to and during the Transition Period for travel,
meals, consulting services and other costs related to the Executive’s efforts to
obtain future employment or consulting work, including but not limited to Board
engagements.  All such expenses shall be submitted to the Executive Vice
President HR/Legal for approval, in a format consistent with the Company’s usual
employee expense reimbursement practices, together with an explanation of the
expense.

 

2.7.     Equity Actions.  The following modifications to equity grants held by
the Executive will be effective on the Termination Date:

 

(a)           Acceleration of Vesting of Stock Options and Restricted Stock
Units.  The Compensation Committee of the Board of Directors has resolved, in
accordance with Section 6.03(c) of the 2000 Stock Plan and Section 6(e) of the
2012 Equity Incentive Plan, to accelerate the vesting of certain non-qualified
stock options and Restricted Stock Units held by the Executive as set forth on
Schedule 1 hereto.

 

(b)           Retirement Exercisability of Stock Options.  As provided in
Section 6.03(e)(i) (B) of the 2000 Stock Plan and Section 6(e) of the 2012
Equity Incentive Plan, the vested non-qualified stock options held by the
Executive remain exercisable until  August 23, 2014, which is the first
anniversary of the Executive’s termination of employment, as set forth on
Schedule 1 hereto.

 

3.             Executive Acknowledgement of Compensation. The Executive
acknowledges that in exchange for entering into this Agreement the Executive has
received good, sufficient and valuable consideration in excess of that to which
the Executive would otherwise have been entitled in the absence of this
Agreement.  The Executive acknowledges that the Executive has been paid in full
for any and all wages, including accrued unused vacation pay.  Unless otherwise
provided for expressly in this Agreement, all other benefits have ceased as of
the Termination Date.

 

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4.             Effect of Breach on Compensation.   The Executive agrees that the
compensation and benefits contained in this Agreement and which flow to the
Executive from the Company are subject to termination, reduction or cancellation
in the event that the Executive takes any action or engages in any conduct
deemed by the Company to be in violation of this Agreement, provided however,
that prior to any such termination , the Company will notify the Executive of
the particular concern and provide the Executive with a reasonable opportunity
to cure.

 

5.             Executive Obligations.

 

5.1.     Return of Property.  The Executive shall return all papers, files,
documents, computers, reference guides, equipment, keys, identification, credit
cards, software, computer access codes, disks and institutional manuals, or
other property belonging to the Company within one week after the Termination
Date; provided the Executive shall return the laptop computer referenced in
Section 2 above not later than the end of the Transition Period. The Executive
shall not retain any copies, duplicates, reproductions or excerpts of any of the
Company’s property.   The Executive may retain copies of all agreements between
the Executive and the Company and other documents relating to his personal
performance.

 

5.2.     Nondisclosure of Confidential Information.  During the course of the
Executive’s employment with the Company, the Executive has become acquainted
with and/or developed confidential information belonging to the Company and its
customers. The Executive agrees not to use or to disclose to any person or
entity any confidential information of the Company or of any past or present
customer of the Company, including but not limited to financial data or
projections, customer lists, projects, economic information, systems, plans,
methods, procedures, operations, techniques, know-how, trade secrets or
merchandising or marketing strategies. In addition, Executive shall continue to
be bound by the terms of Employee Invention Assignment, and Confidentiality
Agreement, which the Executive executed in connection with his employment. The
form of that Agreement is affixed hereto and incorporated by reference as
Attachment B. The provisions of this Section 5.2 shall not apply to any such
confidential information that is (a) presently publicly available or a matter of
public knowledge or public domain generally without breach of this Agreement, or
(b) lawfully received by the Executive from a third party who is or was not
bound in any confidential relationship to the Company, or (c) required to be
disclosed by the Executive pursuant to judicial or government order, provided
the Executive shall give the Company reasonable notice prior to such disclosure
and shall comply with any applicable protective order.

 

5.3.     Nondisparagement.  Provided the Executive is not in breach of his
obligations under this Agreement, the Company agrees not to disparage or make
negative statements about the Executive. The Executive agrees not to disparage
or make negative statements about the Company or any of its officers, directors,
agents, employees, successors and assigns.

 

5.4.     Non-Compete and Non-Solicitation.  The Executive hereby agrees with the
Company that for a period of 12 months following the Termination Date:

 

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(a)           The Executive shall not, without the prior written consent of the
Chief Executive Officer of the Company, directly or indirectly, engage in, be
employed by, act as a consultant or advisor to, be a director, officer, owner or
partner of, or acquire an interest in, any business engaged in manufacturing
implant or dry strip semiconductor processing systems (a “competitive
business”), nor directly or indirectly have any interest in, own, manage,
operate, control, be connected with as a stockholder, lender, joint venturer,
officer, employee, partner or consultant, or otherwise engage, invest or
participate in any competitive business; provided, however, that nothing
contained in this Section 5.4 shall prevent the Executive from investing or
trading in publicly traded stocks, bonds, commodities or securities or in real
estate or other forms of investment for Executive’s own account and benefit
(directly or indirectly);

 

(b)           The Executive shall not actively solicit any employee of the
Company or any of its subsidiaries or affiliates to leave the employment
thereof; and the Executive shall not enter onto Company property without prior
written consent from the Chief Executive Officer of the Company or other
executive officer of the Company;

 

(c)           The Executive shall not induce or attempt to induce any customer,
supplier, licensor, licensee or other individual, corporation or business
organization having a business relationship with the Company or its subsidiaries
or affiliates to cease doing business with the Company or its subsidiaries or
affiliates or in any way interfere with the relationship between any such
customer, supplier, licensor, licensee or other individual, corporation or
business organization and the Company or its subsidiaries or affiliates. 
Solicitation of customers for the purposes of this obligation refers to existing
and/or contemplated products as of the time of this Agreement;

 

(d)           The applicable time periods set forth in this Section 5.4 shall be
extended by the time of any breach by the Executive of any terms of this
Agreement;

 

(e)           The provisions of Section 5.4 contain the sole and exclusive
obligations of the Executive with respect to non-competition and
non-solicitation other than those provided by law, if any; and

 

(f)            The Company acknowledges that negotiations or discussions between
or among Executive and any third party about prospective employment, business
ventures, or other opportunities shall not, alone, constitute a breach of
Section 5.4(a) of this Agreement.

 

5.5.     Resignations from Corporate Office.  Not later than June 28, 2013, the
Executive will execute and deliver to the Company his resignation as an officer
or director of the Company and its subsidiaries and joint ventures, attached
here to as Attachment C, which provides for Executive’s resignation from all
offices effective July 1, 2013 other than as Executive Vice President, Finance,
for which office the resignation will be effective as of the Termination Date. 
From time to time on or after the Termination Date, the Executive will execute
such resignations from offices held in the Company’s subsidiaries, as the
Company may reasonably request.  Executive expressly acknowledges that the
compensation payable to Executive under this Agreement is in full satisfaction
of any compensation due to him in connection with his corporate positions
described in this Section 5.5.  It is understood that the force and effect of
Attachment C arises exclusively in the context of, and as part of, this
Agreement.

 

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5.6.     Cooperation.  The Executive will cooperate fully with the Company in
its defense of or other participation in any administrative, judicial or other
proceeding arising from any charge, complaint or other action which has been or
may be filed against the Company and with respect to which Executive has
knowledge, provided, however, that the Company will pay all reasonable costs
associated with such cooperation, including compensation for the Executive’s
time at the Executive’s usual, and reasonable, rate.  The Executive agrees to be
responsive to requests for information related to the smooth transition of a
successor to his position.

 

6.             SEC Reporting and Applicability of the Company’s Insider Trading
Policy.

 

6.1.     Rule 144.  For the purposes of Rule 144 promulgated by the Securities
Exchange Commission, the Executive shall cease to be an “affiliate” of  the
Company on the Termination Date.

 

6.2.     Section 16 Reporting.  The Executive shall cease to be a reporting
person under the Securities Exchange Act of 1934, as amended, as of the
Termination Date, provided however, the Executive must file a Form 4 with the
SEC to report any purchase, sale, or option exercise after the Termination Date
if the transaction occurs within six months following a Form 4 transaction going
the opposite way (e.g., sale vs. purchase) prior to the Termination Date.

 

6.3.     Insider Trading Policy.  Assuming the Executive does not acquire
material non-public information after the Company’s public announcement of its
earnings for the second fiscal quarter, the Executive will no longer be subject
to restrictions on trading arising under the Company’s insider trading policy as
of the Termination Date.

 

7.             General Release and Covenant Not to Sue.

 

7.1.     Release.  In consideration of the Company’s covenants in this
Agreement, the Executive hereby releases and discharges the Company and its
officers, directors, agents, employees, successors and assigns (“Released
Parties”) from any and all claims by the Executive arising before the signing of
this Agreement, including all claims arising out of the Executive’s employment
with the Company or the termination thereof  (except (1) those relating to
performance of this Agreement and (2) the Company’s obligations under the
Indemnification Agreement between the Executive and the Company dated 
January 17, 2011, the form of which is attached hereto as Attachment D (the
“Indemnification Agreement”)) and claims arising under common law and claims
arising under federal or state labor and employment laws and laws prohibiting
discrimination on the basis of age, sex, race, national origin or disability.
The laws referred to in the preceding sentence include Title VII of the Civil
Rights Act of 1964, as amended; the Equal Pay Act of 1963, as amended; the Age
Discrimination in Employment Act of 1967 (ADEA), as amended; the Fair Labor
Standards Act of 1938, as amended; the Americans With Disabilities Act of 1990,
as amended; the Rehabilitation Act of 1973, as amended; the Family and Medical
Leave Act of 1993, as amended; Chapter 151B of the Massachusetts General Laws,
Chapter 149 of the Massachusetts General Laws; the Massachusetts Civil Rights
Act and the Massachusetts Equal Rights Law; the Worker Adjustment and Retraining
Notification (“WARN”) Act; or any other state or federal law, order, public
policy or regulation affecting or relating to the rights and/or claims of
employees.  Nothing in this Agreement shall be construed to be a release of

 

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certain ADEA and Title VII rights that is not allowed by law, except that the
Executive waives and shall not accept any damages from any such claims.

 

7.2.     Covenant Not to Sue.  The Executive represents and warrants that he has
not filed any complaints, charges, or claims for relief against the Released
Parties with any local, state or federal court or administrative agency.  The
Executive agrees and covenants not to sue or bring any claims or charges against
the Released Parties with respect to any matters arising out of or relating to
the Executive’s employment with or separation from the Company, other than
enforcement of the terms of this Agreement or the Indemnification Agreement.  In
the event that the Executive institutes any such action, that claim shall be
dismissed upon presentation of this Agreement and he shall reimburse the Company
for all legal fees and expenses incurred in defending such claim and obtaining
its dismissal.

 

7.3.     No Implied Admission.  It is understood and agreed that this Agreement
does not constitute any admission by the Company that any action taken with
respect to the Executive was unlawful or wrongful, or that such action
constituted a breach of contract or violated any federal or state law, policy,
rule or regulation.

 

8.             Compliance with Federal Older Workers Benefit Protection Act of
1990.

 

8.1.     Time to Consider Agreement.  The Executive acknowledges that he has
been advised in writing to consult with an attorney and has had ample
opportunity to consult with and review this Agreement with an attorney of his
choice, and has been given a period of at least forty-five (45) days within
which to consider whether to sign this Agreement.  If the Executive has signed
this Agreement prior to the end of this forty-five (45) day period, he
represents that he has done so knowingly and voluntarily.

 

8.2.     Revocation Right.  It is agreed and understood that for a period of
seven (7) days following the execution of this Agreement, which period shall end
at 5:00 p.m. on the seventh day following the date of execution by the
Executive, he may revoke this Agreement.  This Agreement will not become
effective until this revocation period has expired.  This seven (7) day
revocation period cannot be shortened by agreement of the parties or by any
other means.

 

9.             Miscellaneous.

 

9.1.     Availability of Equitable Remedies.  The Executive agrees and warrants
that the covenants contained herein are reasonable, that valid consideration has
been and will be received therefor and that the agreements set forth herein are
the result of arms-length negotiations between the parties hereto.  The
Executive recognizes and acknowledges that the provisions of Section 5 are
vitally important to the continuing welfare of the Company, and its subsidiaries
and affiliates, and that money damages constitute a totally inadequate remedy
for any violation thereof.  Accordingly, in the event of any such violation by
the Executive, the Company, and its subsidiaries and affiliates, in addition to
any other remedies they may have, shall have the right to institute and maintain
a proceeding to compel specific performance thereof or to obtain an injunction
restraining any action by the Executive in violation of Section 5.

 

9.2.     Severability.   In the event that any provision of this Agreement is
found by a court, arbitrator or other tribunal to be illegal, invalid or
unenforceable, then such provision shall

 

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not be voided, but shall be enforced to the maximum extent permissible under
applicable law, and the remainder of this Agreement shall remain in full force
and effect.

 

9.3.     Entire Agreement.  This Agreement and its Exhibits constitutes the
entire agreement between the parties about or relating to the Executive’s
termination of employment from the Company, or the Company’s obligations to the
Executive with respect to his termination and fully supersedes any and all prior
agreements (including but not limited to the Change of Control Agreement between
the Company and the Executive dated January 17, 2011) or understanding between
the parties, other than the Indemnification Agreement.  The Company represents
and warrants that there has been no Change of Control as defined in the
above-mentioned Change of Control Agreement prior to the date hereof and that no
Change of Control transaction is contemplated by the Company as of the date
hereof.   Upon execution of this Agreement, the obligations of the Executive and
the Company relating to the Executive’s employment by the Company will arise
solely and exclusively out of this Agreement and the Indemnification Agreement.

 

9.4.     Binding Benefit.  This Agreement shall be binding on the parties and
upon their heirs, administrators, representatives, executors, successors and
assigns and shall inure to their benefit and to that of their heirs,
administrators, representatives, executors, successors and assigns.

 

9.5.     Amendments.  This Agreement may not be altered, amended or modified,
except by a further written document signed by the Executive and the Company.

 

9.6.     Governing Law. This Agreement shall be governed by the laws of the
Commonwealth of Massachusetts, without regard to or application of choice-of-law
rules or principles.

 

9.7.     Limitations on Recovery.  In the event that the Executive institutes
legal proceedings to enforce this Agreement, he agrees that the sole remedy
available shall be enforcement of the terms of this Agreement and/or a claim for
damages resulting from the breach of this Agreement, but that under no
circumstances shall the Executive be entitled to receive or collect any damages
for claims that Executive has released under this Agreement.

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first set forth above.

 

 

 

AXCELIS TECHNOLOGIES, INC.

 

 

 

 

 

 

By:

/s/ Lynnette C. Fallon

 

Title: Lynnette C. Fallon, EVP HR/Legal and
General Counsel

 

 

 

 

 

/s/ Jay Zager  July 30, 2013

 

Jay Zager

 

 

 

Attachments

 

Schedule 1

 

Equity Actions for Jay Zager

 

 

 

Attachment A

 

Benefits after Termination Date

Attachment B

 

Form of Employee Invention Assignment and Confidentiality Agreement

Attachment C

 

Resignation from Office

Attachment D

 

Form of Indemnification Agreement

 

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Schedule 1

 

Equity Actions for Jay Zager

 

 

 

Date of
Grant

 

Exercise
Price

 

Shares
Granted

 

Shares Vested
as of August 23,
2013 (RSUs
prior to net
issuance)

 

Shares Subject
to Accelerated
Vesting on
Termination
Date

 

Shares Vested
after
acceleration
(RSUs prior to
net issuance)

 

Exercise Period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RSU

 

1/18/2011

 

 

 

50,000

 

25,000

 

12,500

 

37,500

 

NA

 

Options

 

1/18/2011

 

$

3.59

 

200,000

 

100,000

 

50,000

 

150,000

 

Until the first anniversary of the Termination Date

 

Options

 

7/15/2011

 

$

1.60

 

150,000

 

75,000

 

0

 

75,000

 

Until the first anniversary of the Termination Date

 

Options

 

7/16/2012

 

$

0.93

 

150,000

 

37,500

 

0

 

37,500

 

Until the first anniversary of the Termination Date

 

 

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List of Attachments Omitted from the Executive Separation Agreement by and
between
Axcelis Technologies, Inc. (the “Company”) and Jay Zager, dated as of July 17,
2013
as filed with the Securities Exchange Commission (the “Commission”) on Form 8-K

 

Attachment A

 

A document providing detail on the status of Mr. Zager’s employee benefits
following his termination of employment.

 

 

 

Attachment B

 

A copy of the Employee Invention Assignment and Confidentiality Agreement
between the Company and Mr. Zager signed on February 15, 2012.

 

 

 

Attachment C

 

The form of resignation from office signed by Mr. Zager.

 

 

 

Attachment D

 

A copy of the Amended and Restated Indemnification Agreement between the Company
and Mr. Zager dated February 28, 2012.

 

Axcelis will furnish supplementally a copy of any omitted attachment to the
Commission upon request.

 

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