Exhibit 10.33

 

.SEPARATION AGREEMENT

AND GENERAL RELEASE OF CLAIMS

 

1.            PHILIP C.S. YIN (“EXECUTIVE”) HAS BEEN EMPLOYED BY AXT, INC. (THE
“COMPANY”) AS ITS CHIEF EXECUTIVE OFFICER SINCE ON OR ABOUT FEBRUARY 7, 2005
PURSUANT TO A WRITTEN EMPLOYMENT AGREEMENT OF THAT DATE (“EMPLOYMENT
AGREEMENT”).  EXECUTIVE’S EMPLOYMENT WITH THE COMPANY HAS NOW TERMINATED, AND IT
IS THE COMPANY’S DESIRE TO PROVIDE EXECUTIVE WITH THE SEPARATION BENEFITS
DESCRIBED IN THE EMPLOYMENT AGREEMENT AS WELL AS ADDITIONAL SEPARATION BENEFITS,
AND TO RESOLVE ANY CLAIMS THAT EXECUTIVE HAS OR MAY HAVE AGAINST THE COMPANY. 
ACCORDINGLY, EXECUTIVE AND THE COMPANY AGREE AS SET FORTH BELOW.  THIS AGREEMENT
WILL BECOME EFFECTIVE ON THE EIGHTH DAY AFTER IT IS SIGNED BY EXECUTIVE,
PROVIDED THAT EXECUTIVE HAS NOT REVOKED THIS AGREEMENT (BY WRITTEN NOTICE TO THE
CHAIRMAN OF THE COMPANY’S BOARD OF DIRECTORS) PRIOR TO THAT DATE.

 

2.            THE COMPANY AND EXECUTIVE AGREE THAT EXECUTIVE’S EMPLOYMENT WITH
THE COMPANY TERMINATED EFFECTIVE AS OF MARCH 31, 2009 (THE “TERMINATION DATE”). 
EXECUTIVE HEREBY CONFIRMS HIS RESIGNATION OF ANY POSITIONS THAT HE HELD AS AN
OFFICER OF THE COMPANY (INCLUDING THE POSITIONS OF CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER), EFFECTIVE AS OF MARCH 17, 2009, AND ALSO HEREBY
CONFIRMS HIS RESIGNATION FROM ANY POSITIONS THAT HE HELD AS AN OFFICER,
DIRECTOR, OR EMPLOYEE OF ANY DIRECT OR INDIRECT SUBSIDIARY OF THE COMPANY
EFFECTIVE AS OF MARCH 17, 2009.

 

3.            SUBJECT TO EXECUTIVE’S COMPLIANCE WITH THE TERMS OF THIS
AGREEMENT, INCLUDING THE RELEASE OF CLAIMS IN PARAGRAPHS 4 AND 5, THE COMPANY
WILL PROVIDE EXECUTIVE WITH THE FOLLOWING:

 

(a)           a lump sum severance payment, which payment will be in an amount
equal to one years’ base salary at Executive’s final base salary rate
($340,000), less the outstanding Cash Advances (defined below), and less
applicable withholding; this severance payment will be made to Executive on
April 30, 2009;

 

(b)           in the event Executive timely elects to obtain continued group
health insurance coverage under COBRA following the Termination Date, the
Company will pay the full premiums for such coverage through the earlier of
(i) March 31, 2010, or (ii) the date on which Executive first becomes eligible
to obtain other comparable group health insurance coverage; thereafter,
Executive may elect to purchase continued group health insurance coverage under
COBRA at his own expense;

 

(c)           with respect to any equity awards previously granted to Executive
by the Company that were fully or partially unvested as of the Termination Date
(including any stock options or restricted stock awards), the vesting of such
awards shall accelerate and all such awards shall be fully vested as of the
Termination Date; and

 

(d)           with respect to any stock options previously granted to Executive
by the Company that remained unexercised as of the Termination Date, the period
in which Executive may exercise such options shall be extended until the earlier
of (i) September 30, 2010, or (ii) the date on which each particular option
expires by its terms. For purposes of Paragraph 3(a) above, the “Cash Advances”
are those cash advances previously made to Executive by the Company in the
amount of $11,812.20 for personal expenses.

 

Executive acknowledges and agrees that he has been paid all wages that he earned
during his employment with the Company, including, but not limited to, any base
salary, unused paid time off, and bonuses. Executive further acknowledges and
agrees that he shall not be entitled to any payments or benefits from the
Company other than those expressly set forth in this Paragraph 3.

 

4.            IN CONSIDERATION OF THE PAYMENTS AND BENEFITS DESCRIBED IN
PARAGRAPH 3, EXECUTIVE AND HIS SUCCESSORS RELEASE THE COMPANY, ITS PARENTS,
DIVISIONS, DIRECT AND INDIRECT SUBSIDIARIES, AND AFFILIATED ENTITIES, AND EACH
OF THEIR RESPECTIVE CURRENT AND FORMER SHAREHOLDERS, INVESTORS, DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS, INSURERS, LEGAL SUCCESSORS AND ASSIGNS
OF AND FROM ANY AND ALL CLAIMS, ACTIONS AND CAUSES OF ACTION, WHETHER NOW KNOWN
OR UNKNOWN, WHICH EXECUTIVE NOW HAS, OR AT ANY OTHER TIME HAD, OR SHALL OR MAY
HAVE AGAINST THOSE RELEASED PARTIES BASED UPON OR ARISING OUT OF ANY MATTER,
CAUSE, FACT, THING, ACT OR OMISSION WHATSOEVER OCCURRING OR EXISTING AT ANY TIME
UP TO AND INCLUDING THE DATE ON WHICH EXECUTIVE SIGNS THIS AGREEMENT, INCLUDING,
BUT NOT LIMITED TO, ANY CLAIMS OF BREACH OF CONTRACT, WRONGFUL TERMINATION,
RETALIATION, FRAUD, DEFAMATION, INFLICTION OF EMOTIONAL DISTRESS OR NATIONAL
ORIGIN, RACE, AGE, SEX, SEXUAL ORIENTATION, DISABILITY OR OTHER DISCRIMINATION
OR HARASSMENT UNDER THE CIVIL

 

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RIGHTS ACT OF 1964, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE
AMERICANS WITH DISABILITIES ACT, THE FAIR EMPLOYMENT AND HOUSING ACT OR ANY
OTHER APPLICABLE LAW.  NOTWITHSTANDING THE ABOVE RELEASE OF CLAIMS, IT IS
EXPRESSLY UNDERSTOOD THAT THIS RELEASE DOES NOT APPLY TO, AND SHALL NOT BE
CONSTRUED AS, A WAIVER OR RELEASE OF (A) ANY CLAIMS OR RIGHTS THAT CANNOT
LAWFULLY BE RELEASED BY PRIVATE AGREEMENT, INCLUDING STATUTORY INDEMNITY RIGHTS
UNDER CALIFORNIA LABOR CODE SECTION 2802, OR (B) ANY RIGHT OF EXECUTIVE TO
INDEMNIFICATION UNDER THE ARTICLES OF INCORPORATION OR BYLAWS OF THE COMPANY OR
ANY INDEMNITY AGREEMENT BETWEEN THE COMPANY AND EXECUTIVE, AND THE COMPANY SHALL
CONTINUE TO INDEMNIFY EXECUTIVE AGAINST ANY COSTS OR EXPENSES (INCLUDING
ATTORNEYS’ FEES), JUDGMENTS, FINES, LOSSES, CLAIMS, DAMAGES OR LIABILITIES
INCURRED IN CONNECTION WITH ANY CLAIM, ACTION, SUIT, PROCEEDING OR
INVESTIGATION, WHETHER CIVIL, CRIMINAL, ADMINISTRATIVE OR INVESTIGATIVE, BY
REASON OF THE FACT THAT EXECUTIVE WAS A DIRECTOR, OFFICER, EMPLOYEE OR AGENT OF
THE COMPANY, WHETHER ASSERTED OR CLAIMED PRIOR TO, AT OR AFTER THE DATE OF
EXECUTIVE’S TERMINATION OF EMPLOYMENT, TO THE FULLEST EXTENT PERMITTED UNDER
APPLICABLE LAW.

 

5.            EXECUTIVE ACKNOWLEDGES THAT HE HAS READ SECTION 1542 OF THE CIVIL
CODE OF THE STATE OF CALIFORNIA, WHICH STATES IN FULL:

 

A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor.

 

Executive waives any rights that he has or may have under section 1542 (or any
similar provision of the laws of any other jurisdiction) to the full extent that
he may lawfully waive such rights pertaining to this general release of claims,
and affirms that he is releasing all known and unknown claims that he has or may
have against the parties listed above.

 

6.            EXECUTIVE ACKNOWLEDGES AND AGREES THAT HE SHALL CONTINUE TO BE
BOUND BY AND COMPLY WITH THE TERMS OF ANY PROPRIETARY RIGHTS, ASSIGNMENT OF
INVENTIONS, AND/OR CONFIDENTIALITY AGREEMENTS BETWEEN THE COMPANY AND
EXECUTIVE.  TO THE EXTENT HE HAS NOT DONE SO ALREADY,  EXECUTIVE WILL PROMPTLY
RETURN TO THE COMPANY, IN GOOD WORKING CONDITION, ALL COMPANY PROPERTY AND
EQUIPMENT THAT IS IN EXECUTIVE’S POSSESSION OR CONTROL, INCLUDING, BUT NOT
LIMITED TO, ANY FILES, RECORDS, COMPUTERS, COMPUTER EQUIPMENT, CELL PHONES,
CREDIT CARDS, KEYS, PROGRAMS, MANUALS, BUSINESS PLANS, FINANCIAL RECORDS, AND
ALL DOCUMENTS (WHETHER IN PAPER OR ELECTRONIC FORM, AND ANY COPIES THEREOF) THAT
EXECUTIVE PREPARED OR RECEIVED IN THE COURSE OF HIS EMPLOYMENT WITH THE COMPANY.

 

7.            EXECUTIVE AGREES THAT HE WILL NOT, AT ANY TIME IN THE FUTURE,
KNOWINGLY OR INTENTIONALLY DISPARAGE THE COMPANY IN ANY MANNER THAT IS HARMFUL
TO THE COMPANY, ITS BUSINESS REPUTATION, ITS PRODUCTS OR SERVICES, OR ITS
FINANCIAL VIABILITY, OR TO THE PERSONAL OR BUSINESS REPUTATIONS OF THE COMPANY’S
OFFICERS, DIRECTORS, OR EMPLOYEES.  THE COMPANY AGREES THAT ITS EXECUTIVE
OFFICERS AND THE MEMBERS OF ITS BOARD OF DIRECTORS WILL NOT, AT ANY TIME IN THE
FUTURE, DISPARAGE EXECUTIVE IN ANY MANNER THAT IS HARMFUL TO EXECUTIVE’S
PERSONAL OR BUSINESS REPUTATION.  THE PROVISIONS OF THIS PARAGRAPH 7 SHALL NOT
APPLY TO ANY STATEMENTS THAT ARE MADE IN RESPONSE TO ANY INVESTIGATION,
ADMINISTRATIVE PROCESS, LEGAL PROCEEDING, SUBPOENA OR OTHER LEGAL PROCESS.  IN
THE EVENT THE COMPANY IS SOLICITED BY ANY PARTY SEEKING COMMENT OR
RECOMMENDATIONS AS TO THE EXECUTIVE’S ABILITIES FOR SUBSEQUENT EMPLOYMENT, THE
COMPANY’S COMMENTS SHALL BE LIMITED TO CONFIRMATION OF THE EXECUTIVE’S POSITION,
HIS SALARY, DATES OF EMPLOYMENT AND SCOPE OF RESPONSIBILITY WHILE EMPLOYED BY
THE COMPANY.  THE PROVISIONS OF THIS PARAGRAPH 7 SHALL NOT APPLY TO ANY
STATEMENTS THAT ARE MADE TRUTHFULLY IN RESPONSE TO A SUBPOENA OR OTHER
COMPULSORY LEGAL PROCESS.

 

8.            EXECUTIVE AGREES THAT FOR A PERIOD OF ONE YEAR FOLLOWING THE
TERMINATION DATE, HE WILL NOT, ON BEHALF OF HERSELF OR ANY OTHER PERSON OR
ENTITY, DIRECTLY OR INDIRECTLY SOLICIT ANY EMPLOYEE OF THE COMPANY TO TERMINATE
HIS/HER EMPLOYMENT WITH THE COMPANY.

 

9.            IF ANY PROVISION OF THIS AGREEMENT IS DEEMED INVALID, ILLEGAL, OR
UNENFORCEABLE, THAT PROVISION WILL BE MODIFIED SO AS TO MAKE IT VALID, LEGAL,
AND ENFORCEABLE, OR IF IT CANNOT BE SO MODIFIED, IT WILL BE STRICKEN FROM THIS
AGREEMENT, AND THE VALIDITY, LEGALITY, AND ENFORCEABILITY OF THE REMAINDER OF
THE AGREEMENT SHALL NOT IN ANY WAY BE AFFECTED.  IN THE EVENT OF ANY LEGAL
ACTION RELATING TO OR ARISING OUT OF THIS AGREEMENT, THE PREVAILING PARTY SHALL
BE ENTITLED TO RECOVER FROM THE LOSING PARTY ITS ATTORNEYS’ FEES AND COSTS
INCURRED IN THAT ACTION.  THE PARTIES AGREE THAT THE EMPLOYMENT AGREEMENT IS
HEREBY TERMINATED AND OF NO FURTHER FORCE OR EFFECT FOLLOWING THE TERMINATION
DATE, EXCEPT WITH RESPECT TO SECTIONS 10 AND 12-19 THEREOF, WHICH SHALL REMAIN
IN FULL FORCE AND EFFECT.

 

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10.          THE COMPANY INTENDS THAT INCOME PROVIDED TO THE EXECUTIVE PURSUANT
TO THIS AGREEMENT WILL NOT BE SUBJECT TO TAXATION UNDER SECTION 409A OF THE
INTERNAL REVENUE CODE (“SECTION 409A”).  THE PROVISIONS OF THIS AGREEMENT SHALL
BE INTERPRETED AND CONSTRUED IN FAVOR OF SATISFYING ANY APPLICABLE REQUIREMENTS
OF SECTION 409A OF THE CODE.  HOWEVER, THE COMPANY DOES NOT GUARANTEE ANY
PARTICULAR TAX EFFECT FOR INCOME PROVIDED TO THE EXECUTIVE PURSUANT TO THIS
AGREEMENT.  IN ANY EVENT, EXCEPT FOR THE COMPANY’S RESPONSIBILITY TO WITHHOLD
APPLICABLE INCOME AND EMPLOYMENT TAXES FROM COMPENSATION PAID OR PROVIDED TO THE
EXECUTIVE, THE COMPANY SHALL NOT BE RESPONSIBLE FOR THE PAYMENT OF ANY
APPLICABLE TAXES INCURRED BY THE EXECUTIVE ON COMPENSATION PAID OR PROVIDED TO
THE EXECUTIVE PURSUANT TO THIS AGREEMENT.  IN THE EVENT THAT ANY COMPENSATION TO
BE PAID OR PROVIDED TO EXECUTIVE PURSUANT TO THIS AGREEMENT MAY BE SUBJECT TO
THE EXCISE TAX DESCRIBED IN SECTION 409A, THE COMPANY MAY DELAY SUCH PAYMENT FOR
THE MINIMUM PERIOD REQUIRED IN ORDER TO AVOID THE IMPOSITION OF SUCH EXCISE TAX.

 

11.          THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE PARTIES
WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDES ALL PRIOR NEGOTIATIONS
AND AGREEMENTS BETWEEN THE PARTIES, WHETHER WRITTEN OR ORAL, WITH THE EXCEPTION
OF ANY STOCK OPTION OR OTHER EQUITY AGREEMENTS BETWEEN THE PARTIES AND ANY
AGREEMENTS DESCRIBED IN PARAGRAPH 6.  THIS AGREEMENT MAY NOT BE MODIFIED OR
AMENDED EXCEPT BY A DOCUMENT SIGNED BY AN AUTHORIZED OFFICER OF THE COMPANY AND
EXECUTIVE.  THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS
OF LAW.

 

EXECUTIVE ACKNOWLEDGES THAT HE HAS BEEN ADVISED TO CONSULT WITH AN ATTORNEY
PRIOR TO SIGNING THIS AGREEMENT AND THAT HE IS GIVING UP ANY LEGAL CLAIMS (AS
DESCRIBED ABOVE IN PARAGRAPHS 4 AND 5) HE HAS AGAINST THE PARTIES RELEASED ABOVE
BY SIGNING THIS AGREEMENT.  EXECUTIVE FURTHER UNDERSTANDS THAT HE MAY HAVE UP TO
21 DAYS TO CONSIDER THIS AGREEMENT, THAT HE MAY REVOKE IT AT ANY TIME DURING THE
7 DAYS AFTER HE SIGNS IT, AND THAT IT SHALL NOT BECOME EFFECTIVE UNTIL THAT
7-DAY PERIOD HAS PASSED.  EXECUTIVE ACKNOWLEDGES THAT HE IS SIGNING THIS
AGREEMENT KNOWINGLY, WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THE COMPENSATION
AND BENEFITS DESCRIBED IN PARAGRAPH 3, WHICH COMPENSATION AND BENEFITS HE WOULD
NOT OTHERWISE BE ENTITLED TO RECEIVE.

 

 

EXECUTIVE

 

 

 

 

 Dated: April 16, 2009

 

 

/s/ PHILIP C. S. YIN

 

 

 

Philip C.S. Yin

 

 

 

 

 

 

 

 

 

AXT, INC.

 

 

 

 

 

 

 

 

Dated: April 17, 2009

By:

 

/s/ JESSE CHEN

 

 

 

Jesse Chen

 

 

 

 

 

Its:

 

Chairman of the Board

 

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