SEPARATION AGREEMENT and release

 

This Separation Agreement (the “Separation Agreement”) is made by and between
Chris L. Koliopoulos (“Executive”) and Zygo Corporation, a Delaware corporation
(the “Company”).

 

1. Separation from Service. Effective as of October 21, 2013 (the “Separation
Date”), the Executive has ceased to be employed by the Company and its
subsidiaries in any capacity whatsoever, including as an employee, officer,
director or otherwise of the Company and of any of its subsidiaries and
affiliates; and the Executive hereby resigns, effective immediately, from any
and all such positions with the Company and its subsidiaries and affiliates. The
Executive shall execute and deliver such further documents as the Company may
reasonably request in order to evidence or acknowledge the termination of, and
resignation from, any or all such positions.

 

2. Accrued Compensation. As soon as practicable after the execution of this
Separation Agreement (but not later than the Company’s next payroll date), the
Company shall pay to the Executive his accrued base salary since the last
payroll date plus the amount of Executive’s accrued and unused vacation pay that
is payable in accordance with Company’s applicable vacation policy, less
applicable tax withholdings. In addition, the Company will reimburse the
Executive for previously incurred and unreimbursed business expenses that are
eligible for reimbursement in accordance with the Company’s applicable expense
reimbursement policy. The Executive shall receive any vested benefits accrued by
him as of the Separation Date under and in accordance with the terms of the
Company’s 401(k) plan, including any Company matching credits that may be
required under the governing documents for such plan. Executive acknowledges and
agrees that the amounts

 

specified in this paragraph 2 represent all amounts rightfully owed to him by
the Company for the above-listed items as a result of his employment with the
Company through and including the Separation Date.

 

3. Separation Payments and Benefits. Provided that the Executive’s release of
claims set forth in paragraph 7 hereof (the “Release”) is not revoked by the
Executive within the Revocation Period (as defined in paragraph 7), the
Executive will be entitled to receive the payments and benefits described in
this paragraph 3.

 

(a) Initial Payment. On or as soon as practicable (but not more than three (3)
business days) after the date the Release becomes irrevocable in accordance with
paragraph 7 (the “Release Effective Date”), the Company shall make an initial
payment to the Executive of $125,000, less applicable tax withholdings. Such
payment shall be wire transferred to an account designated by the Executive in
writing no later than the Release Effective Date or, if no such designation is
received by the Company, such payment will be made by check and sent to the
Executive by overnight Fed Ex or US mail delivery.

 

(b) Salary Continuation Payments. The Executive shall receive salary
continuation payments at an annual rate of $450,900 (being acknowledged as the
annual base rate of salary in effect immediately prior to the Separation Date)
for a period of two years after the Separation Date. During the six-month period
following the Separation Date, such salary continuation payments will be
accumulated until the first (1st) business day of the seventh month following
the Separation Date at which time the amount so accumulated shall be paid to the
Executive in the form of a single sum cash payment. Thereafter, the Executive
will receive the remaining salary continuation payments in accordance with the
Company’s normal payroll practices. Notwithstanding the foregoing, the entire
unpaid balance of the salary continuation payments shall be due and payable to
the Executive’s legal representative

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within seven business days following the Executive’s death. In order to
facilitate the salary continuation payments, the Company will place $901,800 in
an escrow account with an independent third party (the “Escrow Agent”), who
shall act as the Company’s agent for the timely payment of the amounts payable
to the Executive under this subparagraph 3(b). If a court (i) grants the Company
equitable relief in connection with a violation of paragraphs 5(a), 5(b), 5(c),
or 5(d) (collectively the “Restrictive Covenants”) or (ii) determines that the
Executive has violated any of the Restricted Covenants, the Company may direct
the Escrow Agent to stop future payments. If a stoppage of payments is in
effect, the Escrow Agent shall not make further disbursements from the escrow
account unless and until it is authorized or directed to do so by a court or by
both the Company and the Executive. The Company will select the Escrow Agent,
which must be a bank, trust company or other independent institution with
fiduciary powers, reasonably acceptable to the Executive. The escrow agreement
will contain terms and conditions consistent with the above and such other terms
and conditions as are customary for an escrow arrangement of this nature and
shall contain terms and conditions so such agreement is the functional
equivalent of a “Rabbi Trust” (as described in IRS Rev. Proc. 92-64) for income
tax purposes. The escrow agreement will be subject to prior review and comment
by the Company’s counsel and the Executive’s counsel. The parties intend that
the escrow agreement will be completed and executed within thirty days after the
Release Effective Date, and they shall cooperate with each other toward that
end. The escrow account will be funded within five business days after the
escrow agreement is finalized and executed. All fees and expenses of the Escrow
Agent shall be shared evenly by the Company and the Executive.

 

(c) Company Stock Options.

 

(i) Accelerated Vesting of Unvested Options. The Executive holds outstanding
Company stock options for a total of 473,312 shares of Company common stock,

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of which options for 194,156 shares have not previously vested. A complete list
of the Company stock options granted and currently held by Executive is set
forth on Schedule 1 hereto. As of the Separation Date, the Executive’s unvested
outstanding Company stock options will become fully vested, except for the
unvested portion (26,250 shares) of the stock option for 35,000 shares of
Company stock granted to the Executive on August 27, 2012 (which will be
forfeited on the Separation Date).

 

(ii) Extended Expiration Date of Vested Options. The expiration date of the
Executive’s outstanding vested Company stock options for 447,062 shares of
Company common stock (taking into account the acceleration of vesting and
forfeiture pursuant to 3(c)(i) above) will be extended from 90 days following
the Separation Date to eighteen (18) months following the Separation Date. The
Executive will be eligible for broker-assisted “cashless” exercise of his stock
options as provided for by the terms and conditions of the applicable option
agreement and Company plan. Except as modified by this paragraph 3(c)(ii), the
terms and conditions of the Executive’s options will otherwise remain the same.
For the avoidance of doubt, the Company shall not cancel, terminate, suspend
exercise of, or take any other action with respect to any newly vested options
until there is a court order authorizing any such action beyond the terms
provided for in the option agreements, as modified by the terms of this
paragraph 3(c)(ii).

 

(d) Restricted Stock Units. The Executive holds previously unsettled and
unvested restricted stock units (“RSUs”) with respect to 111,322 shares of
Company common stock. (All previously vested RSUs granted to the Executive have
been settled and are no longer outstanding.) A complete list of the unvested
RSUs held by Executive is set forth on

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Schedule 2 hereto. On the first business day following the Release Effective
Date, 51,574 of those unvested RSUs will become fully vested and will be settled
in accordance with their terms. If requested by Executive or unless the
Executive fails to timely deliver to the Company an adequate amount to pay the
withholding tax on the vested RSUs, the Company will withhold shares that would
otherwise be delivered in settlement of those 51,574 RSUs in satisfaction of the
Executive’s tax withholding obligation. All of the remaining unvested RSUs held
by the Executive shall be cancelled on the Separation Date and those RSUs will
thereupon have no further force or effect.

 

(e) COBRA Coverage. If the Executive timely elects continued group health plan
coverage (including any vision and dental coverage) for himself and/or his
covered spouse and dependents pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”), the Company will reimburse the
Executive for his COBRA premium payments for 18 months following the Separation
Date (or, if earlier, until the date the Executive becomes eligible for another
employer’s group health plan coverage), subject to (and within 30 days after)
Executive’s providing the Company with appropriate evidence that such premium
payments were made by the Executive. Any COBRA premium reimbursements provided
during one calendar year will not affect the amounts eligible for reimbursement
in any other calendar year and the right to reimbursement under this paragraph
3(e) shall not be subject to liquidation or exchange for another benefit or
payment.

 

(f) Legal Fees. The Company will reimburse the Executive for the payment of
legal fees and expenses incurred by him in connection with the negotiation and
preparation of this Separation Agreement and his separation from the Company,
against appropriate documentation evidencing the amount so paid, subject to a
maximum cap of

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$37,500. Such payment will be made promptly after the Release Effective Date or,
if later, the Company’s receipt of such appropriate documentation.

 

(g) Press Release. The Company shall issue the press release attached hereto as
Exhibit A regarding the Executive and his separation of service from the Company
(with such minor revisions as the Company determines, in good faith, to be
necessary or appropriate) promptly following the execution of this Agreement,
but in no event later than three (3) business days of the Release Effective
Date. It is recognized that as an entity whose stock is publicly traded, the
Company has certain disclosure obligations, both as to content and timing, with
respect to the cessation of Executive’s employment and of executive positions
with the Company, including the filing of a Form 8-K describing the terms of
this Agreement.

 

(h) Failure to Make Timely Payments. Should the Company fail to timely make a
payment that is required to be made by it hereunder, unless there has been a
court order that such payment is not required to be made by it hereunder, and
such failure continues for more than five (5) business days, such untimely
payment shall bear interest at the annual rate of 5% until such payment
(together with interest) is made.

 

4. Compliance with Restrictive Covenants. If a court determines that the
Executive fails or has failed to comply with any of the Restrictive Covenants,
then (a) the Executive shall not be entitled to any further separation or other
payments and benefits under paragraph 3 of this Separation Agreement, (b) the
Executive shall immediately return to the Company an amount equal to the cash
payments and the value of any non-cash benefits made or provided to the
Executive pursuant to paragraph 3 of this Separation Agreement (including the
value of accelerated vesting of Company stock options and RSUs pursuant to

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subparagraphs 3(c) and (d) above), and (c) the Executive shall have no further
rights or entitlements under this Separation Agreement. This paragraph 4 shall
not in any manner supersede or limit any other right the Company may have to
enforce or seek legal or equitable relief under this Separation Agreement in the
event of a violation or threatened violation of any of the Restrictive Covenants
or other provisions of this Separation Agreement, or otherwise affect the
validity of the Release. Notwithstanding anything herein to the contrary, the
Executive shall have ten (10) business days after receipt of a court order that
Executive has failed to comply with any of the Restrictive Covenants to exercise
any of the then remaining issued and outstanding 279,156 stock options that were
currently vested as of the Separation Date (but in no event may such options be
exercised after the end of the extended expiration described in paragraph 3(c)
above).

 

5. Restrictive Covenants. The payments and benefits provided to the Executive
under the Agreement are expressly conditioned upon his continuing compliance
with the Restrictive Covenants.

 

(a) Non-Disclosure of Secret and Confidential Information. The Executive shall
not directly or indirectly disclose or use at any time any knowledge,
information, or material relating to any of the Company’s businesses, customers,
machines, designs, apparatus, systems, methods of conducting any part of its
business or the like, “know-how” or trade secrets, which have become known to
the Executive by reason of his employment or otherwise and which are not
generally available to the public (collectively, the “Confidential
Information”). Confidential Information shall not include any information
generally known in the business or industry in which the Company competes (other
than by reason of Executive’s having breached his obligations hereunder) or any
information that Executive can demonstrably prove was independently developed by
him without access to or use of any of the knowledge, information, materials,
know how, trade secrets or the like referenced in the first sentence of this
subparagraph 5(a). Executive shall not be prohibited from disclosing
Confidential Information (i) if and to the extent such disclosure is required by
any court or governmental authority, (ii) from giving truthful testimony with
respect to Confidential

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Information in response to a legal subpoena, or (iii) as otherwise required by
law, provided, in any such case, that the Executive did not, directly or
indirectly, initiate the action or investigation in which such disclosure is
being required, and that, prior to making any such disclosure or providing any
such testimony, the Executive will notify the Company in writing of the
potential disclosure or testimony and give the Company a reasonable opportunity
to contest, limit the scope of or prevent such disclosure or testimony. These
nondisclosure obligations shall remain in effect at all times after the
Separation Date. If at any time after the Separation Date, Executive determines
that he has in his possession or control any Confidential Information belonging
to the Company or any of its subsidiaries, whether in written, electronic or
other form, the Executive shall immediately return to the Company all such
Confidential Information, including all copies and portions thereof.

 

(b) Assignment of Inventions. The Executive has promptly and completely
disclosed in writing to the Company all ideas, developments, inventions and
improvements heretofore made, developed, perfected, devised, conceived or
acquired by him either solely or jointly with others during the Executive’s
employment with the Company, whether or not during regular working hours,
relating in any way to the actual or anticipated business, research,
developments or products of the Company, and the Executive shall so disclose to
the Company all such ideas, developments, inventions and improvements that may
be made, developed, perfected, devised, conceived or acquired by the Executive
within ninety days after the Separation Date. If so requested by the Company,
the Executive shall give, grant, assign, transfer and convey to the Company or
any entity designated by the Company, without recourse or representation, all
rights, title and interest in and to any such ideas, developments, inventions
and improvements.

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In accordance with Cal. Lab. Code §§ 2870 to 2872, the terms of this assignment
of inventions provision shall not apply to an invention that the Executive
developed entirely on his own time without using the Company’s equipment,
supplies, facilities, or trade secret information except for those inventions
during the term of Executive’s employment that either: (1) relate at the time of
conception or reduction to practice of the invention to the Company’s business,
or its actual or demonstrably anticipated research or development; or (2) result
from any work performed by the Executive for the Company. Furthermore,
confidentiality with respect to the disclosure of any inventions reported by the
Executive will be preserved to the maximum extent possible. The Company will
also provide a review process for the Executive to determine such issues as may
arise in connection with this assignment of inventions provision.

 

The Executive agrees, at the request and expense of the Company, to make,
execute and deliver any and all papers, documents, and instruments, including
applications for patents in any and all countries and reissues and extensions
thereof, and to assist and cooperate (without expense to the Executive) with the
Company or its representative in any controversy or legal proceedings relating
to said ideas, developments, inventions and improvements, and the patents which
may be procured thereon. The Company does not assume any responsibility for the
prosecution or defense of any application for patents in any countries arising
from ideas, developments, inventions and improvements disclosed to the Company
pursuant to this Agreement.

 

The Executive’s obligations under this subparagraph 5(b) shall continue beyond
the termination of his employment, but the Company shall compensate the
Executive at a reasonable rate after such termination for time spent by him at
the Company’s request

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providing assistance. In the event that the Company is unable after reasonable
effort to secure the Executive’s signature on any document(s) needed to apply
for or prosecute any intellectual property rights relating to any such ideas,
developments, inventions and improvements, the Executive hereby irrevocably
designates the Company and its duly authorized representative as his agent to
act on his behalf to execute and file any applications and to do all other
lawfully permitted acts to further the issuance or prosecution of intellectual
property rights with the same legal force and effect as if executed by the
Executive.

 

To the extent that any terms of the Company’s Nondisclosure and Assignment of
Inventions Agreement executed by the Executive, grant the Company any rights
superior to those provided in these subparagraphs 5(a) and (b), such superior
terms of the executed Nondisclosure and Assignment of Inventions Agreement shall
govern.

 

(c) Non-Solicitation and Non-Interference. Without the Company’s prior written
consent, the Executive shall not, at any time prior to the expiration of
eighteen (18) months from the Separation Date, directly or indirectly: (i)
solicit, request, advise, entice, persuade or induce any employee, consultant,
or independent contractor employed by or working on behalf of the Company or any
of its subsidiaries or affiliates at any time during the one-year period prior
to the Executive’s termination of employment with the Company to leave the
Company or any of its subsidiaries or affiliates, or to engage in any activity
which, were it done by the Executive, would violate the terms of this Agreement,
or hire or cause to be hired by any third party any such employee, consultant or
independent contractor; or (ii) solicit, request, advise, entice, persuade or
induce any individual or entity, including but not limited to any customer,
supplier, vendor, investor, equity or financing source, or other contracting
party of the Company or any of its subsidiaries or affiliates, to terminate,
reduce

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or refrain from continuing or renewing their present or prospective contractual
or business relationship with the Company or any of its subsidiaries or
affiliates. The restrictions in part (i) of this subparagraph 5(c) shall not
prohibit the Executive from (x) soliciting for employment or hiring Stella
Koliopoulos (his sister), or (y) hiring David Basila if his employment is
terminated by the Company without “cause.”

 

(d) Non-Competition. For a period of twenty four (24) months after the
Separation Date, the Executive shall not, directly or indirectly, without the
prior written consent of the Company, engage in, become financially interested
in, be employed by, render any consultation or business advice with respect to,
or have any connection with, any business engaged in the research, development,
testing, design, manufacture, sale, lease, marketing, utilization or
exploitation of any products or services which are designed for the same purpose
as or are otherwise directly competitive with, products or

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services of the Company or any of its subsidiaries or affiliates, in any
geographic area where, during the period of his employment with the Company or
any subsidiary or at the time of the termination of his employment or other
service with the Company and its subsidiaries, as the case may be, the Company
or any of its subsidiaries or affiliates has or has documented current plans to
have an active business presence. Notwithstanding the foregoing, Executive’s
mere purchase or holding, for investment purposes, of securities representing
less than 5% of the outstanding value or voting interest of a publicly traded
company shall not be deemed to be a violation of the provisions of this
paragraph (it being understood that the purchase or holding of securities of a
company that is not engaged in the research, development, testing, design,
manufacture, sale, lease, marketing, utilization or exploitation of any products
or services which are designed for the same purpose as or are otherwise directly
competitive with, products or services of the Company or any of its subsidiaries
or affiliates, shall not be restricted by this paragraph). Nothing contained
herein shall restrict the Executive from being employed by or providing
consulting services to any entity that is in competition with the Company or any
of its subsidiaries if (i) the competitive business is not the primary business
of such other entity and (ii) the Executive is not involved, directly or
indirectly or in any manner whatsoever, in activities that are in competition
with the Company; provided, however, that as a prerequisite to such employment
or consultancy, the Executive shall have provided such other entity with a copy
of paragraph 5 of this Separation Agreement (as required by paragraph 5(h)
below) and such other entity executes and delivers to the Company a written
acknowledgement, satisfactory to the Company, that such other entity (i) has
received a copy of this paragraph 5 and the restrictions imposed thereunder on
the Executive, and (ii) will not involve the Executive, directly or indirectly
or in any manner whatsoever, in (x) activities that are competitive with the
business of the Company and/or any of its subsidiaries or (y) in a business unit
or segment whose activities in whole or in part are competitive with business
activities of the Company and/or any of its subsidiaries. The provisions of the
prior sentence shall in no way be construed to limit or restrict the remaining
provisions of this paragraph 5, which shall remain absolute and in full force
and effect.

 

(e) Reformation. The Executive acknowledges that the Company and its
subsidiaries conduct their business on a world-wide basis, that their sales and
marketing prospects are for continued expansion into world markets and that,
therefore, the territorial and time limitations set forth in the preceding
subparagraph 5(d) are reasonable and properly required for the adequate
protection of the business of the Company and its subsidiaries. If a court
concludes that any time period and/or the geographic area specified in said

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subparagraph 5(d) is unenforceable, then the time period will be reduced by the
number of months, or the geographic area will be reduced by the elimination of
the overbroad portion, or both, as the case may be, so that the restrictions may
be enforced in the geographic area and for the time to the fullest extent
permitted by law.

 

(f) Enforcement. It is intended that, in view of the nature of the Company’s
business, the restrictions contained in subparagraphs 5(a) through 5(d) above
are considered reasonable and necessary to protect the Company’s legitimate
business interests and that any violation of these restrictions would result in
irreparable injury to the Company. In the event of a breach or threatened breach
by the Executive of any restrictive covenant contained herein, the Company shall
be entitled to a temporary restraining order and injunctive relief. Nothing
contained herein shall be construed as prohibiting the Company from pursuing any
other remedies available to it for any breach or threatened breach, including,
without limitation, the restoration and other remedies specified in the
Agreement and/or the recovery of money damages, attorneys’ fees, and costs.
These covenants and restrictions shall each be construed as independent of any
other provisions in the Agreement and the existence of any claim or cause of
action by the Executive against the Company, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by the
Company of such covenants and restrictions.

 

(g) Severability. Should a court determine that any paragraph or sentence, or
any portion of a paragraph or sentence of this paragraph 5 is invalid,
unenforceable, or void, this determination shall not have the effect of
invalidating or validating the remainder of the paragraph, sentence or any other
provision thereof. Further, it is intended that the court

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should construe this paragraph 5 by limiting and reducing it only to the extent
necessary to be enforceable under then applicable law.

 

(h) Future Employment. If, during the two-year period after the Separation Date,
the Executive seeks or is offered employment, consultancy or other business
relationship by or with any other company, firm, or person, the Executive shall
provide a copy of this paragraph 5 to such company, firm or person before
accepting any such employment, consultancy or other business relationship.

 

(i) Compliance with Federal Securities Laws. The Executive recognizes that he is
in possession of material non-public information; and that the US federal
securities laws prohibit him, among other things, from trading in the Company’s
common stock (including through options, hedges or other similar securities)
while in possession of or privy to such information. Executive agrees to
maintain compliance with all applicable US federal securities laws, as they
pertain to the Company.

 

6. No Other Payments or Benefits. Except for the payments and benefits expressly
set forth in this Separation Agreement, the Executive acknowledges that he has
received all compensation to which he was entitled from the Company, and that he
is not entitled to any other payments or benefits from the Company.

 

7. Release. In consideration of the premises including the payments and benefits
to be made or provided by the Company to the Executive under the provisions of
this Separation Agreement and the Company’s obligations hereunder, except for
the Retained Rights (as defined herein), the Executive, for the Executive and
for the executors and administrators of the Executive’s estate, and the
Executive’s heirs, successors and assigns (collectively, the “Executive
Releasors”), hereby releases and forever discharges the

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Company and its subsidiaries and affiliates, and its and their respective
officers, directors and employees, and any stockholder controlled by any such
officer, director or employee (collectively, the “Zygo Releasees”) from any and
all claims, actions, causes of action, suits, sums of money, debts, dues,
accounts, reckonings, bonds, bills, covenants, contracts, controversies,
agreements, promises, demands or damages of any nature whatsoever or by reason
of any matter, cause or thing regardless of whether known or unknown at present,
which against any Zygo Releasee any such Executive Releasor ever had, now has or
may have arising out of or relating to any transaction, dealing, relationship,
conduct, act or omission, or any other matters or things occurring or existing
at any time prior to and including the date of this Release (collectively
defined herein as “Claims”). This Release includes, but is not limited to, all
Claims the Executive might have under Title VII of the Civil Rights Act of 1964,
as amended, 42 U.S.C. §§2000e, et. seq.; 42 U.S.C. §§1981, et. seq.; the
Americans with Disabilities Act, 29 U.S.C. §§2000e, et. seq.; the Age
Discrimination in Employment Act; the Older Workers Benefits Protection Act; the
federal Family and Medical Leave Act; similar Connecticut and local laws and
regulations, and any and all statutory and common law causes of action for
defamation; slander; slander per se; defamation per se; false light; tortious
interference with prospective business relationships; assault; sexual assault;
battery; sexual harassment; sexual discrimination; hostile work environment;
discrimination; retaliation; workers’ compensation retaliation; wrongful
termination; intentional infliction of emotional distress; breach of a duty or
obligation of any kind or description, including any implied covenant of good
faith and fair dealing; and for breach of contract or any tort whatsoever, as
well as any expenses or attorney’s fees associated with such Claims.

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The Executive represents that he is unaware of any facts on which a claim could
be based against him by the Company, or on which a non-frivolous claim could be
based by a third party against the Company. Based upon this representation, the
Company releases Executive from any and all claims, actions, causes of action,
suits, sums of money, debts, dues, accounts, reckonings, bonds, bills,
covenants, contracts, controversies, agreements, promises, demands or damages of
any nature whatsoever or by reason of any matter, cause or thing regardless of
whether known or unknown at present, against the Executive which the Company,
ever had, now has or may have arising out of or relating to any transaction,
dealing, relationship, conduct, act or omission, or any other matters or things
occurring or existing at any time prior to and including the date of this
Release.

 

The parties acknowledge that this Release does not either affect the rights and
responsibilities of the Equal Employment Opportunity Commission to enforce the
Age Discrimination in Employment Act, or justify interfering with the protected
right of an employee to file a charge or participate in an investigation or
proceeding conducted by the Equal Employment Opportunity Commission under the
Age Discrimination in Employment Act. In the event the Equal Employment
Opportunity Commission commences a proceeding against the Company in which
Executive is a named party, the Executive agrees to waive and forego any
monetary claims which may be alleged by the Equal Employment Opportunity
Commission to be owed to Executive.

 

Notwithstanding the foregoing, nothing in the provisions of this Release shall
act as a release (collectively the “Retained Rights”) by an Executive Releasor
of any Claims against the Company or by the Company of any Claims against the
Executive with respect to (i) any right or obligation under this Separation
Agreement or the Escrow Agreement,

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including any amounts or benefits to which the Executive may become entitled to
receive after the date hereof, any right to indemnity or insurance, any rights
under COBRA or rights under any agreement related to stock options or
Executive’s vested benefits under the Company’s 401(k) plan, or (ii) any Claims
arising with respect to acts, events or occurrences taking place after the date
this Release becomes effective. In addition, nothing in this Release shall be
construed to permit the Company to challenge Executive’s title to shares
acquired by the Executive pursuant to outstanding RSUs and the exercise of
outstanding Company stock options, subject, however, to the Company’s rights
under this Separation Agreement, including any rights the Company may have due
to a breach of this Separation Agreement by the Executive. Nothing in this
Separation Agreement shall affect Executive’s ownership or rights with respect
to the Executive’s options that vested or shares of the Company’s stock that
were owned by him prior to the Separation Date.

 

By executing this Separation Agreement, the Executive acknowledges that (a) the
Executive has been provided an opportunity to consult with an attorney or other
advisor of the Executive’s choice regarding the terms of this Release and, in
fact, he has been represented by Wayne Martino, Esq. of the firm of Brenner,
Saltzman & Wallman LLP, and William H. Narwold, Esq. of the firm of Motley Rice
LLC, (b) Executive has been given twenty-one (21) days in which to consider
whether the Executive wishes to enter into this Release, (c) Executive has
elected to enter into this Release knowingly and voluntarily, (d) Executive’s
waiver of rights or claims is in exchange for the good and valuable
consideration herein, (e) if Executive enters into this Release within fewer
than twenty-one (21) days from receipt of this Release, Executive has knowingly
and voluntarily waived the remaining time, and (f) Executive may revoke this
Release during the seven-day period following the date of

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his execution of this Separation Agreement and Release (the “Revocation Period”)
by delivering a written notice of revocation to John Tomich, Secretary, at the
Company, with a copy to Sheldon Nussbaum at NortonRoseFulbright LLP., 666 Fifth
Avenue, New York, NY 10103 (it being agreed that delivery of such revocation to
both the Secretary and Mr. Nussbaum is necessary for the revocation to be
effective); and provided that, in all instances, such notice is received by the
Company and Mr. Nussbaum prior to the end of the Revocation Period.

 

8. Non-Disparagement. Executive shall not make, publish or cause to be made any
statement, observation or opinion, or communicate any information (whether oral
or written, directly or indirectly) to any third party that either directly or
through other persons or entities, disparages, impugns or in any way reflects
negatively upon (i) the conduct, operations, financial condition, plans,
products, services, business practices, policies or procedures of the Company,
or (ii) any of the present or former management, officers, directors, or
shareholders of the Company or of any of the Company’s subsidiaries or
affiliates in any manner whether or not relating to any of the Company’s
businesses. The Company, through its officers and directors, shall not make,
publish or cause to be made any statement, observation or opinion, or
communicate any information (whether oral or written, directly or indirectly) to
any third party that disparages, impugns or in any way reflects negatively upon
the Executive in any manner whether or not relating to the Executive’s
relationship with the Company. The prevailing party in any such litigation
involving a breach of this paragraph (which shall be the party who or which most
closely obtained the relief sought) shall be entitled to reimbursement from the
other party for such prevailing party’s legal fees and costs with respect to the
disparagement matter. It is intended that each officer

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and director of the Company be a third-party beneficiary for purposes of this
paragraph 8 only, but only to the extent such officer or director similarly
agrees not to disparage the Executive in any manner described in this paragraph
8 pursuant to a writing delivered to Executive no later than ten (10) business
days after the Release Effective Date; and that each such agreeing officer or
director in his individual capacity is entitled to bring a claim against the
Executive for a breach by the Executive of this paragraph 8, or entitling
Executive to bring a claim against such agreeing officer or director for a
breach of this paragraph 8. Nothing in this paragraph 8 shall preclude any party
from providing truthful testimony in response to a legal subpoena or as required
by law, provided that such party gives the other party prior reasonable notice
of such subpoena and reasonably cooperates with the other party in any action he
or it may bring to limit or restrict the scope of the disclosure, provided such
action or proceeding was not initiated directly or indirectly by such party in
order to circumvent such party’s obligations under this paragraph. In addition,
nothing in this Separation Agreement shall prevent the Company from disclosing,
reporting, or commenting upon the Company’s historical performance without
attribution to Executive.

 

9. Cooperation.

 

(a) For a 6-month period after the Separation Date, the Executive will
reasonably cooperate with the Company concerning reasonable requests for
information about matters relating to the business of the Company and its
subsidiaries and affiliates in which he was involved during the period of his
employment, it being understood that such requests by the Company, if any, are
not expected to be significant in time and scope and shall in any event be
subject to the Executive’s personal and professional obligations and
commitments, and that, unless the Company, acting in good faith, has a
compelling reason otherwise,

- 19 -

Executive shall be allowed to satisfy his obligations over the phone or by other
electronic communication. The Executive will, at all times following the
Separation Date, cooperate with the Company and its counsel in connection with
any investigation or review by the Company or any federal, state or local
regulatory, quasi-regulatory or self-governing authority (including, without
limitation, the Securities and Exchange Commission) to the extent any such
investigation or review relates to events or occurrences that transpired while
the Executive was employed by the Company. The Executive shall be entitled to
reimbursement, upon receipt by the Company of suitable documentation, for
reasonable and necessary travel and other expenses which he may incur at the
specific request of the Company and as approved by the Company in advance and in
accordance with its policies and procedures established from time to time.

 

(b) Executive agrees that, in connection with the upcoming Annual Meeting of
Stockholders scheduled to be held in November 2013, or any postponement thereof,
he will not (x) attend any such meeting, or (y) influence or attempt to
influence any other person to vote shares of Company common stock (i) against
any of the director nominees as a director of the Company or (ii) against the
approval of the advisory resolution on executive compensation.

 

10. Company Property. On or prior to the Separation Date, the Executive shall
return to the Company all Company property in his possession, including, without
limitation, all originals and copies (in whatever format) of all proprietary
information belonging to the Company and/or any of its subsidiaries or
affiliates, credit cards, calling cards, keys, key fobs, identification badges,
files, records, product samples, marketing materials, computer disks, laptop
computers, tablets, pagers, building-access cards and keys,

- 20 -

other electronic equipment, and any records, documents, software, e-mails or
other data from or of the Company or any of its subsidiaries or affiliates, or
on personal computers or laptops, however and wherever stored, relating to the
Company’s (or any of its subsidiary’s or affiliate’s) business or confidential
information. Notwithstanding the foregoing, after the Release Effective Date,
and (a) after the Company has scrubbed the Company laptop used by the Executive,
the Company shall transfer ownership of that laptop computer to the Executive;
(b) the Executive will be permitted to keep his Company cell phone (including
the phone number), subject to his being responsible for any costs associated
with the use of the phone; and (c) the Company will transfer ownership to the
Executive of the Company automobile he has been using (2010 Honda Accord—VIN#
5J6TF2H57ALOO5567), provided that the Executive will be responsible for payment
of any taxes, fees and other costs and expenses applicable to such transfer of
ownership, and to the Executive’s ownership of such automobile from the
Separation Date forward. The Executive acknowledges that commencing with the
Separation Date, the Company may cancel all insurance policies relating to such
Company automobile, and that the Executive will be responsible for determining
the appropriate level of insurance and for the insurance premiums and other
obligations relating to such automobile.

 

11. Indemnification; Liability Insurance. For six years following the Separation
Date, (a) the Executive will continue to be indemnified under the Company’s
Certificate of Incorporation and Bylaws at least to the same extent as prior to
the Separation Date, and (b) the Executive will be covered by the Company’s
directors’ and officers’ liability insurance policies that are the same as, or
provide coverage at least equivalent to, the policies and/or coverage in effect
immediately prior to the Separation Date. The Company’s

- 21 -

obligations under this paragraph 11 shall only apply with respect to third-party
claims and shall not apply with respect to any claims that are directly or
indirectly initiated by or on behalf of the Executive against the Company and
vice versa. Executive shall promptly notify the Company of any claims made
against the Executive in the Executive’s capacity as a former officer/Executive
and/or director of the Company.

 

12. Notices. Any notice to be given hereunder shall be in writing and shall be
deemed given when delivered personally, or two business days after being mailed
by certified mail, return receipt requested, addressed as follows:

 

  To Executive at: Dr. Chris L. Koliopoulos     5160 E. Oakmont Drive    
Tucson, AZ 85718           With a copy to:           Wayne Martino, Esq.    
Brenner Saltzman & Wallman, LLP     271 Whitney Avenue     New Haven, CT 06511

 

  To the Company at: Zygo Corporation     Laurel Brook Road     Middlefield,
Conn     Attention: Corporate Secretary & General Counsel           With a copy
to:           Sheldon G. Nussbaum, Esq.     NortonRoseFulbright LLP     666
Fifth Avenue     New York, NY 10103

 

13. Tax Withholding. All payments, benefits and other amounts made or provided
pursuant to this Separation Agreement will be subject to withholding of
applicable federal, state and local taxes.

- 22 -

14. Enforcement. If any provision of this Separation Agreement (including the
Restrictive Covenants) is held by a court of competent jurisdiction to be
illegal, void or unenforceable, such provision shall have no effect; however,
the remaining provisions shall be enforced to the maximum extent possible.
Further, if a court should determine that any portion of this Separation
Agreement is overbroad or unreasonable, such provision shall be given effect to
the maximum extent possible by narrowing or enforcing in part that aspect of the
provision found to be overbroad or unreasonable. Each party will pay it or his
attorney’s fees and costs in connection with litigation involving this
Separation Agreement, provided that the court will have authority, in its
discretion, to award attorney’s fees and costs to the prevailing party in any
litigation.

 

15. Recoupment upon Restatement of Financial Statements. If the Company is
required to restate all or a portion of its financial statement(s) for any
period during which the Executive was employed by the Company then, subject to
applicable law, the Company, acting in its discretion, may require the Executive
to reimburse the Company for the amount of any incentive compensation paid to
him, cause the cancellation of outstanding equity compensation awards, and seek
reimbursement of any gains otherwise realized by him in respect of the exercise
or settlement of any such awards if and to the extent that (a) the amount of
such incentive compensation was or will be based upon the achievement of certain
financial results that were subsequently reduced due to such restatement, and
(b) the amount of the incentive compensation that was, would have been or would
be paid or provided to Executive if the financial results had been properly
reported would have been lower than the amount actually paid or provided. The
provisions of this paragraph do not apply to the 250,000 options to purchase
Company common stock that were

- 23 -

granted as an inducement award upon commencement of the Executive’s employment
with the Company.

 

16. Certain Tax Matters. The parties intend that all payments required by this
Separation Agreement will be exempt from or comply with Section 409A of the
Internal Revenue Code of 1986 (“Section 409A”), and this Separation Agreement
shall be interpreted and administered accordingly. Each installment of the
payments provided under this Separation Agreement shall be a separate payment
for the purposes of Section 409A. Because the Executive is a “specified
Executive” for purposes of Section 409A, any payment under this Separation
Agreement that is subject to Section 409A shall not be made earlier than six
months after the Separation Date, at which time the Executive shall receive a
catch-up payment of the amounts that otherwise would have been paid in the
absence of such six-month delay (provided, if Executive dies after the
Separation Date but before any payment has been made, such remaining payments
that were or could have been delayed will be paid to the Executive’s estate
without regard to such six-month delay). The preceding sentence will apply
notwithstanding any other provisions in the Separation Agreement that permit or
require payment at an earlier time. If the Executive reasonably determines that
the Executive will incur additional tax or interest expense under Section 409A
with respect to any previously unpaid amount or benefit that is required to be
paid or provided in accordance with this Agreement, and that such additional tax
and interest expense can be avoided by an amendment of the provisions of this
Separation Agreement that apply to such previously unpaid amounts and benefits,
the Executive may furnish the proposed text of such amendment to the Company for
its consideration. If the Company

- 24 -

determines that the amendment proposed by the Executive will have the effects
contemplated by the Executive and would have no adverse effect (economically or
otherwise) on the Company (or, if the Company is reimbursed by the Executive for
any such adverse effect in an amount reasonable determined by the Company), then
the Company will either agree to such amendment in the form proposed by the
Executive or agree to negotiate in good faith with the Executive on changes to
the language of such proposed amendment. Notwithstanding anything to the
contrary contained herein, the Executive will be solely responsible for his own
tax liabilities, including without limitation, income, employment, social
security, or other taxes, penalties or interest that may be incurred by him with
respect to the payments and benefits he receives or is entitled to receive
pursuant to this Separation Agreement, including, without limitation, taxes and
other amounts that may be payable under Section 409A, and the Company makes no
representations and shall have no responsibility or liability with respect to
the payment of any such amounts.

 

17. Successors. This Separation Agreement is binding upon, and shall inure to
the benefit of, the parties and their respective heirs, executors,
administrators, successors and assigns.

 

18. Choice of Law. This Separation Agreement shall be construed and enforced in
accordance with the laws of the State of Connecticut without regard to the
principles of conflicts of law.

 

19. Entire Agreement; Termination of Employment Agreement. This Separation
Agreement constitutes the complete understanding between the Company and the
Executive regarding its subject matter and supersedes any and all prior or
contemporaneous, agreements, understandings, and discussions, whether written or
oral. The employment

- 25 -

agreement between the Executive and the Company dated January 18, 2010 is hereby
terminated and is no longer of any force and effect, provided that, if the
Release contained in paragraph 7 of this Separation Agreement does not become
effective, the provisions of Sections 6 (Restrictive Covenants) and 7
(Recoupment Upon Certain Restatement of Financial Statements) of said employment
agreement shall survive its termination and be enforceable in accordance with
their terms.,

 

20. Amendment or Waiver. No provision of this Separation Agreement may be
modified, amended, waived or terminated except by an instrument in writing
signed by the parties to this Separation Agreement. No course of dealing between
the parties will modify, amend, waive or terminate any provision of this
Separation Agreement or any rights or obligations of any party under or by
reason of this Separation Agreement. No delay on the part of the Company in
exercising any right hereunder shall operate as a waiver of such right. No
waiver, express or implied, by a party of any right or any breach by the other
party shall constitute a waiver of any other right of such party or breach by
such other party.

 

21. Headings. The headings used herein are for the convenience of reference
only, do not constitute part of this Separation Agreement and shall not be
deemed to limit or otherwise affect any of the provisions of this Separation
Agreement.

 

22. Counterparts. This Separation Agreement may be executed in one or more
counterparts, including emailed or telecopied facsimiles, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

 

[Signature Page Follows]

- 26 -

 

IN WITNESS WHEREOF, the parties have executed this Separation Agreement on the
date first written above.

 

  ZYGO CORPORATION           /s/ Gary K. Willis     By: Gary K. Willis      
DIRECTOR                 EXECUTIVE           /s/ Chris L. Koliopoulos     Chris
L. Koliopoulos  

- 27 -

SCHEDULE 1

OUTSTANDING STOCK OPTIONS

 

Grant Date   Exercise
Price    Number of
Shares    Number
Unvested    Number
Vested    Total Number
Outstanding                             01/19/2010  $10.83    250,000  
 62,500    187,500    250,000  08/31/2010  $8.05    50,000    12,500    37,500  
 50,000  08/24/2011  $12.26    50,000    25,000    25,000    50,000  08/24/2011 
$12.26    40,812    20,406    20,406    40,812  08/27/2012  $19.39    35,000  
 26,250    8,750    35,000  08/21/2013  $13.42    47,500    47,500    —  
 47,500                             Total        473,312    194,156    279,156  
 473,312 

 

Schedule 2

Outstanding RSUs

 

Grant Date   Number of
RSUs
Granted    Number
Previously
Vested    Unvested
RSUs
Remaining                   08/31/2010   25,000    12,500    12,500  08/24/2011 
 22,108    11,054    11,054  08/24/2011   34,188    17,094    17,094 
08/27/2012   20,231    5,057    15,174  08/27/2012   19,769    19,769    0 
08/27/2012   4,094    4,094    0  08/21/2013   32,700    0    32,700 
08/21/2013   22,800    0    22,800                   Total   180,890    69,568  
 111,322