Exhibit 10.7


 


Execution copy


 


AXCELIS TECHNOLOGIES, INC.


 


EXECUTIVE SEPARATION AGREEMENT


 


THIS EXECUTIVE SEPARATION
AGREEMENT, dated as of July1, 2005, is made by and between Axcelis
Technologies, Inc. (hereinafter referred to as the “Company”) and David W.
Duff  (hereinafter referred to as “Executive”).  In consideration of the mutual covenants
contained herein, the parties agree as follows:


 


1.             Termination
of Active Employment; Separation Period.  
Executive’s active employment with the Company will terminate not later
than Friday, July 29, 2005 (the “Separation Commencement Date”).  During the period from July 30, 2005 through
April 28, 2006, Executive will continue to provide services to the Company on a
part time basis from his home office.  
As described in Section 2, Executive will receive the salary
continuation and benefits during the period following the Separation
Commencement Date and ending Friday, April 28, 2006 (the “Separation Period”).  It is understood that Executive may accept
employment with a third party during the Separation Period.  During the Separation Period, the Executive
shall:


 


1.1.          engage
in special projects mutually agreed upon with the Chief Executive Officer;


 


1.2.          cooperate
with the reasonable requests of the Company to support the transition of the
Executive’s duties to other Company personnel; and


 


1.3.          continue
to be an employee to the extent necessary to provide the benefits described in
Section 2.


 


 At the end of the Separation Period, all
aspects of Executive’s employment shall terminate (the Termination Date”).


 


2.             Termination
Compensation.


 


2.1.          Axcelis
Time Management (ATM).  Executive
will receive a lump sum amount for his ATM balance, following the commencement
of the Separation Period (ATM will cease to accrue as of the commencement of
the Separation Period).


 


2.2.          Salary
Continuation.  The Company will pay
Executive, on a salary continuation basis, Executive’s base salary at the
Separation Commencement Date during the Separation Period, less legally
required payroll tax deductions and the elective deductions referred to in
Section 2.4.


 





















 


2.3.          Benefits.  Attachment
A sets forth detailed information on the impact of Executive’s
separation on Company-provided benefits. 
During the Separation Period, the Company shall:


 


(a)           Allow
Executive to continue to contribute to the Company’s 401(k) Plan, (the
Executive shall receive any contribution that may be made by the Company to his
account) to the extent permissible under the Plan and applicable law and
maintain Executive’s status as employed for the purposes of the Eaton Cash
Balance Plan, if applicable;


 


(b)           Allow
Executive to continue to participate in the Company’s Employee Stock Purchase
Plan in accordance with plan terms, subject to the applicable deductions from
the payments under Section 2.1 to reflect such participation;


 


(c)           Allow
Executive to continue to vest in his stock options until the Termination Date
and to exercise any vested options until the Termination Date and for 90 days
thereafter, to the extent so provided in the option;


 


(d)           Continue
Executive’s participation in the medical and dental plans (including the Mass
General Hospital Executive Registry Program) selected by Executive prior to the
Separation Commencement Date, subject to the applicable deductions from the
payments under Section 2.1 to reflect such participation (Executive will cease
to be covered by the Company’s short and long term disability insurance
Company-provided life insurance upon the Separation Commencement Date);


 


(e)           Continue
to afford the Executive the privileges afforded under the “Executive Tax
Preparation and Financial Planning Program” subject to the limits outlined in
the program overview document;


 


(f)            The
Company agrees to allow the Executive to retain the laptop computer used by him
during the Separation Period;


 


(g)           The
Company agrees to allow Executive to maintain email during his Separation
Period or until Executive finds other employment; and


 


(h)           The
Company agrees to give the mobile phone to the Executive and pay the Executive
a lump sum amount to cover cell phone premiums at his plan level (but not more
than $99 per month) covering the Separation Period.


 


2.4.          Outplacement
Services.  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.  These payments are contingent upon Executive’s
cooperation with the outplacement service and upon active efforts by Executive
to locate another position.


 


2.5.          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


 


2





















 


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 Separation
Commencement Date.


 


2.6.          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.


 


3.             Executive
Obligations.


 


3.1.          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 Separation Commencement Date; provided the Executive shall
return the laptop computer referenced in Section 2 above not later than the end
of the Separation 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.


 


3.2.          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. That Agreement is affixed hereto
and incorporated by reference as Attachment B.


 


3.3.          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.


 


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


 


(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


 


3





















 


business engaged in manufacturing implant, rapid
thermal processing, photostabilization 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 3.4 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; and


 


(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 3.4 shall be extended by the
time of any (1) breach by the Executive of any terms of this Agreement, or (2)
litigation involving the Executive and the Company in respect of any of the
provisions of this Agreement (whether by the Executive seeking relief from the
terms hereof or by the Company seeking to enforce the terms hereof or
otherwise).


 


3.5.          Resignations from Corporate Office.  Not
later than the Separation Commencement Date, the Executive will execute and
deliver to the Company his resignation as a Vice President of the Company and
any subsidiaries of the Company, attached here to as Attachment C.  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 3.5.


 


3.6.          Sumitomo Eaton Nova Corporation. 
Concurrently with the execution of this Agreement, the Executive will
execute and deliver to the Company his resignation as a Director of Sumitomo
Eaton Nova Corporation (“SEN”), in the form attached here to as Attachment D.   The Company shall determine when and if the
Executive’s resignation is submitted to SEN.   
Executive shall, at the Company’s request and expense, continue to serve
as a member of the Board of Directors of SEN until the earlier of (a) the date
his resignation from such Board is submitted by the Company and become
effective or (b) Executive’s term of office expires on June 30, 2006.   The Executive agrees to cooperate in all
ways (including with respect to Board votes) with the Company’s instructions
relating to his membership on the SEN Board and resignation from such Board. Executive
expressly acknowledges that the compensation


 


4





















 


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 3.6.


 


3.7.          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. The Executive agrees to be responsive to requests for
information related to the smooth transition of a successor to his position.


 


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


 


4.1.          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 Separation Commencement Date.


 


4.2.          Section
16 Reporting.  The Executive shall
cease to be a reporting person under the Securities Exchange Act of 1934, as
amended, as of the Separation Commencement Date, provided however, the
Executive must file a Form 4 with the SEC to report any purchase, sale, or
option exercise after the Separation Commencement 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 Separation Commencement Date.


 


5.             Insider
Trading Policy.  Assuming the Executive
does not acquire material non-public information after the Separation
Commencement Date, beginning on the date two trading days after the Company’s
public announcement of its earnings for the fiscal quarter ending after the
Separation Commencement Date, the Executive will no longer be subject to
restrictions on trading arising under the Company’s insider trading policy.


 


6.             General
Release and Covenant Not to Sue.


 


6.1.          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, (2) the
Company’s obligations under the Indemnification Agreement between the Executive
and the Company dated August 6, 2002 (the “Indemnification Agreement”) and (3)
the Company’s obligations under the Change of Control Agreement dated August 6,
2002 if Executive can reasonably demonstrate, based solely on events occurring
prior to July 29, 2005, that Executive’s termination of employment (i) was at
the request of a third party who has taken steps reasonably calculated to
effect a Change of Control or (ii) otherwise arose in connection with or
anticipation of a Change of Control) 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


 


5





















 


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; Maryland Ann. Code Article 100 Sections 88-94, and Maryland Ann. Code
Article 49B, Sections 1 et seq; 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 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.


 


6.2.          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.


 


6.3.          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.


 


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


 


7.1.          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.


 


7.2.          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.


 


8.             Miscellaneous.


 


6





















 


8.1.          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 3 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 3.


 


8.2.          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 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.


 


8.3.          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 or understanding between the parties,
other than the Indemification Agreement.


 


8.4.          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.


 


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


 


8.6.          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.


 


8.7.          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.


 


7





















 


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

  	
   

  
	
   

  	
  Lynnette C. Fallon, Executive Vice President,

  HR/Legal and General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ David W. Duff

  	
   

  
	
   

  	
  David W. Duff

  	
   

  
	
  Attachments

  
	
   

  
	
  A
  –

  	
   

  	
  Benefits
  After Termination Date

  
	
  B
  —

  	
   

  	
  Employee
  Invention Assignment and Confidentiality Agreement

  
	
  C
  –

  	
   

  	
  Resignation
  from Office

  
	
  D—

  	
   

  	
  Resignation from SEN

  
						



 


8