Exhibit 10.2


 


CHANGE
OF CONTROL AGREEMENT


 


AGREEMENT by and between
AXCELIS TECHNOLOGIES, INC., a Delaware corporation (the “Company”), and                                      (the
“Executive”), dated as of the         day of
                     ,
200   .


 


The Board of Directors of the Company (the “Board”)
has determined that it is in the best interests of the Company and its shareholders
to assure that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control
(as defined below) of the Company.  The
Board believes it is imperative to diminish the inevitable distraction of the
Executive by virtue of the personal uncertainties and risks created by a
pending or threatened Change of Control and to encourage the Executive’s full
attention and dedication to the Company currently and in the event of any
threatened or pending Change of Control, and to provide the Executive with
compensation and benefits arrangements upon a Change of Control which ensure
that the compensation and benefits expectations of the Executive will be
satisfied and which are competitive with those of other corporations.  Therefore, in order to accomplish these
objectives, the Board has caused the Company to enter into this Agreement.


 


NOW, THEREFORE, IT IS
HEREBY AGREED AS FOLLOWS:


 


1.                                       Certain Definitions.


 


1.1.                              The
“Effective Date” shall mean the first date during the Change of Control
Period (as defined in Section 1.2) on which a Change of Control (as defined in
Section 2) occurs.  Anything in this
Agreement to the contrary notwithstanding, if a Change of Control occurs and if
the Executive’s employment with the Company is terminated prior to the date on
which the Change of Control occurs, and if it is reasonably demonstrated by the
Executive that such 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,
then for all purposes of this Agreement the “Effective Date” shall mean
the date immediately prior to the date of such termination of employment.


 


1.2.                              The
“Change of Control Period” shall mean the period commencing on the date
hereof and ending on the third anniversary of the date hereof; provided,
however, that commencing on the date one year after the date hereof, and on
each annual anniversary of such date (such date and each annual anniversary
thereof shall be hereinafter referred to as the “Renewal Date”), unless
previously terminated, the Change of Control Period shall be automatically
extended so as to terminate three years from such Renewal Date, unless at least
60 days prior to the Renewal Date the Company shall give notice to the Executive
that the Change of Control Period shall not be so extended.


 


2.                                       Change of Control.  For the purpose of this Agreement, a “Change
of Control” shall mean:


 





















 


2.1.                              The
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 25% or more of either (i) the then
outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) or (ii) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided,
however, that for purposes of this subsection 2.1, the following acquisitions
shall not constitute a Change of Control: 
(i) any acquisition directly from the Company, (ii) any acquisition by
the Company, or (iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled by
the Company; or


 


2.2.                              Individuals
who, as of the date hereof, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least two-thirds of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or


 


2.3.                              Consummation
by the Company of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company or the
acquisition of assets of another corporation (a “Business Combination”),
in each case, unless, following such Business Combination, (i) all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 75% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially
the same proportions as their ownership, immediately prior to such Business
Combination of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (ii) no Person (excluding any employee
benefit plan (or related trust) of the Company or such corporation resulting
from such Business Combination) beneficially owns, directly or indirectly, 25%
or more of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business Combination and
(iii) at least a majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the


 


2





















 


Incumbent Board at the time of the execution of the
initial agreement, or of the action of the Board, providing for such Business
Combination; or


 


2.4.                              Approval
by the shareholders of the Company of a complete liquidation or dissolution of
the Company.


 


Notwithstanding the
foregoing, a “Change of Control” shall not be deemed to have occurred as
a result of any transaction or series of transactions (i) which the Executive,
or any entity in which the Executive is a partner, officer or more than 50%
owner initiates, if immediately following the transaction or series of
transactions that would otherwise constitute a Change in Control, the Executive,
either alone or together with other individuals who are executive officers of
the Company immediately prior thereto, beneficially owns, directly or
indirectly, more than 10% of the then outstanding shares of common stock of the
Company or the corporation resulting from the transaction or series of
transactions, as applicable, or of the combined voting power of the then
outstanding Voting Securities of the Company or such resulting corporation; or
(ii)  an offering of Company Voting
Securities to the public directly by the Company, or any subsidiary or
affiliate.


 


3.                                       Non-Compete and Non-Solicitation.  The Executive hereby agrees with the Company
that for a period of 12 months following any termination of employment of the
Executive, for any reason, and whether occurring before or after the Effective
Date:


 


3.1.                              Non-Compete.  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
competing with any of the businesses conducted by the Company or any of its
subsidiaries or affiliates, 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 business that is competitive with any of the
businesses conducted by the Company or by any subsidiary or affiliate of the
Company; provided, however, that nothing contained in this Section 3 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);


 


3.2.                              Non-Solicitation
of Employees.  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


 


3.3.                              Non-Solicitation
of Customers.  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.


 


3





















 


Solicitation of customers for the purposes of this
obligation refers to existing and/or contemplated products as of the time of
Executive’s termination of employment.


 


3.4.                              Extension
of Time.  The applicable time periods
set forth in this Section 3 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).


 


4.                                       Employment Period.  The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the
employ of the Company subject to the terms and conditions of this Agreement, as
such may be supplemented or modified by an employment agreement, if any,
between the Company and the Executive, for the period commencing on the
Effective Date and ending on the third anniversary of such date (the “Employment
Period”).


 


5.                                       Terms of Employment.


 


5.1.                              Position
and Duties.


 


(a)                                  During
the Employment Period, (i) the Executive’s position (including status, offices,
titles and reporting requirements), authority, duties and responsibilities
shall be at least commensurate in all material respects with the most
significant of those held, exercised and assigned to the Executive at any time
during the 120-day period immediately preceding the Effective Date and (ii) the
Executive’s services shall be performed at the location where the Executive was
employed immediately preceding the Effective Date or any office or location
less than 35 miles from such location.


 


(b)                                 During
the Employment Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive agrees to devote reasonable
attention and time during normal business hours to the business and affairs of
the Company and, to the extent necessary to discharge the responsibilities
assigned to the Executive hereunder, to use the Executive’s reasonable best
efforts to perform faithfully and efficiently such responsibilities.  During the Employment Period it shall not be
a violation of this Agreement for the Executive to (A) serve on corporate,
civic or charitable boards or committees, (B) fulfill speaking engagements and
(C) manage personal investments, so long as such activities do not
significantly interfere with the performance of the Executive’s
responsibilities as an employee of the Company in accordance with this
Agreement.  It is expressly understood
and agreed that to the extent that any such activities have been conducted by
the Executive prior to the Effective Date, the continued conduct of such
activities (or the conduct of activities similar in nature and scope thereto)
subsequent to the Effective Date shall not thereafter be deemed to interfere
with the performance of the Executive’s responsibilities to the Company.


 


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5.2.                              Compensation.


 


(a)                                  Base
Salary.  During the Employment
Period, the Executive shall receive an annual base salary (“Annual Base
Salary”), which shall be paid at a monthly rate, at least equal to twelve
times the highest monthly base salary paid or payable, including any base
salary which has been earned but deferred, to the Executive by the Company and
its affiliated companies in respect of the twelve-month period immediately
preceding the month in which the Effective Date occurs.  During the Employment Period, the Annual Base
Salary shall be increased no more than 12 months after the last salary increase
awarded to the Executive prior to the Effective Date, and thereafter at least
annually, in each case by a percentage not less than the average annual percentage
merit increase in the Executive’s base salary during the five (5) full calendar
years immediately preceding the Effective Date. 
Any increase in Annual Base Salary shall not serve to limit or reduce
any other obligation to the Executive under this Agreement.  Annual Base Salary shall not be reduced after
any such increase and the term Annual Base Salary as utilized in this Agreement
shall refer to Annual Base Salary as so increased.  As used in this Agreement, the term “affiliated
companies” shall include any company controlled by, controlling or under
common control with the Company.


 


(b)                                 Annual
Bonus.  In addition to Annual Base
Salary, the Executive shall be awarded, for each fiscal year ending during the
Employment Period, an annual bonus (the “Annual Bonus”) in cash in an
amount (the “Annual Bonus Amount”) at least equal to the Executive’s
Annual Bonus opportunity for the most recent year for which an annual Bonus
opportunity was established before the Effective Date under the Company’s then
annual incentive plan or program, adjusted by the average of the Executive’s
individual performance rating for each of the three most recent years ended
before the Effective Date, but eliminating any corporate performance
measure.  Each such Annual Bonus shall be
paid no later than the end of the third month of the fiscal year next following
the fiscal year for which the Annual Bonus is awarded, unless the Executive
shall elect to defer the receipt of such Annual Bonus.


 


(c)                                  Incentive,
Savings and Retirement Plans.  During
the Employment Period, the Executive shall be entitled to participate in all
incentive, employee stock purchase, savings and retirement plans, practices,
policies and programs applicable generally to other peer executives of the
Company and its affiliated companies, but in no event shall such plans,
practices, policies and programs provide the Executive with incentive
opportunities (measured with respect to both regular and special incentive
opportunities, to the extent, if any, that such distinction is applicable),
savings opportunities and retirement benefit opportunities, in each case, less
favorable, in the aggregate, than the most favorable of those provided by the
Company and its affiliated companies for the Executive under such plans,
practices, policies and programs as in effect at any time during the 120-day
period immediately preceding the Effective Date or if more favorable to the
Executive, those provided generally at any time after the Effective Date to
other peer executives of the Company and its affiliated companies.


 


(d)                                 Welfare
Benefit Plans.  During the Employment
Period, the Executive and/or the Executive’s family, as the case may be, shall
be eligible for participation in and shall


 


5





















 


receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental death and
travel accident insurance plans and programs) to the extent applicable
generally to other peer executives of the Company and its affiliated companies,
but in no event shall such plans, practices, policies and programs provide the
Executive with benefits which are less favorable, in the aggregate, than the
most favorable of such plans, practices, policies and programs in effect for
the Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, those provided generally
at any time after the Effective Date to other peer executives of the Company
and its affiliated companies.


 


(e)                                  Expenses.  During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Executive in accordance with the most favorable policies,
practices and procedures of the Company and its affiliated companies in effect
for the Executive at any time during the 120-day period immediately preceding
the Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer executives of the
Company and its affiliated companies.


 


(f)                                    Fringe
Benefits.  During the Employment
Period, the Executive shall be entitled to fringe benefits in accordance with
the most favorable plans, practices, programs and policies of the Company and
its affiliated companies in effect for the Executive at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies.


 


(g)                                 Office
and Support Staff.  During the
Employment Period, the Executive shall be entitled to an office or offices of a
size and with furnishings and other appointments, and to personal secretarial
and other assistance, at least equal to the most favorable of the foregoing
provided to the Executive by the Company and its affiliated companies at any
time during the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive, as provided generally at any time thereafter
with respect to other peer executives of the Company and its affiliated
companies.


 


(h)                                 Vacation.  During the Employment Period, the Executive
shall be entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and its affiliated companies as
in effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives
of the Company and its affiliated companies.


 


6





















 


6.                                       Termination of Employment.


 


6.1.                              Death
or Disability.  The Executive’s
employment shall terminate automatically upon the Executive’s death during the
Employment Period.  If the Company
determines in good faith that the Disability of the Executive has occurred
during the Employment Period (pursuant to the definition of Disability set
forth below), it may give to the Executive written notice in accordance with
Section 14.2 of this Agreement of its intention to terminate the Executive’s
employment.  In such event, the Executive’s
employment with the Company shall terminate effective on the 30th day after
receipt of such notice by the Executive (the “Disability Effective Date”),
provided that, within the 30 days after such receipt, the Executive shall not
have returned to full-time performance of the Executive’s duties.  For purposes of this Agreement, “Disability”
shall mean the absence of the Executive from the Executive’s duties with the
Company on a full-time basis for 180 consecutive business days as a result of
incapacity due to mental or physical illness or injury which is determined to
be total and permanent by a physician selected by the Company or its insurers
and acceptable to the Executive or the Executive’s legal representative.


 


6.2.                              Cause.  The Company may terminate the Executive’s
employment during the Employment Period for Cause.  For purposes of this Agreement, “Cause”
shall mean:


 


(a)                                  the
willful and continued failure of the Executive to perform substantially the
Executive’s duties with the Company or one of its affiliates (other than any
such failure resulting from incapacity due to physical or mental illness),
after a written demand for substantial performance is delivered to the
Executive by the Board or the Chief Executive Officer of the Company which
specifically identifies the manner in which the Board or Chief Executive
Officer believes that the Executive has not substantially performed the Executive’s
duties, or


 


(b)                                 the willful engaging by the Executive in illegal conduct or
gross misconduct which is materially and demonstrably injurious to the Company.


 


For purposes of this
provision, no act or failure to act, on the part of the Executive, shall be considered
“willful” unless it is done, or omitted to be done, by the Executive in
bad faith or without reasonable belief that the Executive’s action or omission
was in the best interests of the Company. 
Any act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or upon the instructions of the Chief
Executive Officer or a senior officer of the Company or based upon the advice
of counsel for the Company shall be conclusively presumed to be done, or
omitted to be done, by the Executive in good faith and in the best interests of
the Company.  The cessation of employment
of the Executive shall not be deemed to be for Cause unless and until there
shall have been delivered to the Executive a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters of the entire
membership of the Board at a meeting of the Board called and held for such
purpose (after reasonable notice is provided to the Executive and the Executive
is given an opportunity, together with counsel, to be heard before the Board),
finding that, in the good faith opinion of the Board, the Executive is guilty
of the conduct described in subparagraph (a) or (b) above, and specifying the
particulars thereof in detail.


 


7





















 


6.3.                              Good
Reason.  The Executive’s employment
may be terminated by the Executive for Good Reason.  For purposes of this Agreement, “Good
Reason” shall mean:


 


(a)                                  the
assignment to the Executive of any duties inconsistent in any respect with the
Executive’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by Section
5.1 of this Agreement, or any other action by the Company which results in a
diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive;


 


(b)                                 any
failure by the Company to comply with any of the provisions of Section 5.2 of
this Agreement, other than an isolated, insubstantial and inadvertent failure
not occurring in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive;


 


(c)                                  the
Company’s requiring the Executive to be based at any office or location other
than as provided in Section 5.1(a)(ii) hereof or the Company’s requiring the
Executive to travel on Company business to a substantially greater extent than
required immediately prior to the Effective Date;


 


(d)                                 any purported termination by the Company of the Executive’s
employment otherwise than as expressly permitted by this Agreement; or


 


(e)                                  any failure by the Company to comply with and satisfy
Section 12.3 of this Agreement.


 


For purposes of this
Section 6.3, any good faith determination of “Good Reason” made by the
Executive shall be conclusive.


 


6.4.                              Notice
of Termination.  Any termination by
the Company for Cause, or by the Executive for Good Reason, shall be
communicated by Notice of Termination to the other party hereto given in
accordance with Section 14.2 of this Agreement. 
For purposes of this Agreement, a “Notice of Termination” means a
written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination
of the Executive’s employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of
such notice, specifies the termination date (which date shall be not more than
thirty days after the giving of such notice). 
The failure by the Executive or the Company to set forth in the Notice
of Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or the Company, respectively,
from asserting such fact or circumstance in enforcing the Executive’s or the
Company’s rights hereunder.


 


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6.5.                              Date
of Termination.  “Date of
Termination” means (i) if the Executive’s employment is terminated by the
Company for Cause, or by the Executive for Good Reason, the date of receipt of
the Notice of Termination or any later date specified therein, as the case may
be, (ii) if the Executive’s employment is terminated by the Company other than
for Cause or Disability, the date on which the Company notifies the Executive
of such termination and (iii) if the Executive’s employment is terminated by
reason of death or Disability, the date of death of the Executive or the
Disability Effective Date, as the case may be.


 


7.                                       Obligations of the Company upon Termination.


 


7.1.                              Good
Reason; Other Than for Cause, Death or Disability.  If, during the Employment Period, the Company
shall terminate the Executive’s employment other than for Cause or Disability
or the Executive shall terminate employment for Good Reason:


 


(a)                                  the Company shall pay to the Executive the aggregate of the
following amounts:


 


(i)                                     in
a lump sum in cash within 30 days after the Date of Termination the sum of (1)
the Executive’s Annual Base Salary through the Date of Termination, to the
extent not theretofore paid to the Executive, (2) the amount, if any, which has
been earned by the Executive with respect to any completed Incentive Year under
the Company’s Incentive Compensation Plan or any successor thereto, and any
completed Award Period under the Company’s Axcelis Team Incentive Plan or any
successor thereto, in each case to the extent not theretofore paid to the
Executive, and (3) with respect to each Award Period under the Company’s
Axcelis Team Incentive Plan or any successor thereto which begins before and
ends after the Date of Termination, an amount equal to (x) 100% of the
Executive’s Individual Incentive Target (as defined in such plan) for such
Award Period times (y) a fraction, the numerator of which is the number of days
in such Award Period before the Date of Termination, and the denominator of
which is the total number of days in such Award Period (the sum of the amounts
described in clauses (1), (2) and (3) shall be hereinafter referred to as the “Accrued
Obligations”); and


 


(ii)                                  in
a lump sum in cash within 30 days after the Date of Termination, the product of
(1) the Multiple (as defined below) and (2) the sum of (x) the Executive’s
Annual Base Salary and (y) the Annual Bonus Amount (hereinafter referred to as
the “Severance Obligations”);


 


(b)                                 for
a number of years after the Executive’s Date of Termination equal to the lesser
of two and the Multiple, or such longer period as may be provided by the terms
of the appropriate plan, program, practice or policy, the Company shall
continue benefits to the Executive and/or the Executive’s family at least equal
to those which would have been provided to them in accordance with the plans,
programs, practices and policies described in Section 5.2(d) of this Agreement
if the Executive’s employment had not been terminated or, if more favorable to
the Executive, as in effect generally at any time thereafter with respect to
other peer executives of the Company and its affiliated companies and their
families, provided, however, that (1) if the


 


9





















 


Executive becomes re-employed with another employer
and is eligible to receive medical or other welfare benefits under another employer-provided
plan, the medical and other welfare benefits described herein shall be
secondary to those provided under such other plan during such applicable period
of eligibility, and for purposes of determining eligibility (but not the time
of commencement of benefits) of the Executive for retiree benefits pursuant to
such plans, practices, programs and policies, the Executive shall be considered
to have remained employed for a number of years after the Date of Termination
equal to the lesser of two and the Multiple and to have retired on the last day
of such period; (2) the Company shall not be obligated to continue benefits
under this Section 7.1(b) to the extent such benefits cannot be continued in
accordance with the plan or policy under which such benefits are being provided
to employees generally at the Date of Termination and (3) in any event, under the Consolidated Omnibus Budget
Reconciliation Act of 1985 (COBRA), Executive may continue Executive’s then
current medical and/or dental coverage and Executive’s dependents’ then current
medical and/or dental coverage for up to eighteen (18) months from the
Date of Termination upon payment of monthly premiums and administrative fees;


 


(c)                                  to
the extent not theretofore paid or provided, the Company shall timely pay or
provide to the Executive any other amounts or benefits required to be paid or
provided or which the Executive is eligible to receive under any plan, program,
policy or practice or contract or agreement of the Company and its affiliated
companies, excluding any amounts or benefits which are subject to the
discretion of the Board of Directors, such as future equity grants  (such other amounts and benefits shall be
hereinafter referred to as the “Other Benefits”); and


 


(d)                                 all
stock options, restricted stock, restricted stock units and other stock
interests or stock-based rights awarded to the Executive by the Company on or
before the Date of Termination shall become fully vested as of the Date of
Termination, subject to their early termination or expiration (if applicable)
in accordance with the terms of each such stock option or other award.


 


The “Multiple”
means the lesser of (i) three and (ii) the number of years and portions thereof
(expressed as a decimal fraction) from the Date of Termination until the
Executive’s 65th birthday.


 


7.2.                              Death.  If the Executive’s employment is terminated
by reason of the Executive’s death during the Employment Period, this Agreement
shall terminate without further obligations to the Executive’s legal
representatives under this Agreement, other than for payment of Accrued
Obligations and the timely payment or provision of Other Benefits.  Accrued Obligations shall be paid to the
Executive’s estate or beneficiary, as applicable, in a lump sum in cash within
30 days of the Date of Termination.  With
respect to the provision of Other Benefits, the term Other Benefits as utilized
in this Section 7.2 shall include, without limitation, and the Executive’s
estate and/or beneficiaries shall be entitled to receive, benefits at least
equal to the most favorable benefits provided by the Company and affiliated
companies to the estates and beneficiaries of peer executives of the Company
and such affiliated companies under such plans, programs, practices and
policies relating to death benefits, if any, as in effect with respect to other
peer executives and their beneficiaries at any time during the 120-day period
immediately


 


10





















 


preceding the Effective Date or, if more favorable to
the Executive’s estate and/or the Executive’s beneficiaries, as in effect on
the date of the Executive’s death with respect to other peer executives of the
Company and its affiliated companies and their beneficiaries.


 


7.3.                              Disability.  If the Executive’s employment is terminated
by reason of the Executive’s Disability during the Employment Period, this
Agreement shall terminate without further obligations to the Executive, other
than for payment of Accrued Obligations and the timely payment or provision of
Other Benefits.  Accrued Obligations
shall be paid to the Executive in a lump sum in cash within 30 days of the Date
of Termination.  With respect to the provision
of Other Benefits, the term Other Benefits as utilized in this Section 7.3
shall include, and the Executive shall be entitled after the Disability
Effective Date to receive, disability and other benefits at least equal to the
most favorable of those generally provided by the Company and its affiliated
companies to disabled executives and/or their families in accordance with such
plans, programs, practices and policies relating to disability, if any, as in
effect generally with respect to other peer executives and their families at
any time during the 120-day period immediately preceding the Effective Date or,
if more favorable to the Executive and/or the Executive’s family, as in effect
at any time thereafter generally with respect to other peer executives of the
Company and its affiliated companies and their families.


 


7.4.                              Cause;
Other than for Good Reason.  If the
Executive’s employment shall be terminated for Cause during the Employment
Period, this Agreement shall terminate without further obligations to the
Executive other than the obligation to pay to the Executive (x) the Annual Base
Salary through the Date of Termination and (y) Other Benefits, in each case to
the extent theretofore unpaid.  If the
Executive voluntarily terminates employment during the Employment Period,
excluding a termination for Good Reason, this Agreement shall terminate without
further obligations to the Executive, other than for Accrued Obligations and
the timely payment or provision of Other Benefits.  In such case, all Accrued Obligations shall
be paid to the Executive in a lump sum in cash within 30 days of the Date of
Termination.


 


8.                                       Non-exclusivity of Rights.  Nothing in this Agreement shall prevent or
limit the Executive’s continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated companies
and for which the Executive may qualify, nor, subject to the last sentence of
this Section 8 and to Section 14.6, shall anything herein limit or otherwise
affect such rights as the Executive may have under any contract or agreement
with the Company or any of its affiliated companies.  Without limiting the generality of the
foregoing, the Company and the Executive may, but shall not be required to,
enter into an employment agreement setting forth certain terms and conditions
of the Executive’s employment and, if an employment agreement is in effect, the
terms and conditions of this Agreement shall be and remain in full force and
effect and the terms and conditions of that employment agreement shall be
deemed to supplement but not supersede the terms and conditions of this
Agreement; provided, however, the Executive
shall be entitled to receive the greater of the amounts and benefits due under
this Agreement or such employment agreement but not the aggregate of the
amounts and benefits under both such agreements.  If amounts and benefits are due under this
Agreement and under an employment agreement, the amounts due under this
Agreement shall be paid and the Company will be obligated under the employment
agreement only to the extent the amounts and


 


11





















 


benefits under the employment
agreement exceed the amounts actually paid under this Agreement.  Amounts which are vested benefits or which
the Executive is otherwise entitled to receive under any plan, policy, practice
or program of or any contract or agreement with the Company or any of its affiliated
companies at or subsequent to the Date of Termination shall be payable in
accordance with such plan, policy, practice or program or contract or agreement
except as explicitly modified by this Agreement.  Notwithstanding the foregoing, if the Executive
becomes entitled to receive severance benefits under Section 7.1 hereof, such
severance benefits shall be in lieu of any benefits under any severance or
separation plan, program or policy of the Company or any of its affiliated
companies to which the Executive would otherwise have been entitled.


 


9.                                       Full Settlement; Legal Fees.  The Company’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others.  In no event shall
the Executive be obligated to seek other employment or take any other action by
way of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and except as specifically provided in Section
7.1(b), such amounts shall not be reduced whether or not the Executive obtains
other employment.  The Company agrees to
pay as incurred, to the full extent permitted by law, all legal fees and
expenses which the Executive may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Company, the Executive or others of
the validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (whether such contest is
between the Company and the Executive or between either of them and any third
party, and including as a result of any contest by the Executive about the
amount of any payment pursuant to this Agreement), plus in each case interest
on any delayed payment at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the “Code”).


 


10.                                 Certain Additional Payments by the Company.


 


10.1.                        Anything
in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment or distribution by the Company to or for the
benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this
Section 10) (a “Payment”) would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are incurred
by the Executive with respect to such excise tax (such excise tax, together
with any such interest and penalties, being hereinafter collectively referred
to as the “Excise Tax”), then the Executive shall be entitled to receive
an additional payment (a “Gross-Up Payment”) in an amount such that
after payment by the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.


 


10.2.                        Subject
to the provisions of Section 10.3, all determinations required to be made
under this Section 10, including whether and when a Gross-Up Payment is required
and the


 


12





















 


amount of such Gross-Up Payment and the assumptions to
be utilized in arriving at such determination, shall be made by a nationally
recognized certified public accounting firm as may be designated by the
Executive (the “Accounting Firm”), which shall provide detailed supporting
calculations both to the Company and to the Executive within 15 business days
of the receipt of notice from the Executive that there has been a Payment, or
such earlier time as is requested by the Company.  In the event that the Accounting Firm is
serving as accountant or auditor for the individual, entity or group effecting
the Change of Control, the Executive shall appoint another nationally
recognized accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder).  All fees and expenses of the Accounting Firm
shall be borne solely by the Company. 
Any Gross-Up Payment, as determined pursuant to this Section 10, shall
be paid by the Company to the Executive within five days of the receipt of the
Accounting Firm’s determination.  Any
determination by the Accounting Firm shall be binding upon the Company and the
Executive.  As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made (“Underpayment”), consistent with the calculations required to be
made hereunder.  In the event that the
Company exhausts its remedies pursuant to Section 10.3 and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive.


 


10.3.                        The
Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company
of the Gross-Up Payment.  Such
notification shall be given as soon as practicable but no later than ten
business days after the Executive is informed in writing of such claim and
shall apprise the Company of the nature of such claim and the date on which
such claim is requested to be paid.  The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which he gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect to
such claim is due).  If the Company notifies
the Executive in writing prior to the expiration of such period that it desires
to contest such claim, the Executive shall:


 


(a)                                  give the Company any information reasonably requested by the
Company relating to such claim,


 


(b)                                 take
such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney reasonably
selected by the Company,


 


(c)                                  cooperate with the Company in good faith in order
effectively to contest such claim, and


 


(d)                                 permit the Company to participate in any proceedings
relating to such claim;


 


13





















 


provided, however, that
the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold the Executive harmless, on an after-tax basis, for any
Excise Tax or income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment of costs and
expenses.  Without limitation on the
foregoing provisions of this Section 10.3, the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct the Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the Executive agrees
to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate courts,
as the Company shall determine; provided, however, that if the Company directs
the Executive to pay such claim and sue for a refund, the Company shall advance
the amount of such payment to the Executive, on an interest-free basis and
shall indemnify and hold the Executive harmless, on an after-tax basis, from
any Excise Tax or income tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any extension of
the statute of limitations relating to payment of taxes for the taxable year of
the Executive with respect to which such contested amount is claimed to be due
is limited solely to such contested amount. 
Furthermore, the Company’s control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.


 


10.4.                        If,
after the receipt by the Executive of an amount advanced by the Company
pursuant to Section 10.3, the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to the Company’s
complying with the requirements of Section 10.3) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). 
If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 10.3, a determination is made that the
Executive shall not be entitled to any refund with respect to such claim and
the Company does not notify the Executive in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.


 


11.                                 Confidential Information.  The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the
Executive during the Executive’s employment by the Company or any of its affiliated
companies and which shall not be or become public knowledge (other than by acts
by the Executive or representatives of the Executive in violation of this Agreement).  After termination of the Executive’s
employment with the Company, the Executive shall not, without the prior written
consent of the Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other
than the Company


 


14





















 


and those designated by it.  In no event shall an asserted violation of
the provisions of this Section 11 constitute a basis for deferring or
withholding any amounts otherwise payable to the Executive under this Agreement.


 


12.                                 Successors.


 


12.1.                        This
Agreement is personal to the Executive and without the prior written consent of
the Company shall not be assignable by the Executive otherwise than by will or
the laws of descent and distribution. 
This Agreement shall inure to the benefit of and be enforceable by the
Executive’s legal representatives.


 


12.2.                        This
Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.


 


12.3.                        The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place.  As used in this Agreement, “Company”
shall mean the Company as hereinbefore defined and any successor to its
business and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.


 


13.                                 Trust Deposit.


 


13.1.                        Upon
the occurrence of a Proposed Change of Control (as defined below) during the
Change of Control Period, the Company shall deposit in trust or escrow with a
third party cash in an amount sufficient to provide all of the benefits and
other payments to which the Executive would be entitled hereunder if a Change
of Control occurred on the date of the Proposed Change of Control and the
Executive’s employment were terminated by the Executive for Good Reason
immediately thereafter.  Upon such
deposit, references hereunder to any payment by the Company shall be deemed to
refer to a payment from such trust or escrow; provided,
however, that nothing contained herein shall relieve the Company of its
obligation to make the payments required of it hereunder in the event any such
payment is not made from the trust or escrow.


 


13.2.                        “Proposed
Change of Control” means:


 


(a)                                  the
commencement of a tender or exchange offer by any third person (other than a
tender or exchange offer which, if consummated, would not result in a Change of
Control) for 25% or more of the Outstanding Company Common Stock or combined
voting power of the Outstanding Company Voting Securities;


 


(b)                                 the execution of an agreement by the Company, the
consummation of which would result in the occurrence of a Change of Control;


 


15





















 


(c)                                  the
public announcement by any person (including the Company) of an intention to
take or to consider taking actions which if consummated would constitute a
Change of Control other than through a contested election for directors of the
Company; or


 


(d)                                 the adoption by the Board, as a result of other
circumstances, including circumstances similar or related to the foregoing, of
a resolution to the effect that, for purposes of this Agreement, a Proposed
Change of Control has occurred.


 


14.                                 Miscellaneous.


 


14.1.                        This
Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts, without reference to principles of conflict of
laws.  The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect.  This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.


 


14.2.                        All
notices and other communications hereunder shall be in writing and shall be
given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:


 


	
  If to the
  Executive:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  108 Cherry Hill
  Drive

  
	
   

  	
  Beverly, MA
  01915

  
	
   

  	
   

  
	
  If to the
  Company:

  	
   

  
	
   

  	
   

  
	
   

  	
  Axcelis Technologies, Inc.

  
	
   

  	
  108 Cherry Hill
  Drive

  
	
   

  	
  Beverly, MA
  01915

  
	
   

  	
  Attention:
  Corporate Secretary

  



 


or
to such other address as either party shall have furnished to the other in
writing in accordance herewith.  Notice
and communications shall be effective when actually received by the addressee.


 


14.3.                        The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement.


 


14.4.                        The
Company may withhold from any amounts payable under this Agreement such
Federal, state, local or foreign taxes as shall be required to be withheld
pursuant to any applicable law or regulation.


 


14.5.                        The
Executive’s or the Company’s failure to insist upon strict compliance with any
provision hereof or any other provision of this Agreement or the failure to
assert any right the Executive or the Company may have hereunder, including,
without limitation, the right


 


16





















 


of the Executive to terminate employment for Good
Reason pursuant to Section 6.3 (a) –(e) of this Agreement, shall not be deemed
to be a waiver of such provision or right or any other provision or right of
this Agreement.


 


14.6.                        The
Executive and the Company acknowledge that, except as may otherwise be provided
under any other written agreement between the Executive and the Company, the
employment of the Executive by the Company is “at will” and, prior to the
Effective Date, the Executive’s employment may be terminated by either the
Executive or the Company at any time prior to the Effective Date, in which case
the Executive shall have no further rights under this Agreement.  From and after the Effective Date, this
Agreement shall supersede any other agreement between the parties with respect
to the subject matter hereof.


 


IN
WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused this Agreement to be executed in its name on its behalf, all as of the
day and year first above written.


 


	
   

  	
  EXECUTIVE:

  
	
  Witness:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AXCELIS
  TECHNOLOGIES, INC.

  
	
  ATTEST :

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title: 

  	
   

  	
   

  
								



 


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