Document:

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                                                                  Exhibit - 10.2

                       FORM OF INDEMNIFICATION AGREEMENT

         This Agreement, made this _____ day of __________, _____, by and
between Axcelis Technologies, Inc., a Delaware corporation (the "Company"), and
____________________, ____________________ ("Indemnitee");

                  WHEREAS, the Company and Indemnitee are each aware of the
exposure to litigation of officers, directors and representatives of the Company
as such persons exercise their duties to the Company;

                  WHEREAS, the Company and Indemnitee are also aware of
conditions in the insurance industry that have affected and may affect in the
future the Company's ability to obtain appropriate directors' and officers'
liability insurance on an economically acceptable basis;

                  WHEREAS, the Company desires to continue to benefit from the
services of highly qualified, experienced and otherwise competent persons such
as Indemnitee; and

                  WHEREAS, Indemnitee desires to serve or to continue to serve
the Company as an officer and/or director of the Company, or, if requested to do
so by the Company, as a director, officer, trustee, employee, representative or
agent of another corporation, partnership, joint venture, trust or other
enterprise, for so long as the Company continues to provide on an acceptable
basis adequate and reliable indemnification against certain liabilities and
expenses which may be incurred by Indemnitee;

                  NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants herein contained, the parties hereto agree as follows:

                   1.  INDEMNIFICATION

                       (a)    The Company shall indemnify Indemnitee to the
fullest extent permitted by law with respect to Indemnitee's activities as an
officer and/or director of the Company and/or as a person who is or was serving
or has agreed to serve at the request of the Company as a director, officer,
trustee, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, domestic or foreign, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person or on such person's behalf ("Expenses") in
connection with any claim against Indemnitee, whether or not such claim is
brought by any party who may be an "insured person" under the Company's
directors' and officers' liability insurance, which is the subject of any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative,

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investigative or otherwise and whether formal or informal (a "Proceeding"), to
which Indemnitee was, is, or is threatened to be made a party by reason of
anything done or not done by Indemnitee in any such capacity.

                       (b)    The rights of Indemnitee hereunder shall be in
addition to any rights Indemnitee may now or hereafter have to indemnification
by the Company or otherwise. More specifically, the parties hereto intend that
Indemnitee shall be entitled to receive, as determined by Indemnitee, payment to
the maximum extent permitted by one or any combination of the following:

                             (i)   the payments provided by the Company's
By-laws, as amended and restated, and as in effect on the date hereof, a copy of
the relevant portions of which are attached hereto as Exhibit I;

                            (ii)   the payments provided by the Restated
Certificate of Incorporation or By-laws or their equivalent of the Company in
effect at the time Expenses are incurred by Indemnitee;

                           (iii)   the payments allowable under Delaware law in
effect at the date hereof;

                            (iv)   the payments allowable under the law of the
jurisdiction under which the Company is incorporated at the time Expenses are
incurred by Indemnitee;

                             (v)   the payments available under liability
insurance obtained by the Company; and

                            (vi)   such other payments as are or may be
otherwise available to Indemnitee.

                              Combination of two or more of the payments
provided by (i) through (vi) shall be available to the extent that the
Applicable Document, as hereafter defined, does not require that the payments
provided therein be exclusive of other payments. The document or law providing
for any of the payments listed in items (i) through (vi) above is referred to in
this Agreement as the "Applicable Document." The Company hereby undertakes to
use its best efforts to assist Indemnitee, in all proper and legal ways, to
obtain the payments selected by Indemnitee under items (i) through (vi) above.

                       (c)    For purposes of this Agreement, references to
"other enterprises" shall include employee benefit plans for employees of the
Company or of any of its subsidiaries without regard to ownership of such plans;
references to "fines" shall include any excise taxes assessed on Indemnitee with
respect to any employee benefit plan; references to "serving at the request of
the Company" shall include any service as a director, officer, trustee,
employee, representative or agent of the Company

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which imposes duties on, or involves services by, Indemnitee with respect to an
employee benefit plan, its participants or beneficiaries; references to the
masculine shall include the feminine; references to the singular shall include
the plural and vice versa; and if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan, Indemnitee shall be deemed to have
acted in a manner consistent with the standards required for indemnification by
the Company under the Applicable Documents.

                   2.  INSURANCE

                       The Company shall maintain directors' and officers'
liability insurance which is at least as favorable to Indemnitee as the policy
in effect on the date hereof and for so long as Indemnitee's services are
covered hereunder, provided and to the extent that such insurance is available
on a reasonable commercial basis. However, Indemnitee shall continue to be
entitled to the indemnification rights provided hereunder regardless of whether
liability or other insurance coverage is at any time obtained or retained by the
Company. Any payments in fact made to Indemnitee under an insurance policy
obtained or retained by the Company shall reduce the obligation of the Company
to make payments hereunder by the amount of the payments made under any such
insurance policy. In the event that insurance becomes unavailable in the amount
or scope of coverage of the policy in effect on the date hereof on a reasonable
commercial basis and the Company foregoes maintenance of all or a portion of
such insurance coverage, the Company shall stand as a self-insurer with respect
to the coverage, or portion thereof, not retained, and shall indemnify
Indemnitee against any loss arising out of the reduction or cancellation of such
insurance coverage.

                   3.  PAYMENT OF EXPENSES

                       At Indemnitee's request, the Company shall pay the
Expenses as and when incurred by Indemnitee, after receipt of written notice
pursuant to Paragraph 6 hereof and an undertaking in the form of Exhibit II
attached hereto by or on behalf of Indemnitee (i) to repay such amounts so paid
on Indemnitee's behalf if it shall ultimately be determined under the Applicable
Document that Indemnitee is required to repay such Expenses and (ii) to
reasonably cooperate with the Company concerning the Proceeding. That portion of
Expenses which represents attorneys' fees and other costs incurred in defending
any Proceeding shall be paid by the Company within 30 days of its receipt of
such notice, together with reasonable documentation evidencing the amount and
nature of such Expenses.

                   4.  ESCROW RESERVE

                       The Company shall dedicate up to an aggregate of
$10,000,000 as collateral security for the initial funding of its obligations
hereunder and under similar agreements with other directors, officers and
representatives by depositing assets or bank letters of credit in escrow or
reserving lines of credit that may be drawn down by an escrow agent in the
dedicated amount (the "Escrow Reserve"); provided, however,

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that the terms of any such Escrow Reserve may provide that the cash, securities
or letters or lines of credit available therefor shall only be utilized for the
indemnification or advancement of expenses provided for herein in the event that
there shall have occurred within the preceding five years a Change in Control of
the Company, as defined below. The Company shall promptly provide Indemnitee
with a true and complete copy of the agreement relating to the establishment and
operation of the Escrow Reserve, together with such additional documentation or
information with respect to the escrow as Indemnitee may from time to time
reasonably request. The Company shall promptly deliver an executed copy of this
Agreement to the Escrow Reserve agent to evidence to the agent that Indemnitee
is a beneficiary of the Escrow Reserve and shall deliver to Indemnitee the
escrow agent's signed receipt evidencing that delivery. For purposes of this
Agreement, a "Change in Control" of the Company shall have occurred if at any
time any of the following events shall occur: (i) a tender offer shall be made
and consummated for the ownership of securities of the Company representing 25%
or more of the combined voting power of Company's then outstanding voting
securities; (ii) the Company shall be merged or consolidated with another
corporation and as a result of such merger or consolidation less than 75% of the
outstanding voting securities of the surviving or resulting corporation shall be
owned in the aggregate by the former shareholders of the Company, other than
affiliates (within the meaning of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) of any party to such merger or consolidation, as
the same shall have existed immediately prior to such merger of consolidation;
(iii) the Company shall sell substantially all of its assets to another
corporation which is not a wholly-owned subsidiary of the Company; (iv) any
person (as such term is used in Sections 3(a)(9) and 13(d)(3) of the Exchange
Act) is or becomes the beneficial owner, directly or indirectly, of securities
of the Company representing 25% or more of the combined voting power of the
Company's then outstanding securities; or (v) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors of the Company cease for any reason to constitute at
least a majority thereof unless the election, or the nomination for election by
the Company's shareholders, of each new director was approved by a vote of at
least two-thirds of the directors then still in office who were directors at the
beginning of the period. For purposes of this Agreement, ownership of voting
securities shall take into account and include ownership as determined by
applying the provisions of Rule 13d-3(d)(1)(i) of the Exchange Act (as then in
effect).

                   5.  ADDITIONAL RIGHTS

                       The indemnification provided in this Agreement shall
not be exclusive of any other indemnification or right to which Indemnitee may
be entitled and shall continue after Indemnitee has ceased to occupy a position
as an officer, director or representative as described in Paragraph 1 above with
respect to Proceedings relating to or arising out of Indemnitee's acts or
omissions during Indemnitee's service in such position.

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                   6.  NOTICE TO COMPANY

                       Indemnitee shall provide to the Company prompt written
notice of any Proceeding brought, threatened, asserted or commenced against
Indemnitee with respect to which Indemnitee may assert a right to
indemnification hereunder; provided that failure to provide such notice shall
not in any way limit Indemnitee's rights under this Agreement.

                   7.  COOPERATION IN DEFENSE AND SETTLEMENT

                       Indemnitee shall not make any admission or effect any
settlement with respect to a Proceeding without the Company's written consent
unless Indemnitee shall have determined to undertake Indemnitee's own defense in
such matter and has waived the benefits of this Agreement in writing delivered
to the Company. The Company shall not settle any proceeding to which Indemnitee
is a party in any manner which would impose an Expense on Indemnitee without
Indemnitee's written consent. Neither Indemnitee nor the Company will
unreasonably withhold consent to any proposed settlement. Indemnitee and the
Company shall cooperate to the extent reasonably possible with each other and
with the Company's insurers, in attempts to defend or settle such Proceeding.

                   8.  ASSUMPTION OF DEFENSE

                       Except as otherwise provided below, to the extent that
it may wish, the Company jointly with any other indemnifying party similarly
notified will be entitled to assume Indemnitee's defense in any Proceeding, with
counsel mutually satisfactory to Indemnitee and the Company. After notice from
the Company to Indemnitee of the Company's election so to assume such defense,
the Company will not be liable to Indemnitee under this Agreement for Expenses
subsequently incurred by Indemnitee in connection with the defense thereof other
than reasonable costs of investigation or as otherwise provided below.
Indemnitee shall have the right to employ counsel in such Proceeding, but the
fees and expenses of such counsel incurred after notice from the Company of its
assumption of the defense thereof shall be at Indemnitee's expense unless:

                       (a)    the employment of counsel by Indemnitee has been
authorized by the Company;

                       (b)    counsel employed by the Company initially is
unacceptable or later becomes unacceptable to Indemnitee and such
unacceptability is reasonable under then existing circumstances;

                       (c)    Indemnitee shall have reasonably concluded that
there may be a conflict of interest between Indemnitee and the Company in the
conduct of the defense of such Proceeding; or

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                       (d)    the Company shall not have employed counsel
promptly to assume the defense of such Proceeding.

                       In each of the cases set forth in items (a) through (d)
above, the fees and expenses of counsel shall be at the expense of the Company
and subject to payment pursuant to this Agreement. The Company shall not be
entitled to assume the defense of Indemnitee in any Proceeding brought by or on
behalf of the Company or as to which Indemnitee shall have reached either of the
conclusions provided for in clauses (b) or (c) above.

                   9.  ENFORCEMENT

                       In the event that any dispute or controversy shall arise
under this Agreement between Indemnitee and the Company with respect to whether
Indemnitee is entitled to indemnification in connection with any Proceeding or
with respect to the amount of Expenses incurred, then with respect to each such
dispute or controversy Indemnitee may seek to enforce this Agreement through
legal action or, at Indemnitee's sole option and request, through arbitration.
If arbitration is requested, such dispute or controversy shall be submitted by
the parties to binding arbitration in the City of Boston, Commonwealth of
Massachusetts, before a single arbitrator agreeable to both parties. If the
parties cannot agree on a designated arbitrator within 15 days after arbitration
is requested in writing by either of them, the arbitration shall proceed in the
City of Boston, Commonwealth of Massachusetts, before an arbitrator appointed by
the American Arbitration Association. In either case, the arbitration proceeding
shall commence promptly under the rules then in effect of that Association and
the arbitrator agreed to by the parties or appointed by that Association shall
be an attorney other than an attorney who has, or is associated with a firm
having associated with it an attorney which has, been retained by or performed
services for the Company or Indemnitee at any time during the five years
preceding the commencement of arbitration. The award shall be rendered in such
form that judgment may be entered thereon in any court having jurisdiction
thereof. The prevailing party shall be entitled to prompt reimbursement of any
costs and expenses (including, without limitation, reasonable attorney's fees)
incurred in connection with such legal action or arbitration provided that
Indemnitee shall not be obligated to reimburse the Company unless the arbitrator
or court which resolves the dispute determines that Indemnitee acted in bad
faith in bringing such action or arbitration.

                  10.  EXCLUSIONS

                       Notwithstanding the scope of indemnification which may
be available to Indemnitees from time to time under an Applicable Document, no
indemnification, reimbursement or payment shall be required of the Company
hereunder with respect to:

                       (a)    any claim or any part thereof as to which
Indemnitee shall have been adjudged by a court of competent jurisdiction from
which no appeal is or can be taken, by clear and convincing evidence, to have
acted or failed to act with deliberate

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intent to cause injury to the Company or with reckless disregard for the best
interests of the Company;

                       (b)    any claim or any part thereof arising under
Section 16(b) of the Exchange Act pursuant to which Indemnitee shall be
obligated to pay any penalty, fine, settlement or judgment;

                       (c)    any obligation of Indemnitee based upon or
attributable to Indemnitee gaining in fact any personal gain, profit or
advantage to which Indemnitee was not entitled; or

                       (d)    any Proceeding initiated by Indemnitee without
the consent or authorization of the Board of Directors of the Company, provided
that this exclusion shall not apply with respect to any claims brought by
Indemnitee (i) to enforce Indemnitee's rights under this Agreement or (ii) in
any Proceeding initiated by another person or entity whether or not such claims
were brought by Indemnitee against a person or entity who was otherwise a party
to such Proceeding.

                       Nothing in this Paragraph 10 shall eliminate or diminish
the Company's obligations to advance that portion of Indemnitee's Expenses which
represent attorneys' fees and other costs incurred in defending any proceeding
pursuant to Paragraph 3 of this Agreement.

                  11.  EXTRAORDINARY TRANSACTIONS

                       The Company covenants and agrees that, in the event of
any merger, consolidation or reorganization in which the Company is not the
surviving entity, any sale of all or substantially all of the assets of the
Company or any liquidation of the Company (each such event is hereinafter
referred to as an "extraordinary transaction"), the Company shall:

                       (a)    have the obligations of the Company under this
Agreement expressly assumed by the survivor, purchaser or successor, as the case
may be, in such extraordinary transaction; or

                       (b)    otherwise adequately provide for the satisfaction
of the Company's obligations under this Agreement, in a manner acceptable to
Indemnitee.

                  12.  NO PERSONAL LIABILITY

                       Indemnitee agrees that neither the directors nor any
officer, employee, representative or agent of the Company shall be personally
liable for the satisfaction of the Company's obligations under this Agreement,
and Indemnitee shall look solely to the assets of the Company and the Escrow
Reserve referred to in Paragraph 4 hereof for satisfaction of any claims
hereunder.

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                  13.  PERIOD OF LIMITATIONS

                       No legal action shall be brought and no cause of action
shall be asserted by or on behalf of the Company or any affiliate of the Company
against Indemnitee, Indemnitee's spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of accrual of
such cause of action, and any claim or cause of action of the Company or its
affiliate shall be extinguished and deemed released unless asserted by the
timely filing of legal action within such two-year period; provided, however,
that if any shorter period of limitations is otherwise applicable to any such
cause of action such shorter period shall govern.

                  14.  SEVERABILITY

                       If any provision, phrase, or other portion of this
Agreement should be determined by any court of competent jurisdiction to be
invalid, illegal or unenforceable, in whole or in part, and such determination
should become final, such provision, phrase or other portion shall be deemed to
be severed or limited, but only to the extent required to render the remaining
provisions and portions of this Agreement enforceable, and this Agreement as
thus amended shall be enforced to give effect to the intention of the parties
insofar as that is possible.

                  15.  SUBROGATION

                       In the event of any payment under this Agreement, the
Company shall be subrogated to the extent thereof to all rights to
indemnification or reimbursement against any insurer or other entity or person
vested in Indemnitee, who shall execute all instruments and take all other
action as shall be reasonably necessary for the Company to enforce such rights.

                  16.  GOVERNING LAW

                       The parties hereto agree that this Agreement shall be
construed and enforced in accordance with and governed by the laws of the State
of Delaware.

                  17.  NOTICES

                       All notices, requests, demands and other communications
hereunder shall be in writing and shall be considered to have been duly given if
delivered by hand and receipted for by the party to whom the notice, request,
demand or other communication shall have been directed, or mailed by certified
mail, return receipt requested, with postage prepaid:

                       (a)    If to the Company, to:
                               Axcelis Technologies, Inc.
                               55 Cherry Hill Drive
                               Beverly, Massachusetts  01915
                               Attention:  Secretary

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                       (b)    If to Indemnitee, to:
                                 [Name of Indemnitee]
                                 Axcelis Technologies, Inc.
                                 55 Cherry Hill Drive
                                 Beverly, Massachusetts  01915

Or to such other or further address as shall be designated from time to time by
Indemnitee or the Company to the other.

                  18.  TERMINATION

                       This Agreement may be terminated by either party upon
not less than 60 days' prior written notice delivered to the other party, but
such termination shall not in any way diminish the obligations of the Company
hereunder (including the obligation to maintain the Escrow Reserve referred to
in Paragraph 4 hereof) with respect to Indemnitee's activities prior to the
effective date of the termination.

                  19.  AMENDMENTS

                       This Agreement and the rights and duties of Indemnitee
and the Company hereunder may not be amended, modified or terminated except by
written instrument signed and delivered by the parties hereto.

                  20.  BINDING EFFECT

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

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

                                      AXCELIS TECHNOLOGIES, INC.

                                      By: __________________________
                                      Title:

                                      INDEMNITEE

                                      By: __________________________
                                      Title:

[Exhibits omitted. The registrant hereby agrees to furnish supplementally,
upon request, a copy of any omitted exhibits to this agreement.]

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                                                                   EXHIBIT 10.3

                            FORM OF CHANGE OF CONTROL
                                    AGREEMENT

         AGREEMENT by and between AXCELIS TECHNOLOGIES, INC., a Delaware
corporation (the "Company") and ____________ (the "Executive"), dated as of the
30th day of June, 2000.

         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.

         (a) The "Effective Date" shall mean the first date during the Change of
Control Period (as defined in Section 1(b)) 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

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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.

         (b) 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:

         (a) 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 (a), 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

         (b) 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

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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

         (c) 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 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

         (d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.

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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) by which Eaton Corporation disposes of some or all of its interest in the
Company, including, but not limited to, Eaton Corporation's sale or other
disposition of some or all of its Company Voting Securities; or (iii) an
offering of Company Voting Securities to the public directly by the Company or
by Eaton Corporation, or any subsidiary or affiliate.

         3. 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").

         4. Terms of Employment.

         (a) Position and Duties. (i) During the Employment Period, (A) 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 (B) 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.

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         (ii) 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.

         (b) Compensation.

         (i) 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

                                      -5-
<PAGE>   6

Agreement, the term "affiliated companies" shall include any company controlled
by, controlling or under common control with the Company.

         (ii) 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.

         (iii) 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.

         (iv) 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 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

                                      -6-
<PAGE>   7

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.

         (v) 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.

         (vi) 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.

         (vii) 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 exclusive 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.

         (viii) 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

                                      -7-
<PAGE>   8

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.

         5. Termination of Employment.

         (a) 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 12(b) 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.

         (b) Cause. The Company may terminate the Executive's employment during
the Employment Period for Cause. For purposes of this Agreement, "Cause" shall
mean:

         (i) 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

         (ii) 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

                                      -8-
<PAGE>   9

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 (i) or
(ii) above, and specifying the particulars thereof in detail.

         (c) Good Reason. The Executive's employment may be terminated by the
Executive for Good Reason. For purposes of this Agreement, "Good Reason" shall
mean:

                  (i) 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 4(a) 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;

                  (ii) any failure by the Company to comply with any of the
         provisions of Section 4(b) 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;

                  (iii) the Company's requiring the Executive to be based at any
         office or location other than as provided in Section 4(a)(i)(B) hereof
         or the Company's requiring

                                      -9-
<PAGE>   10

         the Executive to travel on Company business to a substantially greater
         extent than required immediately prior to the Effective Date;

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

                  (v) any failure by the Company to comply with and satisfy
         Section 11(c) of this Agreement.

For purposes of this Section 5(c), any good faith determination of "Good Reason"
made by the Executive shall be conclusive.

         (d) 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 13(b) 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.

         (e) 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

                                      -10-
<PAGE>   11

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.

         6. Obligations of the Company upon Termination.

         (a) 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:

         (i) the Company shall pay to the Executive in a lump sum in cash within
30 days after the Date of Termination the aggregate of the following amounts:

                  A. 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 Executive Strategic
         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 Executive Strategic 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

                  B. 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;

         (ii) 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

                                      -11-
<PAGE>   12

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 4(b)(iv) 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
if the 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;

         (iii) 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 (such other amounts and benefits shall be hereinafter
referred to as the "Other Benefits").

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.

         (b) 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 6(b) shall
include, without limitation, and the Executive's

                                      -12-
<PAGE>   13

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 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.

         (c) 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 6(c) 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.

         (d) 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

                                      -13-
<PAGE>   14

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.

         7. 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 7 and to Section 13(f), 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 supercede 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 and
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 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 6(a) 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.

                                      -14-
<PAGE>   15

         8. 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 6(a)(ii), 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").

         9. Certain Additional Payments by the Company.

(a) 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
9) (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, are 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

                                      -15-
<PAGE>   16

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.

(b) Subject to the provisions of Section 9(c), all determinations required to be
made under this Section 9, including whether and when a Gross-Up Payment is
required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by Ernst & Young LLP
or such other 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 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 9, 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 9(c) 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.

(c) 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

                                      -16-
<PAGE>   17

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:

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

         (ii) 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,

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

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

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 9(c), 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

                                      -17-
<PAGE>   18

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.

(d) If, after the receipt by the Executive of an amount advanced by the Company
pursuant to Section 9(c), 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 9(c)) 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 9(c), 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.

         10. 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

                                      -18-
<PAGE>   19

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 and those designated by it. In no event shall
an asserted violation of the provisions of this Section 10 constitute a basis
for deferring or withholding any amounts otherwise payable to the Executive
under this Agreement.

         11. Successors. (a) 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.

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

         (c) 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.

                                      -19-
<PAGE>   20

         12. Trust Deposit.

         (a) 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.

         (b) "Proposed Change of Control" means:

         (i) 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;

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

         (iii) 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

         (iv) 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.

                                      -20-
<PAGE>   21

         13. Miscellaneous.

         (a) 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.

         (b) 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:
                           -------------------

                                    --------------------
                                    55 Cherry Hill Drive
                                    Beverly, MA 01915

                           If to the Company:
                           -----------------

                                    Axcelis Technologies, Inc.
                                    55 Cherry Hill Drive
                                    Beverly, MA 01915

                                    Attention:  ________________

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.

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

                                      -21-
<PAGE>   22

         (d) 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.

         (e) 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 of the Executive to terminate
employment for Good Reason pursuant to Section 5(c)(i)-(v) 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.

         (f) 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.

                                      -22-
<PAGE>   23

                  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:
                                                 ----------------------------

                                      -23-

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