1
EXHIBIT 2.4
EMPLOYEE MATTERS AGREEMENT
BETWEEN
XXXXX CORPORATION
AND
AXCELIS TECHNOLOGIES, INC.
DATED
June 30, 2000
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS.............................................................................................1
1.1 AD&D Plan.......................................................................................1
1.2 Affiliated Company..............................................................................1
1.3 Agreement.......................................................................................1
1.4 Ancillary Agreements............................................................................2
1.5 ASO Contracts...................................................................................2
1.6 Assets..........................................................................................2
1.7 Axcelis Technologies............................................................................2
1.8 Axcelis Technologies Business...................................................................2
1.9 Axcelis Technologies Employee...................................................................2
1.10 Axcelis Technologies Group......................................................................2
1.11 Axcelis Technologies Stock Value................................................................2
1.12 Axcelis Technologies Transferred Employee.......................................................3
1.13 Bonus Plan......................................................................................3
1.14 Business Travel Accident Insurance..............................................................3
1.15 COBRA...........................................................................................3
1.16 Code............................................................................................3
1.17 Deferred Compensation Plan......................................................................3
1.18. Defined Benefit Plan............................................................................4
1.19 Disability Plan.................................................................................4
1.20 Distribution....................................................................................4
1.21 Distribution Date...............................................................................4
1.22 DOL.............................................................................................4
1.23 Eaton...........................................................................................4
1.24 Eaton Employee..................................................................................4
1.25 Eaton Group.....................................................................................4
1.26 Xxxxx Xxxxxxxxx Agreement.......................................................................4
1.27 Eaton Stock Value...............................................................................4
1.28 Eaton Terminated Employee.......................................................................4
1.29 Educational Assistance Program..................................................................5
1.30 Employee Assistance Program.....................................................................5
1.31 Employment Obligations..........................................................................5
1.32 ERISA...........................................................................................5
1.33 FMLA............................................................................................5
1.34 Foreign Plan....................................................................................5
1.35 Fringe Benefit Plans............................................................................5
1.36 FSA/Dependent Reimbursement Plan................................................................5
1.37 FSA/Medical Reimbursement Plan..................................................................5
1.38 General Assignment and Assumption Agreement.....................................................6
1.39 Group Life Plan.................................................................................6
1.40 HCFA............................................................................................6
1.41 Health and Welfare Plans........................................................................6
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1.42 Health Plans....................................................................................6
1.43 HMO.............................................................................................6
1.44 IPO.............................................................................................6
1.45 IPO Closing.....................................................................................6
1.46 IPO Closing Date................................................................................6
1.47 IPO Registration Statement......................................................................6
1.48 IRS.............................................................................................7
1.49 Leave of Absence Plans..........................................................................7
1.50 Long-Term Disability Plan.......................................................................7
1.51 Material Feature................................................................................7
1.52 Nasdaq..........................................................................................7
1.53 Non-Controlled Group Date.......................................................................7
1.54 Non-US Plan.....................................................................................7
1.55 Option..........................................................................................7
1.56 Participating Company...........................................................................7
1.57 Person..........................................................................................7
1.58 Plan............................................................................................8
1.59 Plan Obligations................................................................................8
1.60 QDRO............................................................................................8
1.61 QMCSO...........................................................................................8
1.62 Ratio...........................................................................................8
1.63 Savings Plan....................................................................................8
1.64 SEC.............................................................................................8
1.65 Section 125 Plan................................................................................8
1.66 Separation......................................................................................8
1.67 Separation Agreement............................................................................9
1.68 Separation Date.................................................................................9
1.69 Severance Plan..................................................................................9
1.70 Short-Term Disability Plan......................................................................9
1.71 Stock Plan......................................................................................9
1.72 Stock Purchase Plan.............................................................................9
1.73 Subsidiary......................................................................................9
1.74 Tax Sharing and Indemnification Agreement.......................................................9
1.75 Transitional Services Agreement.................................................................9
1.76 Unemployment Insurance Program.................................................................10
ARTICLE II GENERAL PRINCIPLES....................................................................................11
2.1 Assumption of Axcelis Technologies Liabilities.................................................11
2.2 Establishment of Axcelis Technologies Plans....................................................11
2.3 Axcelis Technologies Under No Obligation to Maintain Plans.....................................13
2.4 Axcelis Technologies' Participation in Eaton Plans.............................................13
2.5 Terms of Participation by Axcelis Technologies Employees and Axcelis
Technologies Transferred Employees in Axcelis Technologies Plans...............................14
2.6 Claims Administration..........................................................................15
2.7 Foreign Plans..................................................................................15
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ARTICLE III QUALIFIED PENSION PLANS..............................................................................16
3.1 Defined Contribution and 401(k) Plan...........................................................16
3.2 Defined Benefit Plan...........................................................................16
ARTICLE IV NON-QUALIFIED PLAN....................................................................................18
4.1 Deferred Compensation Plan.....................................................................18
ARTICLE V HEALTH AND WELFARE PLANS...............................................................................19
5.1 Health Plans as of the Non-Controlled Group Date...............................................19
5.2 Health Plans from the Separation Date through the Non-Controlled Group Date....................20
5.3 Group Life Plan................................................................................20
5.4 AD&D Plan......................................................................................20
5.5 Severance Plan.................................................................................21
5.6 Disability Plans...............................................................................21
5.7 Business Travel Accident Insurance.............................................................21
5.8 Section 125 Plan...............................................................................22
5.9 COBRA..........................................................................................22
5.10 Administrative Services........................................................................23
5.11 Foreign Plans..................................................................................23
ARTICLE VI EQUITY AND OTHER COMPENSATION.........................................................................24
6.1 Bonus Plan.....................................................................................24
6.2 Eaton Options..................................................................................24
6.3 Stock Purchase Plan............................................................................25
ARTICLE VII FRINGE AND OTHER BENEFITS............................................................................26
7.1 Employee Assistance Program....................................................................26
7.2 Educational Assistance Program.................................................................26
7.3 Other Benefits.................................................................................26
7.4 Administrative Services........................................................................26
ARTICLE VIII ADMINISTRATIVE PROVISIONS...........................................................................27
8.1 Payment of Liabilities, Plan Expenses and Related Matters......................................27
8.2 Sharing of Participant Information.............................................................27
8.3 Reporting and Disclosure Communications to Participants........................................28
8.4 Audits Regarding Vendor Contracts..............................................................28
8.5 Employee Identification Numbers................................................................28
8.6 Beneficiary Designation........................................................................28
8.7 Requests for IRS and DOL Opinions..............................................................28
8.8 Fiduciary Matters..............................................................................28
8.9 Consent of Third Parties.......................................................................29
8.10 Foreign Plans; Requests for Foreign Government Authority Rulings...............................29
ARTICLE IX EMPLOYMENT-RELATED MATTERS............................................................................30
9.1 Terms of Axcelis Technologies Employment.......................................................30
9.2 HR Data Support Systems........................................................................30
9.3 Employment of Employees with U.S. Work Visas...................................................30
9.4 Confidentiality and Proprietary Information....................................................30
9.5 Personnel Records..............................................................................30
9.6 Medical Records................................................................................30
9.7 Unemployment Insurance Program.................................................................31
9.8 Non-Termination of Employment; No Third-Party Beneficiaries....................................31
9.9 Employment Claims..............................................................................31
9.10 Foreign Works Councils and Employee Associations...............................................32
ARTICLE X MISCELLANEOUS..........................................................................................33
10.1 Relationship of Parties........................................................................33
10.2 Affiliates.....................................................................................33
10.3 Limitation of Liability........................................................................33
10.4 Governing Law..................................................................................33
10.5 Termination....................................................................................33
10.6 Notices........................................................................................33
10.7 Counterparts...................................................................................34
10.8 Binding Effect; Assignment.....................................................................34
10.9 Severability...................................................................................34
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative..........................................34
10.11 Entire Agreement; Amendment....................................................................35
10.12 Authority......................................................................................35
10.13 Interpretation.................................................................................35
10.14 Conflict.......................................................................................35
10.15 Subsequent Legal Fees..........................................................................35
10.16 No Third-Party Beneficiaries or Right to Rely..................................................36
SCHEDULE 2.7 FOREIGN PLANS..............................................................................i
SCHEDULE 5.2 EATON HEALTH PLANS.......................................................................iii
SCHEDULE 7.3 OTHER FRINGE BENEFITS.....................................................................iv
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EMPLOYEE MATTERS AGREEMENT
This EMPLOYEE MATTERS AGREEMENT is made and entered into on June 30,
2000, by and between Xxxxx Corporation, an Ohio corporation, and Axcelis
Technologies, Inc., a Delaware corporation, to be effective on and after the
Separation Date (as defined herein). Capitalized terms used herein (other than
the formal names of Eaton Plans (as defined below) and related trusts of Eaton)
and not otherwise defined, shall have the respective meanings assigned to them
in Article I hereof.
WHEREAS, the Board of Directors of Eaton has determined that it is in
the best interests of Eaton and its shareholders to separate Xxxxx'x existing
businesses into two (2) independent businesses, Eaton and the Axcelis
Technologies Business, so that each business may reach its full potential by
focusing its management and employees specifically on its own operations and the
methods of better fitting its own market;
WHEREAS, in furtherance of the foregoing, Eaton and Axcelis
Technologies have agreed to enter into this Agreement to allocate between them
Assets, Plan Obligations, Employment Obligations and responsibilities with
respect to certain employee compensation and benefit plans, programs and
arrangements and certain employment matters; and
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements set forth below, Xxxxx Corporation and Axcelis Technologies,
intending to be legally bound hereby, agree as follows:
ARTICLE I
DEFINITIONS
Wherever used in this Agreement, the following terms shall have the
meanings indicated below, unless a different meaning is plainly required by the
context. The singular and plural shall include each other and any gender, all
genders, unless the context indicates otherwise. Headings of sections are used
for convenience of reference only, and in case of conflict, the text of this
Agreement, rather than such headings, shall control:
1.1 AD&D Plan. "AD&D Plan," when immediately preceded by "Eaton,"
means the Eaton Accidental Death and Dismemberment ("AD&D") Plan. When
immediately preceded by "Axcelis Technologies," "AD&D Plan" means the accidental
death and dismemberment plan to be established by Axcelis Technologies pursuant
to Sections 2.2 and 5.4.
1.2 Affiliated Company. "Affiliated Company" of any Person means
any entity that Controls, is Controlled by, or is under common Control with such
Person. As used herein, "Control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such entity, whether through ownership of voting securities or other interests,
by control, or otherwise.
1.3 Agreement. "Agreement" means this Employee Matters Agreement,
including all the Schedules hereto and all amendments made hereto from time to
time.
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1.4 Ancillary Agreements. "Ancillary Agreements" means all of the
underlying agreements, documents and instruments referred to, contemplated by,
or made a part of the Separation Agreement.
1.5 ASO Contracts. "ASO Contracts" is defined in Subsection 5.1(b)(i).
1.6 Assets. "Assets" is defined in the General Assignment and
Assumption Agreement.
1.7 Axcelis Technologies. "Axcelis Technologies" means Axcelis
Technologies, Inc., a Delaware corporation. Axcelis Technologies shall be solely
responsible to Eaton for ensuring that each member of the Axcelis Technologies
Group complies with the applicable terms of this Agreement.
1.8 Axcelis Technologies Business. "Axcelis Technologies Business"
means the business and operations conducted by Eaton and its Subsidiaries as
Xxxxx'x Semiconductor Equipment Operations as described in the IPO Registration
Statement.
1.9 Axcelis Technologies Employee. "Axcelis Technologies Employee"
means any individual who is: (a) either actively employed the Axcelis
Technologies Group on the Separation Date; (b) on an unpaid leave of absence on
the Separation Date and having his or her name appear on Schedule 1.9; (c) any
other employee or group of employees designated as Axcelis Technologies
Employees (as of the specified date) by Eaton and Axcelis Technologies by mutual
agreement; or (d) an alternate payee under a QDRO affecting the Axcelis
Technologies Savings Plan, or an alternate recipient under a QMCSO, or a
beneficiary, covered dependent or qualified beneficiary (as such terms are
defined under COBRA), in each case, of an employee with respect to that
employee's or former employee's benefit under the applicable Plan(s). Unless
specified otherwise in this Agreement, such an alternate payee, alternate
recipient, beneficiary, covered dependent or qualified beneficiary is an Axcelis
Technologies Employee only to the extent provided in the QDRO or QMSO or under
COBRA, and shall not otherwise be considered a Axcelis Technologies Employee
with respect to any benefits he or she accrues or accrued under any applicable
Plan(s), unless he or she is a Axcelis Technologies Employee by virtue of
Subsections 1.9(a) or (b). Any employees on a paid leave of absence, including,
but not limited to, salary continuation, short term disability or long term
disability will become an Axcelis Technologies Employee, if at all, upon
commencing active employment with Axcelis Technologies after the Separation
Date.
1.10 Axcelis Technologies Group. "Axcelis Technologies Group" means
Axcelis Technologies and each Subsidiary and Affiliated Company of Axcelis
Technologies immediately after the Separation Date, or that is contemplated to
be a Subsidiary or Affiliated Company of Axcelis Technologies pursuant to the
Separation Agreement or an Ancillary Agreement, and each Person that becomes a
Subsidiary or Affiliated Company of Axcelis Technologies after the Separation
Date.
1.11 Axcelis Technologies Stock Value. "Axcelis Technologies Stock
Value" means the opening per-share price of Axcelis Technologies common stock as
listed on Nasdaq on the first trading day after the Distribution Date.
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1.12 Axcelis Technologies Transferred Employee. "Axcelis Technologies
Transferred Employee" means any individual who, as of the Separation Date, is:
(a) either actively employed by the Axcelis Technologies Group; (b) an employee
or group of employees designated by Eaton and Axcelis Technologies, by mutual
agreement, as Axcelis Technologies Transferred Employees; or (c) an alternate
payee under a QDRO affecting the Axcelis Technologies Savings Plan, or an
alternate recipient under a QMCSO, or a beneficiary, covered dependent or
qualified beneficiary (as such term is defined under COBRA), in each case, of an
employee or former employee, described in Subsections 1.13(a) or (b) with
respect to that employee's or former employee's benefit under the applicable
Plan(s). Unless specified otherwise in this Agreement, such an alternate payee,
alternate recipient, beneficiary, covered dependent, or qualified beneficiary is
an Axcelis Technologies Transferred Employee only to the extent provided in the
QDRO or QMCSO or under COBRA or shall not otherwise be considered a Axcelis
Technologies Transferred Employee with respect to any benefits he or she accrues
or accrued under any applicable Plan(s), unless he or she is a Axcelis
Technologies Transferred Employee by virtue of Subsections 1.13(a) or (b)). An
employee may be an Axcelis Technologies Transferred Employee pursuant to this
Section regardless of whether such employee is, as of the Separation Date,
alive, actively employed, on a temporary leave of absence from active
employment, on layoff, terminated from employment, in pay status or eligible for
a benefit under the Eaton Defined Benefit Plan or on any other type of
employment or post-employment status relative to an Eaton Plan, and regardless
of whether, as of the Separation Date, such employee is then receiving any
coverage under or benefits from an Eaton Plan.
1.13 Bonus Plan. "Bonus Plan" means, when immediately preceded by
"Eaton," the Eaton annual execution incentive plan as applied to Axcelis
Technologies Employees and, when immediately preceded by Axcelis Technologies
means the annual incentive plan as adopted by Axcelis Technologies effective on
or after the Separation Date.
1.14 Business Travel Accident Insurance. "Business Travel Accident
Insurance," when immediately preceded by "Eaton," means the policy or policies
covering Eaton Business Travel Accident Insurance in the U.S. and to the extent
applicable, outside the U.S. When immediately preceded by "Axcelis
Technologies," "Business Travel Accident Insurance" means the policy or policies
covering the business travel accident insurance which may be established by
Axcelis Technologies as described in Section 5.7.
1.15 COBRA. "COBRA" means the continuation coverage requirements for
"group health plans" under Title X of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended from time to time, and as codified in
Code Section 4980B and ERISA Sections 601 through 608.
1.16 Code. "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
1.17 Deferred Compensation Plan. "Deferred Compensation Plan," means,
collectively, all plans or programs of deferred compensation sponsored by Eaton
which are not qualified under Section 401(a) of the Code.
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1.18 Defined Benefit Plan. "Defined Benefit Plan" means the Pension
Plan for Xxxxx Corporation Employees to the extent of the Schedules thereto
applying to Axcelis Technologies Employees.
1.19 Disability Plan. "Disability Plan," when immediately preceded by
"Eaton," means the Eaton Disability Plan which consists of the Eaton Short-Term
Disability Plan and the Eaton Long-Term Disability Plan. When immediately
preceded by "Axcelis Technologies," "Disability Plan" means the Axcelis
Technologies Short-Term Disability Plan and the Axcelis Technologies Long-Term
Disability Plan, to be established by Axcelis Technologies pursuant to Sections
2.2 and 5.6.
1.20 Distribution. "Distribution" means Xxxxx'x disposition of all of
its interest in the common stock of Axcelis Technologies, either by distribution
to holders of Xxxxx'x common stock of all the shares of Axcelis Technologies
common stock owned by Eaton or in some other manner.
1.21 Distribution Date. "Distribution Date" means the date of the
consummation of the Distribution.
1.22 DOL. "DOL" means the United States Department of Labor.
1.23 Eaton. "Eaton" means Xxxxx Corporation, an Ohio corporation. Eaton
shall be solely responsible to Axcelis Technologies for ensuring that each
member of the Eaton Group complies with the applicable terms of this Agreement.
1.24 Eaton Employee. "Eaton Employee" means an individual who, on the
Separation Date, is: (a) either actively employed by, or on leave of absence
from, the Eaton Group; (b) on a paid leave of absence, including salary
continuation, short term disability or long term disability from the Axcelis
Technologies Group; (c) an Eaton Terminated Employee; or (d) an employee or
group of employees designated as Eaton Employees by Eaton and Axcelis
Technologies, by mutual agreement.
1.25 Eaton Group. "Eaton Group" means Eaton and each Subsidiary and
Affiliated Company of Eaton (other than any member of the Axcelis Group)
immediately after the Separation Date, giving effect to the Non-US Plan and each
Person that became a Subsidiary or Affiliated Company of Eaton after the
Separation Date.
1.26 Eaton Severance Agreement. "Eaton Xxxxxxxxx Agreement" means
an agreement between Eaton and an Axcelis Technologies Transferred Employee
setting forth the terms and conditions of his or her separation from service
with Eaton.
1.27 Eaton Stock Value. "Eaton Stock Value" means the closing
per-share price of Eaton common stock as listed on the New York Stock Exchange
on the last trading day before the Distribution Date.
1.28 Eaton Terminated Employee. "Eaton Terminated Employee" means
any individual who is a former employee of the Eaton Group and who, on the
Separation Date, is not an Axcelis Technologies Transferred Employee.
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1.29 Educational Assistance Program. "Educational Assistance
Program," when immediately preceded by "Eaton," means the Eaton Educational
Assistance Program. When immediately preceded by "Axcelis Technologies,"
"Educational Assistance Program" means the educational assistance program which
may be established by Axcelis Technologies as described in Section 7.2.
1.30 Employee Assistance Program. "Employee Assistance Program,"
when immediately preceded by "Eaton," means the Eaton Employee Assistance
Program. When immediately preceded by "Axcelis Technologies," "Employee
Assistance Program" means the employee assistance program which may be
established by Axcelis Technologies as described in Section 7.1.
1.31 Employment Obligations. "Employment Obligations" means all
contractual, statutory and common law obligations of an employer with respect to
Axcelis Technologies Employees and Axcelis Technologies Transferred Employees,
except with regard to benefits accrued under the Eaton Defined Benefit Plan or
an Eaton deferred compensation plan.
1.32 ERISA. "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended from time to time.
1.33 FMLA. "FMLA" means the Family and Medical Leave Act of 1993, as
amended from time to time.
1.34 Foreign Plan. "Foreign Plan," when immediately preceded by
"Eaton," means a Plan maintained by the Eaton Group for the benefit of its
employees outside the U.S. When immediately preceded by "Axcelis Technologies,"
"Foreign Plan" means a Plan to be established by Axcelis Technologies for the
benefit of its employees outside the U.S.
1.35 Fringe Benefit Plans. "Fringe Benefit Plans," when immediately
preceded by "Eaton," means the Eaton employee assistance program, educational
assistance program and other fringe benefit plans, programs and arrangements,
sponsored and maintained by Eaton which provide coverage or benefits to Axcelis
Technologies Employees as of the Separation Date (as set forth in Article VII
and Schedule 7.3). When immediately preceded by "Axcelis Technologies," "Fringe
Benefit Plans" means the fringe benefit plans, programs and arrangements to be
established by Axcelis Technologies pursuant to Section 2.2 and Article VII.
1.36 FSA/Dependent Reimbursement Plan. "FSA/Dependent Reimbursement
Plan," when immediately preceded by "Eaton," means the Eaton FSA/Dependent
Reimbursement Plan. When immediately preceded by "Axcelis Technologies,"
"FSA/Dependent Reimbursement Plan" means the dependent care assistance
reimbursement plan to be established by Axcelis Technologies pursuant to
Sections 2.2 and 5.8.
1.37 FSA/Medical Reimbursement Plan. "FSA/Medical Reimbursement
Plan," when immediately preceded by "Eaton," means the Eaton FSA/Medical
Reimbursement Plan. When immediately preceded by "Axcelis Technologies,"
"FSA/Medical Reimbursement Plan" means the medical expense reimbursement plan to
be established by Axcelis Technologies pursuant to Sections 2.2 and 5.8.
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1.38 General Assignment and Assumption Agreement. "General
Assignment and Assumption Agreement" means the Ancillary Agreement having that
name which is an Exhibit to the Separation Agreement.
1.39 Group Life Plan. "Group Life Plan," when immediately preceded
by "Eaton," means the Eaton Group Life Plan. When immediately preceded by
"Axcelis Technologies," "Group Life Plan" means the group life plan to be
established by Axcelis Technologies pursuant to Sections 2.2 and 5.3.
1.40 HCFA. "HCFA" means the United States Health Care Financing
Administration.
1.41 Health and Welfare Plans. "Health and Welfare Plans," when
immediately preceded by "Eaton," means, to the extent providing benefits to
Axcelis Technologies Employees as of a relevant time, the Eaton Health Plans,
the Eaton Group Life Plan, the Eaton Group Insurance Policies, the Eaton Section
125 Plan, and the health and welfare plans listed on Schedule 5.2 established
and maintained by Eaton for the benefit of eligible employees of the Eaton
Group, and such other welfare plans or programs as may apply to Axcelis
Technologies Employees as in effect during the period beginning on the
Separation Date and ending on the Non-Controlled Group Date or such other dates
as Eaton and Axcelis Technologies may agree. When immediately preceded by
"Axcelis Technologies," "Health and Welfare Plans" means the Axcelis
Technologies Health Plans, the Axcelis Technologies Section 125 Plan, and the
health and welfare plans to be established by Axcelis Technologies pursuant to
Section 2.2, Article V, and Schedule 5.1(a).
1.42 Health Plans. "Health Plans," when immediately preceded by
"Eaton," means the medical, HMO, vision, and dental plans and any similar or
successor Plans to the extent they provide coverage to Axcelis Technologies
Employees as in effect during the period beginning on the Separation Date and
ending on the Non-Controlled Group Date (or such other dates as Eaton and
Axcelis may agree). When immediately preceded by "Axcelis Technologies," "Health
Plans" means the medical, HMO, vision and dental plans to be established by
Axcelis Technologies pursuant to Section 2.2 and Article V and any similar or
successor plans thereto.
1.43 HMO. "HMO" means a health maintenance organization that provides
benefits to Axcelis Technologies Employees under the Eaton Health Plans or the
Axcelis Technologies Health Plans.
1.44 IPO. "IPO" means the initial public offering of Axcelis
Technologies common stock pursuant to a registration statement on Form S-1
pursuant to the Securities Act of 1933, as amended.
1.45 IPO Closing. "IPO Closing" means the consummation of the IPO
by Axcelis in accordance with the Separation Agreement and the Underwriting
Agreement, including without limitation, its delivery of Axcelis common stock
to, in return for cash from, the Underwriters.
1.46 IPO Closing Date. "IPO Closing Date" means the date of the IPO
Closing.
1.47 IPO Registration Statement. "IPO Registration Statement" means
the registration statement on Form S-1 pursuant to the Securities Act of 1933 as
amended, as filed with the SEC
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registering the shares of common stock of Axcelis Technologies to be issued in
the IPO, together with all amendments thereto.
1.48 IRS. "IRS" means the Internal Revenue Service.
1.49 Leave of Absence Plans. "Leave of Absence Plans," when
immediately preceded by "Eaton," means the personal, educational,
medical/disability, military and FMLA leaves of absence offered from time to
time under the personnel policies and practices of Eaton. When immediately
preceded by "Axcelis Technologies," "Leave of Absence Plans" means the leave of
absence programs to be established by Axcelis Technologies pursuant to Section
2.2.
1.50 Long-Term Disability Plan. "Long-Term Disability Plan," when
immediately preceded by "Eaton," means the Eaton Long-Term Disability Plan. When
immediately preceded by "Axcelis Technologies," "Long-Term Disability Plan"
means the long-term disability plan to be established by Axcelis Technologies
pursuant to Section 2.2 and Subsection 5.6(b).
1.51 Material Feature. "Material Feature" means any feature of a
Plan that could reasonably be expected to be of material importance, in the
aggregate, to the sponsoring employer or the participants (or their dependents
or beneficiaries) of that Plan, which could include, depending on the type and
purpose of the particular Plan, the class or classes of employees eligible to
participate in such Plan, the nature, type, form, source, and level of benefits
provided under such Plan, the amount or level of contributions, if any, required
to be made by participants (or their dependents or beneficiaries) to such Plan,
and the costs and expenses incurred by the sponsoring employer or Participating
Companies for implementing and/or maintaining such Plan.
1.52 Nasdaq. "Nasdaq" means the Nasdaq National Market.
1.53 Non-Controlled Group Date. "Non-Controlled Group Date" means
the date Eaton and Axcelis Technologies cease to be members of the same
controlled group of corporations for purposes of Section 414 of the Code.
1.54 Non-US Plan. "Non-U.S. Plan" means the Ancillary Agreement
having that name which is an Exhibit to the Separation Agreement.
1.55 Option. "Option," when immediately preceded by "Eaton," means
an option to purchase Eaton common stock pursuant to an Eaton Stock Plan. When
immediately preceded by "Axcelis Technologies," "Option" means an option to
purchase Axcelis Technologies common stock pursuant to the Axcelis Technologies
Stock Plan.
1.56 Participating Company. "Participating Company" means: (a)
Eaton; (b) any Person (other than an individual) that Eaton has approved for
participation in, has accepted participation in, and which is participating in,
a Plan sponsored by Eaton; and (c) any Person (other than an individual) which,
by the terms of such Plan, participates in such Plan or any employees of which,
by the terms of such Plan, participate in or are covered by such Plan.
1.57 Person. "Person" means an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock company,
a trust, a joint venture, an
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unincorporated organization, and a governmental entity or any department, agency
or political subdivision thereof.
1.58 Plan. "Plan" means any plan, policy, program, payroll practice,
arrangement, contract, trust, insurance policy, or any agreement or funding
vehicle providing compensation or benefits to employees, former employees,
directors or consultants of Eaton or Axcelis Technologies, to the extent such
provides or provided coverage or benefits to Axcelis Technologies Employees.
1.59 Plan Obligations. "Plan Obligations" means all funding, benefits,
claims or administrative expenses arising out of any Plan providing coverage to
Axcelis Technologies Employees and Axcelis Technologies Transferred Employees,
except with regard to benefits accrued under the Eaton Defined Benefit Plan or
under an Eaton deferred compensation plan.
1.60 QDRO. "QDRO" means a domestic relations order which qualifies
under Code Section 414(p) and ERISA Section 206(d) and which creates or
recognizes an alternate payee's right to, or assigns to an alternate payee, all
or a portion of the benefits payable to a participant under the Eaton Savings
Plan.
1.61 QMCSO. "QMCSO" means a medical child support order which
qualifies under ERISA Section 609(a) and which creates or recognizes the
existence of an alternate recipient's right to, or assigns to an alternate
recipient the right to, receive benefits for which a participant or beneficiary
is eligible under any of the Health Plans.
1.62 Ratio. "Ratio" means the ratio determined by dividing the Axcelis
Technologies Stock Value by the Eaton Stock Value.
1.63 Savings Plan. "Savings Plan," when immediately preceded by
"Eaton," means the Xxxxx Corporation Share Purchase and Investment Plan, a
defined contribution plan with 401(k) deferral features. When immediately
preceded by "Axcelis Technologies," "Savings Plan" means the defined
contribution plan to be established by Axcelis Technologies as described in
Article III.
1.64 SEC. "SEC" means the United States Securities and Exchange
Commission.
1.65 Section 125 Plan. "Section 125 Plan," when immediately preceded
by "Eaton," means the Eaton FSA/Dependent Reimbursement Plan, and the Eaton
FSA/Medical Reimbursement Plan. When immediately preceded by "Axcelis
Technologies," "Section 125 Plan" means the Axcelis Technologies FSA/Dependent
Reimbursement Plan and the Axcelis Technologies FSA/Medical Reimbursement Plan
to be established by Axcelis Technologies pursuant to Sections 2.2 and 5.8.
1.66 Separation. "Separation" means Xxxxx'x contribution and transfer
to Axcelis Technologies, and Axcelis Technologies' receipt and assumption,
directly or indirectly, of the Assets and Liabilities, as defined in the General
Assignment and Assumption Agreement (including contingent liabilities)
associated with the Axcelis Technologies Business to the extent not contributed
and transferred to Axcelis Technologies prior to the Separation Date.
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1.67 Separation Agreement. "Separation Agreement" means the Master
Separation and Distribution Agreement, dated June 30, 2000 between Eaton and
Axcelis, to which this Agreement is an Exhibit.
1.68 Separation Date. "Separation Date" means the earlier of (i) 12:01
a.m. on the IPO Closing Date and (ii) 11:59 p.m. on June 30, 2000, or as
otherwise provided in the Separation Agreement.
1.69 Severance Plan. "Severance Plan," when immediately preceded by
"Eaton," means the Eaton Severance Plan. When immediately preceded by "Axcelis
Technologies," "Severance Plan" means the severance program, if any, to be
established by Axcelis Technologies pursuant to Sections 2.2 and 5.5.
1.70 Short-Term Disability Plan. "Short-Term Disability Plan," when
immediately preceded by "Eaton," means the Eaton Short-Term Disability Plan.
When immediately preceded by "Axcelis Technologies," "Short-Term Disability
Plan" means the short-term disability plan to be established by Axcelis
Technologies pursuant to Section 2.2 and Subsection 5.6(a).
1.71 Stock Plan. "Stock Plan," when immediately preceded by "Eaton,"
means any plan, program or arrangement, other than the Stock Purchase Plan,
pursuant to which employees and other service providers hold Options, Eaton
Restricted Stock or other Eaton equity incentives. When immediately preceded by
"Axcelis Technologies," "Stock Plan" means the Axcelis Technologies 2000 Stock
Plan.
1.72 Stock Purchase Plan. "Stock Purchase Plan" means the plan intended
to be adopted by Axcelis Technologies before the IPO Closing Date, with
provisions consistent with the requirements of Section 423 of the Code by which
Axcelis Technologies Employees may purchase shares of Axcelis Technologies
common stock.
1.73 Subsidiary. "Subsidiary" of any person means a corporation or
other organization, whether incorporated or unincorporated, of which at least a
majority of the securities or interest having by the terms thereof ordinary
voting power to elect at least a majority of the board of directors or others
performing similar functions with respect to such corporation or other
organization, is directly or indirectly owned or controlled by such Person or by
any one or more of its Subsidiaries, or by such Person and one or more of its
Subsidiaries; provided, however that no Person that is not directly or
indirectly wholly-owned by any other Person shall be a Subsidiary of such other
Person unless such other Person controls, or has the right, power or ability to
control that Person. Unless the context otherwise requires, reference to Eaton
and its Subsidiaries shall not include Axcelis or the subsidiaries of Eaton that
will be or have been transferred to Axcelis Technologies after giving effect to
the Separation, including the actions taken pursuant to the Non-US Plan.
1.74 Tax Sharing and Indemnification Agreement. "Tax Sharing and
Indemnification Agreement" means the Ancillary Agreement having that name which
is an Exhibit to the Separation Agreement.
1.75 Transitional Services Agreement. "Transitional Services Agreement"
means the Ancillary Agreement having that name which is an Exhibit to the
Separation Agreement.
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1.76 Unemployment Insurance Program. "Unemployment Insurance Program,"
when immediately preceded by "Eaton," means any unemployment insurance program
contributed to by Eaton from time to time. When immediately preceded by "Axcelis
Technologies," "Unemployment Insurance Program" means any unemployment insurance
program to be contributed to by Axcelis Technologies pursuant to Section 9.7.
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ARTICLE II
GENERAL PRINCIPLES
2.1 Assumption of Axcelis Technologies Liabilities. Except as set
forth in subsections 2.2(c) and (d) or as specified otherwise in this Agreement
or as mutually agreed upon by Axcelis Technologies and Eaton from time to time,
effective as of Separation Date, and continuing to and including the earlier of
December 31, 2000 and the Non-Controlled Group Date, Axcelis Technologies hereby
becomes a contributing sponsor of and designates Axcelis Technologies Employees
and Axcelis Technologies Transferred Employees as participants in each and all
Eaton employee, fringe, compensation and other plans providing coverage and/or
benefits to such employees immediately prior to the Separation Date. Axcelis
Technologies shall pay (as set forth in the Transitional Services Agreement, if
applicable), perform, fulfill and discharge, in accordance with their respective
terms, all Plan Obligations and all Employment Obligations. If the
Non-Controlled Group Date occurs before December 31, 2000, for the period
beginning on the Non-Controlled Group Date and continuing to and including
December 31, 2000, Axcelis Technologies shall adopt Health and Welfare Plans
with provisions exactly the same as the provisions of the Eaton Health and
Welfare Plans. As of January 1, 2001, Axcelis Technologies shall adopt the
Axcelis Technologies Savings Plan and the Axcelis Technologies Health and
Welfare Plans. Except with respect to the Eaton Savings Plan, Eaton shall not
transfer to Axcelis Technologies any trust assets and other assets that relate
to, arise out of or result from Axcelis Technologies' participation in each
Eaton Plan.
2.2 Establishment of Axcelis Technologies Plans.
(a) Health and Welfare Plans. Except as specified otherwise in
this Agreement, effective as of January 1, 2001 (or such other date(s) as Eaton
and Axcelis Technologies may mutually agree), Axcelis Technologies shall adopt
and have effective the Axcelis Technologies Health and Welfare Plans. Except as
otherwise specified in this Agreement, to the extent administratively and
financially practicable, each of the foregoing Axcelis Technologies Plans as in
effect shall be reasonably comparable in the aggregate to plans offered to their
respective employees by other corporations engaged in a business comparable to
the Axcelis Technologies Business. For the period from the Separation Date to
the Non-Controlled Group Date, Axcelis Technologies Employees shall participate
in the Eaton Plans at the cost and expense of Axcelis Technologies as determined
under the Transitional Services Agreement. If the Non-Controlled Group Date
occurs before December 31, 2000, for the period beginning on the Non-Controlled
Group Date and continuing to and including December 31, 2000, Axcelis
Technologies shall adopt Health and Welfare Plans with provisions exactly the
same as the Eaton Health and Welfare Plans.
(b) Fringe Benefit Plans. Except as otherwise specified
in this Agreement, effective as of January 1, 2001 (or such other date(s) as
Eaton and Axcelis Technologies may mutually agree), Axcelis Technologies shall
adopt and have effective such Fringe Benefit Plans as Axcelis Technologies deems
appropriate. For the period beginning on the Separation Date and continuing to
and including December 31, 2000, Axcelis Technologies Employees shall
participate in the Eaton Fringe Benefit Plans in accordance with their
respective terms at the cost and expense of Axcelis Technologies as determined
under the Transitional Services Agreement.
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(c) The Savings Plan. Except as specified otherwise in
this Agreement, effective as of January 1, 2001 (or such other date(s) as Eaton
and Axcelis Technologies may mutually agree), Axcelis Technologies shall adopt
and have effective the Axcelis Technologies Savings Plan. As soon as
administratively feasible on or after January 1, 2001, Eaton shall cause the
Trustee of the Eaton Savings Plan to transfer to the Trustee of the Axcelis
Technologies Savings Plan assets with a value equal to all account balances,
vested and non-vested, of Axcelis Technologies Employees on or about (as
determined by Eaton) the date the assets are transferred. All account balances
of Axcelis Technologies Employees in the Eaton Savings Plan shall be vested on
January 1, 2001 irrespective of the service rendered by such employees and shall
be deemed vested in the Axcelis Technologies Savings Plan when received by the
trust created pursuant to the Axcelis Technologies Savings Plan. Assets held in
the Eaton Savings Plan in investment funds other than Eaton or Axcelis
Technologies common stock shall be transferred to the Axcelis Technologies
Savings Plan in cash. Assets held in the Eaton Savings Plan in the form of
shares of Eaton and Axcelis Technologies common stock shall be transferred in
the form of such shares of Eaton and Axcelis Technologies common stock. The
Axcelis Technologies Savings Plan shall provide that participants in the Axcelis
Technologies Savings Plan shall be permitted to maintain their Eaton common
stock investments, if any, for a period of not greater than two (2) years but
participants in the Axcelis Technologies Savings Plan shall not be permitted to
direct the acquisition for their respective individual accounts of additional
shares of Eaton common stock. On or before the date of the transfer of assets,
Eaton shall cause Axcelis Technologies or its designee to receive or have access
to records, statements and other administrative materials necessary for the
proper crediting of transferred assets and the initial administration of the
Axcelis Technologies Savings Plan. For the period from the Separation Date to
the earlier (i) of January 1, 2001 and (ii) the Non-Controlled Group Date,
Axcelis Technologies Employees shall participate in the Eaton Savings Plan in
accordance with its terms as in effect on the Separation Date and from time to
time thereafter (which specifically do not provide for Axcelis Technologies
common stock as an available investment fund) at the cost and expense of Axcelis
Technologies as determined under the Transitional Services Agreement.
(d) Defined Benefit Plan. For the period from the
Separation Date to and including the earlier of December 31, 2000 and the
Non-Controlled Group Date (or such other date(s) as Eaton and Axcelis
Technologies may mutually agree), Axcelis Technologies Employees shall
participate in the Eaton Defined Benefit Plan in accordance with its terms at
the cost and expense of Axcelis Technologies as determined under the
Transitional Services Agreement. After such earlier date, Axcelis Technologies
may, but shall not be obligated to, adopt such Defined Benefit Plan as Axcelis
Technologies, in its sole and complete discretion, determines appropriate. No
assets or liabilities shall be transferred from the trust established with
respect to the Eaton Defined Benefit Plan to any other trust, whether or not
Axcelis Technologies adopts a defined benefit plan. Accrued benefits of Axcelis
Technologies Employees in the Eaton Defined Benefit Plan shall be held in the
Eaton Defined Benefit Plan and vested balances shall be distributed, if at all,
in accordance with such plan's terms.
(e) Equity and Other Compensation. Except as specified
otherwise in this Agreement, Axcelis Technologies shall adopt the Axcelis
Technologies Stock Plan and the Stock Purchase Plan before the IPO Closing Date.
Except as specified in Section 6.1 or otherwise in this Agreement, effective as
of Distribution Date (or such other date(s) as Eaton and Axcelis Technologies
may mutually agree), Axcelis Technologies may, but shall not be obligated to,
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adopt such long-term, other incentive or defined compensation plan(s) as Axcelis
Technologies determines appropriate in its discretion. In no event may an
Axcelis Technologies Plan provide for or allow for the issuance from Axcelis
Technologies of any Axcelis Technologies capital stock prior to the Distribution
Date.
(f) Other Plans. Except as otherwise specified in this
Agreement, effective as of the earlier of January 1, 2001 or the Non-Controlled
Group Date (or such other date(s) as Eaton and Axcelis Technologies may mutually
agree), Axcelis Technologies shall adopt certain plans equivalent to the Eaton
Plans that are specifically tied to its payroll practices, including, without
limitation, a salary continuation and a personal time off plan. Axcelis
Technologies shall also adopt the Eaton Section 125 Plan as its plan effective
beginning on the Separation Date and continuing to and including December 31,
2000. Effective on the earlier of January 1, 2001 and the Non-Controlled Group
Date, Axcelis Technologies shall adopt its own such plans and shall cease
participation in the comparable Eaton plan. If the Non-Controlled Group Date
occurs before December 31, 2000, for the period beginning on the Non-Controlled
Group Date and continuing to and including December 31, 2000, Axcelis
Technologies shall adopt plans contemplated by this subparagraph with provisions
exactly the same as the corresponding Eaton plan.
2.3 Axcelis Technologies Under No Obligation to Maintain Plans.
Except as specified otherwise in this Agreement, nothing in this Agreement shall
preclude Axcelis Technologies, at any time after the Distribution Date, from
amending, merging, modifying, terminating, eliminating, reducing or otherwise
altering in any respect any Axcelis Technologies Plan, any benefit under any
Axcelis Technologies Plan or any trust, insurance policy or funding vehicle
related to any Axcelis Technologies Plan, or any employment or other service
arrangement with Axcelis Technologies Employees or vendors (to the extent
permitted by law).
2.4 Axcelis Technologies' Participation in Eaton Plans.
(a) Participation in Eaton Plans. Except as otherwise
specified in this Agreement or as Eaton and Axcelis Technologies may mutually
agree, Axcelis Technologies shall, until the earlier of (i) Axcelis
Technologies' adoption of a comparable plan and (ii) the Non-Controlled Group
Date, continue to be a Participating Company in the Eaton Plans. Effective as of
any date on or after the Separation Date and before the Non-Controlled Group
Date (or such other date(s) as Eaton or Axcelis Technologies may mutually
agree), any member of the Axcelis Technologies Group not described in the
preceding sentence may, at its request and with the consent of Eaton and Axcelis
Technologies, become a Participating Company in any or all of the Eaton Plans,
to the extent that Axcelis Technologies has not yet established a corresponding
Plan.
(b) Xxxxx'x General Obligations as Plan Sponsor. To the
extent that Axcelis Technologies is a Participating Company in any Eaton Plan,
Eaton shall continue to administer, or cause to be administered, in accordance
with its terms and applicable law, such Eaton Plan, and shall have the sole and
absolute discretion and authority to interpret the Eaton Plan, as set forth
therein. Eaton shall not amend any Material Feature of any Eaton Plan in which
Axcelis Technologies is a Participating Company, except to the extent: (i) such
amendment would not materially affect any coverage or benefits of Axcelis
Technologies Employees or Axcelis
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Technologies Transferred Employees under such Plan; (ii) Axcelis Technologies
shall consent to such amendment and such consent shall not be unreasonably
withheld; (iii) such amendment is necessary or appropriate to comply with
applicable law; or (iv) such other amendments as shall equally apply to all then
participants in such plan.
(c) Axcelis Technologies' General Obligations as
Participating Company. Axcelis Technologies shall timely perform, with respect
to its participation in the Eaton Plans, the duties of a Participating Company
as set forth in each such Plan or any procedures adopted pursuant thereto or
pursuant to the Transitional Services Agreement, including (without limitation):
(i) assisting in the administration of claims, to the extent requested by the
claims administrator of the applicable Eaton Plan; (ii) fully cooperating with
Eaton Plan auditors, benefit personnel and benefit vendors; (iii) preserving the
confidentiality of all financial arrangements Eaton has or may have with any
vendors, claims administrators, trustees, service providers or any other entity
or individual with whom Eaton has entered into an agreement relating to the
Eaton Plans; (iv) preserving the confidentiality of participant information
(including, without limitation, health information in relation to FMLA leaves)
to the extent not specified otherwise in this Agreement; and (v) confirming and
providing information necessary for the proper operation of Xxxxx'x Human
Resources Management System. Without limiting the foregoing, Axcelis
Technologies shall timely provide to Eaton information necessary to Eaton to
administer the vesting provisions of the Eaton Defined Benefit Plan with respect
to Axcelis Technologies Employees after the Separation Date, including, but not
limited to, the termination dates of each such Axcelis Technologies Employee who
was a non-vested participant in the Eaton Defined Benefit Plan.
(d) Termination of Participating Company Status. Except
as otherwise may be mutually agreed upon by Eaton and Axcelis Technologies,
effective as of the Non-Controlled Group Date or such other date as Axcelis
Technologies establishes a corresponding Plan (as specified in Section 2.2 or
otherwise in this Agreement), Axcelis Technologies shall automatically cease to
be a Participating Company in the corresponding Eaton Plan.
2.5 Terms of Participation by Axcelis Technologies Employees and
Axcelis Technologies Transferred Employees in Axcelis Technologies Plans.
(a) Non-Duplication of Benefits. Except as specified
otherwise in this Agreement, as of the Separation Date, or other date that
applies to any particular Axcelis Technologies Plan established thereafter, the
Axcelis Technologies Plans shall be, with respect to Axcelis Technologies
Employees and Axcelis Technologies Transferred Employees, in all respects the
successors in interest to, be primarily responsible for Plan Obligations arising
thereafter and shall not provide benefits that duplicate benefits already, or
which in the ordinary course will be, paid or otherwise delivered by, the
corresponding Eaton Plans. Eaton and Axcelis Technologies shall agree on methods
and procedures, including amending the respective Plan documents, to prevent
Axcelis Technologies Employees and Axcelis Technologies Transferred Employees
from receiving duplicate benefits from the Eaton Plans and the Axcelis
Technologies Plans.
(b) Service Credit. Except as otherwise specified in this
Agreement, with respect to Axcelis Technologies Employees and Axcelis
Technologies Transferred Employees,
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each Axcelis Technologies Plan shall provide that all service, all compensation
and all other benefit-affecting determinations that, as of the Separation Date,
were recognized under the corresponding Eaton Plan shall, as of the date the
relevant Axcelis Technologies Plan is established, receive full recognition and
credit and be taken into account under such Axcelis Technologies Plan to the
same extent as if such items occurred under such Axcelis Technologies Plan,
except to the extent that duplication of benefits would result. The service
crediting provisions shall be subject to any respectively applicable "service
bridging," "break in service," "employment date" or "eligibility date" rules
under the Axcelis Technologies Plans and the Eaton Plans.
2.6 Claims Administration. From the date of this Agreement through
the later of January 1, 2001 and the Distribution Date the management of the
Plans shall be conducted under the supervision of the plan administrator
appointed for such purpose under each of the respective Plans by Eaton, and
claims made by participants shall be made, adjudicated and appealed in
accordance with the respective Plan's claim procedure.
2.7 Foreign Plans. Axcelis Technologies and Eaton each intend that
matters, issues, or Plan Obligations relating to, arising out of or resulting
from Foreign Plans and non-U.S.-related employment matters be handled in a
manner that is consistent with comparable U.S. matters, issues or Plan
Obligations as reflected in this Agreement (to the extent permitted by
applicable law or as otherwise specified in the applicable Section or Schedule
thereto or Schedule 2.7). Axcelis Technologies Employees participating in the
Xxxxxx Hammer Europa Ltd. Pension Scheme ("CHE") pension plan and the Save as
You Earn Scheme (as set forth on Schedule 2.7) (each in the UK) as of the
Separation Date will not be eligible to participate in such plans after the
Distribution Date. Eaton and Axcelis Technologies shall cause the establishment
of and permit participation after the Distribution of such employees in Group
Personal Pension Plans or Defined Contribution Plans in a form mutually
acceptable to Eaton and Axcelis Technologies and at employer and company
contribution rates having regard to comparable benefits at retirement to the CHE
and Save as You Earn Plans.
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ARTICLE III
QUALIFIED PENSION PLANS
3.1 Defined Contribution and 401(k) Plan.
(a) Savings Plan Trust. Effective as of January 1, 20001
(or such other date as Eaton and Axcelis Technologies may mutually agree),
Axcelis Technologies shall establish, or cause to be established, a separate
trust, which is intended to be tax-qualified under Code Section 401(a), to be
exempt from taxation under Code Section 501(a)(1), and to form the Axcelis
Technologies Savings Plan.
(b) Savings Plan: Assumption of Liabilities and Transfer
of Assets. Effective as of January 1, 2001 (or such other date as Eaton and
Axcelis Technologies may mutually agree) and subject to Section 2.2(c): (i) the
Axcelis Technologies Savings Plan shall assume and be solely responsible for all
Plan Obligations relating to, arising out of or resulting from the participation
by Axcelis Technologies Employees and Axcelis Technologies Transferred Employees
in the Eaton Savings Plan; and (ii) Eaton shall cause the accounts of the
Axcelis Technologies Employees and the Axcelis Technologies Transferred
Employees under the Eaton Savings Plan that are held by its related trust to be
transferred to the Axcelis Technologies Savings Plan and its related trust, and
Axcelis Technologies shall cause such transferred accounts to be accepted by
such Plan and its related trust. Effective as of January 1, 2001 (or such other
date as Eaton and Axcelis Technologies may mutually agree), Axcelis Technologies
shall enter into agreements to accomplish such assumption and transfer, the
maintenance of the necessary participant records, the appointment of an initial
trustee under the Axcelis Technologies Savings Plan and the engagement of an
initial record keeper under the Axcelis Technologies Savings Plan. Axcelis
Technologies and Eaton shall use commercially reasonable efforts to accomplish
the establishment of the Savings Plan and related trust spin-off.
(c) Stock Considerations. Axcelis Technologies and Eaton
shall assume sole responsibility for ensuring that their respective company
stock funds, and underlying employer securities held in each such fund, are
maintained in compliance with all applicable SEC and other requirements. The
Axcelis Technologies Savings Plan shall permit the participants to maintain
investments in Eaton Technologies common stock for a period of up to two years.
(d) No Distribution to Axcelis Technologies Transferred
Employees. The Eaton Savings Plan and the Axcelis Technologies Savings Plan
shall provide that no distribution of account balances shall be made to any
Axcelis Technologies Employee or Axcelis Technologies Transferred Employee
solely on account of the Axcelis Technologies Group ceasing to be an Affiliated
Company of the Eaton Group as of the Non-Controlled Group Date.
3.2 Defined Benefit Plan.
(a) Defined Benefit. Effective as of the earlier of
December 31, 2000 and the Non-Controlled Group Date (or such other date as Eaton
and Axcelis Technologies may mutually agree), Axcelis Technologies Employees
shall cease to be participants in the Eaton Defined Benefit Plan. All accrued
benefits of Axcelis Technologies Employees shall be held by
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the Eaton Defined Benefit Plan and administered in accordance with the terms of
the Eaton Defined Benefit Plan, provided (i) service rendered to Axcelis
Technologies after the Non-Controlled Group Date by Axcelis Technologies
Employees and Axcelis Technologies Transferred Employees who formerly
participated in the Eaton Defined Benefit Plan will be credited for vesting
purposes under the Eaton Defined Benefit Plan and (ii) an Axcelis Technologies
Employee or an Axcelis Technologies Transferred Employee who formerly
participated in the Eaton Defined Benefit Plan who is employed by Axcelis
Technologies on the second anniversary of the Distribution Date shall be fully
vested under the Eaton Defined Benefit Plan regardless of the number of years of
service actually rendered. The Eaton Defined Benefit Plan shall be administered
in accordance with its terms with respect to determining whether the disposition
of Eaton of all or any portion of its ownership interest in Axcelis Technologies
causes a separation from service for purposes of making distributions to
participants under the Eaton Defined Benefit Plan then eligible to receive
benefits under the Eaton Defined Benefit Plan.
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ARTICLE IV
NON-QUALIFIED PLAN
4.1 Deferred Compensation Plan.
(a) Amounts Accrued Under Eaton Deferred Compensation
Plans. Amounts accrued under Eaton Deferred Compensation Plans on behalf of
Axcelis Technologies Employees shall be the sole responsibility of Eaton and
such amounts shall be paid by Eaton in accordance with the terms of such plans
or an Eaton Severance Agreement. Axcelis Technologies shall not be obligated
with respect to any Eaton Deferred Compensation Plan.
(b) Axcelis Technologies Deferred Compensation Plans. From
and after the Distribution Date, Axcelis Technologies may, but shall not be
obligated to, establish deferred compensation plans, programs or arrangements as
Axcelis Technologies deems appropriate in its discretion.
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ARTICLE V
HEALTH AND WELFARE PLANS
5.1 Health Plans as of the Non-Controlled Group Date.
(a) Axcelis Technologies Health Plans. As of January 1, 2001
(or such other date(s) as Eaton and Axcelis Technologies may mutually agree),
Axcelis Technologies shall have established the Axcelis Technologies Health
Plans, and Axcelis Technologies shall cease to be a Participating Company in the
Eaton Health Plans. If the Non-Controlled Group Date occurs prior to December
31, 2000, for the period beginning on the Non-Controlled Group Date and
continuing to and including December 31, 2000, Axcelis Technologies shall adopt
Health Plans with provisions exactly the same as the Eaton Health Plan. After
their respective adoptions, Axcelis Technologies shall be solely responsible for
the administration of the Axcelis Technologies Health Plans, including the
payment of all employer-related costs in establishing and maintaining the
Axcelis Technologies Health Plans responsibilities, and for the collection and
remittance of employee premiums, subject to Section 8.2.
(b) Vendor Arrangements. Eaton and Axcelis Technologies
shall each use commercially reasonable efforts for and on behalf of Axcelis
Technologies to procure, effective as of January 1, 2001 (or such other date(s)
as Eaton and Axcelis Technologies may mutually agree): (i) third party ASO
contracts which are comparable in the aggregate in all Material Features to the
ASO contracts entered into by Eaton (the "ASO Contracts"); (ii) group insurance
policies which are reasonably comparable in the aggregate to plans offered to
their employees by other corporations engaged in a business comparable to the
Axcelis Technologies Business; and (iii) HMO agreements which are reasonably
comparable in the aggregate to HMO agreements offered to their employees by
other corporations engaged in a business comparable to the Axcelis Technologies
Business. In each case, Axcelis Technologies shall, as of January 1, 2001 (or
such other date as Eaton and Axcelis Technologies may mutually agree),
establish, adopt and/or implement such contracts, agreements or arrangements.
Axcelis Technologies may elect to discontinue any or all such contracts,
agreements or arrangements after the Distribution Date in accordance with
Section 2.3.
(c) Continuance of Elections, Co-Payments and Maximum
Benefits.
Beginning on the Separation Date and continuing until January
1, 2001 or such other date as Axcelis Technologies and Eaton may mutually agree,
Axcelis Technologies shall cause the Axcelis Technologies Health Plans to
recognize and maintain all coverage and contribution elections made by Axcelis
Technologies Employees and Axcelis Technologies Transferred Employees under the
Eaton Health Plans and apply such elections under the Axcelis Technologies
Health Plans for the remainder of the period or periods for which such elections
are by their terms applicable. The transfer or other movement of employment
between Eaton to Axcelis Technologies at any time upon or before the
Distribution Date shall neither constitute nor be treated as a "status change"
or termination of employment under the Eaton Health Plans or the Axcelis
Technologies Health Plans.
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(d) HCFA. As of the Separation Date (or such other date as
Eaton and Axcelis Technologies may mutually agree), Axcelis Technologies shall
assume all Plan Obligations relating to, arising out of or resulting from
claims, if any, under the HCFA data match reports that relate to Axcelis
Technologies Employees and Axcelis Technologies Transferred Employees.
5.2 Health Plans from the Separation Date through the Non-Controlled
Group Date. Except as otherwise agreed by Eaton and Axcelis Technologies, for
the period beginning with the Separation Date and ending on the Non-Controlled
Group Date (or such other period as Eaton and Axcelis Technologies may mutually
agree), Axcelis Technologies shall be a Participating Company in the Eaton
Health Plans listed on Schedule 5.2. Eaton shall administer claims incurred
under the Eaton Health Plans by Axcelis Technologies Employees before the
Non-Controlled Group Date but only to the extent that Axcelis Technologies
has not, before the Non-Controlled Group Date, established and assumed
administrative responsibility for a corresponding Health Plan. Any determination
made or settlements entered into by Eaton with respect to such claims shall be
final and binding. Axcelis Technologies shall reimburse Eaton for any and all
direct and indirect costs and expenses associated with its participation in the
Eaton Health Plans, subject to Section 8.1.
5.3 Group Life Plan.
(a) Axcelis Technologies' Participation in Eaton Group Life
Plan. Axcelis Technologies shall, until the Non-Controlled Group Date (or such
other date as Eaton and Axcelis Technologies may mutually agree), continue to be
a Participating Company in the Eaton Group Life Plan. Axcelis Technologies shall
cease to be a Participating Company in the Eaton Group Life Plan coincident with
the Non-Controlled Group Date. Axcelis Technologies shall reimburse Eaton for
any and all direct and indirect costs and expenses associated with its
participation in the Eaton Group Life Plan, subject to Section 8.1.
(b) Axcelis Technologies' Establishment of Axcelis
Technologies Group Life Plan. Eaton and Axcelis Technologies shall each use
commercially reasonable efforts to procure an arrangement on behalf of Axcelis
Technologies for a Group Life Plan which shall be reasonably comparable to life
plans offered by other corporations engaged in a business comparable to the
Axcelis Technology Business and is financially, administratively and legally
practicable. Axcelis Technologies will reimburse Eaton for its direct and
indirect costs and expenses associated with its procurement, preparation, and
implementation of the Axcelis Technologies Group Life Plan, subject to Section
8.1.
5.4 AD&D Plan.
(a) Axcelis Technologies' Participation in Eaton AD&D Plan.
Axcelis Technologies shall, until the earlier of December 31, 2000 and the
Non-Controlled Group Date (or such other date as Eaton and Axcelis Technologies
may mutually agree), continue to be a Participating Company in the Eaton AD&D
Plan. Axcelis Technologies shall cease to be a Participating Company in the
Eaton AD&D Plan coincident with such earlier applicable date. Axcelis
Technologies shall reimburse Eaton for any and all direct and indirect costs and
expenses associated with its participation in the Eaton AD&D Plan, subject to
Section 8.2.
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(b) Axcelis Technologies' Establishment of Axcelis
Technologies AD&D Plan. Eaton and Axcelis Technologies shall each use
commercially reasonable efforts to procure an arrangement on behalf of Axcelis
Technologies for an AD&D Plan which shall be comparable in the aggregate
reasonably comparable in the aggregate to plans offered to their employees by
other corporations engaged in a business comparable to the Axcelis Technologies
Business. Axcelis Technologies will reimburse Eaton for its direct and indirect
costs and expenses associated with its procurement, preparation and
implementation of the Axcelis Technologies AD&D Plan, subject to Section 8.1.
5.5 Severance Plan. Axcelis Technologies shall, until the earlier of
December 31, 2000 or the Non-Controlled Group Date (or such other date as Eaton
and Axcelis Technologies may mutually agree), continue to be a Participating
Company in the Eaton Severance Plan. Axcelis Technologies shall cease to be a
Participating Company in the Eaton Xxxxxxxxx Plan coincident with such earlier
applicable date. If Axcelis Technologies so elects, Eaton will assist Axcelis
Technologies in establishing the Axcelis Technologies Severance Plan. Axcelis
Technologies will reimburse Eaton for any and all direct and indirect payments,
costs and expenses related to its participation in the Eaton Severance Plan and
Xxxxx'x preparation and implementation of the Axcelis Technologies Severance
Plan, subject to Section 8.1. None of the Separation, the IPO, the
Non-Controlled Group Date or the Distribution shall be an event giving rise to
severance payments under the Eaton Xxxxxxxxx Plan or the Axcelis Technologies
Severance Plan.
5.6 Disability Plans.
(a) Short-Term Disability Plan. Effective on the earlier of
December 31, 2000 or the Non-Controlled Group Date (or such other date as Eaton
and Axcelis Technologies may mutually agree), Axcelis Technologies shall
implement or cause to be implemented, the Axcelis Technologies Short-Term
Disability Plan. Eaton will administer Axcelis Technologies' Short-Term
Disability Plan through the earlier of December 31, 2000 or the Non-Controlled
Group Date (or such other date as Eaton and Axcelis Technologies may mutually
agree). Axcelis Technologies shall reimburse Eaton for its costs and expenses
associated with such administration, subject to Section 8.1.
(b) Long-Term Disability Plan. Axcelis Technologies shall,
until the earlier of December 31, 2000 or the Non-Controlled Group Date (or such
other date as Axcelis Technologies and Eaton may mutually agree), continue to be
a Participating Company in the Eaton Long-Term Disability Plan. Eaton and
Axcelis Technologies shall each use commercially reasonable efforts for and on
behalf of Axcelis Technologies to procure, effective as of January 1, 2001 (or
such other date as Eaton and Axcelis Technologies may mutually agree), an
Axcelis Technologies Long-Term Disability Plan. Axcelis Technologies will
reimburse Eaton for any and all direct and indirect costs and expenses
associated with its participation in the Eaton Long-Term Disability Plan and
Xxxxx'x assistance in procuring, preparing, and implementing the Axcelis
Technologies Long-Term Disability Plan, subject to Section 8.2.
5.7 Business Travel Accident Insurance. Through the earlier of
December 31, 2000 or the Non-Controlled Group Date (or such other date as Eaton
and Axcelis Technologies may mutually agree), Axcelis Technologies shall remain
a Participating Company in the Eaton
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Business Travel Accident Insurance policy. Eaton shall be responsible for
administering or causing to be administered the Eaton Business Travel Accident
Insurance policy with respect to Axcelis Technologies Employees. Axcelis
Technologies shall reimburse Eaton for any and all direct and indirect expenses
and costs associated with its participation in the Eaton Business Travel
Accident Insurance policy, subject to Section 8.2. Eaton and Axcelis
Technologies shall each use commercially reasonable efforts for and on behalf of
Axcelis Technologies to procure a Business Travel Accident Insurance policy
which shall be reasonably comparable in the aggregate to plans offered to their
employees by other corporations engaged in a business comparable to the Axcelis
Technologies Business, effective as of January 1, 2000 (or such other date as
Eaton and Axcelis Technologies may mutually agree). Effective as of January 1,
2001, Axcelis Technologies shall be solely responsible for maintaining its own
Business Travel Accident Insurance policy.
5.8 Section 125 Plan. Through the earlier of December 31, 2000 and
the Non-Controlled Group Date (or such other date as Eaton and Axcelis
Technologies may mutually agree), Axcelis Technologies and designated members of
the Axcelis Technologies Group shall remain Participating Companies in the Eaton
Section 125 Plan. The existing elections for Axcelis Technologies Employees
participating in the Eaton Section 125 Plan and for newly-eligible Axcelis
Technologies Employees who elect to participate in the Eaton Section 125 Plan
shall remain in effect through December 31, 2000 (or such other date as Eaton
and Axcelis Technologies may mutually agree). Effective on January 1, 2001 (or
such other date immediately following the date that Axcelis Technologies'
participation in the Eaton Section 125 Plan terminates), Axcelis Technologies
shall establish, or cause to be established, the Axcelis Technologies Section
125 Plan and Axcelis Technologies shall be solely responsible for the Axcelis
Technologies Section 125 Plan. Eaton will administer, or cause to be
administered, the Eaton Section 125 Plan for Axcelis Technologies Employees and
the Axcelis Technologies Section 125 Plan through such date as Eaton and Axcelis
Technologies may mutually agree. Axcelis Technologies shall reimburse Eaton for
any and all direct and indirect expenses and costs attributable to Axcelis
Technologies Employees, subject to Section 8.2.
5.9 COBRA. Eaton shall be responsible through the earlier of
December 31, 2000 and the Non-Controlled Group Date (or such other date as Eaton
and Axcelis Technologies may mutually agree) for compliance with the health care
continuation coverage requirements of COBRA and the Eaton Health and Welfare
Plans with respect to Axcelis Technologies Employees, Axcelis Technologies
Transferred Employees and qualified beneficiaries (as such term is defined under
COBRA). Axcelis Technologies shall be responsible for providing Eaton with all
necessary employee change notices and related information for covered
dependents, spouses, qualified beneficiaries (as such terms are defined under
COBRA) and alternate recipients pursuant to QMCSO, in accordance with applicable
Eaton COBRA policies and procedures. As soon as administratively practicable
after the earlier of December 31, 2000 or the Non-Controlled Group Date (or such
other date as Eaton and Axcelis Technologies may mutually agree), Eaton shall
provide Axcelis Technologies (through hard copy, electronic format or such other
mechanism as is appropriate under the circumstances) with a list of all
qualified beneficiaries (as such term is defined under COBRA) that relate to the
Axcelis Technologies Group and the relevant information pertaining to their
coverage elections and remaining COBRA time periods. Effective as of the earlier
of January 1, 2001 and the Non-Controlled Group Date (or such other date as
Eaton and Axcelis Technologies may mutually agree), Axcelis
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Technologies shall be solely responsible for compliance with the health care
continuation coverage requirements of COBRA and the Axcelis Technologies Health
and Welfare Plans for Axcelis Technologies Employees and Axcelis Technologies
Transferred Employees and their qualified beneficiaries (as such term is defined
under COBRA).
5.10 Administrative Services. To the extent not provided otherwise
in this Article, Eaton shall provide certain administrative services to Axcelis
Technologies in conjunction with both the Eaton and Axcelis Technologies Health
and Welfare Plans in such manner and for such period as Eaton and Axcelis
Technologies may mutually agree. Axcelis Technologies shall compensate Eaton for
any and all such services as provided in the Transitional Services Agreement,
subject to Section 8.2.
5.11 Foreign Plans. Eaton and Axcelis Technologies each will make
reasonable efforts to amend each contract with a foreign third-party
administrator/government agency that relates to any of Xxxxx'x Health and
Welfare Plans in existence as of the date of this Agreement to permit Axcelis
Technologies to have its own contracts after the Distribution Date. In those
cases where the above is not possible due to governmental restrictions or plan
provisions or other reasons, reasonable efforts will be made by Eaton and
Axcelis Technologies to identify similar plans for participation by Axcelis
Technologies employees.
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ARTICLE VI
EQUITY AND OTHER COMPENSATION
6.1 Bonus Plan. Except as may be provided in an Eaton Xxxxxxxxx
Agreement, Employees of the Axcelis Technologies Business (including, for this
purpose, any employees of Eaton who are designated as employees of the Axcelis
Technologies Business for purposes of the Separation) shall cease their
participation in the Eaton plans providing annual and multi-year incentive
compensation opportunities, and each other compensation plan as of the
Separation Date. Payment of amounts earned by Axcelis Technologies Employees or
Axcelis Technologies Transferred Employees under the Eaton annual and multi-year
incentive compensation plan(s) previously covering such employees shall be the
responsibility of Axcelis Technologies. Effective as of the Separation Date (or
such other date as Eaton and Axcelis Technologies may mutually agree), Axcelis
Technologies shall establish the Axcelis Technologies Bonus Plan for Axcelis
Technologies Employees and Axcelis Technologies Transferred Employees for
Axcelis Technologies fiscal period(s) beginning on and after the Separation Date
(or such other date as Eaton and Axcelis Technologies may mutually agree), to be
administered at the direction of the Axcelis Technologies Board of Directors.
6.2 Eaton Options.
(a) (i) Option Assumption by Axcelis Technologies. If Eaton
disposes of its interests in Axcelis Technologies by a dividend to Eaton
shareholders, at the Distribution Date (or such later date as Eaton and Axcelis
Technologies may mutually agree), each outstanding Eaton Option held by Axcelis
Technologies Transferred Employees, whether vested or unvested, shall be, in
connection with the Distribution, assumed by Axcelis Technologies. Each Eaton
Option so assumed by Axcelis Technologies shall continue to have, and be subject
to, the same terms and conditions as are set forth in the Eaton Stock Plans and
as provided in the respective option agreements governing such Eaton Option as
of the Distribution Date (or such other date as Eaton and Axcelis Technologies
may mutually agree), except that (i) such Eaton Option shall be exercisable for
that number of whole shares of Axcelis Technologies common stock equal to the
quotient of the number of shares of Eaton common stock that were issuable upon
exercise of such Eaton Option as of the Distribution Date divided by the Ratio,
rounded down to the nearest whole number of shares of Axcelis Technologies
common stock, and (ii) the per share exercise price for the shares of Axcelis
Technologies common stock issuable upon exercise of such assumed Eaton Option
shall be equal to the product determined by multiplying the exercise price per
share of Eaton common stock at which such Eaton Option was exercisable as of the
Distribution Date by the Ratio, rounded up to the nearest whole cent.
(ii) Assumption Criteria. The assumption of Eaton Options
by Axcelis Technologies pursuant to Subsection 6.2(a) shall meet the following
criteria: (i) the aggregate intrinsic value of the assumed Eaton Options
immediately after the assumption shall not be greater than such value
immediately before the assumption; (ii) with respect to each such assumed Eaton
Option, the Ratio of the exercise price per share to the Axcelis Technologies
Stock Value of the assumed Eaton Options immediately after the assumption shall
not be less than the Ratio of the exercise price per share to the Eaton Stock
Value immediately before the assumption; and (iii) the vesting and option term
of the assumed Eaton Options shall not be
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changed. If any assumed option has vesting provisions based on performance, the
substituted option shall also have performance vesting criteria reasonably
comparable as determined by the Axcelis Technologies Board of Directors.
(b) If Eaton disposes of its interest in Axcelis
Technologies in a transaction which is not a dividend to its shareholders, Eaton
and Axcelis Technologies shall use their best efforts to make arrangements with
respect to Eaton options as are in Xxxxx'x judgment necessary or desirable under
the terms of such disposition transaction.
(c) Certain Non-U.S. Optionees. Except as may otherwise be
agreed upon by Eaton and Axcelis Technologies, this Section 6.2 shall govern the
treatment of Eaton Options held by non-U.S. Axcelis Technologies Transferred
Employees.
6.3 Stock Purchase Plan. On or after the Distribution Date,
Axcelis Technologies Employees and Axcelis Technologies Transferred Employees
may be eligible to begin purchases of Axcelis Technologies common stock under
the Stock Purchase Plan. In no event may any stock purchases or orders to
purchase be consummated under the Stock Purchase Plan prior to the Distribution
Date.
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ARTICLE VII
FRINGE AND OTHER BENEFITS
7.1 Employee Assistance Program. Axcelis Technologies shall use
commercially reasonable efforts for and on behalf of Axcelis Technologies to
procure, effective as of the January 1, 2001 (or such other date as Eaton and
Axcelis Technologies may mutually agree), a contract with a service provider
that provides coverage to or for an Axcelis Technologies Employee Assistance
Program. Axcelis Technologies shall cease to be a Participating Company in the
Eaton Employee Assistance Program coincident with Axcelis Technologies'
establishment of the Axcelis Technologies Employee Assistance Program. Axcelis
Technologies shall reimburse Eaton for any and all direct and indirect costs and
expense associated with its participation in the Eaton Employee Assistance
Program.
7.2 Educational Assistance Program. Effective as of January 1,
2001 (or such other date as Axcelis Technologies and Eaton may mutually agree),
Axcelis Technologies shall provide an Axcelis Technologies Educational
Assistance Program to Axcelis Technologies Employees which is reasonably
comparable to the Educational Assistance Program provided to Axcelis
Technologies Employees prior to the Separation Date. Axcelis Technologies shall
cease to be a Participating Company in the Eaton Educational Assistance Program
coincident with Axcelis Technologies' establishment of the Axcelis Technologies
Educational Assistance Program. At such time, any and all outstanding approved
reimbursements under the Eaton Educational Assistance Program for Axcelis
Technologies Employees shall be made by Axcelis Technologies. Furthermore,
Axcelis Technologies shall reimburse Eaton for any and all direct and indirect
costs and expenses associated with its participation in the Eaton Educational
Assistance Program.
7.3 Other Benefits. To the extent that Eaton maintains, sponsors
or provides other fringe benefits as specified in Schedule 7.3 to its eligible
employees, then Eaton shall, to the extent permitted by law, continue to make
such benefits available to Axcelis Technologies Employees on substantially
similar terms and conditions as are offered to the employees of the Eaton Group
through the Distribution Date (or such other date upon which Axcelis
Technologies and Eaton mutually agree). Axcelis Technologies shall reimburse
Eaton for any and all direct and indirect costs and expenses associated with,
arising out of or resulting from providing such other fringe benefits to its
employees, subject to Section 8.2. Axcelis Technologies and Eaton shall each use
commercially reasonable efforts to mutually agree on whether, when and on what
terms any member of the Axcelis Technologies Group shall maintain, sponsor or
offer fringe benefits after the Distribution Date.
7.4 Administrative Services. To the extent not provided otherwise
in this Article, Eaton shall provide certain administrative services to Axcelis
Technologies in conjunction with both the Eaton and the Axcelis Technologies
Fringe Benefit Plans in such manner and for such period as Eaton and Axcelis
Technologies may mutually agree. Axcelis Technologies shall compensate Eaton for
any and all such services as provided for in the Transitional Services
Agreement, subject to Section 8.1.
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ARTICLE VIII
ADMINISTRATIVE PROVISIONS
8.1 Payment of Liabilities, Plan Expenses and Related Matters.
(a) Expenses and Costs Chargeable to a Trust. Effective
as of the Separation Date, Axcelis Technologies shall pay its share of any
contributions made to or expenses incurred by any trust maintained in connection
with any Eaton Plan while Axcelis Technologies is a Participating Company in
that Eaton Plan.
(b) Contributions to Trusts. Eaton shall use reasonable
procedures to determine the allocable share of Axcelis Technologies
contributions to and expenses incurred by the respective trusts established
under the Eaton Defined Benefit Plan and the Eaton Savings Plan, Health and
Welfare and other plans in which Axcelis Technologies Employees and Axcelis
Technologies Transferred Employees then participate.
(c) Administrative Expenses Not Chargeable to a Trust.
Effective as of the Separation Date, to the extent not charged pursuant to the
Transitional Services Agreement (as contemplated by Section 8.1) or another
Ancillary Agreement, to the extent not otherwise agreed to in writing by Eaton
and Axcelis Technologies and to the extent not chargeable to a trust established
in connection with an Eaton Plan (as provided in paragraph 8.1(a)), Axcelis
Technologies shall be responsible, through either direct payment or
reimbursement to Eaton in accordance with Section 5.6 of the Separation
Agreement and/or in accordance with the Transitional Services Agreement as
applicable, for its allocable share of actual third party and/or vendor costs
and expenses incurred by Eaton and additional costs and expenses, subject to the
methodology determined by Eaton in the administration of (i) the Eaton Plans
while Axcelis Technologies participates in such Eaton Plans, and (ii) the
Axcelis Technologies Plans, to the extent Eaton procures, prepares, implements
and/or administers such Axcelis Technologies Plans. To the extent not otherwise
determinable through direct allocation of costs and expenses, Axcelis
Technologies' allocable share of such costs and expenses will be based on the
number of Axcelis Technologies Employees then participating as a percentage of
total Eaton employees then participating.
8.2 Sharing of Participant Information. In addition to the
responsibilities and obligations of Eaton and Axcelis Technologies contemplated
by the Separation Agreement for non-U.S. locations, Eaton and Axcelis
Technologies shall share, or cause to be shared, all participant information
that is necessary or appropriate for the efficient and accurate administration
of each of the Eaton Plans and the Axcelis Technologies Plans during the
respective periods applicable to such Plans as Eaton may determine. Eaton and
Axcelis Technologies and their respective authorized agents shall, subject to
applicable laws of confidentiality and data protection, be given reasonable and
timely access to, and may make copies of, all information relating to the
subjects of this Agreement in the custody of the other party or its agents, to
the extent necessary or appropriate for such administration, provided that each
recipient of such information shall provide the same confidential treatment to
such information as it would to such information of its own.
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8.3 Reporting and Disclosure Communications to Participants. While
Axcelis Technologies is a Participating Company in the Eaton Plans, Axcelis
Technologies shall take, or cause to be taken, all actions necessary or
appropriate to facilitate the distribution of all Eaton Plan-related
communications and materials to Axcelis Technologies Employees, participants and
beneficiaries, including (without limitation) summary plan descriptions and
related summaries of material modification(s), summary annual reports,
investment information, prospectuses, notices and enrollment material for the
Eaton Plans and Axcelis Technologies Plans. Axcelis Technologies shall assist
Eaton in complying with all reporting and disclosure requirements of ERISA,
including the preparation of Form Series 5500 annual reports for the Eaton Plans
and plan audits, where applicable.
8.4 Audits Regarding Vendor Contracts. From the period beginning
as of the Separation Date and ending on such date as Eaton and Axcelis
Technologies may mutually agree (but no later than three years after the
Distribution Date), Eaton and Axcelis Technologies and their duly authorized
representatives shall have the right upon mutually agreeable terms to conduct
joint audits with respect to any vendor contracts that relate to both the Eaton
Health and Welfare Plans and the Axcelis Technologies Health and Welfare Plans.
The scope of such audits shall encompass the review of all correspondence,
account records, claim forms, canceled drafts (unless retained by the bank),
provider bills, medical records submitted with claims, billing corrections,
vendor's internal corrections of previous errors and any other documents or
instruments relating to the services performed by the vendor under the
applicable vendor contracts. Prior to the commencement of any audit, Eaton and
Axcelis Technologies shall agree on the performance standards, audit
methodology, auditing policy and quality measures, reporting requirements and
the manner in which costs and expenses incurred in connection with such audits
will be shared.
8.5 Employee Identification Numbers. Until the Distribution Date
(or such other date as Eaton and Axcelis Technologies may mutually agree), Eaton
and Axcelis Technologies shall not change any employee identification numbers
assigned by Eaton. Eaton and Axcelis Technologies will establish a policy
pursuant to which employee identification numbers assigned to either employees
of Eaton or Axcelis Technologies shall not be duplicated between Eaton and
Axcelis Technologies.
8.6 Beneficiary Designation. On or before the Non-Controlled Group
Date Axcelis Technologies shall (i) advise Axcelis Technologies Employees of its
adoption of new plans and (ii) solicit Axcelis Technologies Employees to provide
current beneficiary designation forms.
8.7 Requests for IRS and DOL Opinions. Eaton and Axcelis Technologies
shall make such applications to regulatory agencies, including the IRS and DOL,
as may be necessary or appropriate in regard to any matter covered by this
Agreement. Axcelis Technologies and Eaton shall cooperate fully with one another
on any issue relating to the transactions contemplated by this Agreement for
which Eaton and/or Axcelis Technologies elects to seek a determination letter or
private letter ruling from the IRS or an advisory opinion from the DOL.
8.8 Fiduciary Matters. Eaton and Axcelis Technologies acknowledge
that actions contemplated to be taken pursuant to this Agreement may be subject
to fiduciary duties or standards of conduct under ERISA or other applicable law,
and that no party shall be deemed to
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be in violation of this Agreement if such party fails to comply with any
provisions hereof based upon such party's good faith determination that to do so
would violate such a fiduciary duty or standard.
8.9 Consent of Third Parties. If any provision of this Agreement is
dependent on the consent of any third party (such as a vendor) and such consent
is withheld, Eaton and Axcelis Technologies shall use commercially reasonable
efforts to implement the applicable provisions of this Agreement. If any
provision of this Agreement cannot be implemented due to the failure of such
third party to consent, Eaton and Axcelis Technologies shall negotiate in good
faith to implement the provision in a mutually satisfactory manner.
8.10 Foreign Plans; Requests for Foreign Government Authority Rulings.
Axcelis Technologies shall cooperate fully with Eaton on any issue relating to
the transactions contemplated by this Agreement for which Eaton elects to seek a
determination letter, private letter ruling or advisory opinion from a foreign
government authority with respect to any of the Axcelis Technologies Plans
relating to the transactions contemplated by this Agreement.
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ARTICLE IX
EMPLOYMENT-RELATED MATTERS
9.1 Terms of Axcelis Technologies Employment. All basic terms and
conditions of employment for Axcelis Technologies Employees and Axcelis
Technologies Transferred Employees, including without limitation their pay and
benefits in the aggregate, shall remain reasonably comparable to the pay and
benefits offered to their employees by other corporations engaged in the Axcelis
Technology Business through December 31, 2003 or the Non-Controlled Group Date.
In addition, nothing in the Separation Agreement, an Eaton Severance Agreement,
this Agreement or any other Ancillary Agreement shall be construed to change the
at-will status of the employment of any of the employees of the Eaton Group or
the Axcelis Technologies Group.
9.2 HR Data Support Systems. Eaton shall provide human resources data
support for Axcelis Technologies Employees and Axcelis Technologies Transferred
Employees to the extent and under the terms and conditions set forth in the
Transitional Services Agreement.
9.3 Employment of Employees with U.S. Work Visas. Axcelis Technologies
Employees with U.S. work visas authorizing them to work for Axcelis Technologies
will continue to hold work authorization for the Axcelis Technologies Group
after the Separation Date. Axcelis Technologies will request and process all
necessary amendments to the nonimmigrant visa status of Axcelis Technologies
Employees and Axcelis Technologies Transferred Employees with U.S. work visas
authorizing them to work for Eaton, to obtain authorization to work for Axcelis
Technologies.
9.4 Confidentiality and Proprietary Information. No provision of this
Agreement, the Separation Agreement or any other Ancillary Agreement shall be
deemed to release any individual from his or her obligations under any agreement
relating to confidential or proprietary information of any member of the Eaton
Group, or otherwise relieve any individual of his or her obligations under any
non-competition agreement.
9.5 Personnel Records. Subject to applicable laws on confidentiality
and data protection, Eaton shall make available to Axcelis Technologies prior to
the earlier of December 31, 2000 and the Non-Controlled Group Date (or such
other date as Eaton and Axcelis Technologies may mutually agree), personnel
records of Axcelis Technologies Employees and Axcelis Technologies Transferred
Employees to the extent such records relate to Axcelis Technologies Employees'
and Axcelis Technologies Transferred Employees' active employment by, unpaid
leave of absence from or termination of employment with Axcelis Technologies,
provided that each recipient of such information shall provide confidential
treatment to such information as it would to such information of its own.
Axcelis Technologies shall fully reimburse Eaton for any and all direct and
indirect costs and expenses associated with making such records available,
subject to Section 8.1.
9.6 Medical Records. Subject to applicable laws on confidentiality and
data protection, Eaton shall make available to Axcelis Technologies prior to the
earlier of December 31, 2000 or the Non-Controlled Group Date (or such other
date as Eaton and Axcelis
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Technologies may mutually agree), medical records of Axcelis Technologies
Employees and Axcelis Technologies Transferred Employees to the extent such
records (a) relate to Axcelis Technologies Employees' and Axcelis Technologies
Transferred Employees' active employment by, leave of absence from, or
termination of employment with Axcelis Technologies, and (b) are necessary to
administer and maintain employee benefit plans, including Axcelis Technologies
Health Plans and Axcelis Technologies workers' compensation plans, and for
determining eligibility for paid and unpaid leaves of absence for medical
reasons. Axcelis Technologies shall fully reimburse Eaton for any and all direct
and indirect costs and expenses associated with making such records available.
9.7 Unemployment Insurance Program.
(a) Claims Administration Through December 31, 2000.
Unless otherwise directed by Axcelis Technologies, Eaton and Axcelis
Technologies shall each use commercially reasonable efforts to cause Axcelis
Technologies to receive service from Xxxxx'x third party unemployment insurance
administrators through December 31, 2000 (or such other date as Eaton and
Axcelis Technologies may mutually agree). Axcelis Technologies shall reimburse
Eaton for its allocable share of fees and related costs and expenses paid by
Eaton to its third party unemployment insurance administrator for services
rendered during such period, pursuant to the Transitional Services Agreement.
Axcelis Technologies shall cooperate with the unemployment insurance
administrator by providing any and all necessary or appropriate information
reasonably available to Axcelis Technologies.
(b) Claim Administration After December 31, 2000. Before
December 31, 2000, Eaton and Axcelis Technologies shall use commercially
reasonable efforts for and on behalf of Axcelis Technologies to procure an
agreement with Xxxxx'x third party unemployment insurance administrator to
administer all unemployment compensation claims of Axcelis Technologies
Transferred Employees and Axcelis Technologies Employees, regardless of when
such claims were filed. Axcelis Technologies shall reimburse Eaton for any and
all direct and indirect costs and expenses associated with such procurement,
subject to the Transitional Services Agreement.
9.8 Non-Termination of Employment; No Third-Party Beneficiaries.
No provision of this Agreement, the Separation Agreement or any other Ancillary
Agreement shall be construed to create any right or accelerate entitlement to
any compensation or benefit whatsoever on the part of any Axcelis Technologies
Employee, Axcelis Technologies Transferred Employee or other former, present or
future employee of Eaton or Axcelis Technologies under any Eaton Plan or Axcelis
Technologies Plan or otherwise. Without limiting the generality of the
foregoing: (a) none of the Separation, the IPO or the Distribution, nor the
termination of the Participating Company status of Axcelis Technologies or any
member of the Axcelis Technologies Group shall cause any employee to be deemed
to have incurred a termination of employment unless required by applicable law;
and (b) no transfer of employment between Eaton and Axcelis Technologies shall
be deemed a termination of employment for any purpose hereunder.
9.9 Employment Claims. Axcelis Technologies shall have the sole
responsibility for all employment-related claims, including benefit-related
claims other than claims for breach of fiduciary duty relating to or for
benefits due under the Eaton Defined Benefit Plan, regarding
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Axcelis Technologies Employees and Axcelis Technologies Transferred Employees
that came into existence before, were made before, came into existence after or
were made after the Separation Date relating to, arising out of or resulting
from their employment as a part of Eaton.
9.10 Foreign Works Councils and Employee Associations. To the extent
any provision of this Agreement is contrary to the provisions of any Works
Council/Collective Bargaining/Employee Association agreement to which Eaton or
any Affiliated Company of Eaton is a party, the terms of such agreement shall
prevail. Should any provisions of this Agreement be deemed by any appropriate
authority to be a mandatory subject for any works council/collective
bargaining/employee association, Eaton may be obligated to communicate/bargain
with the respective party representing affected employees concerning those
subjects, and the outcome thereof shall be binding on Axcelis as between Eaton
and Axcelis.
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ARTICLE X
MISCELLANEOUS
10.1 Relationship of Parties. Nothing in this Agreement shall be
deemed or construed by the parties or any third party as creating the
relationship of principal and agent, partnership or joint venture between the
parties, the understanding and agreement being that no provision contained
herein, and no act of the parties, shall be deemed to create any relationship
between the parties other than the relationship set forth herein.
10.2 Affiliates. Each of Eaton and Axcelis Technologies shall cause
to be performed any and all actions of the Eaton Group or the Axcelis
Technologies Group, respectively, required to be performed by this Agreement.
10.3 Limitation of Liability. EXCEPT TO THE EXTENT, IF ANY,
SPECIFICALLY PROVIDED HEREIN, IN THE SEPARATION AGREEMENT OR IN ANY OTHER
ANCILLARY AGREEMENT, IN NO EVENT SHALL ANY MEMBER OF THE EATON GROUP OR THE
AXCELIS GROUP BE LIABLE TO ANY OTHER MEMBER OF THE EATON GROUP OR THE AXCELIS
GROUP FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES
OR LOST PROFITS, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING
NEGLIGENCE), ARISING IN ANY WAY OUT OF THIS AGREEMENT, WHETHER OR NOT SUCH PARTY
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED, THAT THE
FOREGOING LIMITATIONS SHALL NOT LIMIT EACH PARTY'S INDEMNIFICATION OBLIGATIONS
FOR LIABILITIES AS SET FORTH IN ANY ANCILLARY AGREEMENT PROVIDING FOR
INDEMNIFICATION OR INSURANCE.
10.4 Governing Law. To the extent not preempted by applicable
federal law, including, without limitation, ERISA, the Code and applicable
securities laws, this Agreement shall be construed in accordance with and all
disputes hereunder shall be governed by the local laws of the State of Ohio,
excluding its conflict of law rules. The United States District Court for the
Northern District of Ohio shall have jurisdiction and venue over, and shall be
the sole court used by the parties to initiate resolution of, all disputes
between the parties that are permitted to be brought in a court of law pursuant
to the Separation Agreement.
10.5 Termination. This Agreement may be terminated in accordance with
Section 6.3 of the Separation Agreement.
10.6 Notices. Notices, offers, instructions, consents, requests or
other communications required or permitted to be given by either party pursuant
to the terms of this Agreement shall be given in writing to the respective
parties to the following addresses:
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if to Eaton:
Office of the Secretary Xxxxx
Corporation Eaton Center
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Fax: 000-000-0000
if to Axcelis:
Chief Executive Officer
Axcelis Technologies, Inc.
00 Xxxxxx Xxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Fax: 000-000-0000
or to such other address as the party to whom notice is given may have
previously furnished to the other in writing as provided herein. Any notice
involving non-performance, termination, or renewal shall be sent by hand
delivery or recognized overnight courier or, within the United States, may also
be sent via certified mail, return receipt requested. All other notices may also
be sent by fax, confirmed by first class mail. All notices shall be deemed to
have been given and received on the earlier of actual delivery or three (3) days
from the date of postmark.
10.7 Counterparts. This Agreement, including the Schedules hereto and
the other documents referred to herein, will be executed in counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute one and the same agreement.
10.8 Binding Effect; Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective legal
successors and permitted assigns. This Agreement may be enforced separately by
each member of the Eaton Group and each member of the Axcelis Technologies
Group. Neither party may assign this Agreement or any rights or obligations
hereunder in whole or in part, without the prior written consent of the other
party, which consent will not be unreasonably withheld, and any assignment
without such consent shall be void. No permitted assignment of any rights or
obligations hereunder, in whole or in part, by operation of law or otherwise,
will release the assigning party as the obligor, jointly and severally with the
assignee, from any of its obligations hereunder.
10.9 Severability. If any term or other provision of this Agreement is
determined by a court, administrative agency or arbitrator to be invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other conditions and provisions of this Agreement shall nevertheless remain in
full force and effect. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible and in an acceptable manner to the
end that transactions contemplated hereby are fulfilled to the fullest possible
extent.
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative. Any
provision of this agreement or any breach thereof may only be waived if done
specifically and in writing by the
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39
party which is entitled to the benefits thereof. No failure or delay on the part
of either party hereto in the exercise of any right hereunder shall impair such
right or be construed to be a waiver of, or acquiescence in, any breach of any
representation, warranty or agreement herein, nor shall any single or partial
exercise of any such right preclude other or further exercise thereof or of any
other right. All rights and remedies existing under this Agreement or the
Schedules attached hereto are cumulative to, and not exclusive of, any rights or
remedies otherwise available.
10.11 Entire Agreement; Amendment. This Agreement, the Separation
Agreement, and the other Ancillary Agreements, including the Exhibits and
Schedules attached hereto and thereto, constitute the sole and entire
understanding of the parties with respect to the matters contemplated hereby and
thereby and supersede and render null and void all prior negotiations,
representations, agreements and understandings (oral and written) between the
parties with respect to such matters. No change or amendment shall be made to
this Agreement (including any exhibits or schedules hereto) except by an
instrument in writing signed by each of the parties hereto.
10.12 Authority. Each of the parties hereto represents to the other
that (a) it has the corporate or other requisite power and authority to execute,
deliver and perform this Agreement, (b) the execution, delivery and performance
of this Agreement by it have been duly authorized by all necessary corporate or
other actions, (c) it has duly and validly executed and delivered this
Agreement, and (d) this Agreement is a legal, valid and binding obligation,
enforceable against it in accordance with its terms subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and general equity principles.
10.13 Interpretation. The headings contained in this Agreement or any
Schedule hereto are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Any capitalized term used in
any Schedule but not otherwise defined therein shall have the meaning assigned
to such term in this Agreement. When a reference is made in this Agreement to an
Article, Section or Schedule, such reference shall be to an Article of, Section
of, or Schedule to this Agreement unless otherwise indicated. The language used
in this agreement will be deemed to be the language chosen by the parties hereto
to express their mutual intent and agreement, and no rule of strict construction
or canons or aids in interpretation will be applied against either party.
10.14 Conflict. In the event of any conflict between the provisions of
this Agreement and the Separation Agreement or any other Ancillary Agreement,
the provisions of this Agreement shall control.
10.15 Subsequent Legal Fees. In the event any arbitration or litigation
is initiated to enforce the terms and provisions of this Agreement, the party
prevailing in said action shall be entitled to its reasonable attorneys fees and
costs and shall be paid same in full by the losing party promptly upon demand by
the prevailing party. A party may also include its claim for such fees and costs
in said action for adjudication thereof.
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10.16 No Third-Party Beneficiaries or Right to Rely. Notwithstanding
anything to the contrary in this Agreement (a) nothing in this Agreement is
intended to or shall create for or grant to any third person any rights
whatever, as a third party beneficiary or otherwise; (b) no third person is
entitled to rely on any of the representations, warranties, covenants or
agreements contained herein; and (c) no party hereto shall incur any liability
or obligation to any third person because of any reliance by such third person
on any representation, warranty, covenant or agreement herein.
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41
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf by its duly authorized officers or
representatives on the date first above written.
XXXXX CORPORATION
By: /s/ XXX XXXXXXXXXXXX By: /s/ XXXXXX X. XXXXXX
------------------------------ -------------------------------
Name: Xxx Xxxxxxxxxxxx Name: Xxxxxx X. Xxxxxx
---------------------------- -----------------------------
Title: Vice President--Strategic Title: Executive Vice President,
--------------------------- ----------------------------
Planning Chief Financial and
--------------------------- ----------------------------
Planning Officer
----------------------------
AXCELIS TECHNOLOGIES, INC.
By: /s/ XXXX X. PUMA By: /s/ XXXXX X. XXXXXXX
------------------------------ -------------------------------
Name: Xxxx X. Puma Name: Xxxxx X. Xxxxxxx
---------------------------- -----------------------------
Title: President, Chief Operating Title: Chief Executive Officer and
--------------------------- ----------------------------
Officer and Secretary Vice Chairman of the Board
--------------------------- ----------------------------
[Schedules omitted. The registrant hereby agrees to furnish supplementally, upon
request, a copy of any omitted Schedule to this Agreement.]
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