UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
 

FORM 10-K/A

AMENDMENT NO. 1 TO FORM 10-K

 

(Mark one)

 

ý

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the fiscal year ended December 31, 2004

 

 

 

o

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                 to                

 

Commission file number   000-30941

 

AXCELIS TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

 

34-1818596

(State or other jurisdiction of incorporation or organization)

 

(IRS Employer Identification No.)

 

 

 

108 Cherry Hill Drive
Beverly, Massachusetts 01915

(Address of principal executive offices, including zip code)

 

 

 

(978) 787-4000

(Registrant’s telephone number, including area code)

 

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of class

 

Name of each exchange on which
registered

None

 

None

 

Securities registered pursuant to Section 12(g) of the Act:

 

Common Stock, $0.001 par value

Preferred Share Purchase Rights

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ý    No  o.

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ý

 

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes  ý  No  o.

 

Aggregate market value of the voting stock held by nonaffiliates of the registrant as of June 30, 2004: $1,234,768,164

 

Number of shares outstanding of the registrant’s Common Stock, $0.001 par value, as of March 4, 2005: 100,180,688

 

Documents incorporated by reference:

 

Portions of the definitive Proxy Statement for Axcelis Technologies, Inc.’s Annual Meeting of Stockholders to be held on May 12, 2005 are incorporated by reference into Part III of this Form 10-K.

 

 



 

AMENDMENT NO. 1

 

EXPLANTORY NOTE

 

We are filing this amendment to our Annual Report on Form 10-K for the fiscal year ended December 31, 2004, originally filed with the Securities and Exchange Commission on March 15, 2005, solely for the purpose of complying with Regulation S-X, Rule 3-09. Rule 3-09 requires that Form 10-K, but not the annual shareholders’ report, contain separate financial statements for unconsolidated subsidiaries and investees accounted for by the equity method when such entities are individually significant.

 

We have determined that our 50% owned joint venture with Sumitomo Heavy Industries, Ltd., known as Sumitomo Eaton Nova Corporation (“SEN”), which is not consolidated in the Axcelis Technologies, Inc. financial statements (and is accounted for under the equity method) was significant under Rule 3-09 in relationship to the Axcelis Technologies, Inc. financial results for the year ended December 31, 2004. Since SEN’s fiscal year ended after the date of the filing of our Form 10-K, Rule 3-09 provides that the SEN financial statements may be filed as an amendment to our Form 10-K within 90 days after the end of SEN’s fiscal year ended March 31, 2005.

 

Therefore, this Form 10-K/A amends the following portions of the Axcelis Technologies Form 10-K filed on March 15, 2005:

 

•           Item 8 is being amended by submitting the financial statements of SEN for the fiscal years ended March 31, 2005, 2004 and 2003 (the “SEN Financial Statements”) as a separate section of this report immediately following Item 15;

 

              Item 15 is being amended to:

 

              include the list of the SEN Financial statements being filed herewith as required by Item 15(a); and

 

              add to the list of exhibits and exhibits filed in accordance with Item 601 of Regulation S-K an Exhibit 23.2,

 

2



 

Consent of Ernst & Young - Independent Auditors relating to the SEN Financial Statements, as required by Item 15(c).

 

As required by Rule 3-09, we will determine with respect to each future fiscal year, whether SEN has been significant with respect to Axcelis’ financial results for such year, and file SEN financial statements as necessary to comply with Rule 3-09.

 

Item 15. Exhibits and Financial Statement Schedules

 

(a) The following documents are filed as part of the Company’s Form 10-K, as originally filed on March 15, 2005, and as amended by this form 10-K/A:

 

(1)(A) Financial Statements of Axcelis Technologies, Inc.:

 

Report of Ernst & Young LLP - Independent Auditors

 

 

 

Consolidated Statements of Operations-For the years ended December 31, 2004, 2003 and 2002

 

Consolidated Balance Sheets-December 31, 2004 and 2003

 

Consolidated Statements of Stockholders’ Equity-For the years ended December 31, 2004, 2003 and 2002

 

Consolidated Statements of Cash Flows-For the years ended December 31, 2004, 2003 and 2002

 

 

 

Notes to Consolidated Financial Statements

 

 

 

(1)(B) Financial Statements of Sumitomo Eaton Nova Corporation:

 

 

 

Report of Ernst & Young LLP - Independent Auditors

 

 

 

Consolidated Statements of Operations-For the years ended March 31, 2005, 2004 and 2003

 

Consolidated Balance Sheets-March 31, 2005 and 2004

 

Consolidated Statements of Stockholders’ Equity-For the years ended March 31, 2005, 2004 and 2003

 

Consolidated Statements of Cash Flows-For the years ended March 31, 2005, 2004 and 2003

 

 

(2)          Financial Statement Schedules:

 

Schedule II - Valuation and Qualifying Accounts for the years ended December 31, 2004, 2003 and 2002

 

All other schedules for which provision is made in the applicable regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.

 

(b) Exhibits

 

The exhibits filed as part of this Form 10-K are listed on the Exhibit Index immediately preceding such Exhibits, which Exhibit Index is incorporated herein by reference.

 

(c) Financial Statement Schedules

 

The response to this portion of Item 15 is submitted as a separate section of this report.

 

3



 

Report of Independent Auditors

 

The Board of Directors

Sumitomo Eaton Nova Corporation

 

We have audited the accompanying consolidated balance sheets of Sumitomo Eaton Nova Corporation (the “Company”) as of March 31, 2005 and 2004, and the related consolidated statements of income, shareholders’ equity and cash flows for each of the three years in the period ended March 31, 2005, all expressed in Japanese yen.  Our audits also included the translation of these statements as of and for the year ended March 31, 2005 into U.S. dollars on the basis described in Note 1.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with auditing standards generally accepted in the United States.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  We were not engaged to perform an audit of the Company’s internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion the financial statements referred to above expressed in Japanese yen present fairly, in all material respects, the consolidated financial position of Sumitomo Eaton Nova Corporation at March 31, 2005 and 2004, and the consolidated results of its operations and its cash flows for each of the three years in the period ended March 31, 2005, in conformity with accounting principles generally accepted in the United States.  Also, in our opinion, the financial statements expressed in U.S. dollars as of and for the year ended March 31, 2005, when considered in relation to the basic financial statements taken as a whole, have been properly translated on the basis described in Note 1.

 

As discussed in Note 1 to the Consolidated Financial Statements, effective July 1, 2003, the Company adopted the provisions of Emerging Issues Task Force Issue No. 00-21, “Accounting for Revenue Arrangements with Multiple Deliverables.”

 

 

/s/ Ernst & Young ShinNihon

 

Tokyo, Japan

May 20, 2005

 

4



 

Sumitomo Eaton Nova Corporation

 

Consolidated Statements of Income

 

 

 

Years ended March 31,

 

Year ended March 31,

 

 

 

2003

 

2004

 

2005

 

2005

 

 

 

(Thousands of yen)

 

(U.S. dollars in
thousands)

 

Net sales (Notes 1, 6 and 13):

 

 

 

 

 

 

 

 

 

Systems

 

¥

12,281,385

 

¥

17,838,626

 

¥

28,457,929

 

$

264,602

 

Services

 

5,579,160

 

5,630,836

 

6,987,942

 

64,974

 

Net sales

 

17,860,545

 

23,469,462

 

35,445,871

 

329,576

 

Cost of sales (Note 6)

 

10,320,596

 

12,946,966

 

19,319,808

 

179,636

 

Gross profit

 

7,539,949

 

10,522,496

 

16,126,063

 

149,940

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses (Note 1,4 and 6)

 

4,587,471

 

5,066,003

 

6,812,951

 

63,347

 

Income from operations

 

2,952,478

 

5,456,493

 

9,313,112

 

86,593

 

 

 

 

 

 

 

 

 

 

 

Other income (expense), net

 

(12,988

)

(7,190

)

10,444

 

97

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

2,939,490

 

5,449,303

 

9,323,556

 

86,690

 

 

 

 

 

 

 

 

 

 

 

Income taxes (benefit) (Note 8):

 

 

 

 

 

 

 

 

 

Current

 

1,342,811

 

2,212,528

 

3,900,102

 

36,263

 

Deferred

 

(129,316

)

(118,800

)

(389,016

)

(3,617

)

 

 

1,213,495

 

2,093,728

 

3,511,086

 

32,646

 

 

 

 

 

 

 

 

 

 

 

Net income

 

¥

1,725,995

 

¥

3,355,575

 

¥

5,812,470

 

$

54,044

 

 

See accompanying notes to consolidated financial statements.

 

5



 

Sumitomo Eaton Nova Corporation

 

Consolidated Balance Sheets

 

 

 

March 31,

 

March 31,

 

 

 

2004

 

2005

 

2005

 

 

 

(Thousands of yen)

 

(U.S. dollars in
thousands)

 

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

¥

6,571,767

 

¥

9,345,190

 

$

87,021

 

Trade receivables, net (Note 2 and 12)

 

10,178,713

 

14,910,846

 

138,848

 

Due from affiliates – current (Note 6)

 

80,720

 

99,759

 

929

 

Inventories (Note 3)

 

7,429,764

 

6,050,698

 

56,343

 

Deferred income taxes and other current assets (Note 8)

 

370,720

 

437,435

 

4,073

 

Total current assets

 

24,631,684

 

30,843,928

 

287,214

 

 

 

 

 

 

 

 

 

Property, plant and equipment, net (Note 4)

 

3,291,712

 

2,787,756

 

25,959

 

 

 

 

 

 

 

 

 

Deferred income taxes and other assets (Note 8)

 

405,557

 

756,647

 

7,046

 

 

 

¥

28,328,953

 

¥

34,388,331

 

$

320,219

 

Liabilities and shareholders’ equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Trade payables:

 

 

 

 

 

 

 

Notes

 

¥

2,145,931

 

¥

1,812,547

 

$

16,878

 

Accounts

 

3,842,233

 

2,962,956

 

27,591

 

 

 

5,988,164

 

4,775,503

 

44,469

 

Due to affiliates (Note 6)

 

1,958,962

 

1,825,148

 

16,995

 

Income taxes payable

 

1,670,737

 

2,859,210

 

26,625

 

Other current liabilities (Note 5)

 

673,243

 

1,086,361

 

10,116

 

Total current liabilities

 

10,291,106

 

10,546,222

 

98,205

 

Accrued retirement benefits for employees and directors (Note 9)

 

83,165

 

74,957

 

698

 

 

 

 

 

 

 

 

 

Shareholders’ equity (Note 10):

 

 

 

 

 

 

 

Capital stock:

 

 

 

 

 

 

 

Authorized – 20,000 shares

 

 

 

 

 

 

 

Issued and outstanding – 12,000 shares

 

600,000

 

600,000

 

2,511

 

Retained earnings

 

17,354,682

 

23,167,152

 

207,541

 

Accumulated other comprehensive income

 

 

 

11,264

 

Total shareholders’ equity

 

17,954,682

 

23,767,152

 

221,316

 

 

 

¥

28,328,953

 

¥

34,388,331

 

$

320,219

 

 

See accompanying notes to consolidated financial statements.

 

6



 

Sumitomo Eaton Nova Corporation

 

Consolidated Statements of Shareholders’ Equity

 

 

 

Capital stock

 

Retained
earnings
(Note 10)

 

Accumulated
other
comprehensive
income (loss)

 

Total

 

 

 

(Thousands of yen)

 

Balance at March 31, 2002

 

¥

600,000

 

¥

12,513,112

 

¥

          —

 

¥

13,113,112

 

Net income

 

 

1,725,995

 

 

1,725,995

 

Minimum pension liability adjustment

 

 

 

(10,356

)

(10,356

)

Total comprehensive income

 

 

 

 

 

 

 

1,715,639

 

Cash dividends

 

 

(120,000

)

 

(120,000

)

Balance at March 31, 2003

 

600,000

 

14,119,107

 

(10,356

)

¥

14,708,751

 

Net income

 

 

3,355,575

 

 

 

3,355,575

 

Minimum pension liability adjustment

 

 

 

10,356

 

10,356

 

Total comprehensive income

 

 

 

 

 

 

 

3,365,931

 

Cash dividends

 

 

(120,000

)

 

(120,000

)

Balance at March 31, 2004

 

600,000

 

17,354,682

 

 

¥

17,954,682

 

Net income and total comprehensive income

 

 

5,812,470

 

 

5,812,470

 

Balance at March 31, 2005

 

¥

600,000

 

¥

23,167,152

 

¥

          —

 

¥

23,767,152

 

 

 

 

Capital stock

 

Retained
earnings
(Note 10)

 

Accumulated
other
comprehensive
income (loss)

 

Total

 

 

 

(U.S. dollars in thousands)

 

Balance at March 31, 2004

 

$

2,511

 

$

153,497

 

$

13,874

 

$

169,882

 

Net income

 

 

54,044

 

 

54,044

 

Foreign currency translation adjustment

 

 

 

(2,610

)

(2,610

)

Total comprehensive income

 

 

 

 

 

 

 

51,434

 

Balance at March 31, 2005

 

$

2,511

 

$

207,541

 

$

11,264

 

$

221,316

 

 

See accompanying notes to consolidated financial statements.

 

7



 

Sumitomo Eaton Nova Corporation

 

Consolidated Statements of Cash Flows

 

 

 

Year ended March 31,

 

Year ended
March 31,

 

 

 

2003

 

2004

 

2005

 

2005

 

 

 

(Thousands of yen)

 

(U.S. dollars in
thousands)

 

Operating activities

 

 

 

 

 

 

 

 

 

Net income

 

¥

1,725,995

 

¥

 3,355,575

 

¥

 5,812,470

 

$

54,044

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation

 

948,038

 

592,877

 

428,129

 

3,980

 

Loss on fixed asset disposal

 

15,169

 

16,762

 

584,384

 

5,434

 

Deferred income taxes (benefit) provision

 

(129,316

)

(118,800

)

(389,016

)

(3,617

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

Trade receivables

 

(138,988

)

(1,128,413

)

(4,732,133

)

(44,065

)

Due from affiliates

 

9,183

 

(24,788

)

(19,039

)

(177

)

Inventories

 

(294,216

)

(3,580,547

)

1,379,066

 

12,842

 

Trade payables

 

1,220,204

 

3,105,887

 

(1,212,661

)

(11,292

)

Due to affiliates

 

(511,245

)

690,414

 

(133,814

)

(1,246

)

Income taxes payable

 

875,472

 

684,009

 

1,188,473

 

11,067

 

Other current liabilities

 

(41,329

)

230,389

 

413,118

 

3,847

 

Other, net

 

(12,748

)

267,344

 

(2,763

)

(26

)

Net cash provided by operating activities

 

3,666,219

 

4,090,709

 

3,316,214

 

30,791

 

 

 

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

 

 

 

Purchases of property, plant and equipment, net of proceeds from sale

 

(204,247

)

(474,019

)

(508,557

)

(4,736

)

Other, net

 

11,663

 

31,959

 

(34,234

)

(319

)

Net cash used in investing activities

 

(192,584

)

(442,060

)

(542,791

)

(5,055

)

 

 

 

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

 

 

 

Decrease in short-term borrowings, net

 

(800,000

)

 

 

 

Cash dividends paid

 

(120,000

)

(120,000

)

 

 

Net cash used in financing activities

 

(920,000

)

(120,000

)

 

 

 

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

 

 

(895

)

Net increase in cash and cash equivalents

 

2,553,635

 

3,528,649

 

2,773,423

 

24,841

 

Cash and cash equivalents at beginning of the year

 

489,483

 

3,043,118

 

6,571,767

 

62,180

 

Cash and cash equivalents at end of the year

 

¥

3,043,118

 

¥

 6,571,767

 

¥

 9,345,190

 

$

87,021

 

 

 

 

 

 

 

 

 

 

 

Supplementary information

 

 

 

 

 

 

 

 

 

Interest paid during the year

 

¥

949

 

¥

 

¥

 

$

 

Income taxes paid during the year

 

¥

467,339

 

¥

 1,528,519

 

¥

 2,768,804

 

$

24,485

 

 

See accompanying notes to consolidated financial statements.

 

8



 

Sumitomo Eaton Nova Corporation

 

Notes to Consolidated Financial Statements

 

March 31, 2005

 

Note 1.  Nature of Business and Significant Accounting Policies

 

General

 

Sumitomo Eaton Nova Corporation (the “Company”) was established on April 1, 1983 under the Commercial Code of Japan.  The Company is owned equally by Sumitomo Heavy Industries, Ltd. (“SHI”), a Japanese corporation, and Axcelis Technologies, Inc. (“Axcelis”), a U.S. corporation.  The Company designs, manufactures, sells and repairs ion implantation equipment and semiconductor equipment primarily for Japanese semiconductor manufacturing customers under a license agreement with Axcelis.

 

The Company and its wholly-owned subsidiary maintain their records and prepare their financial statements in accordance with accounting principles generally accepted in Japan.  Certain adjustments and reclassifications have been incorporated in the accompanying consolidated financial statements to conform with accounting principles generally accepted in the United States of America.  These adjustments were not recorded in the statutory books of account.

 

Basis of Financial Statements

 

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary.  All significant intercompany balances and transactions are eliminated in consolidation.

 

Use of Estimates

 

The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  The actual results could differ from those estimates.

 

Foreign Currency

 

The Company’s functional currency is the Japanese yen.  Transaction gains and losses, which arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency, are included in the results of operations as incurred.  Transaction gains and losses in each of the years in the three year period ended March 31, 2005 were not material.

 

9



 

The accompanying consolidated financial statements expressed in U.S. dollars have been prepared for use in conjunction with the preparation of the consolidated financial statements of Axcelis and have been translated into U.S. dollars in accordance with Statement of Financial Accounting Standards No. 52, Foreign Currency Translation.  Assets and liabilities are translated using the exchange rate in effect at year-end.  Statement of income items are translated using the average rates for the year.  The effects of these translation adjustments are accumulated and included in accumulated other comprehensive loss, a separate component of shareholders’ equity.

 

Cash Equivalents

 

All highly liquid investments with a maturity of three months or less when purchased are considered to be cash equivalents.

 

Inventories

 

Inventories are stated at the lower of cost or market, cost being determined by the average method.

 

Long-Lived Assets

 

Property, plant and equipment is stated on the basis of cost.  Depreciation is computed by the declining-balance method over the estimated useful lives of the respective assets (buildings – 6 to 40 years; machinery – 4 to 13 years; and furniture, fixtures and automobiles – 2 to 20 years) except for buildings purchased after April 1, 1998, which are depreciated on the straight-line basis over 31 years.

 

Long-lived assets are reviewed for impairment losses whenever events or changes in circumstances indicate the carrying amount may not be recoverable.  The asset would be considered impaired when the future net undiscounted cash flows generated by the asset are less than its carrying value.  An impairment loss would be recognized based on the amount by which the carrying value of the asset exceeds its fair value.

 

Accumulated Other Comprehensive Income (Loss)

 

At March 31, 2003, accumulated other comprehensive income (loss) was comprised of a minimum pension liability of ¥(10,356) thousand.

 

At March 31, 2004 and 2005, accumulated other comprehensive income (loss) on a U.S. dollar basis was comprised of an accumulated foreign currency translation adjustment of U.S.$13,874 thousand and U.S.$11,264 thousand, respectively.

 

10



 

Concentration of Credit Risk

 

Financial instruments, which potentially expose the Company to concentrations of credit risk, consist primarily of trade notes and accounts receivable.  These financial instruments are carried at cost less an allowance for doubtful accounts, which approximates fair value.  Substantially all of the Company’s notes and accounts receivable are due from companies in the semiconductor industry located in Japan.  The Company performs ongoing credit evaluations of its customers’ financial condition and provides an allowance for specific doubtful notes and accounts receivable and generally does not require collateral to secure the notes and accounts receivable.

 

For the year ended March 31, 2003, three customers accounted for net sales of 15%, 13% and 11%.  Three customers accounted for net sales of 21%, 13% and 8% for the year ended March 31, 2004.  For the year ended March 31, 2005, three customers accounted for net sales of 17%, 13%, and 10%, respectively.

 

At March 31, 2004 and 2005 accounts receivables from one customer approximated 15% and 14% of consolidated trade receivables, respectively.

 

Revenue Recognition

 

For revenue arrangements prior to July 1, 2003, the Company recognized sales at the later of the time of shipment to the customer or the transfer of risk of ownership (which is generally upon customer inspection for machinery sales to domestic customers).  The cost of system installation at the customer’s site was accrued at the time of shipment for installation and acceptance testing performance obligations incurred at the time of sales.  Management believes the customer’s post delivery acceptance provisions and the installation process have been established to be routine, commercially inconsequential and perfunctory because the process is a replication of the pre-shipment procedures.  The majority of the Company’s systems are designed and tailored to meet the customer’s specifications as outlined in the contract between the customer and the Company.  To ensure that the customer’s specifications are satisfied, per contract terms, the systems are tested at the Company’s facilities prior to shipment, normally with the customer present, under conditions that substantially replicate the customer’s production environment and the customer’s criteria are confirmed to have been met.  The Company has never failed to successfully complete a system installation.  The Company has a demonstrated history of customer acceptance subsequent to shipment and installation of these systems.

 

11



 

In November 2002, the Financial Accounting Standards Board’s Emerging Issues Task Force reached a consensus on Issue No. 00-21, “Accounting for Revenue Arrangements with Multiple Deliverables” (“EITF 00-21”).  This issue addresses the determination of whether an arrangement involving more than one deliverable contains more than one unit of accounting and how the arrangement consideration should be measured and allocated to the separate units of accounting.  EITF 00-21 became effective for revenue arrangements entered into in periods beginning after June 15, 2003.

 

For revenue arrangements occurring on or after July 1, 2003, the Company has revised its revenue recognition policy to comply with the provisions of EITF 00-21.  The Company’s revenue transactions include sales of systems under multiple element arrangements.  Revenue under these arrangements is allocated to all elements, except systems, based upon their estimated fair market value.  The amount of revenue allocated to systems is calculated on a residual method.  Under this method, the total value of the arrangement is allocated first to the undelivered elements based on the greater of the fair value of the undelivered elements or the portion of the sales price that will not be received until the elements are delivered, with the residual amount being allocated to systems revenue.  The amount allocated to installation is based upon hourly rates and the estimated time to complete the service.  The fair value of all other elements is based upon the price charged when these elements are sold separately.  System revenue and installation revenue are generally recognized at the time of customer acceptance.

 

Service revenue includes revenue from spare parts, maintenance services and equipment overhaul services.  Revenue related to maintenance service contracts is recognized ratably over the duration of the contracts.  Revenue related to equipment overhauls is recognized upon completion of the service.  Revenue related to spare parts is recognized upon the later of shipment or when title and risk of loss passes to the customer.

 

Under the provisions of EITF 00-21, the Company has accounted for this change in accounting principle on a prospective basis for revenue arrangements occurring on or after July 1, 2003.  The impact of this change for the year ended March 31, 2004 was to decrease net income by ¥642,631.  The pro-forma effect of this accounting change, had it been applied consistently for the years ended March 31, 2003 and 2004 is as follows:

 

 

 

2003

 

2004

 

 

 

(Thousands of yen)

 

Reported net income

 

¥

1,725,995

 

¥

3,355,575

 

Pro-forma effect of EITF 00-21

 

(24,780

)

642,631

 

Pro-forma net income

 

¥

1,701,215

 

¥

3,998,206

 

 

12



 

Shipping and Handling Costs

 

Shipping and handling costs are included in cost of products sold.

 

Research and Development Costs

 

Research and development costs are expensed in the year in which such costs are incurred, except for costs relating to equipment that is acquired or constructed for research and development activities and have alternative future uses.  Research and development expense for the years ended March 31, 2003, 2004 and 2005 was ¥1,528,782 thousand, ¥1,665,889 thousand and ¥3,002,413 thousand (U.S.$27,916 thousand), respectively, and was included in selling, general and administrative expenses in the accompanying consolidated statements of income.

 

Retirement Benefits

 

The cost of retirement benefits for seconded employees is incurred by and reimbursed to SHI (see Note 6).  The provision for accrued employees’ retirement benefits represents the cost for employees who have been employed directly by the Company (see Note 9).

 

Recent Accounting Pronouncements

 

In January 2003, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 46 “Consolidation of Variable Interest Entities, an Interpretation of Accounting Research Bulletin No. 51” (“FIN 46”).  FIN 46 provides a new consolidation model, which determines control and consolidation based on potential variability in gains and losses.  The adoption of FIN 46 did not have any impact on the Company’s consolidated financial statements.

 

In November 2004 the FASB issued Statement of Financial Accounting Standards No. 151 (“SFAS 151”) “Inventory Costs, an amendment of ARB 43, Chapter 4.”  SFAS 151 amends the guidance in ARB 43, Chapter 4, “Inventory Pricing” to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage).  SFAS 151 requires that idle facility expense, excessive spoilage, double freight, and rehandling costs be recognized as current period charges.  In addition, SFAS 151 requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities.  SFAS 151 is effective for inventory costs incurred during fiscal years beginning after June 15 2005, however early adoption is permitted for inventory costs incurred during fiscal years beginning after November 2004.  The Company plans to adopt SFAS 151 on January 1, 2006.  The Company is assessing what effect, if any, adopting SFAS 151 will have on its financial position or results of operations.

 

13



 

Note 2.  Trade Receivable

 

The components of trade receivables, net follow:

 

 

 

2004

 

2005

 

2005

 

 

 

(Thousands of yen)

 

(U.S. dollars in
thousands)

 

Notes

 

¥

5,189

 

¥

180,923

 

$

1,685

 

Accounts

 

10,184,876

 

14,748,183

 

137,333

 

 

 

10,190,065

 

14,929,106

 

139,018

 

Allowance for doubtful accounts

 

(11,352

)

(18,260

)

(170

)

 

 

¥

10,178,713

 

¥

14,910,846

 

$

138,848

 

 

Note 3.  Inventories

 

The components of inventories follow:

 

 

 

2004

 

2005

 

2005

 

 

 

(Thousands of yen)

 

(U.S. dollars in
thousands)

 

Work in process

 

¥

5,583,318

 

¥

4,188,363

 

$

39,001

 

Raw materials and parts

 

1,846,446

 

1,862,335

 

17,342

 

 

 

¥

7,429,764

 

¥

6,050,698

 

$

56,343

 

 

Note 4.  Property, Plant and Equipment, Net

 

The components of property, plant and equipment, net follow:

 

 

 

2004

 

2005

 

2005

 

 

 

(Thousands of yen)

 

(U.S. dollars in
thousands)

 

Land

 

¥

299,485

 

¥

299,485

 

$

2,789

 

Building and land improvements

 

4,369,429

 

4,434,825

 

41,296

 

Machinery

 

4,415,740

 

869,008

 

8,092

 

Furniture, fixtures and automobiles

 

1,901,901

 

1,944,412

 

18,106

 

Construction in process

 

17,485

 

70,988

 

661

 

 

 

11,004,040

 

7,618,718

 

70,944

 

Accumulated depreciation

 

(7,712,328

)

(4,830,962

)

(44,985

)

 

 

¥

3,291,712

 

¥

2,787,756

 

$

25,959

 

 

In 2005, the Company determined that certain machinery used in its research and development activities had no current or future and was disposed of.  As a result, the Company recorded a loss on disposal of ¥584 million, which was included in selling, general and administrative expenses in the accompanying consolidated statements of income.

 

14



 

Note 5.  Product Warranty

 

The Company offers a one year warranty for all of its products, the terms and conditions of which vary depending upon the product sold.  The Company estimates the costs that may be incurred under its warranty and records a liability in the amount of such costs at the time product revenue is recognized.  Factors that affect the Company’s warranty include the number of installed units, historical and anticipated product failure rates, material usage and service labor costs.  The Company periodically assesses the adequacy of its recorded warranty and adjusts the amount as necessary.

 

Changes in the Company’s product warranty (included in other current liabilities on the consolidated balance sheets) for the years ended March 31, 2004 and 2005 are as follows:

 

 

 

2003

 

2004

 

2005

 

2005

 

 

 

(Thousands of yen)

 

(U.S. dollars in
thousands)

 

Beginning balance

 

¥

21,200

 

¥

23,300

 

¥

36,700

 

$

347

 

Warranties issued during the period

 

35,192

 

78,640

 

125,874

 

1,172

 

Settlements made during the period

 

(33,092

)

(65,240

)

(107,674

)

(1,008

)

Balance as of March 31

 

¥

23,300

 

¥

36,700

 

¥

54,900

 

$

511

 

 

Note 6.  Transactions with Affiliates

 

Transactions with affiliates for the years ended March 31, 2003, 2004 and 2005 were as follows:

 

 

 

2003

 

2004

 

2005

 

2005

 

 

 

(Thousands of yen)

 

(U.S. dollars in
thousands)

 

Revenues:

 

 

 

 

 

 

 

 

 

Axcelis and affiliates

 

¥

612,738

 

¥

1,219,911

 

¥

533,601

 

$

4,961

 

 

 

¥

612,738

 

¥

1,219,911

 

¥

533,601

 

$

4,961

 

Inventories purchased:

 

 

 

 

 

 

 

 

 

SHI and affiliates

 

¥

1,161,380

 

¥

1,877,370

 

¥

1,655,123

 

$

15,389

 

Axcelis and affiliates

 

599,863

 

410,708

 

288,191

 

2,679

 

 

 

¥

1,761,243

 

¥

2,288,078

 

¥

1,943,314

 

$

18,068

 

 

15



 

 

 

2003

 

2004

 

2005

 

2005

 

 

 

(Thousands of yen)

 

(U.S. dollars in

 

 

 

 

 

thousands)

 

Other income from affiliates :

 

 

 

 

 

 

 

 

 

Territory commission and sales assistance fees from Axcelis

 

 

 

¥

     25,253

 

$

234

 

 

 

 

 

¥

     25,253

 

$

234

 

Other expenses to affiliates:

 

 

 

 

 

 

 

 

 

Royalties to Axcelis

 

¥

   452,874

 

¥

   682,681

 

¥

1,025,965

 

$

9,539

 

Commissions to Axcelis and affiliates

 

403,412

 

263,183

 

315,584

 

2,934

 

Other expenses to Axcelis and affiliates

 

 

 

92

 

1

 

Management fees and royalties to SHI

 

101,761

 

149,297

 

226,059

 

2,102

 

Subcontract charges to SHI affiliates

 

335,773

 

316,826

 

291,618

 

2,711

 

Other expenses to SHI and affiliates

 

30,065

 

198,723

 

186,691

 

1,736

 

 

 

¥

1,323,885

 

¥

1,610,710

 

¥

2,046,009

 

$

19,023

 

 

Balances due from and to affiliates at March 31, 2004 and 2005 were as follows:

 

 

 

2004

 

2005

 

2005

 

 

 

(Thousands of yen)

 

(U.S. dollars in

 

 

 

 

 

 

 

thousands)

 

Due from affiliates:

 

 

 

 

 

 

 

Axcelis and affiliates

 

¥

80,720

 

¥

99,759

 

$

929

 

 

 

¥

80,720

 

¥

99,759

 

$

929

 

Due to:

 

 

 

 

 

 

 

SHI

 

¥

1,306,569

 

¥

1,096,284

 

$

10,208

 

Axcelis

 

602,368

 

623,150

 

5,803

 

SHI affiliates

 

32,573

 

77,064

 

717

 

Axcelis affiliates

 

17,452

 

28,650

 

267

 

 

 

¥

1,958,962

 

¥

1,825,148

 

$

16,995

 

 

Pension funding for the seconded employees (employees on temporary assignment) is provided through a plan administered by SHI.  Under this arrangement, the Company is billed monthly for the pension costs attributable to those individuals.  Under the terms of the pension agreement with SHI, no additional costs related to earned benefits are to be borne by the Company.  Pension contributions paid to SHI for the years ended March 31, 2003, 2004 and 2005 were ¥155,201 thousand, ¥158,155 thousand and ¥138,227 thousand (U.S.$1,285 thousand), respectively.

 

16



 

Note 7.  Financing Arrangements

 

Leases

 

Rental expenses for equipment, land and office space for the years ended March 31,
2003, 2004 and 2005 amounted to ¥331,178 thousand, ¥278,315 thousand and ¥268,802 thousand (U.S.$2,499 thousand), respectively.  Future minimum non-cancelable rental commitments at March 31, 2005 under operating leases are as follows:

 

Year ended March 31

 

(Thousands of
yen)

 

(U.S. dollars in
thousands)

 

2006

 

¥

   127,880

 

$

1,191

 

2007

 

64,615

 

601

 

2008

 

60,780

 

566

 

2009

 

60,780

 

566

 

2010

 

58,827

 

548

 

Later years

 

814,464

 

7,584

 

 

 

¥

1,187,346

 

$

11,056

 

 

Note 8.  Income Taxes

 

Income taxes include corporation, enterprise, and inhabitants’ taxes which, in the aggregate, resulted in a statutory tax rate of approximately 41.74% in 2003 and 2004 and 40.44% in 2005.  The difference between income tax expense and the amount computed by applying the statutory income tax rate to income before income taxes is summarized as follows:

 

 

 

2003

 

2004

 

2005

 

2005

 

 

 

(Thousands of yen)

 

(U.S. dollars in

 

 

 

 

 

thousands)

 

Tax at statutory rate

 

¥

1,226,943

 

¥

2,279,147

 

¥

3,766,717

 

$

35,023

 

Tax effect of:

 

 

 

 

 

 

 

 

 

Nondeductible expenses

 

6,198

 

12,757

 

12,675

 

118

 

Change in future statutory tax rate

 

1,776

 

 

 

 

Tax credit for costs of information technologies and research and development activities

 

 

(211,432

)

(286,765

)

(2,666

)

Other items, net

 

(21,422

)

13,256

 

18,459

 

171

 

Income tax expense

 

¥

1,213,495

 

¥

2,093,728

 

¥

3,511,086

 

$

32,646

 

 

In March 2003, the Japanese government enacted a tax law change that resulted in a decrease in the aggregate statutory tax rate for the Company’s fiscal year beginning on April 1, 2004.  The effect of this change on the Company’s 2003 income tax expense is included in the above table as the change in future statutory tax rate.

 

17



 

Deferred income taxes reflect the net tax effect of the temporary differences between the amounts of the assets and liabilities recorded for financial and income tax purposes.  Significant components of the Company’s deferred tax assets as of March 31, 2004 and 2005 were as follows:

 

 

 

2004

 

2005

 

2005

 

 

 

(Thousands of yen)

 

(U.S. dollars in

 

 

 

 

 

 

 

thousands)

 

Current assets:

 

 

 

 

 

 

 

Accrued enterprise tax

 

¥

170,551

 

¥

205,468

 

$

1,913

 

Loss on disposal of inventory

 

7,311

 

2,105

 

20

 

Warranty reserve

 

14,841

 

22,202

 

207

 

Bonus payment reserve

 

165,735

 

187,201

 

1,743

 

Other

 

1,337

 

14,959

 

139

 

 

 

¥

359,775

 

¥

431,935

 

$

4,022

 

Non current assets:

 

 

 

 

 

 

 

Accrued retirement benefits

 

¥

33,631

 

¥

30,312

 

$

282

 

Depreciation

 

12,057

 

43,393

 

404

 

Research and development tax credit

 

 

286,581

 

2,669

 

Other

 

6,934

 

9,193

 

86

 

 

 

¥

52,622

 

¥

369,479

 

$

3,441

 

 

Note 9.  Employees’ and Directors’ Retirement Benefits

 

The Company has a defined benefit pension plan that covers substantially all employees.  Benefits under the plan are based on the employees’ compensation as of the date of retirement and years of service.  The Company’s policy is to fund amounts which are actuarially determined to provide the plan with sufficient assets to meet future benefit payment requirements.  Assets of the plan are invested in equity securities, debt securities, money market instruments, and insured products.

 

The Company also provides certain defined benefits to its statutory auditors and directors who are not statutory auditors, directors or employees of SHI, Axcelis or one of their affiliates.  Their benefits are based on years of service, compensation at retirement and position.  This plan is unfunded.

 

The measurement date used to determine the pension obligation for the benefit plan is December 31.

 

18



 

The reconciliation of beginning and ending balances of the projected benefit obligation and plan assets, and the funded status of the Company’s plans are as follows:

 

 

 

2004

 

2005

 

2005

 

 

 

(Thousands of yen)

 

(U.S. dollars in

 

 

 

 

 

 

 

thousands)

 

Change in benefit obligation

 

 

 

 

 

 

 

Benefit obligation at beginning of year

 

¥

 647,050

 

¥

 769,551

 

$

7,281

 

Service cost

 

59,578

 

64,331

 

598

 

Interest cost

 

11,847

 

10,842

 

101

 

Actuarial losses

 

73,601

 

33,460

 

311

 

Foreign currency exchange rate changes

 

 

 

(114

)

Change in additional minimum liability

 

(17,388

)

 

 

Benefits paid

 

(5,137

)

(1,988

)

(18

)

Benefit obligation at end of year

 

769,551

 

876,196

 

8,159

 

 

 

 

 

 

 

 

 

Change in plan assets

 

 

 

 

 

 

 

Fair value of plan assets at beginning of year

 

344,161

 

484,651

 

4,586

 

Actual gain on plan assets

 

65,488

 

29,680

 

276

 

Foreign currency exchange rate changes

 

 

 

(72

)

Contributions

 

77,939

 

78,922

 

734

 

Benefits paid

 

(2,937

)

(1,988

)

(18

)

Fair value of plan assets at end of year

 

484,651

 

591,265

 

5,506

 

Funded status

 

(284,900

)

(284,931

)

(2,653

)

Unrecognized transition obligation

 

64,621

 

53,851

 

501

 

Unrecognized net loss

 

137,114

 

156,123

 

1,454

 

Net amount recognized in the consolidated Balance sheets

 

¥

  (83,165

)

¥

  (74,957

)

$

(698

)

 

The components of net pension expense of the Company’s plans for the years ended March 31, 2003, 2004 and 2005 were as follows:

 

 

 

2003

 

2004

 

2005

 

2005

 

 

 

(Thousands of yen)

 

(U.S. dollars in

 

 

 

 

 

 

 

 

 

thousands)

 

Service cost

 

¥

 52,628

 

¥

 59,578

 

¥

 64,331

 

$

598

 

Interest cost

 

13,449

 

11,847

 

10,842

 

101

 

Expected return on plan assets

 

(13,171

)

(13,766

)

(19,386

)

(180

)

Net amortization and deferrals

 

10,994

 

14,555

 

14,927

 

138

 

Net pension expense

 

¥

 63,900

 

¥

 72,214

 

¥

 70,714

 

$

657

 

 

19



 

The aggregate accumulated benefit obligation of this plan was as follows:

 

 

 

2004

 

2005

 

2005

 

 

 

(Thousands of yen)

 

(U.S. dollars in

 

 

 

 

 

 

 

thousands)

 

Aggregate accumulated benefit obligation

 

¥

519,506

 

¥

601,983

 

$

5,605

 

 

The discount rates and weighted average rates of increases in future salary levels used in determining the actuarial present value of the projected benefit obligation as of March 31,  2004 and 2005 were as follows:

 

 

 

2004

 

2005

 

Discount rate

 

1.5

%

1.5

%

Weighted average rates of increases in future salary levels

 

2.67

%

2.67

%

 

The discount rates, weighted average rates of increases in future salary levels and the expected long-term rates of return on plan assets used in determining net pension expense for the years ended March 31, 2003, 2004 and 2005 were as follows:

 

 

 

2003

 

2004

 

2005

 

Discount rate

 

2.5

%

2.0

%

1.5

%

Weighted average rates of increases in future salary levels

 

2.67

%

2.67

%

2.67

%

Expected long-term rates of return on plan assets

 

4.0

%

4.0

%

4.0

%

 

The expected long-term rate of return on plan assets assumption is determined from the plan’s asset allocation using forward-looking assumptions in the context of historical returns.

 

The following benefit payments, which reflected expected future service, as appropriate, are expected to be paid:

 

Year ended March 31

 

(Thousands of
yen)

 

(U.S. dollars
in thousands)

 

2006

 

¥

    9,095

 

$

85

 

2007

 

10,147

 

94

 

2008

 

11,109

 

103

 

2009

 

12,198

 

114

 

2010

 

13,118

 

122

 

2011 – 2015

 

175,393

 

1,633

 

 

20



 

The investment strategy is to manage the assets of the plan to meet the long-term liabilities while maintaining sufficient liquidity to pay current benefits.  This is primarily achieved by holding equity-like investments while investing a portion of the assets in long duration bonds in order to match the long-term nature of the liabilities.  The Company will periodically undertake an asset and liability modeling study if a material shift in the plan’s liability profile or changes in the capital markets call for such a study.  The Company’s weighted-average asset allocations for its defined benefit plan at March 31, 2004 and 2005, by asset category, are as follows:

 

Asset Category

 

2004

 

2005

 

Target

 

Equity securities

 

38.6

%

36.9

%

31 – 45%

 

Debt securities

 

26.5

 

28.2

 

21 – 35

 

Foreign currency securities investment fund

 

28.7

 

30.4

 

19 – 43

 

Loan receivables

 

6.2

 

4.5

 

0 – 7

 

 

 

100.0

%

100.0

%

 

 

 

The Company expects to contribute approximately ¥80,895 thousand (U.S.$753 thousand) to its defined benefit plan for the year ending March 31, 2006.

 

Note 10.  Shareholders’ Equity

 

The Commercial Code of Japan (“Code”) provides that an amount equal to at least 10% of the amount to be disbursed as a distribution of earnings be appropriated to the legal reserve until the total of such reserve and the additional paid-in capital account equals 25% of the common stock account.  The Code also provides to the extent that the sum of additional paid-in capital account and the legal reserve account exceed 25% of the common stock account then the amount of the excess (if any) is available for appropriations by resolution of the shareholders.

 

Retained earnings available for dividends under the Code are based on the amount presented in the Company’s non-consolidated financial statements, which are prepared in accordance with accounting principles and practices generally accepted in Japan.  Under the Code, the amount of retained earnings available for dividends as of March 31, 2005 amounted to ¥19,746,179 thousand (U.S.$183 million).

 

Note 11.  Financial Instruments

 

The total carrying amount reported in the balance sheets for financial instruments, cash and cash equivalents, notes and accounts receivables, short-term debt, notes and accounts payables approximates their respective fair value.

 

21



 

Note 12.  Supplemental Balance Sheet Information

 

Changes in allowance for doubtful accounts:

 

 

 

2003

 

2004

 

2005

 

2005

 

 

 

(Thousands of yen)

 

(U.S. dollars in thousands)

 

Balance at beginning of year

 

¥

23,958

 

¥

9,632

 

¥

11,352

 

$

107

 

Addition

 

 

1,720

 

6,908

 

64

 

Reversal

 

(14,326

)

 

 

 

Foreign currency exchange rate changes

 

 

 

 

(1

)

Balance at end of year

 

¥

9,632

 

¥

11,352

 

¥

18,260

 

$

170

 

 

Note 13.  Sales to Foreign Customers

 

The Company’s sales to foreign customers amounted to ¥4,878,493 thousand, ¥3,303,006 thousand and ¥4,802,513 thousand (U.S.$44,653 thousand) for the years ended March 31, 2003, 2004 and 2005, respectively.

 

22



 

SIGNATURE
 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

AXCELIS TECHNOLOGIES, INC.

 

 

 

 

 

 

 

 

/s/ Mary G. Puma

 

DATED: JUNE 28, 2005

By:  Mary G. Puma, Chairman and Chief Executive Officer

 

23



 

EXHIBIT INDEX

 

Exhibit No.

 

Description

 

 

 

3.1

 

Amended and Restated Certificate of Incorporation of the Company. Incorporated by reference to Exhibit 3.1 of the Company’s Registration Statement on Form S-1 (Registration No. 333-36330).

 

 

 

3.2

 

Bylaws of the registrant, as amended as of January 23, 2002. Incorporated by reference to Exhibit 3.2 of the Company’s Form 10-K for the year ended December 31, 2001, filed with the Commission on March 12, 2002.

 

 

 

3.3

 

Certificate of Designation of Series A Participating Preferred Stock, filed with the Secretary of State of Delaware on July 5, 2000. Incorporated by reference to Exhibit 3.3 of the Company’s Form 10-K for the year ended December 31, 2000, filed with the Commission on March 30, 2001.

 

 

 

4.1

 

Specimen Stock Certificate. Incorporated by reference to Exhibit 4.1 of the Company’s Registration Statement on Form S-1 (Registration No. 333-36330).

 

 

 

4.2

 

Rights Agreement between the Company and EquiServe Trust Company, N.A. Incorporated by reference to Exhibit 4.1 of the Company’s Registration Statement on Form S-1 (Registration No. 333-36330).

 

 

 

4.3

 

Indenture between the Company and State Street Bank and Trust Company, as trustee, including the form of note, dated as of January 15, 2002. Incorporated by reference to Exhibit 4.1 of the Company’s Report on Form 8-K filed with the Commission on January 15, 2002.

 

 

 

4.4

 

Registration Rights Agreement by and among the Company, Morgan Stanley & Co., Incorporated, Salomon Smith Barney Inc. and SG Cowen Securities Corporation, dated as of January 15, 2002. Incorporated by reference to Exhibit 4.2 of the Company’s Report on Form 8-K filed with the Commission on January 15, 2002.

 

 

 

4.5

 

Revolving Credit Agreement dated as of October 3, 2003, among the Company, ABN Amro Bank N.V. and the other lenders named therein, as amended. Pursuant to Regulation S-K, Item 601(b)(4)(iii), this exhibit has not been filed, since the total amount of the facility does not exceed 10% of the Company’s total assets at this time. The Company will furnish a copy of the Credit Agreement to the Commission on request.

 

 

 

10.1*

 

2000 Stock Plan, as amended on December 18, 2003. Incorporated by reference to Exhibit 10.1 of the Company’s Report on Form 10-K for the year ended December 31, 2003 filed with the Commission on March 8, 2004.

 

 

 

10.2*

 

Employee Stock Purchase Plan, adopted by the Board of Directors on June 9, 2000. Incorporated by reference to Exhibit 10.2 of the Company’s report on Form 10-Q for the quarter ended September 30, 2000 filed with the Commission on November 14, 2000.

 

 

 

10.3

 

Form of Indemnification Agreement entered into by the Company with each of its directors

 

24



 

 

 

and executive officers. Incorporated by reference to Exhibit 10.2 of the Company’s Registration Statement on Form
S-1 (Registration No. 333-36330).

 

 

 

10.4*

 

Form of Change in Control Agreement between the registrant and each of its executive officers, updated as of May 1, 2002. Filed with the original Form 10-K for the year ended December 31, 2004 (“the Original Form 10-K”) on March 15, 2005.

 

 

 

10.5*

 

Executive Separation Agreement between the Company and Jan Paul van Maaren. Incorporated by reference to Exhibit 10.1 of the Company’s Report on Form 8-K filed with the Commission on February 3, 2005.

 

 

 

10.6*

 

Form of Employee non-qualified stock option grant under the 2000 Stock Plan, updated as of April 5, 2002. Incorporated by reference to Exhibit 10.1 of the Company’s report on Form 10-Q filed with the Commission on November 9, 2004.

 

 

 

10.7*

 

Form of Non-Employee Director stock non-qualified stock option grant under the 2000 Stock Plan, updated as of July 12, 2004. Incorporated by reference to Exhibit 10.2 of the Company’s report on Form 10-Q filed with the Commission on November 9, 2004.

 

 

 

10.8*

 

Employment Agreement between the Company and Mary G. Puma. Incorporated by reference to Exhibit 10.5 of the Company’s Registration Statement on Form S-1 (Registration No. 333-36330).

 

 

 

10.9**

 

Organization Agreement dated December 3, 1982 between Eaton Corporation and Sumitomo Heavy Industries, Ltd. relating to Sumitomo Eaton Nova Corporation, as amended. Incorporated by reference to Exhibit 10.6 of the Company’s Registration Statement on Form S-1 (Registration No. 333-36330).

 

 

 

10.10**

 

Master License Agreement dated January 16, 1996 between Eaton Corporation and Sumitomo Eaton Nova Corporation. Incorporated by reference to Exhibit 10.7 of the Company’s Registration Statement on Form S-1 (Registration No. 333-36330).

 

 

 

10.11*

 

Executive Officer Agreement dated as of December 18, 2003 between the Company and Stephen G. Bassett. Incorporated by reference to Exhibit 10.2 of the Company’s report on Form 10-K filed with the Commission on March 8, 2004.

 

 

 

10.12*

 

Axcelis Team Incentive Plan for executive officers, adopted by the Compensation Committee of the Board of Directors on January 26, 2005. Incorporated by reference to Exhibit 10.1 of the Company’s Report on Form 8-K filed with the Commission on January 31, 2005.

 

 

 

10.13*

 

Employee Stock Purchase Plan, as amended by the Board of Directors on January 27, 2005, effective July 1, 2005. Filed with the Original Form 10-K on March 15, 2005.

 

 

 

10.14*

 

Executive Officer Cash Compensation at March 1, 2005. Filed with the Original Form 10-K on March 15, 2005.

 

 

 

10.15*

 

Director Compensation at March 1, 2005. Filed with the Original Form 10-K on March 15, 2005.

 

25



 

14.1

 

Ethical Business Conduct at Axcelis, revised through January 2003. Incorporated by reference to Exhibit 14.1 of the Company’s report on Form 10-K filed with the Commission on March 28, 2003.