8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 17, 2005

AXT, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-24085	94-3031310
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
4281 Technology Drive
Fremont, California 94538
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (510) 683-5900

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01.  Entry into a Material Definitive Agreement

On March 17, 2005, AXT, Inc. (the “Company”) announced that it has appointed Dr. Philip C.S. Yin as chief executive officer, effective March 28, 2005.  In connection with this appointment, the Company has entered into an offer of employment (the “Offer Letter”) with Dr. Yin dated February 7, 2005, effective as of his commencement of employment with the Company.  Pursuant to the Offer Letter, Dr. Yin shall be employed as Chief Executive Officer of the Company at a salary of $220,000 per annum and a housing and car allowance.  Dr. Yin shall be eligible to participate in the executive bonus plan approved by the compensation committee at a target annual bonus of $100,000, and shall be granted options to purchase 240,000 shares of common stock of the Company (the “Options”).  The Options shall vest over four years at the rate of 25% on the one year anniversary of the date of grant, and thereafter in equal monthly installments at the rate of 1/48th per month over the remaining 36 months.

If Dr. Yin’s employment with the Company is terminated without cause, or if Dr. Yin terminates his employment as a result of a defined constructive termination, he shall be eligible to receive continuing payment of his last base salary and COBRA benefits for one year after such termination.  If, after a change in the Company’s control, Dr. Yin’s employment is terminated without cause or as a result of a defined constructive termination, the balance of any unvested portion of his Options shall become immediately vested in full.

The Company has also entered into an indemnification agreement with Dr. Yin in form and substance substantially as previously filed by the Company as an exhibit to its annual report on Form 10-K filed with the Securities and Exchange Commission.

A copy of the Offer Letter is attached hereto as Exhibit 99.1.

Item 5.02.  Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers

(b)Resignation of Principal Executive Officer.

In connection with the Company’s announcement described below of the appointment of Dr. Philip C.S. Yin as chief executive officer, Mr. Donald L. Tatzin, currently interim chief executive officer of the Company, will resign as an officer effective March 25, 2005, but will remain a member of the board of directors of the Company.

(c)Appointment of New Principal Executive Officer

On March 17, 2005, the Company announced that it has appointed Dr. Philip C.S. Yin as chief executive officer, effective March 28, 2005.  Dr. Yin replaces Donald L. Tatzin, who has served as the company’s interim chief executive officer since May 2004.  Dr. Yin, age 63, was general manager-North America of Aixtron, Inc., a provider of deposition equipment to the semiconductor industry, from 2003 to February 2005.  From 2002 to 2003, Dr. Yin was sole proprietor of Philip C.S. Yin Consulting, a consultant of semiconductor materials in areas of epitaxial deposition, silicon wafers and strategic business development.  From 1999 to 2002,

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Dr. Yin was President of ATMI Epitaxial Services, a business unit of ATMI Corp., a supplier of materials and materials packaging to semiconductor manufacturers.  From 1996 to 1999, Dr. Yin was Senior Vice President/Sales & Marketing, of Crysteco, Inc., a manufacturer of epitaxial substrates and products, whose assets were subsequently acquired by Okmetic, Inc., and from 1989 to 1996, Director of Sales of Mitsubishi Silicon America, a provider of polished and epitaxial silicon wafers for the fabrication of integrated circuits and semiconductor devices.  Dr. Yin holds a B.S. in Physics from Villanova University, and an M.S. and Ph.D. in Material Science from Brooklyn Polytechnical Institute.

The material terms of the employment agreement between the Company and Dr. Yin are described under Item 1.01 above and incorporated by reference herein.  Dr. Yin is expected to join the board of directors of the Company.

A copy of the press release dated March 17, 2005 announcing this action is attached hereto as Exhibit 99.2.

Item 9.01 Financial Statements and Exhibits.

(c)Exhibits.

Exhibit No.	Description
99.1	Offer Letter from the Company to Dr. Philip C.S. Yin.
99.2	Press release dated March 17, 2005 announcing the appointment of a new chief executive officer.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	AXT, INC.
Date: March 17, 2005	By:	/s/ WILSON W. CHEUNG
		Wilson W. Cheung
		Chief Financial Officer

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EX-99.1

Exhibit 99.1

February 7, 2005

Mr. Philip C.S. Yin

14219 N. Desert Flower Drive

Fountain Hills, AZ  85268

Dear Phil:

AXT, Inc. (“AXT” or the “Company”) is pleased to offer employment to you on the following terms.

1.Position. Your position will be Chief Executive Officer, reporting to the Company’s Board of Directors.  Your principal place of employment will be Fremont, California.  You will devote your full time, ability, attention, energy, knowledge, skill, and productive employment time solely to performing your duties as an employee of AXT.  You will comply with all of AXT’s rules and policies.  However, except as specifically described below, if there is any conflict between any such rule or policy and the terms of this letter, the latter will prevail.

2.Compensation.

(a)Your base monthly salary will be $18,333.33 per month, less applicable withholding, payable in accordance with the Company’s regular payroll policies.

(b)Subject to the approval of the Company’s Board of Directors, you will be granted a stock option to purchase 240,000 shares of the Company’s Common Stock (the “Option”).  Twenty five percent (25%) of the shares will vest on your first anniversary with the company.  Then the balance will vest at the rate of one forty-eighth (1/48) per month for the remaining Thirty-six (36) months.  No further vesting will occur after the options become One Hundred percent (100%) vested or after your termination of employment.  Options shall be granted under the Company’s 1997 Stock Option Plan, and except as set forth in sections 6 and 7 below, pursuant to the standard form option agreement approved by the Board of Directors.

(c)You will be eligible to participate in any annual bonus plan established by the Compensation Committee of the Board of Directors for executive officers of the

Company.  For Calendar Year 2005, the target bonus amount payable to you under this plan shall be $100,000.00.  Your bonus payment eligibility for Calendar Year 2005 will be based on the achievement of specific goals and performance objectives established by the Compensation Committee and which will be mutually agreed upon between you and the Compensation Committee on or before sixty days after your commencement of employment with the Company. 

3.Auto Allowance.  You will receive an auto allowance of $600.00 per month.

4.Housing Allowance.  So long as your principal residence is in Arizona, AXT will provide an apartment rental assistance of $2500.00 per month.  AXT will pay for the transportation of your personal goods and auto from your apartment in the Chicago area to Fremont, California.  Should you relocate your principal residence to the San Francisco Bay Area, AXT will pay the cost of physical relocation of your personal goods from Arizona to your new home in that area.

5.Employee Benefits.  During the term of this Agreement, you will be entitled to all of the Company’s standard benefits for employees at your level.

6.Termination Without Cause.  We are entering into this Agreement because we hope to have a long and productive relationship.  However, if the Company terminates you from employment other than for “Cause” (as defined below), as it reserves the right to do at any time, and if you execute a general release of claims in a form acceptable to AXT, you will receive the following severance benefits:  (a) continuing payment of your last base salary for one (1) year after the date your employment terminates; and (b) provided you timely elect to continue your health insurance benefits under the applicable COBRA laws, the Company will reimburse you for the premiums necessary to maintain your health insurance coverage during the COBRA continuation period.  Notwithstanding the foregoing, in no event shall you continue to receive any benefits under this paragraph if you resign, are terminated for Cause (as defined below), or if your employment ends because of your death or disability, nor shall you receive any severance benefit under this paragraph on or after the date on which you begin employment with another employer.  You shall promptly give notice to the Chairman of the Board of AXT of any new employment you begin on or after the date of a termination from AXT that makes you eligible for benefits under this paragraph.

7.Termination for Cause.  You may be terminated at any time, without notice for “Cause.”  The definition of “Cause” is as follows:  (a) You commit any act of fraud, misappropriation, theft, dishonesty, or other act of moral turpitude; (b) You breach or neglect the duties you are required to perform as President and Chief Executive Officer; (c) You engage in willful misconduct in the performance of your duties hereunder, commit insubordination (in the sole, reasonable discretion of AXT’s Board of Directors), or otherwise fail to perform your duties hereunder as directed by AXT’s Board of

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Directors; (d) You are guilty of, convicted of, or plead guilty or nolo contendre to, a felony, crime of moral turpitude or other serious offense; or (e) You fail to comply with AXT’s Code of Business Conduct or Ethics, or violate, in any material respects, your obligations in connection with certification of any periodic reports filed by AXT with the Securities and Exchange Commission.

AXT’s total liability to you in the event of termination of your employment under this section shall be limited to the payment of your salary and other earned compensation through the effective date of termination.

8.Termination on a Change of Control.  In the event that, after a Change of Control (as defined below), (i) you are terminated by the Company without Cause or (ii) you terminate your employment with the Company as a result of a Constructive Termination (as defined below), and if you execute a general release of claims in a form acceptable to AXT or the acquiring company, you will receive the following severance benefits:  (a) continuing payment of your last base salary for one (1) year after the date your employment terminates; and (b) provided you timely elect to continue your health insurance benefits under the applicable COBRA laws, the Company will reimburse you for the premiums necessary to maintain your health insurance coverage during the COBRA continuation period.  Notwithstanding the foregoing, in no event shall you continue to receive any benefits under this paragraph if you resign, are terminated for Cause (as defined below), or if your employment ends because of your death or disability, nor shall you receive any severance benefit under this paragraph on or after the date on which you begin employment with another employer.  You shall promptly give notice to the Chairman of the Board of AXT or the acquiring company of any new employment you begin on or after the date of such termination.

For purposes of this paragraph 8, a “Change of Control” shall mean a merger, consolidation, sale of substantially all assets of the Company or transfer of beneficial ownership (as determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of outstanding shares of the capital stock of the Company by 1 (one) or more shareholders of the Company, in which the shareholders of the Company immediately prior to such merger, consolidation, sale or transfer do not own at least 50% (fifty percent) of the combined voting power of the capital stock of the Company or surviving or successor corporation or entity immediately after such transaction.

“Cause” shall be as defined in paragraph 7, above.  “Constructive Termination” for purposes of this paragraph 8, only, shall mean any of the following:  (i) a greater than 15% (fifteen percent) reduction by the Company in your total compensation in effect immediately prior to such reduction (unless in connection with a reduction effecting all other executive officers of the Company similarly); or (ii) a requirement that you relocate to a new place of work that exceeds by at least 20 (twenty) miles the commute distance from your principal place of residence in the Fremont area to the AXT, Inc. Corporate

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Offices in Fremont prior to the time of the Change of Control; or (iii) a material adverse change in your position, causing such position to be of significantly less stature or of significantly less responsibility (it being understood that a mere change in title not otherwise resulting in the material adverse change described in this clause (iii) will not be deemed a Constructive Termination hereunder).

9.Treatment of Equity Compensation Following a Change in Control.  Notwithstanding any provision to the contrary contained in any plan or agreement evidencing the Option, in the event of a Change in Control in which the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the “Acquiror”), does not assume the Company’s rights and obligations under the then-outstanding portion of the Option held by you or substitute for such portion of the Option substantially equivalent options for the Acquiror’s stock, then the vesting and exercisability of such Option shall be accelerated in full effective as of the date ten (10) days prior to but conditioned upon the consummation of the Change in Control, provided that you remain an employee or other service provider with the Company immediately prior to the Change in Control.  Except as set forth above in this section, the treatment of stock-based compensation upon the consummation of a Change in Control shall be determined in accordance with the terms of the plans or agreements providing for such awards or options.

10.Indemnification.  The Company agrees to indemnify you against any claims that arise in connection with your service as an Officer or Director of the Company pursuant to the Company’s standard form of indemnification agreement and applicable law.

11.Directors and Officers Insurance.  Directors and Officers Insurance is currently maintained by the Company and, to the extent that such insurance remains available to the Company upon terms acceptable to the Company, the Company will use its best commercial efforts to continue to maintain such insurance at such levels as the Company’s Board of Directors may from time to time approve.

12.Arbitration

(a)Arbitration Required.

Any dispute, claim, or controversy arising out of or related to Employee’s employment with AXT or the termination of that employment shall be resolved exclusively through final and binding arbitration.  This agreement to arbitrate includes all state, federal, and foreign statutory or common law claims, including but not limited to discrimination claims arising under the California Fair Employment and Housing Act, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, and the Age Discrimination in Employment Act, or claims under the California Labor Code.  Any demand for arbitration must be made within one (1) year

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of the termination of employment, provided, however, that if a claim arose under a statute or other rule of law providing for a longer time to file a claim, that statute or rule shall govern.

(b)Costs or Fees.

All administrative costs of the arbitration, such as arbitrator and court reporting fees, shall be divided equally between AXT and Employee, unless otherwise required by law.  Each party shall bear its other costs of arbitration, including attorney’s fees, provided, however, that the arbitrator(s) may award attorney’s fees to the prevailing party under the provisions of any applicable law.

(c)Representation.

Employee may, but is not required to, have an attorney represent him in preparation for and during the arbitration.  If Employee decides to use an attorney, Employee shall be solely responsible for the payment of his attorney’s fees and costs, subject to any statutory authority of the arbitrator to order reimbursement by Company.

(d)Arbitration Procedure.

All disputes subject to arbitration under this Agreement shall be resolved pursuant to the then current Employment Arbitration Rules and Procedures of the Judicial Arbitration and Mediation Service, and judgment on the award rendered by the arbitrator(s) may be entered by any court having jurisdiction thereof.  The arbitrator shall have the authority to make any award that would be made by a court, but the arbitrator shall not have the authority to amend, modify, supplement or change the terms and conditions of employment set forth in this Agreement or the Company’s policies.

(e)Location.

The location of the arbitration shall be in Alameda County or San Francisco, California.

(f)Waiver of Right to Jury Trial.

Employee agrees that if for any reason any dispute or controversy between him and AXT arising from or related to his employment or the termination of his employment is resolved in court rather than through arbitration, then trial of that dispute will be to a judge sitting without a jury, and Employee specifically waives any right he may have to trial by jury of any such dispute or controversy.

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(g)Survival.

Employee’s agreement to arbitrate and the terms of this Section 11 will survive the termination of Employee’s employment with Company.

(h)Employee Acknowledgment.

Employee understands that he electing to resolve any dispute, claim or controversy described in section 7(a), above, in an arbitral forum rather than a judicial forum and that he is giving up the right to a jury trial of any such dispute, claim, or controversy.

13.Governing Law.  This agreement will be governed in accordance with the laws of California without reference to principles of conflicts of law.

14.Entire Agreement.  This Agreement, together with the Confidential Information and Inventions Agreement you must sign as a condition of beginning employment, constitutes the complete, final and exclusive embodiment of the entire agreement between you and the Company with regard to this subject matter.  It is entered into without reliance on any promise or representation, written or oral, other than those expressly contained herein, and it supersedes any other such promises, warranties or representations.  Any ambiguity in this Agreement shall not be construed against either party as the drafter.

15.Modification or Waiver.  This Agreement may not be modified or amended except in a writing signed by both you and a duly authorized member of the Board of Directors.  Any waiver of a breach of this Agreement shall be in writing and shall not be deemed to be a waiver of any successive breach.

16.Successors and Assigns.  This Agreement shall bind the heirs, personal representatives, successors and assigns of both you and the Company, and inure to the benefit of both you and the Company, their heirs, successors and assigns.

17.Severability.  If any provision of this Agreement is determined to be invalid or unenforceable, in whole or in part, this determination will not affect any other provision of this Agreement and the provision in question shall be modified by the court so as to be rendered enforceable in a manner consistent with the intent ofthe parties insofar as possible.

18.Counterparts.  This Agreement may be executed in counterparts and facsimile signatures will suffice as original signatures.

19.Miscellaneous.  Final employment by the Company is subject to your provision of eligibility for hiring as required by applicable INS regulations.

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If the foregoing is acceptable, please execute a copy of this letter where provided below and return it to me.  This offer will expire if not accepted by February 15, 2005.

Sincerely,

/s/ Don Tatzin for and on behalf of Jesse Chen
Chairman of the Board
The foregoing offer of employment is accepted.
/s/ Philip C.S. Yin	Start Date:	March 28, 2005 or sooner
Philip C.S. Yin
February 12, 2005

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EX-99.2

Exhibit 99.2

Contact:	Wilson W. Cheung
	Chief Financial Officer
	(510) 683-5900

AXT, Inc. Announces the Appointment of Phil Yin as Chief Executive Officer

FREMONT, Calif.- March 17, 2005 - AXT, Inc. (NASDAQ: AXTI), a leading manufacturer of compound semiconductor substrates, today announced that the Board of Directors has appointed Philip C. S. Yin, Ph.D. as chief executive officer, effective March 28, 2005.  Yin replaces Donald L. Tatzin, who has served as the company’s interim chief executive officer since May 2004.

Yin has a distinguished career as an executive in the compound semiconductor and semiconductor industries.  He most recently served as general manager for North America of AIXTRON Inc., the world’s leading manufacturer of MOCVD equipment used in the compound semiconductor industry.  From 1999 to 2002, he was president of ATMI Epitaxial Services.  Prior to that, Yin held positions as senior vice president, sales and marketing of Crysteco, and director of sales for Mitsubishi Silicon America.  He also held various positions with Monsanto Electronics Materials and IBM Thomas J. Watson Research Center.

Yin received his undergraduate and graduate education from Villanova University and Brooklyn Polytechnic Institute, respectively. He is a member of the Electrochemical Society and the American Association for Crystal Growth.

“We are very pleased to welcome Phil as our chief executive officer,” said Jesse Chen, chairman of AXT’s Board of Directors.  “Phil brings an extraordinary combination of sales experience and technical expertise in compound semiconductors to AXT.  He knows our customers and our technology and is exceptionally well regarded in the industry.  We believe that AXT is poised for growth during 2005 and Phil’s track record of increasing sales and customer satisfaction in his previous positions will accelerate our improvement.”

“We would also like to express our gratitude to Don Tatzin for his service as AXT’s interim chief executive officer and as its chief financial officer before that,” said Chen.  “Don has brought tremendous leadership to AXT and we are pleased that he will continue to serve as a member of AXT’s Board of Directors.”

-More-

About AXT, Inc.

AXT is a leading producer of high-performance compound semiconductor substrates for the fiber optics and communications industries. The company’s proprietary Vertical Gradient freeze (VGF) crystal growth technology produces low-defect, semi-insulating and semi-conducting gallium arsenide, indium phosphide and germanium wafers. For more information, see AXT’s website at http://www.axt.com . The company can also be reached at 4281 Technology Drive, Fremont, California 94538 or by calling (510) 683-5900. AXT is traded on the Nasdaq National Market under the symbol AXTI.

Safe Harbor Statement

The foregoing paragraphs contain forward-looking statements within the meaning of the Federal Securities laws, including statements related to the expectations of the company’s performance during 2005. Such forward-looking statements are based upon specific assumptions subject to uncertainties and factors relating to the Company’s operations and business environment, which could cause actual results of the Company to differ materially from those expressed or implied in the forward-looking statements contained in the foregoing discussion. Such uncertainties and factors include: overall conditions in the markets in which we compete, market acceptance and demand for our products, the impact of competitive products and pricing, and other factors as set forth in the Company’s Form 10-K and other filings made with the Securities and Exchange Commission, all of which are difficult to predict and some of which are beyond the Company’s control. The Company does not undertake any obligation to update publicly any forward-looking statement, either as a result of new information, future events or otherwise.

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