Exhibit 10.14
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED
EMPLOYMENT AGREEMENT (the “ Agreement ”) is made and entered
into effective as of December 1, 2007 (“ Effective Date ”) by and between
CYMER, INC. , a Nevada corporation (the “ Company ”) and the
Company’s President and Chief Operating Officer,
ROBERT P AKINS (the
“ Employee
”). This Agreement shall replace and supersede that
certain [Amended and Restated] Employment Agreement between
Employee and the Company entered into effective as of
January 2, 2007 (the “ Original Employment Agreement
”).
RECITALS
A.
The Company and Employee previously entered into the Original
Employment Agreement and desire to amend and restate the Original
Employment Agreement in its entirety as set forth herein, effective
as of the Effective Date, to clarify the application of
Section 409A of the Internal Revenue Code to the benefits that
may be provided to Employee.
B.
The Company may from time to time need to address the possibility
of an acquisition transaction or change of control event. The
Board of Directors of the Company (the “ Board ”) recognizes that such
events can be a distraction to the Employee and can cause the
Employee to consider alternative employment opportunities.
The Board has determined that it is in the best interests of the
Company and its stockholders to assure that the Company will have
the continued dedication and objectivity of the Employee,
notwithstanding the possibility, threat or occurrence of a Change
of Control (as defined below) of the Company, although no such
Change of Control is now contemplated.
C.
The Board believes that it is in the best interests of the Company
and its stockholders to provide the Employee with an incentive to
continue the Employee’s employment and to motivate the
Employee to maximize the value of the Company upon a Change of
Control for the benefit of its stockholders.
D.
The Board believes that it is imperative to provide the Employee
with certain benefits upon a Change of Control and, under certain
circumstances, upon termination of the Employee’s employment
in connection with a Change of Control, which benefits are intended
to provide the Employee with financial security and provide
sufficient incentive and encouragement to the Employee to remain
with the Company notwithstanding the possibility of a Change of
Control.
E.
To accomplish the foregoing objectives, the Board has directed the
Company, upon execution of this Agreement by the Employee, to agree
to the terms provided herein.
F.
Certain capitalized terms used in this Agreement are defined in
Section 7 below.
AGREEMENT
In
consideration of the mutual covenants herein contained, and in
consideration of the continuing employment of the Employee by the
Company, the parties agree as follows:
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1.
Duties and Scope of Employment. The Company shall
employ the Employee in the position of Chief Executive Officer
and Chairman of the Board as such position has been defined in
terms of responsibilities and compensation as of the Effective Date
of this Agreement; provided, however , that the Board shall
have the right, at any time prior to the occurrence of a Change of
Control, to revise such responsibilities and compensation as the
Board in its discretion may deem necessary or appropriate.
The Employee shall comply with and be bound by the Company’s
operating policies, procedures and practices from time to time in
effect during the Employee’s employment. During the
term of the Employee’s employment with the Company, the
Employee shall continue to devote the Employee’s full time,
skill and attention to the Employee’s duties and
responsibilities, and shall perform them faithfully, diligently and
competently, and the Employee shall use the Employee’s best
efforts to further the business of the Company and its affiliated
entities.
2.
Base Compensation. The Company shall pay the
Employee as compensation for the Employee’s services a base
salary, which as the Effective Date of this Agreement is at the
annualized rate of $ 600,000 .00 (and which may be
modified from time to time in accordance with this Agreement, the
“ Base Compensation
”). The Base Compensation shall be paid periodically in
accordance with normal Company payroll practices. The Board
or the Compensation Committee of the Board shall review the Base
Compensation according to normal Company practice, but no less
frequently than annually, and may in its discretion modify the Base
Compensation but may not decrease the Base Compensation below the
dollar amount specified above, unless Employee consents to such
reduction.
3.
Incentive Compensation. During the term of this
Agreement, the Employee shall be eligible to receive payments under
the Company’s various incentive and bonus programs as
approved from time to time by the Board or the Compensation
Committee of the Board in either’s sole discretion. Any
payment payable thereunder shall be payable in accordance with the
applicable program and the Company’s normal practices and
policies.
4.
Employee Benefits. The Employee shall be eligible
to participate in the employee benefit plans and executive
compensation programs maintained by the Company applicable to other
key executives of the Company, including (without limitation)
retirement plans, savings or profit-sharing plans, stock option,
stock purchase or other equity plans, incentive bonus program,
3-year bonus program or other long-term incentive programs, bonus
programs, life, disability, health, accident and other insurance
programs, paid vacations, and similar plans or programs, subject in
each case to the generally applicable terms and conditions of the
applicable plan or program in question and to the sole
determination of the Board or any committee administering such plan
or program.
5.
Employment Relationship. The Company and the
Employee acknowledge that the Employee’s employment is and
shall continue to be at-will, as defined under applicable
law. If the Employee’s employment terminates for any
reason, the Employee shall not be entitled to any payments,
benefits, damages, awards or compensation other than as provided by
this Agreement, or as may otherwise be available in accordance with
any Company plan or policy approved by the Board.
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6.
Termination Benefits.
(a)
Subject to Sections 8 and 9 below, if upon or within eighteen (18)
months after a Change of Control either (i) the Company
terminates the Employee’s employment due to an Involuntary
Termination other than for Cause, or (ii) the Employee
voluntarily resigns for Good Reason, then the Employee shall be
entitled to receive severance and other benefits pursuant to this
Section 6; provided, however, that in order to receive such
benefits the Employee must deliver to the Company an executed
Waiver and Release in the form attached hereto as Exhibit A,
or such other form as the Company may require (the
“Release”), within the time period set forth therein,
but in no event later than forty-five days following the
Employee’s termination, and the Employee must permit the
Release to become effective in accordance with its
terms. Notwithstanding the foregoing, Employee shall
not be entitled to receive any severance or other benefits pursuant
to this Section 6 if the Board, as constituted prior to the
Change in Control, determined that Employee was demoted by the
Company to a position not eligible for an Employment Agreement
prior to the Change of Control from the position held by Employee
as of the Effective Date. The foregoing determination may be
made at any time by the Board prior to a Change in Control, shall
be made in the Board’s sole discretion, and shall be binding
and conclusive on all persons, including Employee.
(i)
Pay Continuation. The Employee shall be entitled
to monthly payments equal to (A) one-twelfth (1/12) of the
greater of the Base Compensation in effect immediately prior to the
Change of Control and the Base Compensation in effect immediately
prior to such termination plus (B) one-thirty-sixth (1/36) of
the aggregate amounts paid to the Employee under the
Company’s bonus and incentive programs with respect to the
three previous calendar years. Such monthly payments shall be
paid according to the normal payroll practice of the Company for
24 months following the effective date of the Release (the
“ Termination Period
”).
(ii)
Incentive Payments.
(1)
The Employee shall be entitled to receive a percentage of each of
the Employee’s Target Incentives for any on-going calendar
period in which such termination occurs. Such percentage
shall equal a fraction, the numerator of which shall be the number
of days in such calendar period up to and including the date of
such termination and the denominator of which shall be the number
of days in such calendar period. Such amount shall be payable
according to the normal practice of the Company with respect to the
payment of such compensation. “Target Incentive”
shall mean the maximum amount payable to the Employee at the end of
a calendar period under any Company bonus or incentive program if
all of such program’s corporate and individual performance
objectives for that period are met. “Target
Incentive” does not include amounts payable under the
Company’s 3-year bonus program, long-term incentive plan or
similar plan or program.
(2)
The unvested portion of any bonus accrued for Employee under the
Company’s 3-year bonus program, long-term incentive plan or
similar plan or program shall vest and become payable in full in a
lump sum as soon as administratively practicable following the date
of termination.
(iii)
Equity Awards. The unvested portion of any stock
option(s) or other equity award(s) held by the Employee
under the Company’s equity plans shall vest and become
exercisable in full upon the date of such termination. The
Employee shall be entitled to exercise
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all
of the Employee’s vested stock options until the later of
(A) the original post-termination exercise period provided in
the Employee’s stock option agreement or (B) one year
from the date of such termination (but not beyond the earlier of
(1) the original contractual life of the option, or
(2) ten years from the original grant date of the
option).
(iv)
Medical Benefits. Assuming the Employee timely
and accurately elects to continue his health insurance benefits
under the Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”), commencing with the effective date of the
Release the Company shall pay the COBRA premiums for the Employee
and his or her qualified beneficiaries until the earliest of
(i) the end of the Termination Period, (ii) the
expiration of the Employee’s continuation coverage under
COBRA and any applicable state COBRA-like statute that provides
mandated continuation coverage or (iii) the date the Employee
becomes eligible for health insurance benefits of a subsequent
employer.
(b)
[In the event the Employee voluntarily resigns employment with the
Company for any reason within the 30-day period beginning one year
after a Change of Control, the Employee shall receive the severance
and other benefits set forth in Sections
6(a)(i)-(iv) above.]
7.
Definition of Terms. The following terms referred
to in this Agreement shall have the following meanings:
(a)
Cause. “Cause” shall mean any of the
following: (i) any act of personal dishonesty taken by the
Employee in connection with the Employee’s responsibilities
as an employee and intended to result in substantial personal
enrichment of the Employee, (ii) conviction of a felony that
is injurious to the Company, (iii) a willful act by the
Employee which constitutes gross misconduct and which is injurious
to the Company, or (iv) continued violations by the Employee
of the Employee’s obligations under Section 1 of this
Agreement after there has been delivered to the Employee a written
demand for performance from the Company which describes the basis
for the Company’s belief that the Employee has not
substantially performed the Employee’s duties.
(b)
Change of Control. “Change of
Control” shall mean the occurrence of any of the following
events:
(i)
The acquisition by any “person” (as such term is used
in Sections 13(d) and 14(d) of the Exchange Act)
(other than the Company or a person that directly or indirectly is
controlled by the Company) of the “beneficial
ownership” (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing
fifty percent (50%) or more of the total voting power represented
by the Company’s then outstanding voting securities; or
(ii)
A change in the composition of the Board occurring within a
two-year period, as a result of which fewer than a majority of the
directors are Incumbent Directors. “Incumbent
Directors” shall mean directors who either (A) are
directors of the Company as of the date hereof, or (B) are
elected to the Board with the affirmative votes of at least a
majority of the Incumbent Directors at the time of such electio
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