Exhibit 10.17
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,
RAE ANN WERNER (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 Acccounting Officer 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 $ 240,394 .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
12 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 th
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