Exhibit 10.16
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
THIS AMENDED AND RESTATED
EMPLOYMENT AGREEMENT (the
“ Agreement ”) is made and entered into
effective as of November 6, 2008 (“ Effective
Date ”) by and between CYMER, INC. , a Nevada
corporation (the “ Company ”) and the
Company’s President and Chief Operating Officer (COO),
EDWARD J. BROWN, JR. (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 December 1, 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 President
and Chief Operating Officer (COO) 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 $ 465,000.00 (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 effective date of the
Release.
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(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 effective as of the date of such
termination (but contingent upon the effectiveness of the
Release). The Employee shall be entitled to exercise 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 “ Change of Control Resignation
Period ”), provided that the Employee delivers the
Release required by Section 6(a) and permits it to become
effective in accordance with its terms, 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
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(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 election or (C) are nominated for election
to the Board by a committee of the Board, at least a majority of
whose members are Incumbent Directors at the time of such
nomination (but in each case shall not include an individual not
otherwise an Incumbent Director whose election or nomination is in
connection with an actual or threatened proxy contest relating to
the election of directors to the Company); or
(iii)
A merger or consolidation of the
Company with any other corporation, other than a merger or
c
