Exhibit 10.21
EMPLOYMENT
AGREEMENT
This Employment Agreement (the
“Agreement”) is made and entered into effective as of
October 21, 2004 by and between Bill N. Alexander, Jr., (the
“Employee”) and Cymer, Inc., a Nevada corporation (the
“Company”).
RECITALS
A.
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.
B.
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 his employment and to
motivate the Employee to maximize the value of the Company upon a
Change of Control for the benefit of its stockholders.
C.
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.
D.
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.
E.
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:
1.
Duties and Scope of
Employment . The
Company shall employ the Employee in the position of Senior
Executive Vice President as such position has been defined in terms
of
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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 his employment. During the
term of the Employee’s employment with the Company, the
Employee shall continue to devote his full time, skill and
attention to his duties and responsibilities, and shall perform
them faithfully, diligently and competently, and the Employee shall
use his 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 his services a base salary at the
annualized rate of $240,000.00 (“Base
Compensation”). Such salary shall be paid periodically
in accordance with normal Company payroll practices. The
Board or the Compensation Committee of the Board shall review the
base salary of the Employee according to normal Company practice,
but no less frequently than annually, and may in its discretion
increase but not decrease the base salary below the amount
specified in this agreement.
3.
Annual Incentive
. Beginning with the
Company’s current fiscal year and for each fiscal year
thereafter during the term of this Agreement, the Employee shall be
eligible to receive an annual bonus under the Company’s
annual incentive plan (the “Annual Incentive”) based
upon performance targets approved by the Compensation Committee of
the Board (the “Target Incentive”) in its sole
discretion. The Annual Incentive payable hereunder shall be
payable in accordance with 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,
incentive or other bonus plans, 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.
6.
Termination
Benefits.
(a)
Subject to Sections 8 and 9 below,
in the event the Employee’s employment terminates as a result
of an Involuntary Termination other than for Cause upon or within
eighteen (18) months after a Change of Control, then the Employee
shall be entitled to receive severance and other benefits as
follows:
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(i)
Pay
Continuation. The
Employee shall be entitled to monthly payments equal to the
Employee’s monthly Base Compensation as in effect immediately
prior to the Change of Control plus one-twelfth (1/12) of the
average of the annual bonus amount paid to the Employee with
respect to the three previous calendar years. Such monthly
amounts shall be paid according to the normal payroll practice of
the Company for 12 months following the date of termination (the
“Termination Period”).
(ii)
Annual Incentive.
The Employee shall be
entitled to receive a percentage of the Employee’s Target
Incentive for the calendar year in which such termination occurs.
Such percentage shall equal a fraction, the numerator of which
shall be the number of days in such calendar year up to and
including the date of such termination and the denominator of which
shall be the number of days in such calendar year. Such
amount shall be payable according to the normal practice of the
Company with respect to the payment of bonuses.
(iii)
Options.
The unvested portion of any stock
option(s) held by the Employee under the Company’s stock
option plans shall vest and become exercisable in full upon the
date of such termination. Employee shall have one year from the
date of such termination to exercise any vested options.
(iv)
Medical Benefits.
The Company shall reimburse the
Employee for the cost of the Employee’s group health, vision
and dental plan coverage in effect until the end of the Termination
Period. The Employee may use this payment, as well as any
other payment made under this Section 6, for such continuation
coverage or for any other purpose. To the extent the Employee
pays the cost of such coverage, and the cost of such coverage is
not deductible as a medical expense by the Employee, the Company
shall “gross-up” the amount of such reimbursement for
all taxes payable by the Employee on the amount of such
reimbursement and the amount of such gross-up.
(b)
In the event the Employee
voluntarily resigns his employment with the Company 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 his 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 his duties.
(b)
Change of
Control. “Change of Control” shall mean the
occurrence of any of the following events:
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(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
