Exhibit 10.12
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
THIS AMENDED AND RESTATED
EMPLOYMENT AGREEMENT (the “ Agreement ”)
is made and entered into effective as of January 2, 2007 (“
Effective Date ”) by and between CYMER,
INC. , a Nevada corporation (the “ Company
”) and the Company’s Chief Executive Officer and
Chairman of the Board , ROBERT P AKINS (the “
Employee ”). This Agreement shall replace
and supersede that certain Employment Agreement between Employee
and the Company entered into effective as of April 1, 2002
(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.
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,
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 pursuant
to this Section 6. 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 date of
termination (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.
(2)
The unvested portion of any bonus
accrued for Employee under the Company’s 3-year bonus 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 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 original contractual
life of the option); provided, however , that
notwithstanding the foregoing, with respect to each stock option
granted to the Employee before the Effective Date of this
Agreement, such stock option shall not remain exercisable beyond
the later of the fifteenth (15th) day of the third (3rd) month
following the date at which, or December 31 of the calendar year in
which, the stock option would otherwise have expired if the stock
option had not been extended, based on the terms of the stock
option at
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the original grant date, or such
later date that would not cause such option to be treated as
deferred compensation under 409A of the Code (as defined
below).
(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”), 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
