Exhibit 10.23


 


Cymer, Inc.


Long-Term Incentive Program


Summary Description


 


Establishment:  The Compensation Committee of Cymer’s Board
of Directors originally adopted the Long-Term Incentive Program on October 16,
2007 (“LTIP”).  The following is a summary of the terms of
the LTIP, as amended effective January 1, 2009.


 


Eligibility:  Director-level
employees and senior Individual Contributor employees and above that are
employed by Cymer or its subsidiaries are eligible to participate in the
LTIP.  Employees hired or promoted to an
eligible position within a fiscal year will be eligible to participate in the
LTIP for that fiscal year and receive a full award.  Those employees first hired or promoted to an
eligible position on or after October 1st of a fiscal year will not be
eligible to participate in the LTIP for the immediately following fiscal year.


 


Award
Targets:  Equity awards will be
granted under Cymer’s Amended And Restated 2005 Equity Incentive Plan or any
successor equity incentive plan (“Incentive Plan”) and may include any of the
following equity vehicles: performance-based vesting restricted stock units (“PRSUs”),
restricted stock units (“RSUs”), stock options, and/or any other equity awards
permitted under the Incentive Plan. All potential equity awards granted under
the LTIP will be based on a target dollar amount which is benchmarked annually
against similarly-sized companies within our industry.  This target dollar award is then converted
into equity awards by dividing an average fair value of the equity vehicle into
the target dollar award to determine the size of the equity award (the “equity
guideline”). The equity guideline is tied to the position level held at the
time of the grant and is expressed as a number of shares subject to the equity
awards (i.e., participants at the same position level are eligible to receive
similar-sized equity awards).


 


PRSU
Performance Measures: The number of shares subject to any PRSU awards that will vest and
become issuable to participants following the applicable 3-year performance
period that commences on the first trading day of the fiscal year that includes
the date of grant (“the performance period”) will be determined based on Cymer’s
relative performance compared to Cymer’s peer companies as listed on the
attached Appendix A (the “peer companies”) over the performance period,
and individual MBO achievement during the performance period, such
determination based on performance measures approved by the Compensation
Committee of Cymer’s Board of Directors as follows:


 


Financial
Performance Metrics: 
Cymer’s actual performance measured against two financial metrics:


 


·      Revenue Growth relative to peer companies:  60% weighting.


 


Revenue
Growth is defined as the average 1-year growth for the three (3) fiscal years
covered in the performance period. 
1-year growth is calculated as ending fiscal year total revenue divided
by prior fiscal year total revenue, minus one.


 


·      Net Income Change as a Percentage of Revenue relative to peer
companies:  40% weighting.


 


Net
Income Growth is defined as the average 1-year net income change as a percent
of revenue for the three (3) years covered in the performance period.  One year change is calculated as ending year
net income minus prior year net income, divided by ending year total
revenue.  Note:  the net income change as a percent of revenue
calculation is used rather than true net income growth (ending year net income
divided by prior year net income, minus one) as many peer companies have
recently experienced net losses and net income growth cannot be calculated when
one year is a loss.


 


Individual
Performance Metrics: 
The number of shares subject to PRSUs that will vest and be issued will
be adjusted downward if the participant’s individual 3-year average MBO
achievement during the performance period is less than 100% of the participant’s
target MBOs.  For example, if individual
average MBO achievement over the performance period is 92% of target (100%),
the number of shares subject to PRSUs that will vest and be issued on the
distribution date is reduced by 8%.


 

















 


Calculation of PRSU Awards:


 


Award
Determination:  The actual
PRSU award earned is based on Cymer’s percentile rank of actual performance as
measured relative to peer companies for Revenue Growth (weighted 60%) and Net
Income Growth (weighted 40%):


 


	
  Percent Rank vs. Peers

  	
   

  	
  Percent of Target

  Award Earned

  	
   

  
	
  < 40th Percentile

  	
   

  	
  0

  	
  %

  
	
  40th – 50th Percentile

  	
   

  	
  50

  	
  %

  
	
  50th – 60th Percentile

  	
   

  	
  75

  	
  %

  
	
  60th – 70th Percentile

  	
   

  	
  100

  	
  %

  
	
  70th – 80th Percentile

  	
   

  	
  125

  	
  %

  
	
  80th – 90th Percentile

  	
   

  	
  150

  	
  %

  
	
  Greaterthan 90th Percentile

  	
   

  	
  200

  	
  %

  



 


·                  Target Revenue Growth Component:


 


·                  No PRSUs will be awarded for relative performance to peer companies
below 40th percentile ranking (refer to chart above),


 


·                  Between 50% and 100% of the PRSU target will be awarded for relative
performance to peer companies that is at or above the 40th and at or below
the 70th percentile ranking (refer to chart above),


 


·                  An above-plan performance multiplier will
be applied only to the target revenue growth component amounts of the PRSUs
when Cymer’s performance is greater than 70th percentile ranking (refer to chart above)
against peer companies.


 


·                  Target Net Income Growth Component:


 


·                  No PRSUs will be awarded for performance
below 40th percentile ranking (refer to chart above),


 


·                  Between 50% and 100% of the PRSU target will be awarded for relative
performance to peer companies that is at or above  the 40th and at or below the 70th percentile
ranking (refer to chart above),


 


·                  An above-plan performance multiplier will
be applied only to the target net income growth component amounts of the PRSUs
when Cymer’s performance is greater than 70th percentile ranking (refer to chart above)
against peer companies.


 


Performance Adjustments:  An adjustment will be made to
the target PRSUs based upon achievement against established individual MBOs:


 


·                  Target Individual MBO Adjustments:


 


·                  No PRSUs will be awarded to a participant
whose individual 3-year average MBO performance is below 60% of the MBO target,
regardless of Cymer’s financial performance,


 


·                  PRSUs will be adjusted downward based on
the individual’s 3-year average MBO achievement if 3-year average MBO
achievement is below 100%.


 


All determinations of financial metric and
individual MBO performance are subject to approval by executive management 


 

















 


and/or the Compensation Committee of Cymer’s Board
of Directors:


 


Vesting/Performance
Period:


 


PRSUs: 
PRSU shares will vest and be issued, if at all, following the end of the
performance period.  The number of PRSU
shares that vest and will be issued to the participant, if any, will be
contingent upon the level of achievement of the performance measures as
determined by the Compensation Committee following the end of the performance
period.  The PRSU shares that vest upon
achievement of the performance measures, as determined by the Compensation
Committee, will be issued during the first calendar year that follows the
performance period, but no later than 30 days following the completion and
certification of financial statements for the performance period.  A participant
must be employed on the last day of the performance period in order to be
eligible for any shares subject to the PRSU award to vest and become issuable
to the participant.


 


RSUs:  RSU
grants vest over a three-year period commencing on or about the first date of
the fiscal year in which the award is granted with 33% of the shares vesting on
the first, second and third annual anniversaries of the vesting commencement
date subject to the participant’s continued service with Cymer through the
applicable vesting dates.


 


Stock Options:  Stock option grants vest over a four-year period commencing on or about
the first date of the fiscal year in which the award is granted with 25% of the
shares vesting on the first annual anniversary of the vesting commencement
date, and the balance vesting in 36 equal monthly installments thereafter over
the remaining 3-year vesting period subject to the participant’s continued
service with Cymer through the applicable vesting dates.


 


Other Equity Awards:  Equity awards other than PRSUs,
stock options and RSUs will be subject to such vesting conditions as may be
determined by the Compensation Committee.


 


PRSU
Performance Approval and Process: Revenue growth and net
income growth performance will be calculated and verified by Finance and
approved by the Compensation Committee of Cymer’s Board of Directors for the
performance period.   All determinations
of financial and individual MBO metric performance are subject to approval by
executive management and/or the Compensation Committee of Cymer’s Board of
Directors.  The Compensation Committee
has the authority to alter any portion of the PRSU award distributable to any
individual participant under the LTIP.


 


Terms of
Equity Awards:  All equity awards will be granted in
accordance with the terms of Cymer’s Incentive Plan and the applicable form of
equity award agreement for the Incentive Plan. 
Participants will receive a prospectus describing the terms of the
equity awards according to the Incentive Plan.


 


Annual
Maximum: The
dollar value of the aggregate annual awards under the LTIP and the Short-Term
Incentive Plan (STIP) may not exceed 15% of Cymer’s adjusted EBITDA annually
(earnings before interest, taxes, depreciation, amortization and compensation
expense attributable to stock options). If the aggregate award amount under
both plans exceeds the cap, the awards will be adjusted downward proportional
to 15% of Cymer’s adjusted EBITDA for the year.


 


Disclaimer: Cymer reserves the right to modify the LTIP at any time. Cymer also retains
the right to award additional incentive compensation outside the LTIP without
regard to the minimum performance metrics or annual maximum limits set forth in
the LTIP.


 

















 


APPENDIX A


 


List of Peer
Companies(1)


 


Advanced Energy
Industries, Inc.


Asyst Technologies, Inc.


Axcelis Technologies, Inc.


Brooks Automation, Inc. (USA)


Coherant Inc


FEI Company


FLIR Systems, Inc.


FormFactor, Inc.


MKS Instruments, Inc.


Newport Corporation


Phototronics, Inc.


Varian
Semiconductor


Veeco Instruments, Inc.


Agilent
Technologies Inc.


Applied Materials, Inc.


KLA-Tencor
Corporation


Lam Research
Corporation


Leap Wireless
International, Inc.


MEMC Electronic
Materials, Inc.


Microchip
Technology, Inc.


Novellus Systems, Inc.


 






(1) The applicable list of peer companies will be
reconfirmed by Cymer prior to the beginning of each performance period.  If a company is acquired or is no longer an
operating entity as of the end of the performance period, the company will be
excluded from the peer list for that performance period.


 

















 


APPENDIX B


 


Target Amounts for
Fiscal Year 2009


 


The LTIP target award values and actual equity awards granted for fiscal
year 2009 performance to our named executive officers are as follows:


 


	
   

  	
   

  	
   

  	
   

  	
  Awards Granted

  	
   

  
	
  Executive Officer

  	
   

  	
  Target Award

  Value (1)

  	
   

  	
  Number of

  Restricted

  Stock Units

  (RSUs) (2)

  	
   

  	
  Number of

  Performance

  Restricted

  Stock Units

  PRSUs (2)

  	
   

  	
  Aggregate Fair

  Market Value

  of Awards on

  Grant Date (3)

  	
   

  
	
  Robert P. Akins, Chairman of the Board and Chief
  Executive Officer

  	
   

  	
  $

  	
  1,200,000

  	
   

  	
  17,820

  	
   

  	
  17,820

  	
   

  	
  $

  	
  775,526

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Edward J. Brown, Jr., President and Chief
  Operating Officer

  	
   

  	
  $

  	
  900,000

  	
   

  	
  13,370

  	
   

  	
  13,370

  	
   

  	
  $

  	
  581,862

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Paul B. Bowman, Vice President Investor Relations
  and Interim Chief Financial Officer

  	
   

  	
  $

  	
  600,000

  	
   

  	
  8,910

  	
   

  	
  8,910

  	
   

  	
  $

  	
  387,763

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Rae Ann Werner, Vice President, Corporate Controller
  and Chief Accounting Officer

  	
   

  	
  $

  	
  200,000

  	
   

  	
  2,970

  	
   

  	
  2,970

  	
   

  	
  $

  	
  129,254

  	
   

  



 


The 2009 target dollar amount is divided into two (2) equity award
components granted under the Incentive Plan: 50% in RSUs and 50% in PRSUs.  For
fiscal year 2009, in view of the ongoing economic recession and in conjunction
with the Company’s cost reduction initiative, the equity awards actually
granted under the LTIP were reduced to approximately 65% of the target dollar
amount.


 






	
  (1)

  	
  The
  Target Award Value dollar amount for each executive represent the target
  dollar value of the LTIP awards as established consistent with our 60th
  percentile pay philosophy and assumes that exactly 100% of the financial and
  individual performance target metrics are achieved. However, as noted above,
  in view of the ongoing economic recession and in conjunction with the
  Company’s cost reduction initiative, the equity awards actually granted under
  the LTIP for fiscal year 2009 were reduced to approximately 65% of the Target Award Value. Please also
  refer to the LTIP sections entitled “PRSU Performance Measures” and
  “Calculation of PRSU Awards” for a description of adjustments to be made to
  the PRSU awards depending upon actual performance.

  
	
   

  	
   

  
	
  (2)

  	
  The
  number of RSUs and PRSUs granted were each calculated by dividing the
  adjusted dollar value applicable to such portion of the equity award,
  dividing by Cymer’s 30-day average stock price as of January 2, 2009
  ($21.88) and rounding the result to the nearest ten shares.

  
	
   

  	
   

  
	
  (3)

  	
  The
  aggregate fair market value of the RSUs and PRSUs on the grant date
  (February 5, 2009) was calculated by multiplying the aggregate number of
  shares to be issued in respect of the awards by the closing sales price of
  our stock on the grant date ($21.76) and rounding the result to the nearest
  dollar.