Exhibit 10.13


 


EMPLOYMENT AGREEMENT


 


This Employment Agreement (the
“Agreement”) is made and entered into effective as of March 01, 2004 by and
between Nancy Baker (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 Chief Financial Officer,
as such position has been defined in terms of responsibilities


 


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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 $250,000.00 (“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 eighteen (18) 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 indirectly controls,
is controlled by, or is under common control with, 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 of Directors of the Company 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, or nominated for election, to the Board
of Directors of the Company with the affirmative votes of at least a majority
of the Incumbent Directors at the time of such election or nomination (but
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 consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) at least fifty percent (50%) of the total voting power represented by
the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation.


 


(c)                                  Disability.  “Disability” shall mean that the Employee
has been unable to substantially perform his duties under this Agreement as the
result of his incapacity due to physical or mental illness, and such inability,
at least 26 weeks after its commencement, is determined to be total and
permanent by a physician selected by the Company or its insurers and acceptable
to the Employee or the Employee’s legal representative (such agreement as to
acceptability not to be unreasonably withheld).


 


(d)                                  Exchange Act.  “Exchange Act” shall mean the Securities
Exchange Act of 1934, as amended.


 


(e)                                  Involuntary Termination.  “Involuntary Termination” shall
mean (i) without the Employee’s express written consent, the significant
reduction of the Employee’s duties or responsibilities relative to the
Employee’s duties or responsibilities in effect immediately prior to such
reduction; provided, however, that a reduction in duties or responsibilities
solely by virtue of the Company being acquired and made part of a larger entity
(as, for example, when the Chief Financial Officer of Company remains as such
following a Change of Control and is not made the Chief Financial Officer of
the acquiring corporation) shall not constitute an “Involuntary Termination”;
(ii) without the Employee’s express written consent, a substantial reduction,
without good business reasons, of the facilities and perquisites (including
office space and location) available to the Employee immediately prior to such
reduction; (iii) without the Employee’s express written consent, a material
reduction by the Company in the Base Compensation or Target Incentive of the
Employee as in effect immediately prior to such reduction, or the ineligibility
of the Employee to continue to participate in any long-term incentive plan of
the Company; (iv) a material reduction by the Company in the kind or level of


 


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employee benefits to which the
Employee is entitled immediately prior to such reduction with the result that
the Employee’s overall benefits package is significantly reduced; (v) the
relocation of the Employee to a facility or a location more than 50 miles from
the Employee’s then present location, without the Employee’s express written
consent; (vi) any purported termination of the Employee by the Company which is
not effected for death or Disability or for Cause; or (vii) the failure of the
Company to obtain the assumption of this agreement by any successors
contemplated in Section 10 below.


 


8.                                      Limitation
on Payments.


 


(a)                                  In the event that the
severance and other benefits provided for in this Agreement or otherwise
payable to the Employee (i) constitute “parachute payments” within the meaning
of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and
(ii) but for this Section 8 would be subject to the excise tax imposed by
Section 4999 of the Code, then the Employee’s severance benefits under Section
6 shall be payable either (i) in full, or (ii) as to such lesser amount which
would result in no portion of such severance benefits being subject to excise
tax under Section 4999 of the Code, whichever of the foregoing amounts, taking
into account the applicable federal, state and local income taxes and the
excise tax imposed by Section 4999, results in the receipt by the Employee on
an after-tax basis, of the greatest amount of severance benefits under this
Agreement, notwithstanding that all or some portion of such severance benefits
may be taxable under Section 4999 of the Code.


 


(b)                                  If a reduction in the
payments and benefits that would otherwise be paid or provided to the Employee
under the terms of this Agreement is necessary to comply with the provisions of
Section 8(a), the Employee shall be entitled to select which payments or
benefits will be reduced and the manner and method of any such reduction of
such payments or benefits (including but not limited to the number of options
that would vest under Section 6(b) subject to reasonable limitations
(including, for example, express provisions under the Company’s benefit plans)
(so long as the requirements of Section 8(a) are met).  Within thirty (30) days after the amount of
any required reduction in payments and benefits is finally determined in
accordance with the provisions of Section 8(c), the Employee shall notify the
Company in writing regarding which payments or benefits are to be reduced.  If no notification is given by the Employee,
the Company will determine which amounts to reduce.  If, as a result of any reduction required by Section 8(a), amounts
previously paid to the Employee exceed the amount to which the Employee is
entitled, the Employee will promptly return the excess amount to the Company.


 


(c)                                  Unless the Company
and the Employee otherwise agree in writing, any determination required under
this Section 8 shall be made in writing by the Company’s independent public
accountants (the “Accountants”), whose determination shall be conclusive and
binding upon the Employee and the Company for all purposes.  For purposes of making the calculations
required by this Section 8, the Accountants may make reasonable assumptions and
approximations concerning applicable taxes and may rely on reasonable, good
faith interpretations concerning the application of Sections 280G and 4999 of
the Code. The Company and the Employee shall furnish to the Accountants such
information and documents as the Accountants may reasonably request in order to
make a determination under this Section. 
The Company shall bear all costs the Accountants may reasonably incur in
connection with any calculations contemplated by this Section 8.


 


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9.                                      Certain
Business Combinations.  In the event
it is determined by the Board, upon receipt of a written opinion of the
Company’s independent public accountants, that the enforcement of any Section
or subsection of this Agreement, including, but not limited to, Section 6(b)
hereof, which allows for the acceleration of vesting of options to purchase
shares of the Company’s common stock upon a termination in connection with a
Change of Control, would preclude accounting for any proposed business
combination of the Company involving a Change of Control as a pooling of
interests, and the Board otherwise desires to approve such a proposed business transaction
which requires as a condition to the closing of such transaction that it be
accounted for as a pooling of interests, then any such Section of this
Agreement shall be null and void, but only if the absence of enforcement of
such Section would preserve the pooling treatment.  For purposes of this Section 9, the Board’s determination shall
require the unanimous approval of the disinterested Board members.


 


10.                               Successors.


 


(a)                                  Company’s Successors.  Any successor to the Company
(whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company’s business and assets shall assume the obligations under this Agreement
and agree expressly to perform the obligations under this Agreement in the same
manner and to the same extent as the Company would be required to perform such
obligations in the absence of a succession. 
For all purposes under this Agreement, the term “Company” shall include
any successor to the Company’s business and assets which executes and delivers
the assumption agreement described in this Section 10(a) or which becomes bound
by the terms of this Agreement by operation of law.


 


(b)                                  Employee’s Successors.  The terms of this Agreement and
all rights of the Employee hereunder shall inure to the benefit of, and be
enforceable by, the Employee’s personal or legal representatives, executors,
administrators, successors, heirs, devisees and legatees.


 


11.                               Notice.  Notices and all other communications
contemplated by this Agreement shall be in writing and shall be deemed to have
been duly given when personally delivered or when mailed by U.S. registered or
certified mail, return receipt requested and postage prepaid.  In the case of the Employee, mailed notices
shall be addressed to him at the home address which he most recently
communicated to the Company in writing. 
In the case of the Company, mailed notices shall be addressed to its
corporate headquarters, and all notices shall be directed to the attention of
its Secretary.


 


12.                               Miscellaneous
Provisions.


 


(a)                                  Waiver.  No provision of this Agreement shall be
modified, waived or discharged unless the modification, waiver or discharge is
agreed to in writing and signed by the Employee and by an authorized officer of
the Company (other than the Employee). 
No waiver by either party of any breach of, or of compliance with, any
condition or provision of this Agreement by the other party shall be considered
a waiver of any other condition or provision or of the same condition or
provision at another time.


 


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(b)                                  Whole Agreement.  No agreements, representations or
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof.


 


(c)                                  Choice of Law.  The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
California.


 


(d)                                  Severability.  The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision hereof, which shall remain in full force and effect.


 


(e)                                  Arbitration.  Any dispute or controversy arising out of, relating to
or in connection with this Agreement shall be settled exclusively by binding
arbitration in San Diego, California, in accordance with the National Rules for
the Resolution of Employment Disputes of the American Arbitration Association
then in effect.  Judgment may be entered
on the arbitrator’s award in any court having jurisdiction.  The arbitrator shall: a) have the authority
to compel adequate discovery for the resolution of the dispute and to award
such relief as would otherwise be permitted by law; and (b) issue a written
arbitration decision including the arbitrator’s essential findings and
conclusions and a statement of the award. 
Both the Employee and the Company shall be entitled to all rights and
remedies they would have in a court of law. 
The Company shall pay all fees in excess of those which will be required
if the dispute were decided in a court of law.


 


(f)                                    No
Assignment of Benefits.  The
rights of any person to payments or benefits under this Agreement shall not be
made subject to option or assignment, either by voluntary or involuntary
assignment or by operation of law, including (without limitation) bankruptcy,
garnishment, attachment or other creditor’s process, and any action in
violation of this Section 12(g) shall be void.


 


(g)                                 Assignment by Company.  The Company may assign its rights
under this Agreement to an affiliate, and an affiliate may assign its rights
under this Agreement to another affiliate of the Company or to the Company;
provided, however, that no assignment shall be made if the net worth of the
assignee is less than the net worth of the Company at the time of
assignment.  In the case of any such
assignment, the term “Company” when used in a section of this Agreement shall
mean the corporation that actually employs the Employee.


 


(h)                                 Counterparts.  This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together will constitute
one and the same instrument.


 


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IN WITNESS WHEREOF, each of the
parties has executed this Agreement, in the case of the Company by its duly
authorized officer, as of the day and year first above written.


 


 


	
  COMPANY:

  	
  CYMER, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:  Hugh Grinolds

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:  

  	
  Exec. VP,
  CPS

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Hugh
  Grinolds

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  EMPLOYEE:

  	
   

  	
  /s/ Nancy J.
  Baker

  	
   

  



 


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