Exhibit 10.21


 


EMPLOYMENT AGREEMENT


 


This Employment Agreement (the “Agreement”) is made and entered into
effective as of September 29, 2003, by and between Anthony Yen, (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 Vice President 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
$200,000.00 (“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 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:

  	
  Executive Vice President, Corporate Processes and Services

  
	
   

  	
   

  
	
   

  	
  /s/ Hugh Grinolds

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  EMPLOYEE:

  	
  /s/ Anthony Yen

  	
   

  
	
   

  	
  Anthony Yen

  
				



 


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