Document:

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                                                                    EXHIBIT 10.7

                                   CYMER, INC.
                             1996 STOCK OPTION PLAN
                     (AS AMENDED THROUGH FEBRUARY 24, 2000)

     1.   PURPOSES OF THE PLAN. The purposes of this Stock Plan are:

          / /  to attract and retain the best available personnel for positions
               of substantial responsibility,

          / /  to provide additional incentive to Employees, Directors and
               Consultants, and

          / /  to promote the success of the Company's business.

     Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant.

     2.   DEFINITIONS. As used herein, the following definitions shall apply:

          (a)  "ADMINISTRATOR" means the Board or any of its Committees as shall
be administering the Plan, in accordance with Section 4 of the Plan.

          (b)  "APPLICABLE LAWS" means the requirements relating to the
administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options are, or will be, granted under
the Plan.

          (c)  "BOARD" means the Board of Directors of the Company.

          (d)  "CODE" means the Internal Revenue Code of 1986, as amended.

          (e)  "COMMITTEE" means a committee of Directors appointed by the Board
in accordance with Section 4 of the Plan.

          (f)  "COMMON STOCK" means the Common Stock of the Company.

          (g)  "COMPANY" means Cymer, Inc., a Nevada corporation.

          (h)  "CONSULTANT" means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services and who is compensated
for such services.

          (i)  "DIRECTOR" means a member of the Board.

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          (j)  "DISABILITY" means total and permanent disability as defined in
Section 22(e)(3) of the Code.

          (k)  "EMPLOYEE" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract. If reemployment upon expiration of a leave of absence approved by the
Company is not so guaranteed, on the 181st day of such leave any Incentive Stock
Option held by the Optionee shall cease to be treated as an Incentive Stock
Option and shall be treated for tax purposes as a Nonstatutory Stock Option.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.

          (l)  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

          (m)  "FAIR MARKET VALUE" means, as of any date, the value of Common
Stock determined as follows:

               (i)  If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
THE WALL STREET JOURNAL or such other source as the Administrator deems
reliable;

               (ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of
determination, as reported in THE WALL STREET JOURNAL or such other source as
the Administrator deems reliable;

               (iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.

          (n)  "INCENTIVE STOCK OPTION" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

          (o)  "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an Incentive Stock Option.

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          (p)  "NOTICE OF GRANT" means a written or electronic notice evidencing
certain terms and conditions of an individual Option grant. The Notice of Grant
is part of the Option Agreement.

          (q)  "OFFICER" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

          (r)  "OPTION" means a stock option granted pursuant to the Plan.

          (s)  "OPTION AGREEMENT" means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.

          (t)  "OPTIONED STOCK" means the Common Stock subject to an Option.

          (u)  "OPTIONEE" means the holder of an outstanding Option granted
under the Plan.

          (v)  "PARENT" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.

          (w)  "PLAN" means this 1996 Stock Option Plan.

          (x)  "RULE 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.

          (y)  "SECTION 16(b)" means Section 16(b) of the Securities Exchange
Act of 1934, as amended.

          (t)  "SERVICE PROVIDER" means an Employee, Director or Consultant.

          (u)  "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.

          (v)  "SUBSIDIARY" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.

     3.   STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 12 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 7,000,000 Shares. The Shares may be authorized, but unissued,
or reacquired Common Stock.

          If an Option expires or becomes unexercisable without having been
exercised in full, the unpurchased Shares which were subject thereto shall
become available for future grant or sale under the Plan (unless the Plan has
terminated); PROVIDED, however, that Shares that have actually been

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issued under the Plan, whether upon exercise of an Option, shall not be returned
to the Plan and shall not become available for future distribution under the
Plan, except that if Shares of Restricted Stock are repurchased by the Company
at their original purchase price, such Shares shall become available for future
grant under the Plan.

     4.   ADMINISTRATION OF THE PLAN.

          (a)  PROCEDURE.

               (i)  MULTIPLE ADMINISTRATIVE BODIES. The Plan may be administered
by different Committees with respect to different groups of Service Providers.

               (ii) SECTION 162(m). To the extent that the Administrator
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.

               (iii) RULE 16b-3. To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the Plan shall be administered by the
Board or a Committee of two or more "non-employee directors" within the meaning
of Rule 16b-3.

               (iv) OTHER ADMINISTRATION. Other than as provided above, the Plan
shall be administered by (A) the Board or (B) a Committee, which committee shall
be constituted to satisfy Applicable Laws.

          (b)  POWERS OF THE ADMINISTRATOR. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:

               (i)  to determine the Fair Market Value;

               (ii) to select the Service Providers to whom Options may be
granted hereunder;

               (iii) to determine the number of shares of Common Stock to be
covered by each Option granted hereunder;

               (iv) to approve forms of agreement for use under the Plan;

               (v)  to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any Option granted hereunder. Such terms and
conditions include, but are not limited to, the exercise price, the time or
times when Options may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and
any restriction

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or limitation regarding any Option or the shares of Common Stock relating
thereto, based in each case on such factors as the Administrator, in its sole
discretion, shall determine;

               (vi) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;

               (vii) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;

               (viii) to modify or amend each Option subject to Section 14(c) of
the Plan), including the discretionary authority to extend the post-termination
exercisability period of Options longer than is otherwise provided for in the
Plan;

               (ix) to allow Optionees to satisfy withholding tax obligations by
electing to have the Company withhold from the Shares to be issued upon exercise
of an Option that number of Shares having a Fair Market Value equal to the
amount required to be withheld. The Fair Market Value of the Shares to be
withheld shall be determined on the date that the amount of tax to be withheld
is to be determined. All elections by an Optionee to have Shares withheld for
this purpose shall be made in such form and under such conditions as the
Administrator may deem necessary or advisable;

               (x)  to authorize any person to execute on behalf of the Company
any instrument required to effect the grant of an Option previously granted by
the Administrator;

               (xi) to make all other determinations deemed necessary or
advisable for administering the Plan.

          (c)  EFFECT OF ADMINISTRATOR'S DECISION. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options.

     5.   ELIGIBILITY. Nonstatutory Stock Options may be granted to Service
Providers. Incentive Stock Options may be granted only to Employees.

     6.   LIMITATIONS.

          (a)  Each Option shall be designated in the Option Agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year
(under all plans of the Company and any Parent or Subsidiary) exceeds
$100,000, such Options shall be treated as Nonstatutory Stock Options. For
purposes of this Section 6(a), Incentive Stock Options shall be

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taken into account in the order in which they were granted. The Fair Market
Value of the Shares shall be determined as of the time the Option with
respect to such Shares is granted.

          (b)  Neither the Plan nor any Option shall confer upon an Optionee any
right with respect to continuing the Optionee's relationship as a Service
Provider with the Company, nor shall they interfere in any way with the
Optionee's right or the Company's right to terminate such relationship at any
time, with or without cause.

          (c)  The following limitations shall apply to grants of Options:

               (i)  No Service Provider shall be granted, in any fiscal year of
the Company, Options to purchase more than 500,000 Shares.

               (ii) In connection with his or her initial service, a Service
Provider may be granted Options to purchase up to an additional 500,000 Shares
which shall not count against the limit set forth in subsection (i) above.

               (iii) The foregoing limitations shall be adjusted proportionately
in connection with any change in the Company's capitalization as described in
Section 12.

     7.   TERM OF PLAN. Subject to Section 18 of the Plan, the Plan shall become
effective upon its adoption by the Board. It shall continue in effect for a term
of ten (10) years unless terminated earlier under Section 14 of the Plan.

     8.   TERM OF OPTION. The term of each Option shall be stated in the Option
Agreement. In the case of an Incentive Stock Option, the term shall be ten (10)
years from the date of grant or such shorter term as may be provided in the
Option Agreement. Moreover, in the case of an Incentive Stock Option granted to
an Optionee who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Incentive
Stock Option shall be five (5) years from the date of grant or such shorter term
as may be provided in the Option Agreement.

     9.   OPTION EXERCISE PRICE AND CONSIDERATION.

          (a)  EXERCISE PRICE. The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:

               (i)  In the case of an Incentive Stock Option

                    (A)  granted to an Employee who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.

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                    (B)  granted to any Employee other than an Employee
described in paragraph (A) immediately above, the per Share exercise price shall
be no less than 100% of the Fair Market Value per Share on the date of grant.

               (ii) In the case of a Nonstatutory Stock Option, the per Share
exercise price shall not be less than 100% of the Fair Market Value per Share on
the date of grant.

               (iii) Notwithstanding the foregoing, Options may be granted with
a per Share exercise price of less than 100% of the Fair Market Value per Share
on the date of grant pursuant to a merger or other corporate transaction.

          (b)  WAITING PERIOD AND EXERCISE DATES. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised.

          (c)  FORM OF CONSIDERATION. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:

               (i)  cash;

               (ii) check;

               (iii) promissory note;

               (iv) other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than six months
on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;

               (v)  consideration received by the Company under a formal
cashless exercise program adoptedby the Company in connection with the Plan;

               (vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement;

               (vii) any combination of the foregoing methods of payment; or

               (viii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.

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     10.  EXERCISE OF OPTION.

          (a)  PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. Unless the Administrator provides otherwise,
vesting of Options granted hereunder shall be tolled during any unpaid leave of
absence. An Option may not be exercised for a fraction of a Share.

               An Option shall be deemed exercised when the Company receives:
(i) written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 12 of the Plan.

               Exercising an Option in any manner shall decrease the number of
Shares thereafter available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is exercised.

          (b)  TERMINATION OF RELATIONSHIP AS A SERVICE PROVIDER. If an Optionee
ceases to be a Service Provider, other than upon the Optionee's death or
Disability, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement to the extent that he or she is
entitled to exercise it on the date of termination (but in no event later than
the expiration of the term of such Option as set forth in the Option Agreement).
In the absence of a specified time in the Option Agreement, the Option shall
remain exercisable for three (3) months following the Optionee's termination.
If, on the date of termination, the Optionee is not entitled to exercise his or
her entire Option, the Shares covered by the unexercisable portion of the Option
shall revert to the Plan. If, after termination, the Optionee does not exercise
his or her Option within the time specified by the Administrator, the Option
shall terminate, and the Shares covered by such Option shall revert to the Plan.

          (c)  DISABILITY OF OPTIONEE. If an Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option at any time within twelve (12) months from the date of
termination, but only to the extent that the Optionee is entitled to exercise it
on the date of termination (and in no event later than the expiration of the
term of the Option as set forth in the Option Agreement). If, on the date of
termination, the Optionee is not

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entitled to exercise his or her entire Option, the Shares covered by the
unexercisable portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.

          (d)  DEATH OF OPTIONEE. If an Optionee dies while a Service Provider,
the Option may be exercised at any time within twelve (12) months following the
date of death (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant), by the Optionee's estate or by a
person who acquires the right to exercise the Option by bequest or inheritance,
but only to the extent that the Optionee would have been entitled to exercise
the Option on the date of death. If, at the time of death, the Optionee is not
entitled to exercise his or her entire Option, the Shares covered by the
unexercisable portion of the Option shall immediately revert to the Plan. The
Option may be exercised by the executor or administrator of the Optionee's
estate or, if none, by the person(s) entitled to exercise the Option under the
Optionee's will or the laws of descent or distribution. If the Option is not so
exercised within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

          (e)  BUYOUT PROVISIONS. The Administrator may at any time offer to buy
out for a payment in cash or Shares, an Option previously granted based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.

     11.  NON-TRANSFERABILITY OF OPTIONS. Unless determined otherwise by the
Administrator, an Option may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee. If the Administrator makes an Option
transferable, such Option shall contain such additional terms and conditions as
the Administrator deems appropriate.

     12.  ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR
ASSET SALE.

          (a) CHANGES IN CAPITALIZATION. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities

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convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to an Option.

          (b)  DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the time and in
the manner contemplated. To the extent it has not been previously exercised, an
Option will terminate immediately prior to the consummation of such proposed
action.

          (c)  MERGER OR ASSET SALE. In the event of a merger of the Company
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option shall be assumed or an equivalent option
substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation. In the event that the successor corporation refuses to
assume or substitute for the Option, the Optionee shall fully vest in and have
the right to exercise the Option as to all of the Optioned Stock, including
Shares as to which it would not otherwise be vested or exercisable. If an Option
becomes fully vested and exercisable in lieu of assumption or substitution in
the event of a merger or sale of assets, the Administrator shall notify the
Optionee in writing or electronically that the Option shall be fully vested and
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option shall terminate upon the expiration of such period. For the purposes
of this paragraph, the Option shall be considered assumed if, following the
merger or sale of assets, the option confers the right to purchase or receive,
for each Share of Optioned Stock subject to the Option immediately prior to the
merger or sale of assets, the consideration (whether stock, cash, or other
securities or property) received in the merger or sale of assets by holders of
Common Stock for each Share held on the effective date of the transaction (and
if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the merger or sale of assets is
not solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation, provide for
the consideration to be received upon the exercise of the Option, for each Share
of Optioned Stock subject to the Option, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.

     13.  DATE OF GRANT. The date of grant of an Option shall be, for all
purposes, the date on which the Administrator makes the determination granting
such Option, or such other later date as is determined by the Administrator.
Notice of the determination shall be provided to each Optionee within a
reasonable time after the date of such grant.

     14.  AMENDMENT AND TERMINATION OF THE PLAN.

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          (a)  AMENDMENT AND TERMINATION. The Board may at any time amend,
alter, suspend or terminate the Plan.

          (b)  SHAREHOLDER APPROVAL. The Company shall obtain shareholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.

          (c)  EFFECT OF AMENDMENT OR TERMINATION. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.

     15.  CONDITIONS UPON ISSUANCE OF SHARES.

          (a)  LEGAL COMPLIANCE. Shares shall not be issued pursuant to the
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.

          (b)  INVESTMENT REPRESENTATIONS. As a condition to the exercise of an
Option, the Company may require the person exercising such Option to represent
and warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required.

     16.  INABILITY TO OBTAIN AUTHORITY. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.

     17.  RESERVATION OF SHARES. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

     18.  SHAREHOLDER APPROVAL. The Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months after the date the Plan is
adopted. Such shareholder approval shall be obtained in the manner and to the
degree required under Applicable Laws.

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                             1996 STOCK OPTION PLAN

                             STOCK OPTION AGREEMENT

     Unless otherwise defined herein, the terms defined in the Plan shall have
the same defined meanings in this Option Agreement.

I.   NOTICE OF STOCK OPTION GRANT

[Optionee's Name and Address]

     You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as
follows:

          Grant Number                      _________________________

          Date of Grant                     _________________________

          Vesting Commencement Date         _________________________

          Exercise Price per Share          $________________________

          Total Number of Shares Granted    _________________________

          Total Exercise Price              $_________________________

          Type of Option:                   ___  Incentive Stock Option

                                            ___  Nonstatutory Stock Option

          Term/Expiration Date:             _________________________

     VESTING SCHEDULE:

     This Option may be exercised, in whole or in part, in accordance with the
following schedule:

     [25% of the Shares subject to the Option shall vest twelve months after the
Vesting Commencement Date, and 1/48 of the Shares subject to the Option shall
vest each month thereafter, subject to the Optionee continuing to be a Service
Provider on such dates].

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     TERMINATION PERIOD:

     This Option may be exercised for _____ [days/months] after Optionee ceases
to be a Service Provider. Upon the death or Disability of the Optionee, this
Option may be exercised for such longer period as provided in the Plan. In no
event shall this Option be exercised later than the Term/Expiration Date as
provided above.

II.  AGREEMENT

     1.   GRANT OF OPTION. The Plan Administrator of the Company hereby grants
to the Optionee named in the Notice of Grant attached as Part I of this
Agreement (the "Optionee") an option (the "Option") to purchase the number of
Shares, as set forth in the Notice of Grant, at the exercise price per share set
forth in the Notice of Grant (the "Exercise Price"), subject to the terms and
conditions of the Plan, which is incorporated herein by reference. Subject to
Section 14(c) of the Plan, in the event of a conflict between the terms and
conditions of the Plan and the terms and conditions of this Option Agreement,
the terms and conditions of the Plan shall prevail.

          If designated in the Notice of Grant as an Incentive Stock Option
("ISO"), this Option is intended to qualify as an Incentive Stock Option under
Section 422 of the Code. However, if this Option is intended to be an Incentive
Stock Option, to the extent that it exceeds the $100,000 rule of Code Section
422(d) it shall be treated as a Nonstatutory Stock Option ("NSO").

     2.   EXERCISE OF OPTION.

          (a)  RIGHT TO EXERCISE. This Option is exercisable during its term in
accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of the Plan and this Option Agreement.

          (b)  METHOD OF EXERCISE. This Option is exercisable by delivery of an
exercise notice, in the form attached as Exhibit A (the "Exercise Notice"),
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised (the "Exercised Shares"), and
such other representations and agreements as may be required by the Company
pursuant to the provisions of the Plan. The Exercise Notice shall be completed
by the Optionee and delivered to the stock option administrator of the Company.
The Exercise Notice shall be accompanied by payment of the aggregate Exercise
Price as to all Exercised Shares. This Option shall be deemed to be exercised
upon receipt by the Company of such fully executed Exercise Notice accompanied
by such aggregate Exercise Price.

               No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Exercised Shares shall be considered
transferred to the Optionee on the date the Option is exercised with respect to
such Exercised Shares.

                                     -2-
<PAGE>

     3.   METHOD OF PAYMENT. Payment of the aggregate Exercise Price shall be by
any of the following, or a combination thereof, at the election of the Optionee:

          (a)  cash;

          (b)  check;

          (c)  consideration received by the Company under a formal cashless
exercise program adopted by the Company in connection with the Plan;

          (d)  surrender of other Shares which (i) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six (6) months on the date of surrender, AND (ii) have a Fair Market Value
on the date of surrender equal to the aggregate Exercise Price of the Exercised
Shares; or

          (e)  with the Administrator's consent, delivery of Optionee's
promissory note (the "Note") in the form attached hereto as Exhibit C, in the
amount of the aggregate Exercise Price of the Exercised Shares together with the
execution and delivery by the Optionee of the Security Agreement attached hereto
as Exhibit B. The Note shall bear interest at the "applicable federal rate"
prescribed under the Code and its regulations at time of purchase, and shall be
secured by a pledge of the Shares purchased by the Note pursuant to the Security
Agreement.

     4.   NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by the Optionee. The terms
of the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.

     5.   TERM OF OPTION. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option Agreement.

     6.   TAX CONSEQUENCES. Some of the federal tax consequences relating to
this Option, as of the date of this Option, are set forth below. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES.

          (a)  EXERCISING THE OPTION.

               (i)  NONSTATUTORY STOCK OPTION. The Optionee may incur regular
federal income tax liability upon exercise of a NSO. The Optionee will be
treated as having received compensation income (taxable at ordinary income tax
rates) equal to the excess, if any, of the Fair Market Value of the Exercised
Shares on the date of exercise over their aggregate Exercise Price. If

                                     -3-
<PAGE>

the Optionee is an Employee or a former Employee, the Company will be required
to withhold from his or her compensation or collect from Optionee and pay to the
applicable taxing authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.

               (ii) INCENTIVE STOCK OPTION. If this Option qualifies as an ISO,
the Optionee will have no regular federal income tax liability upon its
exercise, although the excess, if any, of the Fair Market Value of the Exercised
Shares on the date of exercise over their aggregate Exercise Price will be
treated as an adjustment to alternative minimum taxable income for federal tax
purposes and may subject the Optionee to alternative minimum tax in the year of
exercise. In the event that the Optionee ceases to be an Employee but remains a
Service Provider, any Incentive Stock Option of the Optionee that remains
unexercised shall cease to qualify as an Incentive Stock Option and will be
treated for tax purposes as a Nonstatutory Stock Option on the date three (3)
months and one (1) day following such change of status.

          (b)  DISPOSITION OF SHARES.

               (i)  NSO. If the Optionee holds NSO Shares for at least one year,
any gain realized on disposition of the Shares will be treated as long-term
capital gain for federal income tax purposes.

               (ii) ISO. If the Optionee holds ISO Shares for at least one year
after exercise and two years after the grant date, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes. If the Optionee disposes of ISO Shares within one year
after exercise or two years after the grant date, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income
rates) to the extent of the excess, if any, of the lesser of (A) the difference
between the Fair Market Value of the Shares acquired on the date of exercise and
the aggregate Exercise Price, or (B) the difference between the sale price of
such Shares and the aggregate Exercise Price. Any additional gain will be taxed
as capital gain, short-term or long-term depending on the period that the ISO
Shares were held.

          (c)  NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES. If the
Optionee sells or otherwise disposes of any of the Shares acquired pursuant to
an ISO on or before the later of (i) two years after the grant date, or (ii) one
year after the exercise date, the Optionee shall immediately notify the Company
in writing of such disposition. The Optionee agrees that he or she may be
subject to income tax withholding by the Company on the compensation income
recognized from such early disposition of ISO Shares by payment in cash or out
of the current earnings paid to the Optionee.

     7.   ENTIRE AGREEMENT; GOVERNING LAW. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the

                                     -4-
<PAGE>

Company and Optionee with respect to the subject matter hereof, and may not be
modified adversely to the Optionee's interest except by means of a writing
signed by the Company and Optionee. This agreement is governed by the internal
substantive laws, but not the choice of law rules, of California.

     8.   NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND AGREES
THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED
ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A
SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL
NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE
OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.

     By your signature and the signature of the Company's representative below,
you and the Company agree that this Option is granted under and governed by the
terms and conditions of the Plan and this Option Agreement. Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions relating to the Plan
and Option Agreement. Optionee further agrees to notify the Company upon any
change in the residence address indicated below.

                                     -5-
<PAGE>

OPTIONEE:                                   CYMER, INC.

-----------------------------------         -----------------------------------
Signature                                   By

------------------------------------        -----------------------------------
Print Name                                  Title

------------------------------------
Residence Address

------------------------------------

                                     -6-
<PAGE>

                                CONSENT OF SPOUSE

     The undersigned spouse of Optionee has read and hereby approves the terms
and conditions of the Plan and this Option Agreement. In consideration of the
Company's granting his or her spouse the right to purchase Shares as set forth
in the Plan and this Option Agreement, the undersigned hereby agrees to be
irrevocably bound by the terms and conditions of the Plan and this Option
Agreement and further agrees that any community property interest shall be
similarly bound. The undersigned hereby appoints the undersigned's spouse as
attorney-in-fact for the undersigned with respect to any amendment or exercise
of rights under the Plan or this Option Agreement.

                                       ---------------------------------------
                                       Spouse of Optionee

                                     -7-
<PAGE>

                                    EXHIBIT A

                             1996 STOCK OPTION PLAN

                                 EXERCISE NOTICE

Cymer, Inc.
16275 Technology Drive
San Diego, CA  92127-1815

Attention:  Corporate Secretary

     1    EXERCISE OF OPTION. Effective as of today, ________________, 200__,
the undersigned ("Purchaser") hereby elects to purchase ______________ shares
(the "Shares") of the Common Stock of Cymer, Inc. (the "Company") under and
pursuant to the 1996 Stock Option Plan (the "Plan") and the Stock Option
Agreement dated ___________, ___ (the "Option Agreement"). The purchase price
for the Shares shall be $______ , as required by the Option Agreement.

     2    DELIVERY OF PAYMENT. Purchaser herewith delivers to the Company the
full purchase price for the Shares.

     3    REPRESENTATIONS OF PURCHASER. Purchaser acknowledges that Purchaser
has received, read and understood the Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions.

     4    RIGHTS AS SHAREHOLDER. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Shares so acquired shall
be issued to the Optionee as soon as practicable after exercise of the Option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date of issuance, except as provided in Section 12 of the
Plan.

     5    TAX CONSULTATION. Purchaser understands that Purchaser may suffer
adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.

<PAGE>

     6    ENTIRE AGREEMENT; GOVERNING LAW. The Plan and Option Agreement are
incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser's interest except by
means of a writing signed by the Company and Purchaser. This agreement is
governed by the internal substantive laws, but not the choice of law rules, of
California.

Submitted by:                               Accepted by:

PURCHASER:                                  CYMER, INC.

                                            By:
-----------------------------------            --------------------------------
Signature

-----------------------------------         -----------------------------------
Print Name                                  Its

ADDRESS:                                    ADDRESS:

-----------------------------------         16275 Technology Drive
                                            San Diego, CA  92127-1815
-----------------------------------

                                            -----------------------------------
                                            Date Received

                                     -2-<PAGE>

                                                                  EXHIBIT 10.14

                              EMPLOYMENT AGREEMENT

This Employment Agreement (the "Agreement") is made and entered into
effective as of March 1, 2000, by and between Wallace E. Breitman
(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 aquisition 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 shareholders 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 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 recognition 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 Vice President, Human Resources and
Administration, 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 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 the affiliated entities.

2.       BASE COMPENSATION. The Company shall pay the Employee as
compensation for her services a base salary at the annualized rate of
$180,000.00 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.

                                     -1-
<PAGE>

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 Committees of the Board (the "Target Incentive").
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 program 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 of 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 the Company's established
employee plans and policies at the time of termination.

6.       TERMINATION BENEFITS. Subject to Section 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 18 months after a Change of
Control, then the Employee shall be entitled to receive severance and other
benefits as follows:

         (a)     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 9 months following the date of termination (the
         "Termination Period").

         (b)     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.

         (c)     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.

         (d)     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 each gross up.

7.       DEFINITION OF TERMS. The following terms referred to in this
Agreement shall have the following meanings:

         (a)     CAUSE "Cause" shall mean (1) 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, and (iv)
         continued violations by the Employee of the Employee's obligations
         under Section 1 of this Agreement that

                                     -2-
<PAGE>

are demonstrably willful and deliberate on the Employee's part 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:

                 (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, or the approval by the stockholders of the
                 Company of a plan of complete liquidation of the Company or of
                 an agreement for the sale or disposition by the Company of all
                 or substantially all the Company's assets.

         (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 the 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 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

                                     -3-
<PAGE>
         location, without the Employee's express written consent, (vi) any
         purported termination of the Employee by the Company which is not
         affected for death or Disability or for Cause, or any purported
         termination for which the grounds relied upon are not valid; or (vii)
         the failure of the Company to obtain the assumption of this agreement
         by any successors  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.

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 this 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

                                     -4-
<PAGE>

         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, divisees 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.

         (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
         make 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.
         Judgement may be entered on the arbitrator's award in any court
         having jurisdiction. The Company and the Employee shall each pay
         one-half of the costs and expenses of such arbitration, and each
         shall separately pay its counsel fees and expenses.  Punitive
         damages shall not be awarded.

         (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.

                                     -5-
<PAGE>

         (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.

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:     Robert P. Akins

                                  Title:  Chairman of the Board,
                                          Chief Executive Officer and President

                                  /s/ Robert P. Akins
                                  ---------------------------------

EMPLOYEE:                         /s/ Wallace E. Breitman
                                  ---------------------------------
                                      Wallace E. Breitman

                                     -6-

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