Document:

Exhibit 10.2

[WEST LETTERHEAD]

[DATE]

Dear
[Plan Participant]:

Congratulations.  On February 27,
2007, the Compensation Committee of our Board of Directors granted you the
following stock option and performance-vesting share units.

	
  

  	
  Stock Option Award:

  	
  [_____________]

  
	
   

  	
   

  	
   

  
	
   

  	
  Target PVS Units:

  	
  [_____________]

  

 

The awards were made under the terms of our 2004 Stock-Based
Compensation Plan.  We have attached a
summary of the terms of your awards. 
Please read it carefully.

I am pleased that you are a participant in this long-term incentive
compensation program and trust that your participation will be beneficial to
both you and the Company.

	
  

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Richard D. Luzzi

  
	
   

  	
  Vice President, Human Resources

  

 

RDL/rm

Enclosure

Summary of Your Stock
Options

 

What is a stock option?

A
stock option is the right to purchase a fixed number of shares at a set
exercise price.  The option granted by
this award is a non-qualified stock option. 
The stock option gains value when the price of our common stock exceeds
the exercise price.

How many shares may I purchase and what is the price?

The
number of shares you may purchase and the exercise price are as follows:

	
  Exercise Price

  	
   

  	
  Total shares that may be 

  purchased upon exercise

  
	
  $44.97

  	
   

  	
   

  

 

May I purchase the shares immediately?

No.  So long as your employment with us continues,
25% of your option becomes exercisable — or “vests” — each year for the first
four years following the grant date.  At
the end of the four-year period, you may exercise the entire option.  The following chart shows when and what
portion of your option becomes exercisable.

	
  Date

  	
   

  	
  Portion of the option

  that becomes exercisable

  
	
  February 27, 2007 (grant date)

  	
   

  	
  0%

  	
   

  
	
  February 27, 2008

  	
   

  	
  25%

  	
   

  
	
  February 27, 2009

  	
   

  	
  50%

  	
   

  
	
  February 27, 2010

  	
   

  	
  75%

  	
   

  
	
  February 27, 2011 and thereafter

  	
   

  	
  100%

  	
   

  

 

When will my option expire?

The
option expires on February 27, 2017, which will be referred to as the
“Expiration Date.”  This means that once it
becomes exercisable, the option may be exercised until
February 26, 2017.  In addition,

·        if you
die, the option will remain exercisable for one year from your date of death;

·        if your
employment terminates for any reason other than retirement, disability, death
or removal for cause, the option will expire on 60 days after the termination
date;

 1
 

 

·        if we
terminate your employment for cause, the option will expire on the commencement
of business on your date of termination.

How do I exercise my stock option?

There
are four ways to exercise a stock option.

·        Cash.  You
write a check to the Company for the exercise price, plus any applicable
withholding taxes.

·        Already
owned shares.  You may deliver (or have the Company
withhold) shares of common stock you own with a fair market value equal to the
exercise price, plus any applicable withholding taxes.

·        Combination
of shares and cash.  You may use a combination of cash and stock.

·        Reduction
of proceeds.  With the consent of the Committee, you may
elect to have shares you would otherwise receive upon the exercise reduced by
an amount equal to the total exercise cost divided by the fair market value of
the shares at the time of your exercise. 
In effect, you would receive the “net” shares otherwise due you after
deducting for the exercise cost, plus applicable withholding taxes.

Enclosed
with this award is an Information Sheet about Computershare, the Company’s
stock plan record keeper.  This contains
important additional information about how to exercise your Options.  Please review it carefully.

When do I have to pay for the exercise?

The
full exercise price and applicable taxes must be paid within three days of
exercise.

Are there any other restrictions on my ability to exercise my option?

All
option exercise transactions by West’s officers who are subject to Section 16
of the Securities and Exchange Act of 1934 must comply with the restrictions
contained in our Securities Trading Policy, including review by and written
pre-approval of our General Counsel.

Are there circumstances that would lead to a forfeiture of my award?

Yes,
in certain situations you must give up amounts you receive as a result of the
option you exercise.  These situations
are described below.

If
within (i) the term of the option or (ii) within 3 months following termination
of employment or (iii) within 3 months after you exercise any portion of the
option, whichever is the latest, you directly or indirectly engage in conduct
deemed to be any activity in competition with any activity of the Company, or
inimical, contrary or harmful to, or not in the best interests of, the Company
or if you fail to comply with any of the terms and conditions of the Plan or
this award (unless the failure is remedied within ten days after having been
notified of such failure), then any and all rights to exercise this option will
terminate and you must pay us an amount equal to any gain realized by you from
exercising all or any portion of this option.

 2
 

 

We
may also deduct from any amounts we owe you, such as amounts owed as wages or
other compensation, fringe benefits, or vacation paid.  Whether or not we elect to make any
deduction, if we do not recover the full amount you owe, you agree to pay us
immediately the unpaid balance.  By
agreeing to accept this award, you consent to our right to make these
deductions.

Are there any other things I should be aware of?

This
is a summary of the terms of your stock option award.  Your award is subject to the terms of
the 2004 Stock-Based Compensation Plan. This award is being delivered with an Information Statement, which
gives additional information about your award and the 2004 Stock-Based
Compensation Plan under which it was granted. 
We encourage you to read the Information Statement.  Additional terms and conditions may apply to
your award under the terms of the Plan.

 

 3
 

Summary of Your
Performance-Vesting Share Unit Award

 

What is a performance-vesting share unit?

A
PVS Unit award represents the conditional right to receive a distribution of
shares.  The number of shares you will
receive depends on how well the Company’s actual performance compares to
specified performance goals at the end of the performance period.      

What are the performance goals?

The
performance levels are based on two equally weighted performance measures.  The two measures of corporate performance
are:

·        Average
return on invested capital — also called “ROIC” — is measured by dividing the
average of the Company’s net operating profit (without regard to taxes) over
the performance period by the average outstanding equity plus debt over that
period.

·        Compounded
annual revenue growth — also called “CAGR” — is the compound annual growth rate
in net sales for the Company over the same period.

What is the performance period?

The
Company’s performance against the goals is measured over a three-year period
that begins January 1, 2007 and ends December 31, 2009.

Your
target PVS Units award presented on the first page of this letter  is the number of shares of West Common Stock that you would
receive if the Company obtains 100% of both of the ROIC and CAGR performance
targets.  Additional shares of Common
Stock will be distributable under this PVS award if actual performance exceeds
the target performance level, and fewer shares of Common Stock will be
distributable if actual performance falls short of the target performance
level.  No shares of  Common
Stock  will be paid out  if
actual performance falls below the minimum acceptable level.

The
following table shows the performance targets for CAGR and Average ROIC and the
corresponding PVS Units payouts for Performance
Period VI.

	
  

  	
   

  	
   

  	
   

  	
  CAGR

  	
   

  	
  Average ROIC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   (applies to 50% of PVS Units)

  	
   

  	
   (applies to 50% of PVS Units)

  	
   

  
	
  Performance

  	
   

  	
  Range

  	
   

  	
  Performance

  	
   

  	
  Payout

  	
   

  	
  Performance

  	
   

  	
  Payout

  	
   

  
	
  Maximum:

  	
   

  	
  150

  	
  %

  	
  15

  	
  %

  	
  200

  	
  %

  	
  15

  	
  %

  	
  200

  	
  %

  
	
   

  	
   

  	
  125

  	
  %

  	
  12.5

  	
  %

  	
  150

  	
  %

  	
  12.5

  	
  %

  	
  150

  	
  %

  
	
   

  	
   

  	
  110

  	
  %

  	
  11

  	
  %

  	
  120

  	
  %

  	
  11

  	
  %

  	
  120

  	
  %

  
	
  Target:

  	
   

  	
  100

  	
  %

  	
  10

  	
  %

  	
  100

  	
  %

  	
  10

  	
  %

  	
  100

  	
  %

  
	
   

  	
   

  	
  85

  	
  %

  	
  8.5

  	
  %

  	
  75

  	
  %

  	
  8.5

  	
  %

  	
  75

  	
  %

  
	
  Threshold:

  	
   

  	
  70

  	
  %

  	
  7.0

  	
  %

  	
  50

  	
  %

  	
  7.0

  	
  %

  	
  50

  	
  %

  
	
  Less than 70%:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  -0-

  	
   

  	
   

  	
   

  	
  -0-

  	
   

  

 

If
actual CAGR or ROIC falls between any of the performance range percentages
above, the payout for that portion of your PVS Units will be determined by
applying a mathematical formula to estimate the value based on the two nearest
percentages.  For more information on the
calculation, please see below.

 4
 

Can my award be changed?

Yes,
the Committee can change or revise the targets as it considers
appropriate.  In the event of
acquisitions or divestitures the Committee will on a case-by-case basis
determine the necessity to change or revise the performance targets.

When will I know how many shares I will receive?

The
shares will be distributed to you in early 2010 after the ROIC and CAGR for the
performance period is calculated. This will be done by the Compensation
Committee after review of the Company’s audited financial statements.

Will I receive dividends on my PVS Units?

During
the Performance Period, your account will be credited with additional PVS Units
as if the target PVS Units award had been reinvested in dividends paid on
Common Stock during the period.  At the
end of the Performance Period, you may receive additional shares of Common
Stock equal to the amount of PVS Units credited through this
dividend-reinvestment feature.

May I defer receipt of my shares?

Yes.  Delivery of shares upon payout may be
deferred under the Deferred Compensation Plan for participants in certain
countries.  We will provide details on
the deferral opportunity before the end of each Performance Period.  You may similarly defer receipt of additional
shares you would otherwise receive.

Are there circumstances under which my right to receive shares would
terminate?

You will not be
entitled to receive a distribution with respect to any PVS Units granted by
this award if:

1.                     Your
employment terminates for any reason before the end of Performance Period ; or

2.                     If
at any time during your employment or within 3 months following termination of
your employment, you directly or indirectly engage in activity harmful to, or
not in the best interest of, the Company. 
Such activity includes, without limitation:

·        conduct
related to your employment for which either criminal or civil penalties against
you may be sought;

·        acquisition
of a direct or indirect interest or an option to acquire such an interest in any
person or entity engaged in competition with the Company’s business (other than
an interest of not more than 5 percent of the outstanding stock of any publicly
traded company);

·        accepting
employment with or serving as a director, officer, employee or consultant of,
or furnishing information to, or otherwise facilitating the efforts of, any
person or entity engaged in competition with the Company’s business;

 5
 

 

·        soliciting,
employing, interfering with, or attempting to entice away from the Company any
employee who has been employed by the Company in an executive or supervisory
capacity within one year before such solicitation, employment, interference or
enticement;

·        violation
of Company policies, including the Company’s insider-trading policy; or

·        using
for yourself or others, or disclosing to others, any confidential or
proprietary information of the Company in contravention of any Company policy
or agreement.

Are there any other things I should be aware of?

This is summary of your
PVS Unit award.  Your award is subject to
the terms of the 2004 Stock-Based Compensation Plan; provided, however, that
any amount that is payable in excess of your Target PVS Unit award will be
distributable under the 2007 Omnibus Incentive Compensation Plan if the Omnibus
Plan is approved by shareholders during our annual meeting on May 1, 2007.   This award is being delivered with an
Information Statement, which gives additional information about your award and
the 2004 Stock-Based Compensation Plan under which it is granted.  We encourage you to read the Information
Statement.  Additional terms and
conditions may apply to your award under the terms of the Plan.

 6Exhibit 10.1

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED
EMPLOYMENT AGREEMENT (the “Agreement”)
is made and entered into effective as of January 2, 2007 (“Effective
Date”) by and between CYMER,
INC., a Nevada corporation (the “Company”)
and the Company’s Vice President, Controller
and Chief Acccounting Officer, RAE
ANN  WERNER (the “Employee”).  This Agreement shall replace and supersede
that certain Employment Agreement between Employee and the Company entered into
effective as of May 1, 2003 (the “Original Employment Agreement”).

RECITALS

A.            The
Company and Employee previously entered into the Original Employment Agreement
and desire to amend and restate the Original Employment Agreement in its
entirety as set forth herein, effective as of the Effective Date.

B.            The
Company may from time to time need to address the possibility of an acquisition
transaction or change of control event. 
The Board of Directors of the Company (the “Board”)
recognizes that such events can be a distraction to the Employee and can cause
the Employee to consider alternative employment opportunities.  The Board has determined that it is in the
best interests of the Company and its stockholders to assure that the Company will
have the continued dedication and objectivity of the Employee, notwithstanding
the possibility, threat or occurrence of a Change of Control (as defined below)
of the Company, although no such Change of Control is now contemplated.

C.            The
Board believes that it is in the best interests of the Company and its
stockholders to provide the Employee with an incentive to continue the Employee’s
employment and to motivate the Employee to maximize the value of the Company
upon a Change of Control for the benefit of its stockholders.

D.            The
Board believes that it is imperative to provide the Employee with certain
benefits upon a Change of Control and, under certain circumstances, upon
termination of the Employee’s employment in connection with a Change of
Control, which benefits are intended to provide the Employee with financial
security and provide sufficient incentive and encouragement to the Employee to
remain with the Company notwithstanding the possibility of a Change of Control.

E.             To
accomplish the foregoing objectives, the Board has directed the Company, upon
execution of this Agreement by the Employee, to agree to the terms provided
herein.

F.             Certain
capitalized terms used in this Agreement are defined in Section 7 below.

AGREEMENT

In consideration of the mutual covenants herein
contained, and in consideration of the continuing employment of the Employee by
the Company, the parties agree as follows:

 1
 

1.             Duties and Scope of Employment.  The Company shall employ the Employee in the
position of Vice President, Controller and Chief
Acccounting Officer as such position has been defined in terms of
responsibilities and compensation as of the Effective Date of this Agreement; provided, however, that the Board shall have the right, at
any time prior to the occurrence of a Change of Control, to revise such
responsibilities and compensation as the Board in its discretion may deem
necessary or appropriate.  The Employee
shall comply with and be bound by the Company’s operating policies, procedures
and practices from time to time in effect during the Employee’s
employment.  During the term of the
Employee’s employment with the Company, the Employee shall continue to devote
the Employee’s full time, skill and attention to the Employee’s duties and
responsibilities, and shall perform them faithfully, diligently and
competently, and the Employee shall use the Employee’s best efforts to further
the business of the Company and its affiliated entities.

2.             Base Compensation.  The Company shall pay the Employee as
compensation for the Employee’s services a base salary, which as the Effective
Date of this Agreement is at the annualized rate of $240,394.18 (and
which may be modified from time to time in accordance with this Agreement, the “Base Compensation”).  The Base Compensation shall be paid
periodically in accordance with normal Company payroll practices.  The Board or the Compensation Committee of
the Board shall review the Base Compensation according to normal Company
practice, but no less frequently than annually, and may in its discretion
modify the Base Compensation but may not decrease the Base Compensation below
the dollar amount specified above, unless Employee consents to such reduction.

3.             Incentive Compensation. 
During the term of this Agreement, the Employee shall
be eligible to receive payments under the Company’s various incentive and bonus
programs as approved from time to time by the Board or the Compensation
Committee of the Board in either’s sole discretion.  Any payment payable thereunder shall be
payable in accordance with the applicable program and the Company’s normal
practices and policies.

4.             Employee Benefits.  The Employee shall be eligible to participate
in the employee benefit plans and executive compensation programs maintained by
the Company applicable to other key executives of the Company, including
(without limitation) retirement plans, savings or profit-sharing plans, stock
option, stock purchase or other equity plans, incentive bonus program, 3-year
bonus program or other long-term incentive programs, bonus programs, life,
disability, health, accident and other insurance programs, paid vacations, and
similar plans or programs, subject in each case to the generally applicable
terms and conditions of the applicable plan or program in question and to the
sole determination of the Board or any committee administering such plan or
program.

5.             Employment Relationship.  The Company and the Employee acknowledge that
the Employee’s employment is and shall continue to be at-will, as defined under
applicable law.  If the Employee’s
employment terminates for any reason, the Employee shall not be entitled to any
payments, benefits, damages, awards or compensation other than as provided by
this Agreement, or as may otherwise be available in accordance with any Company
plan or policy approved by the Board.

 2
 

6.             Termination Benefits.

(a)           Subject to Sections
8 and 9 below, in the event the Employee’s employment terminates as a result of
an Involuntary Termination other than for Cause upon or within eighteen (18)
months after a Change of Control, then the Employee shall be entitled to
receive severance and other benefits pursuant to this Section 6.   Notwithstanding the foregoing, Employee
shall not be entitled to receive any severance or other benefits pursuant to
this Section 6 if the Board, as constituted prior to the Change in Control,
determined that Employee was demoted by the Company to a position not eligible
for an Employment Agreement prior to the Change of Control from the position
held by Employee as of the Effective Date. 
The foregoing determination may be made at any time by the Board prior
to a Change in Control, shall be made in the Board’s sole discretion, and shall
be binding and conclusive on all persons, including Employee.

(i)            Pay Continuation.  The Employee shall be entitled to monthly payments
equal to (A) one-twelfth (1/12) of the greater of the Base Compensation in
effect immediately prior to the Change of Control and the Base Compensation in
effect immediately prior to such termination plus (B) one-thirty-sixth (1/36)
of the aggregate amounts paid to the Employee under the Company’s bonus and
incentive programs with respect to the three previous calendar years.  Such monthly payments shall be paid according
to the normal payroll practice of the Company for 12
months following the date of termination (the “Termination
Period”).

(ii)           Incentive Payments.

(1)           The Employee shall
be entitled to receive a percentage of each of the Employee’s Target Incentives
for any on-going calendar period in which such termination occurs.  Such percentage shall equal a fraction, the
numerator of which shall be the number of days in such calendar period up to
and including the date of such termination and the denominator of which shall
be the number of days in such calendar period. 
Such amount shall be payable according to the normal practice of the
Company with respect to the payment of such compensation.  “Target Incentive” shall mean the maximum
amount payable to the Employee at the end of a calendar period under any
Company bonus or incentive program if all of such program’s corporate and
individual performance objectives for that period are met.  “Target Incentive” does not include amounts
payable under the Company’s 3-year bonus program.

(2)           The unvested
portion of any bonus accrued for Employee under the Company’s 3-year bonus
program shall vest and become payable in full in a lump sum as soon as
administratively practicable following the date of termination.

(iii)         Equity Awards.  The unvested portion of any stock option(s)
or other equity award(s) held by the Employee under the Company’s equity plans
shall vest and become exercisable in full upon the date of such
termination.  The Employee shall be
entitled to exercise all of the Employee’s vested stock options until the later
of (A) the original post-termination exercise period provided in the Employee’s
stock option agreement or (B) one year from the date of such termination (but
not beyond the original contractual life of the option); provided,
however, that notwithstanding the foregoing, with respect to each
stock option granted to the Employee before the Effective Date of this
Agreement, such stock option shall not remain exercisable beyond the later of
the fifteenth (15th) day of the third (3rd) month following the date at which,
or December 31 of the calendar year in which, the stock option would otherwise
have expired if the stock option had not been extended, based on the terms of
the stock option at

 3
 

the original grant date,
or such later date that would not cause such option to be treated as deferred
compensation under 409A of the Code (as defined below).

(iv)          Medical Benefits.  Assuming the Employee timely and accurately
elects to continue his health insurance benefits under the Consolidated Omnibus
Budget Reconciliation Act of 1985 (“COBRA”), the Company shall pay the COBRA
premiums for the Employee [and his or her qualified
beneficiaries] until the earliest of (i) the end of the Termination
Period, (ii) the expiration of the Employee’s continuation coverage under COBRA
and any applicable state COBRA-like statute that provides mandated continuation
coverage or (iii) the date the Employee becomes eligible for health insurance
benefits of a subsequent employer.

(b)           In the event the
Employee voluntarily resigns employment with 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 the
Employee’s 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 the Employee’s 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
is controlled by 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 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 to the Board with the affirmative votes of at least a majority of the
Incumbent Directors at the time of such election or (C) are nominated for
election to the Board by a committee of the Board, at least a majority of whose
members are Incumbent Directors at the time of such nomination (but in each
case 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

 4
 

(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 the Employee’s duties under this Agreement
as the result of the Employee’s 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 any 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 fifty (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 termination 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 termination benefits being subject to 

 5
 

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
termination benefits under this Agreement, notwithstanding that all or some
portion of such termination 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(a)(iii)) 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)           Any determination
required under this Section 8 shall be made in writing by a nationally
recognized accounting or consulting firm appointed by the Company, which firm
shall not then be serving as accountant or auditor for or consultant to the
Company or the person or entity that effected the Change in Control and whose
determinations 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, such firm 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 such firm such information and
documents as such firm may reasonably request in order to make a determination
under this Section 8.  The Company shall
bear all costs such firm may reasonably incur in connection with any
calculations contemplated by this Section 8.

9.             Application of Code Section 409A.  If the Company determines that any
termination benefit provided in Section 6 fails to satisfy the distribution
requirement of Section 409A(a)(2)(A) of the Code as a result of Section
409A(a)(2)(B)(i) of the Code, the payment of such benefit shall be accelerated
to the minimum extent necessary so that the benefit is not subject to the
provisions of Section 409A(a)(1) of the Code. 
(It is the intention of the preceding sentence to apply the short-term
deferral provisions of Section 409A of the Code, and the regulations and other
guidance thereunder, to the termination benefits, and the payment schedule as
revised after the application of the preceding sentence shall be referred to as
the “Revised Payment Schedule.”)  If
there is no Revised Payment Schedule that would avoid the application of
Section 409A(a)(1) of the Code, the payment of such benefits shall not be paid
pursuant to a Revised Payment Schedule and instead shall be delayed to the
minimum extent necessary so that such benefits are not subject to the
provisions of Section 409A(a)(l) of the Code (e.g.,
payments to which Employee would otherwise be entitled during the first six
months following separation from service shall accumulate and be paid at the
expiration of such period,

 6
 

unless a permitted distribution event occurs during
such period).  The Board or the
Compensation Committee of the Board may attach conditions to or adjust the
amounts paid pursuant to this Section 9 to preserve, as closely as possible,
the economic consequences that would have applied in the absence of this
Section 9; provided, however, that no such
condition or adjustment shall result in the payments being subject to Section
409A(a)(1) of the Code.

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.

(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.  This Agreement represents the Company’s and
the Employee’s entire understanding with respect to the subject matter
contained herein and supersedes all previous understandings, written or oral
between the Company and the Employee concerning the subject matters of this
Agreement, including but not limited to the Original Employment Agreement.

 7
 

(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: (i)
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
(ii) 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(f) 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.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

 8

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:

  	
  /s/ Robert P. Akins

  
	
   

  	
   

  	
  Title:

  	
  CEO.

  
	
   

  	
   

  	
  Date:

  	
  April 19, 2007

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Employee:

  	
   

  	
  /s/ Rae Ann Werner

  
	
   

  	
   

  	
  Rae Ann Werner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
  April 19, 2007

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