Exhibit 10.16

 

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[FORM OF 2011 MANAGEMENT INCENTIVE BONUS FOR NAMED EXECUTIVE OFFICERS]

PERSONAL & CONFIDENTIAL

      MKS MEMORANDUM

 

 

 

TO:   DATE:   APRIL 20, 2011 SUBJECT:   2011 MKS MANAGEMENT/KEY EMPLOYEE BONUS
PLAN

 

Attached is a copy of your 2011 MKS Bonus Plan (The Plan). This plan exists to
provide key managers and employees the opportunity to benefit financially while
improving MKS’ overall business performance. You have been included in the plan
because you are working in a position that allows you to exert influence over
how well MKS performs.

The 2011 Bonus Plan is intended to encourage us to make prudent choices about
how operations are conducted. The growth of MKS is dependent upon our making
decisions that constantly focus on achieving customer satisfaction while
maintaining sound fiscal control. While one person alone cannot change the
direction of any company, the combined decisions made by the participants in
this plan play an important part in influencing MKS’ overall business
performance. The measure of our business performance for The Plan will be MKS’
financial results. This year the financial metric used to calculate performance
for bonus achievement will be corporate Adjusted Operating Income. Adjusted
Operating Income for The Plan is defined as Operating Income excluding cost of
amortization and any unanticipated charges or income not related to the
operating performance of MKS.

The attached chart shows the payout of your target bonus as a function of
Adjusted Operating Income. Based on our business model and current expectations,
we have set a payout goal equal to 100% of your target bonus when our Adjusted
Operating Income reaches $200 million. As you can see from the attached chart,
you will start earning a payout under this bonus plan when Adjusted Operating
Income reaches $150 million. Your bonus payout will be 60% of target at Adjusted
Operating Income of $150 million, and you will receive the maximum bonus payout
of 200% of target at Adjusted Operating Income of $237.5 million.

As you well know it is difficult for us to look long-term into our industry so
your efforts to carefully weigh any expenses are very much appreciated.

NOTE: Your target bonus amount is XX1% of your 2011 eligible earnings.

This plan is confidential. Only a select group of individuals are eligible.
Neither this plan, nor the financial performance targets associated with it,
should be shared with anyone inside or outside the company.

 

1  Target bonus amounts in 2011 for Named Executive Officers were as follows:
Leo Berlinghieri – 100%; Gerald Colella – 70%; Seth Bagshaw and John Smith –
50%; John Lee – 55%

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PERSONAL & CONFIDENTIAL

MKS MEMORANDUM

2011 Annual Management/Key Employee Bonus Plan

Based on Adjusted Operating Income

(January 1 – December 31)

The payout of your bonus will be achieved according to the schedule shown in the
chart below. For example, you will receive 80% of your target bonus if our
Adjusted Operating Income reaches $175 million and 100% of your target bonus if
Adjusted Operating Income reaches $200 million. At an Adjusted Operating Income
of $237.5 million or more, you will receive 200% of your target corporate bonus.

 

ANNUAL BONUS   Adjusted Operating Income    Bonus Payout
(percentage of
target)  

<$150,000,000

     0 % 

$150,000,000

     60 % 

$175,000,000

     80 % 

$200,000,000

     100 % 

$207,500,000

     125 % 

$215,000,000

     150 % 

$222,500,000

     175 % 

>=$237,500,000

     200 % 

This information is extremely confidential and should be treated as such. Please
do not share this information with anyone inside or outside of

MKS Instruments, Inc.

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2011 MKS Management/Key Employee Bonus Plans

The MKS Annual Bonus Plan (The Plan) is based on fiscal year performance
(January through December). Performance measurements are set at the beginning of
the fiscal year.

Plan participants have 100% of their bonus tied to achievement of corporate
goals.

Participation/Approval:

Participation in the Plan requires the approval of the most senior individual in
each organization as well as Human Resources and the Chief Executive Officer and
President. Participation in the plan is reviewed on an annual basis.

Target:

Bonus target guidelines are established for positions as a percentage of pay.

Payout:

The bonus payout amount is a percentage of eligible W-2 earnings received during
the plan period, i.e. “base salary” including regular, holiday, vacation, sick,
and retro pay. Bonus payments attributable to the prior year are excluded from
this calculation.

Administration:

Bonus payout is made as soon as possible after the end of the fiscal year and
the performance assessment has been completed, but in no event later than
March 15 of the subsequent year.

Note: In order to receive the bonus payment the plan participant must be
actively employed as of the payout date of The Plan.

MKS reserves the right to change the plan at any time, subject to senior
management discretion. In no way does this plan create a contract of employment.