Exhibit 10.1

 

SUPPLEMENTAL RETIREMENT PLAN

OF VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC.

2005 RESTATEMENT

SECTION 1: ESTABLISHMENT AND PURPOSE OF THE PLAN

The Plan was established by the Company effective as of the “Spinoff Date,”
which is the effective date of the establishment of the Company as a public
corporation separate from Varian Associates, Inc. The purpose of the Plan is to
provide deferred compensation consisting of (a) allocations of Matching
Contributions that exceed the amounts that the Retirement Plan formula and the
Dollar Limitations permit to be allocated under the Retirement Plan and
(b) Profit Sharing Contributions that exceed the amounts that the Dollar
Limitations permit to be allocated under the Retirement Plan. The Plan has been
restated in this 2005 Restatement with the intention of complying with the
provisions of Section 409A of the Code and shall be operated and construed in
accordance with such intent. This 2005 Restatement shall be effective as of
January 1, 2005.

Capitalized terms used in the Plan are defined herein or, if not, are defined in
the Retirement Plan.

SECTION 2: ELIGIBILITY AND PARTICIPATION

Participation in the Plan shall be limited to:

(a) Officers of the Company; and

(b) Any other participant in the Retirement Plan who is designated by the
Committee.

SECTION 3: RESERVE ACCOUNTS AND CREDITS

(a) Reserve Account. The Company shall establish on its books a special unfunded
Reserve Account for each Participant. As of each December 31, the Company shall
credit interest on the balance in each Reserve Account (not including any
amounts credited under Subsections (b) and (c) below for the calendar year then
ending). The interest credited to the Reserve Account shall be at a rate equal
to the long-term applicable federal rate for December, plus two percentage
points.

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(b) Matching Contributions. As of each December 31, for each Participant -, the
Company shall credit to a Participant’s Reserve Account an amount determined as
follows:

(i) First, the hypothetical amount of the Participant’s Matching Contribution
for the Plan Year ended immediately prior to such December 31 crediting date
shall be calculated, based on the assumptions (A) that the Dollar Limitations do
not apply and (B) that the Matching Contribution formula equals 9.5% of the
Participant’s Eligible Earnings;

(ii) Second, the amount calculated under Paragraph (i) above shall be reduced
(but not below zero) by the – maximum amount of the Participant’s Matching
Contribution that would have been made for the Plan Year if the Participant had
made the maximum possible contribution to the Retirement Plan; and

(iii) The remainder (if any) shall be the amount credited to the Participant’s
Reserve Account under this Subsection (b).

(c) Profit-Sharing Contributions. As of the close of each Plan Year for which
the Company makes a Profit-Sharing Contribution under the Retirement Plan, the
Company shall credit to a Participant’s Reserve Account an amount determined as
follows:

(i) First, the hypothetical amount of the Participant’s share of the
Profit-Sharing Contribution shall be calculated, based on the assumption that
the Dollar Limitations do not apply;

(ii) Second, the amount calculated under Paragraph (i) above shall be reduced
(but not below zero) by the actual amount of the Participant’s share of the
Profit-Sharing Contribution; and

(iii) The remainder (if any) shall be the amount credited to the Participant’s
Reserve Account under this Subsection (e).

(d) Vesting. A Participant’s Reserve Account shall become vested and
nonforfeitable at the same time and to the same extent as the Participant
becomes vested in his or her Company contributions accounts under the Retirement
Plan. A Participant’s Reserve Account shall be divided into subaccounts to the
extent necessary to allocate interest credits properly between vested and
nonvested portions of the Participant’s Plan benefit.

(e) Effect of Termination of Employment on Reserve Account Crediting. If a
Participant is otherwise entitled to have an amount credited to his or her
Reserve Account under Subsection (a), (b) or (c), but the Participant’s
employment with the Company and its subsidiaries terminates before the crediting
date, such amount shall nevertheless be credited to his or her Reserve Account.

 

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SECTION 4: DISTRIBUTIONS

(a) In General. Following the termination of a Participant’s employment with the
Company and its subsidiaries, the Company shall pay to the Participant the
vested balance credited to his or her Reserve Account as follows:

(i) Payments under this Section 4(a) shall be made begun as soon as
administratively feasible after the date the Participant terminates employment
(the “Date of Termination”); provided, however, if a Participant is a “specified
employee” as defined in Section 409A(a)(2)(B)(i) of the Code, the commencement
of the delivery of any payments under this Section 4 (a) will be delayed to the
date that is 6 months after the Participant’s Date of Termination (the “Earliest
Payment Date”). Any payments that are delayed pursuant to the preceding sentence
shall be paid on the Earliest Payment Date.

(ii) Payment of amounts payable under this Section 4(a) shall be made in the
form of cash installments, payable quarterly, over a period of 15 years. The
amount of any installment payment to be distributed from a Reserve Account shall
be determined by dividing the vested balance remaining in such Reserve Account
by the number of installments then remaining to be distributed. Notwithstanding
the preceding provisions, a Participant may elect before December 31, 2005 to
have the vested balance in his or her Reserve Account as of December 31, 2005
paid to him or her in the form of a lump sum or quarterly installments over a
period of five years. Beginning with deferrals for the 2006 and later Plan
Years, a Participant may elect to have the credits made to his or her Reserve
Account for such Plan Year paid to him or her in the form of a lump sum or
quarterly installments over a period of five years. A different election may be
made for each such Plan Year. An election for a Plan Year must be made no later
than December 31 of the prior Plan Year.

(iii) A Participant may elect to change the form of payment only if the election
is made more than 12 months before the first payment is to be made and defers
the date of payment for at least five years.

(b) Accelerated Payment in Case of Disability or Unforeseeable Emergency. In the
event of a Participant’s Disability or an Unforeseeable Emergency, upon
application by the Participant, the Committee may determine in its sole
discretion that distribution of all or a portion of the Participant’s vested
Reserve Account shall be made in a different form or on an earlier date than
provided for in Subsection (a) (including, in the case of Unforeseeable
Emergency, a date prior to the Participant’s termination of employment).
Distributions on account of an Unforeseeable Emergency shall be permitted only
to the extent reasonably needed to satisfy the Participant’s emergency need
(which may include amounts necessary to pay any Federal, state, or local income
taxes or penalties reasonably anticipated to result from the distribution), but,
in any case, a distribution on account of unforeseeable emergency may not be
made to the extent that such emergency is or may be relieved through
reimbursement or compensation from insurance or otherwise, or by liquidation of
the Participant’s assets, to the extent the liquidation of such assets would not
cause severe financial hardship.

 

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(c) Death of the Participant. In the event of a Participant’s death before the
entire vested Reserve Account has been distributed to him or her, the unpaid
vested balance remaining in the Participant’s Reserve Account shall be paid to
his or her beneficiary or beneficiaries under the Retirement Plan, in a lump sum
as soon as administratively feasible.

(d) Change in Control. In the event of a change in the ownership or effective
control of the Company or a change in the ownership of a substantial portion of
the assets of the Company, as determined under guidance published by the U.S.
Department of the Treasury, each Participant’s Reserve Account shall become
fully vested and shall be distributed no later than 12 months after such event.

(e) No Acceleration. Except as otherwise provided in this Section 4, the time
for payment of a Participant’s Reserve Account shall not be accelerated.

SECTION 5: NO FUNDING

The Plan shall be unfunded and shall represent an unsecured obligation of the
Company. Benefits hereunder shall be paid only from the general assets of the
Company, and the Participants shall have no rights to any segregated funds or
property of the Company and shall have no rights greater than those of an
unsecured general creditor of the Company.

SECTION 6: ADMINISTRATION

The Plan shall be administered by the Committee (or its delegate). The Committee
shall make such rules, interpretations, and computations as it may deem
appropriate. Any decision of the Committee with respect to the Plan, including
(without limitation) any determination of eligibility to participate in the Plan
and any calculation of benefits hereunder, shall be conclusive and binding on
all persons.

SECTION 7: CLAIMS AND REVIEW PROCEDURES

(a) Application for Benefits. Any application for benefits under the Plan shall
be submitted to the Committee at the Company’s principal office. Such
application shall be in writing and on the prescribed form, if any, and shall be
signed by the applicant.

(b) Denial of Applications. In the event that any application for benefits is
denied in whole or in part, the Committee shall notify the applicant in writing
of the right to a review of the denial. Such written notice shall set forth, in
a manner calculated to be understood by the applicant, specific reasons for the
denial, specific references to the Plan provisions on which the denial was
based, a description of any information or material necessary to perfect the
application, an explanation of why such material is necessary, and an
explanation of the Plan’s review procedure. Such written notice shall be given
to the applicant within 90 days after the Committee receives the application,
unless special circumstances require an extension of time for processing the
application. In no event shall such an extension exceed a period of 90 days from
the end of the initial 90-day period. If such an extension is required, written
notice thereof shall be furnished to the applicant before the end of the initial
90-day period. Such notice shall indicate the special circumstances requiring an
extension of time and the date by which the Committee expects to render a
decision. If written notice is not given to the applicant within the period
prescribed by this Section 7(b), the application shall be deemed to have been
denied for purposes of Section 7(c) upon the expiration of such period.

 

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(c) Request for Review. Any person whose application for benefits is denied in
whole or in part (or such person’s duly authorized representative) may appeal
the denial by submitting to the Committee a request for a review of such
application within 90 days after receiving written notice of denial. The
Committee shall give the applicant or such representative an opportunity to
review pertinent documents (except legally privileged materials) in preparing
such request for review and to submit issues and comments in writing. The
request for review shall be in writing and shall be addressed to the Committee
at the Company’s principal office. The request for review shall set forth all of
the ground on which it is based, all facts in support of the request, and any
other matters which the applicant deems pertinent. The Committee may require the
applicant to submit such additional facts, documents, or other material as it
may deem necessary or appropriate in making its review.

(d) Decision on Review. The Committee shall act upon each request for review
within 60 days after receipt thereof, unless special circumstances require an
extension of time for processing, but in no event shall the decision on review
be rendered more that 120 days after the Committee receives the request for
review. If such an extension is required, written notice thereof shall be
furnished to the applicant before the end of the initial 60-day period. The
Committee shall give prompt, written notice of its decision to the applicant and
to the Company. In the event that the Committee confirms the denial of the
application for benefits in whole or in part, such notice shall set forth, in a
manner calculated to be understood by the applicant, the specific reasons for
such denial and specific references to the Plan provisions on which the decision
is based. To the extent that the Committee overrules the denial of the
application for benefits, such benefits shall be paid to the applicant.

(e) Rules and Procedures. The Committee shall adopt such rules and procedures,
consistent with ERISA and the Plan, as it deems necessary or appropriate in
carrying out its responsibilities under this Section 7.

(f) Exhaustion of Administrative Remedies. No legal or equitable action for
benefits under the Plan shall be brought unless and until the claimant (i) has
submitted a written application for benefits in accordance with Section 7(a),
(ii) has been notified that the application is denied, (iii) has filed a written
request for a review of the application in accordance with Section 7(c), and
(iv) has been notified in writing that the Committee has affirmed the denial of
the application; provided, however, that an action may be brought after the
Committee has failed to act on the claim within the time prescribed in
Section 7(b) and Section 7(d), respectively.

SECTION 8: AMENDMENT AND TERMINATION

The Company expects to continue the Plan indefinitely. Future conditions,
however, cannot be foreseen, and the Company shall have the authority to amend
or terminate the Plan at any time. The Company shall also have the authority to
distribute all or a portion of any Participant’s Reserve Account at any time,
regardless of whether the Plan is then being terminated. In the event of an
amendment or termination of the Plan, the amount of a Participant’s benefits
hereunder shall not be less than the amount to which the Participant would have
been entitled if his or her employment had terminated immediately prior to such
amendment or termination.

 

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SECTION 9: EMPLOYMENT RIGHTS

Nothing in the Plan shall be deemed to give any person a right to remain in the
employ of the Company or of any of its subsidiaries. The Company and its
subsidiaries reserve the right to terminate any person’s employment, with or
without cause.

SECTION 10: NO ASSIGNMENT

The rights of any person to payments or benefits under the Plan shall not be
transferable nor 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. Any act in
violation of this Section shall be void.

SECTION 11: APPLICABLE LAW

The validity, interpretation, construction, and performance of the Plan shall be
governed by ERISA, and by the laws of the State of Massachusetts to the extent
that they have not been preempted by ERISA.

SECTION 12: DEFINITIONS

(a) “Code” means the Internal Revenue Code of 1986, as amended. Reference to a
specific section of the Code shall include such section, any valid regulation
promulgated thereunder, and any comparable provision of any future legislation
amending, supplementing or superseding such section.

(b) “Committee” means the Compensation Committee of the Company’s Board of
directors.

(c) “Company” means Varian Semiconductor Equipment Associates, Inc., a Delaware
corporation.

(d) “Compensation Ceiling” means the limitation described in section 401(a)(17)
of the Code, adjusted as prescribed by the Code. The Compensation Ceiling for
plan years beginning in 2005 is $210,000.

(e) “Disability” means the participant (A) is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, (B) is, by reason of
any medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, receiving income replacement benefits for a period of not less
than three months under an accident and health plan covering employees of the
Company, or (C) has been determined to be totally disabled by the Social
Security Administration.

 

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(f) “Dollar Limitations” means (i) the Compensation Ceiling and (ii) the
limitation on annual additions described in section 415(c)(1) of the Code,
adjusted in each case as prescribed by the Code.

(g) “Eligible Earnings” shall have the meaning given to such term in the
Retirement Plan, except that Eligible Earnings for purposes of this Plan shall
not be subject to the Compensation Ceiling.

(h) “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended. Reference to a specific section of ERISA shall include such section,
any valid regulation promulgated thereunder, and any comparable provision of any
future legislation amending, supplementing or superseding such section.

(i) “Participant” means an individual who is eligible to participate in the Plan
pursuant to Section 2 above and for whose benefit an amount is credited to a
Reserve Account pursuant to Section 3 above.

(j) “Plan” means this Supplemental Retirement Plan of Varian Semiconductor
Equipment Associates, Inc., as amended from time to time.

(k) “Plan Year” means the Retirement Plan’s Plan Year.

(l) “Reserve Account” means the unfunded bookkeeping account described in
Section 3(a).

(m) “Retirement Plan” means the Varian Semiconductor Equipment Associates, Inc.
Retirement Plan, as amended from time to time.

(n) “Spinoff Date” means the effective date of the establishment of the Company
as a public corporation separate from Varian Associates, Inc.

(o) “Unforeseeable Emergency” means a severe financial hardship of the
Participant or beneficiary resulting from a sudden and unexpected illness or
accident of the Participant or beneficiary, the Participant’s or beneficiary’s
spouse, or the participant’s or beneficiary’s dependent (as defined in
Section 152(a) of the Code), from a loss of the Participant’s or beneficiary’s
property due to casualty or from other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Participant or beneficiary. A hardship shall not constitute an Unforeseeable
Emergency under the Plan to the extent that it is or may be relieved:

(i) Through reimbursement or compensation, by insurance or otherwise;

(ii) By liquidation of the Participant’s assets, to the extent that the
liquidation of such assets would not itself cause severe financial hardship; or

(iii) By discontinuing deferrals under this Plan or under any other plan of the
Company as soon as permissible.

 

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An Unforeseeable Emergency under the Plan shall in no event include the need to
send a child to college or the desire to purchase a home.

 

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