exv10w28





Exhibit
10.28


Whereas, MKS Instruments, Inc. (“the “Company”) and Gerald G. Colella (“Employee”) have entered
into an employment agreement dated April 25, 2005, Appendix A of which includes deferred
compensation benefits, and



Whereas, such deferred compensation benefits are subject to the provisions of Internal Revenue Code
Section 409A, and



Whereas Appendix A has been administered in accordance with the provisions of Section 409A as of
January 1, 2005, and



Whereas, Appendix A must be formally amended in writing on or before December 31, 2008, to
incorporate applicable provisions of Section 409A in order to avoid potentially adverse tax
consequences to Employee,



Now, therefore, in accordance with Section 16 of Appendix A, the Company and Employee hereby agree
that Appendix A of the Agreement is amended in its entirety to read as follows, effective as of
November 10, 2008:



APPENDIX A

Supplemental Retirement Benefits




1. Purpose. (a) General: The purpose of this Appendix A is to provide Employee
with supplemental retirement benefits to encourage his continued employment with the Corporation.
Benefits will be payable only if Employee fully complies with all of the requirements of this
Appendix A.



(b) For Benefit of Employee Only: Benefits under this Appendix A are provided for the
benefit of Employee only. No other employee shall accrue any rights of any kind as a result of the
existence of the arrangement described in this Appendix A. Supplemental retirement benefits may be
provided to an employee only as specifically authorized by the Board of Directors of the
Corporation.



(c) Internal Revenue Code Section 409A: The provisions of this Appendix A shall be
interpreted in a manner consistent with the requirements of Section 409A of the Internal Revenue
Code.



2. Definitions. As used in this Appendix A, the following terms have the meanings set
forth below, unless a different meaning is required by the context:



 








 





2.1. “Actuarially Equivalent” means a benefit of equivalent value to another benefit,
determined on the following basis:




Interest Rate: The average annual interest rate on 10-year Treasury securities as
published by the Federal Reserve for the calendar quarter immediately preceding the calendar
quarter in which the actuarially equivalent benefit is being determined plus 25 basis
points; and




Mortality: The most recent “applicable mortality table” prescribed by Section
417(e)(3)(A)(ii) of the Internal Revenue Code (or a successor provision as determined by the
Corporation).



2.2. “Base salary” means base salary as defined in the Employment Agreement, before any
pre-tax salary reductions for participation in any benefits plan of the Corporation.



2.3. “Beneficiary” means one or more persons, trusts, estates or other entities,
designated by Employee to receive death benefits under Section 6.1(b) of this Appendix A upon
Employee’s death. If Employee fails to designate a Beneficiary or if all designated Beneficiaries
predecease Employee, then such death benefits shall be payable to the executor or personal
representative of Employee’s estate.



Employee shall designate his Beneficiary by completing and signing a beneficiary designation form
prescribed by the Corporation, and returning it to the Corporation or its designated agent.
Employee shall have the right to change a Beneficiary by completing, signing and otherwise
complying with the terms of the beneficiary designation form and the Corporation’s rules and
procedures, as in effect from time to time. Upon the acceptance by the Corporation of a new
beneficiary designation form, all Beneficiary designations previously filed shall be canceled. The
Corporation shall be entitled to rely on the last beneficiary designation form filed by Employee
and accepted by the Corporation prior to his or her death. No designation or change in designation
of a Beneficiary shall be effective until received and acknowledged in writing by the Corporation
or its designated agent. If the Corporation has any doubt as to the proper Beneficiary to receive
payments pursuant to this Appendix A, the Corporation shall have the right, exercisable in its
discretion, to withhold such payments until this matter is resolved to the Corporation’s
satisfaction.



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2.4. “Bonus” means a bonus paid under the Corporation’s Management Incentive Program.



2.5. “Change in Control” means the first to occur of any of the following events:




(a) Any “person” (as that term is used in Section 13 and 14(d)(2) of the Securities Exchange
Act of 1934 (“Exchange Act”)) becomes the beneficial owner (as that term is used in Section
13(d) of the Exchange Act), directly or indirectly, of fifty percent (50%) or more of the
Company’s capital stock entitled to vote in the election of directors;




(b) The shareholders of the Company approve any consolidation or merger of the Company,
other than a consolidation or merger of the Company in which the holders of the common stock
of the Company immediately prior to the consolidation or merger hold more than fifty percent
(50%) of the common stock of the surviving corporation immediately after the consolidation
or merger;




(c) The shareholders of the Company approve any plan or proposal for the liquidation or
dissolution of the Company; or




(d) The shareholders of the Company approve the sale or transfer of all or substantially all
of the assets of the Company to parties that are not within a “controlled group of
corporations” (as defined in Code Section 1563) in which the Company is a member.



2.6. “Corporation” means MKS Instruments, Inc. (the “Company”) and any corporation, trust,
association or enterprise which is required to be considered, together with the
Corporation, as one employer pursuant to the provisions of Sections 414(b), 414(c), 414(m) or
414(o) of the Code. For purposes of applying Code sections 1563(a)(1), (2), and (3) and regulation
section 1.414(c)-2 to the determination of companies under common control for purposes of this
Appendix A, 80% shall be used instead of “at least 80%” each place it appears in such sections.



2.7. “Compensation” for any calendar year means the sum of Employee’s Base Salary for such
year plus any Bonus paid in such year.



2.8. “Early Retirement Benefit” means the Retirement benefit determined under Section 5.2
of this Appendix A upon Employee’s Retirement prior to his Normal Retirement Date.



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2.9. “Employment Agreement” means the Employment Agreement between Employee and the
Corporation that contains this Appendix A.



2.10. “Final Average Pay” means, for purposes of Section 5 the average of Employee’s
three (3) highest years of Compensation during the ten (10) calendar year period immediately
preceding the calendar year in which Employee Retires, and for purposes of determining death
benefits under Section 6 the average of Employee’s three (3) highest years of Compensation during
the ten (10) calendar year period immediately preceding the calendar year containing Employee’s
date of death. The foregoing notwithstanding, any calendar year in which Employee has no
Compensation from the Corporation shall be ignored in determining such ten calendar year period.



2.11. “Normal Retirement Age” means Employee’s 65th birthday or, if earlier, the date
Employee is deemed to have Retired in accordance with Section 2.15(b).



2.12. “Normal Retirement Benefit” means the Retirement benefit determined under Section
5.1 of this Appendix A upon Employee’s Retirement on or after his Normal Retirement Date.



2.13. “Normal Retirement Date” means the first day of the month in which Employee attains
Normal Retirement Age.



2.14. “Permanent and Total Disability” means (a) Employee 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, or (b) Employee 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 Corporation.
Employee shall be conclusively presumed to be Permanently and Totally Disabled upon determination
that he is disabled by the Social Security Administration.



2.15. “Retirement” or “Retires” or “Retired” means the earlier of:




(a) Employee’s Separation from Service with the Corporation upon or after satisfying the
vesting requirements of Section 4.1, or



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(b) Employee’s deemed Retirement. Employee shall be deemed to have Retired with a fully
vested Normal Retirement Benefit on the earliest of (i) the date he becomes Permanently and
Totally Disabled, (ii) the date of Employee’s Separation from Service as a result of the
Corporation’s termination of Employee’s employment with the Corporation for any reason other
than Termination for Cause as defined in Section 2.21 of this Appendix A, (iii) the date of
Employee’s death while employed by the Corporation, or (iv) the date of Employee’s
qualifying Separation from Service following a Change in Control in accordance with the
provisions of Section 7 of this Appendix A.



2.16. “Retirement Date” means the date Employee Retires or is deemed to have Retired in
accordance with Section 2.15 of this Appendix A. The term “Retirement Date” shall include
Employee’s Early Retirement Date as defined in Section 5.2 of this Appendix A.



2.17. “Section 409A” means Section 409A of the Internal Revenue Code, as the same may be
amended from time to time, and any successor statute thereto. References in this Appendix A to
Section 409A shall be deemed to mean and include any published guidance, regulations, notices,
rulings and similar announcements issued by the Internal Revenue Service or by the Secretary of the
Treasury under or interpreting Section 409A, decisions by any court of competent jurisdiction
involving a Participant or a beneficiary and any closing agreement made under section 7121 of the
Code that is approved by the Internal Revenue Service and involves a Participant, all as determined
by the Corporation in good faith, which determination may (but shall not be required to) be made in
reliance on the advice of such tax counsel or other tax professional(s) with whom the Corporation
from time to time may elect to consult with respect to any such matter.



2.18. “Separates from Service” or “Separation from Service” means Employee’s
separation from service with the Corporation as a result of death retirement, or any other reason,
except that for purposes of this section 2.18 the employment relationship is treated as continuing
intact while Employee is on military leave, sick leave, or other bona fide leave of absence if the
period of such leave does not exceed six months, or if longer, so long as Employee retains a right
to reemployment with the Corporation under an applicable statute or by contract. For purposes of
this Section 2.18 a leave of absence constitutes a bona fide leave of absence only if there is a
reasonable expectation that the employee will return to perform services for the employer. If the
period of leave exceeds six months and the individual does not retain a right



5









 







to reemployment under an applicable statute or by contract, the employment relationship is deemed
to terminate on the first date immediately following such six-month period. Whether an Employee has
a Separation from Service shall be determined in accordance with the provisions of Section 409A,
and regulations thereunder, and any other applicable guidance.



2.19. “Specified Employee” means, at any time when stock of the Corporation is publicly
traded on an established securities market or otherwise (as determined in accordance with Section
409A), an employee who is a “specified employee” within the meaning of Section 409A. The
Corporation shall have the discretion to use any alternative permitted under Section 409A to
determine whether Employee is a Specified Employee, and to take any action necessary to make such
alternative binding.



2.20. “Termination of Employment” means, for purposes of Section 4.6 of this Appendix A,
Termination for Cause, or Employee’s voluntary severance from employment with the Corporation
(within the meaning of the Corporation’s normal policies and procedures) for any reason other than
Retirement.



2.21. “Termination for Cause” means, solely for purposes of this Appendix A, termination of
Employee’s employment by the Corporation as a result of Employee’s conviction for the commission of
a felony, material breach of any employment or other agreements between Employee and the
Corporation, or willful failure to perform the material responsibilities of his position with the
Corporation.



2.22. “Trust” means a Trust established pursuant to Section 10 of this Appendix A.



3. Eligibility for Retirement Benefits.



3.1. General: Subject to Sections 4.2, 4.3, 4.4, and 4.5 the Corporation shall pay the
retirement benefits described in this Appendix A only if Employee Retires from employment with the
Corporation upon or after satisfying the vesting requirements set forth in Section 4.1, or upon
Employee’s deemed Retirement pursuant to Section 2.15(b).



4. Vesting.



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4.1 General: Except as provided in Sections 4.2, 4.3, 4.4, and 4.5, and subject to
Section 10.1, Employee’s benefits under this Appendix A shall be fully vested and nonforfeitable if
Employee satisfies both (a) and (b) while employed with the Corporation:




(a) attains age 60, and




(b) has 25 years of service with the Corporation. Employee shall have 25 years of service
on the 25th anniversary of Employee’s original hire date.



The foregoing notwithstanding, Employee shall be fully vested in his benefit under this Appendix A
upon Employee’s deemed Retirement pursuant to Section 2.15(b) of this Appendix A.



4.2. Termination for Cause: All benefits shall be forfeited, and no amount shall be
payable under this Appendix A, in the event of Employee’s Termination for Cause.



4.3. Compliance with Noncompete, Nondisclosure, and Nonsolicitation Agreements. All
benefits under this Appendix A are expressly conditioned upon Employee’s compliance with the terms
of any noncompetition, nondisclosure, or nonsolicitation provisions contained in the Employment
Agreement, or in any other agreement between Employee and the Corporation. All benefits payable
under this Appendix A shall be forfeited, and no amount shall be payable, in the event Employee
violates the terms of any such provisions. If Employee violates the terms of any such provisions,
and benefit payments have commenced to Employee, any such payments shall cease, and Employee shall
repay all previously paid benefits to the Corporation upon demand. If Employee fails to repay such
amounts upon demand, the Corporation shall have the right to take any action necessary to recover
such payments from Employee.



4.4. Notice of Intent to Retire. Benefits payable under this Appendix A are specifically
conditioned upon Employee providing to the Corporation written notice of Employee’s intent to
Retire at least six months prior to Employee’s Retirement date. In the event Employee fails to
satisfy the notice requirements of this Section 4.4, all benefits shall be forfeited, and no amount
shall be payable under this Appendix A. The foregoing notwithstanding, the Corporation, in its
sole and absolute discretion, may elect to waive the notice requirement of this Section 4.4. The
foregoing notwithstanding, this Section 4.4 shall not apply to death



7









 







benefits payable under Section 6 of this Appendix A, or to Retirement benefits payable under
Section 5 as a result of Employee’s deemed Retirement pursuant to Section 2.15(b).



4.5. Release. Benefits payable under this Appendix A (other than death benefits payable
under Section 6) are specifically conditioned upon and provided in exchange for Employee signing a
separation agreement that releases the Corporation from any liabilities that may have arisen as a
result of Employee’s employment and/or termination of employment with the Corporation. In the event
Employee terminates employment with the Corporation for any reason other than death (including
Retirement) without satisfying the requirements of this Section 4.5 all benefits shall be
forfeited, and no amount shall be payable under this Appendix A.



4.6. Termination of Employment Prior to Satisfying Vesting Requirements. No benefits are
payable under this Appendix A upon Employee’s Termination of Employment with the Corporation prior
to satisfying the vesting requirements set forth in Section 4.1.



5. Retirement Benefits.



5.1. Normal Retirement Benefit. This Section 5.1 describes the Retirement benefit payable
by the Corporation in the event Employee Retires on or after his Normal Retirement Date. Employee’s
Normal Retirement Benefit shall be paid in the form of an Actuarially Equivalent lump sum, as set
forth in Section 5.3.



(a) Married on Retirement Date: If Employee is married on his Retirement Date, Employee’s
Normal Retirement Benefit shall be:




50% times Final Average Pay



payable annually for the life of Employee with 50% of such amount continuing after Employee’s death
to his spouse for her life, with payments commencing on Employee’s Normal Retirement Date, and
subsequent payments made as of each anniversary thereof. Solely for purposes of this Section 5.1,
“Spouse” shall mean the spouse to whom Employee is married on his Retirement Date (regardless of
whether that is the same spouse to whom he is married on his date of death), unless the Corporation
is directed by a court of competent jurisdiction to treat someone else as Employee’s “spouse.”



8









 





(b) Not Married on Retirement Date: If Employee is not married on his Retirement Date,
Employee’s Normal Retirement Benefit shall be:




50% times Final Average Pay



payable annually for the life of Employee with a ten year certain guarantee, with payments
commencing on Employee’s Normal Retirement Date, and subsequent payments made on each anniversary
thereof.



5.2. Early Retirement Benefit. This Section 5.2 describes the Retirement benefit payable
by the Corporation in the event Employee Retires prior to his Normal Retirement Date. Employee may
Retire from employment with the Corporation prior to his Normal Retirement Date on the first day of
any month coincident with or next following the date he satisfies the vesting requirements of
section 4.1. The date on which Employee Retires under this Section 5.2 shall be his Early
Retirement Date. Employee’s Early Retirement Benefit shall be paid in the form of an Actuarially
Equivalent lump sum, as set forth in Section 5.3.



(a) Married on Early Retirement Date: If Employee is married on his Early Retirement
Date, Employee’s Early Retirement Benefit shall be:




50% times Final Average Pay



multiplied by the applicable percentage as set forth in the following schedule:



	 	 	 	 	 	 	 	 	 	 	 	 	 
	Age at which Early Retirement
Benefits Commence
	 	 	62	 	 	 	61	 	 	 	60	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Applicable Percentage
	 	 	100	%	 	 	90	 	 	 	80	 






payable annually for the life of Employee with 50% of such amount continuing after Employee’s death
to his spouse for her life, with payments commencing on Employee’s Early Retirement Date, and
subsequent payments made on each anniversary thereof. Solely for purposes of this Section 5.2,
“Spouse” shall mean the spouse to whom Employee is married on his Early Retirement Date (regardless
of whether that is the same spouse to whom he is married on his date of death), unless the
Corporation is directed by a court of competent jurisdiction to treat someone else as Employee’s
“spouse



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(b) Not Married on Early Retirement Date: If Employee is not married on his Early
Retirement Date, Employee’s Early Retirement Benefit shall be:




50% times Final Average Pay



multiplied by the applicable percentage as set forth in the following schedule:



	 	 	 	 	 	 	 	 	 	 	 	 	 
	Age at which Early Retirement
Benefits Commence
	 	 	62	 	 	 	61	 	 	 	60	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Applicable Percentage
	 	 	100	%	 	 	90	 	 	 	80	 






payable annually for the life of Employee with a ten year certain guarantee, with payments
commencing on Employee’s Early Retirement Date, and subsequent payments made on each anniversary
thereof.



5.3. Form of Payment:



Employee’s Normal Retirement Benefit or Early Retirement Benefit, determined in accordance with
section 5.1 or 5.2 as applicable, shall be paid in the form of a single lump sum that is
Actuarially Equivalent to such Normal Retirement Benefit or Early Retirement Benefit. Such lump sum
shall be paid on Employee’s Retirement Date (or, if later, the earliest date permitted by Section
409A). No benefits shall be payable in the form of an annuity or in installments.



5.4. Delay of Payment to Specified Employee. Sections 5.1 through 5.3 of this Appendix A
notwithstanding, in the event Employee is a Specified Employee on the date Employee Separates from
Service, then any amount payable under this Appendix A as a result of such Separation from Service,
other than amounts payable as a result of Employee’s Permanent and Total Disability, shall not be
made earlier than (a) the date that is six months after the date of such Employee’s Retirement or,
if earlier, (b) the date of the Employee’s death. Employee’s Retirement benefit shall be
actuarially increased, in the manner determined by the Corporation, to account for such delayed
commencement date.



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5.5. Time of Payment: Where the provisions of this Appendix A require that a payment be
made on a designated date, (for example, under Sections 5.1, 5.2, 5.3, and 5.4) such payment shall
be deemed to have been made on such date if it is made as soon as administratively practicable
following such date. In no event, however, shall payment be made later than the end of the calendar
year containing such designated date or, if later, the 15th day of the third calendar
month following such designated date. No adjustment shall be made to Employee’s Retirement benefit
as a result of any delay between the specified payment date and the actual payment date. In no
event shall Employee be permitted to designate, directly or indirectly, the taxable year in which
payment will be made.



5.6. Death While Employed by the Corporation. In the event Employee dies while employed
by the Corporation, any benefits payable under this Appendix A shall be determined in accordance
with Section 6.



5.7 Domestic Relations Orders. The payment of all or part of Employee’s Retirement
benefit may, in the sole discretion of the Corporation, be accelerated and paid to a person other
than Employee if Corporation determines that such payment is necessary to fulfill a valid domestic
relations order as defined in Section 414(p)(1)(B) of the Internal Revenue Code.



6. Death While Employed by the Corporation.



6.1. General. In the event Employee dies while employed by the Corporation the death
benefit payable under this Appendix A shall be as follows:




(a) if Employee is married on his date of death, 50% of the lump sum that is Actuarially
Equivalent to the Normal Retirement Benefit determined under Section 5.1(a) of this Appendix
A, such lump sum benefit to be determined as if Employee Retired on his date of death after
reaching Normal Retirement Age; or




(b) if Employee is not married on his date of death, 50% of the lump sum that is Actuarially
Equivalent to the Normal Retirement Benefit determined under Section 5.1(b) of this Appendix
A, such lump sum benefit to be determined as if Employee Retired on his date of death after
reaching Normal Retirement Age.



The death benefit shall be payable in a lump sum as soon as administratively practicable following
Employee’s date of death.



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6.2. Payee. This death benefit shall be payable to Employee’s (a) surviving spouse if
Employee is married on his date of death, or (b) Beneficiary if Employee is not married on his date
of death. “Surviving spouse” for purposes of this Section 6.2 means the spouse to whom Employee is
married on his date of death.



7. Effect of a Change in Control of the Corporation. Anything in this Appendix A to the
contrary notwithstanding, this Section 7 shall apply in the event of a Change in Control. If,
within three years after the date of a Change in Control, Employee voluntarily Separates from
Service with the Corporation for Good Reason, and employee is not otherwise eligible for
Retirement, then Employee shall be deemed to have Retired with a fully vested Normal Retirement
Benefit on the date of such Separation from Service.



Solely for purposes of this Section 7, “Good Reason” shall mean Employee’s voluntary Separation
from Service within 90 days following (i) a material diminution in Employee’s positions, duties and
responsibilities from those described in this Employment Agreement (ii) a reduction in Employee’s
Base Salary (other than a reduction which is part of a general salary reduction program affecting
senior executives of the Corporation) (iii) a material reduction in the aggregate value of the
pension and welfare benefits provided to Employee from those in effect prior to the Change in
Control (other than a reduction which is proportionate to the reductions applicable to other senior
executives pursuant to a cost-saving plan that includes all senior executives), (iv) a material
breach of any provision of this Employment Agreement by the Corporation, (v) the Corporation’s
requiring Employee to be based at a location that creates for Employee a one way commute in excess
of 60 miles from his primary residence, except for required travel on the Corporation’s business
to an extent substantially consistent with the business travel obligations of Employee under this
Employment Agreement. Notwithstanding the foregoing, a termination shall not be treated as a
termination for Good Reason (i) if Employee shall have consented in writing to the occurrence of
the event giving rise to the claim of termination for Good Reason or (ii) unless Employee shall
have delivered a written notice to the Corporation within 30 days of his having actual knowledge of
the occurrence of one of such events stating that he intends to terminate his employment for Good
Reason and specifying the factual basis for such termination, and such event, if capable of being
cured, shall not have been cured within 30 days of the receipt of such notice.



8. Effect of termination of employment and rehire. Upon Employee’s Retirement, the
benefit payable under this Appendix A, if any, shall be determined by the Corporation and such



12









 







determination shall be conclusive and binding (subject to Section 14). If Employee is subsequently
reemployed by the Corporation such reemployment, additional service, and additional compensation
shall not result in a re-determination of the benefits due under this Appendix A.



9. Administration.



9.1. Powers of the Corporation: The Board of Directors of the Company (the “Board”) shall
have the sole authority to act on behalf of the Corporation under this Appendix A (subject to
Section 9.3), and shall have all the powers necessary to administer the benefits under this
Appendix A, including, without limitation, the power to interpret the provisions of this Appendix A
and to establish rules and prescribe any forms required to administer benefits under this Appendix
A



9.2. Actions of the Board: All determinations, interpretations, rules, and decisions of
the Board shall be conclusive and binding upon all persons having or claiming to have any interest
or right under this Appendix A.



9.3. Delegation: The Board shall have the power to delegate specific duties and
responsibilities to officers or other employees of the Corporation or other individuals or
entities. Any delegation by the Board may allow further delegations by the individual or entity to
whom the delegation is made. Any delegation may be rescinded by the Board at any time. Each
person or entity to whom a duty or responsibility has been delegated shall be responsible for the
exercise of such duty or responsibility and shall not be responsible for any act or failure to act
of any other person or entity.



9.4. Reports and Records: The Board and those to whom the Board has delegated duties
under Section 9.3 shall keep records of all their proceedings and actions and shall maintain books
of account, records, and other data as shall be necessary for the proper administration of this
Appendix A and for compliance with applicable law.



9.5. Costs: The costs of providing and administering the benefits under this Appendix A
shall be borne by the Corporation.



10. Unfunded Benefits; Establishment of Trust.



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10.1. Unfunded Status. This Appendix A shall be unfunded for tax purposes and for
purposes of Title 1 of ERISA.



10.2. Establishment of Trust. The Corporation shall not be required to set aside any
funds to discharge its obligations hereunder, but may set aside such funds to informally fund all
or part of its obligations hereunder if it chooses to do so, including without limitation the
contribution of assets to a “rabbi trust” (the Trust). Any setting aside of amounts, or acquisition
of any insurance policy or any other asset, by the Corporation with which to discharge its
obligations hereunder in trust or otherwise, shall not be deemed to create any beneficial ownership
interest in Employee, his surviving spouse, or Beneficiary, and legal and equitable title to any
funds so set aside shall remain in the Corporation, and any recipient of benefits hereunder shall
have no security or other interest in such funds. The rights of Employee and his surviving spouse
and Beneficiary(ies) under this Appendix A shall be no greater than the rights of a general
unsecured creditor of the Corporation. Any and all funds so set aside by the Corporation shall
remain the general assets of the Corporation, and subject to the claims of its general creditors,
present and future.



10.3. Interrelationship of this Appendix A and the Trust. The provisions of this Appendix
A shall govern the rights of Employee to receive distributions pursuant to the provisions of this
Appendix A. The provisions of the Trust shall govern the rights of the Corporation, Employee, and
creditors of the Corporation to the assets transferred to the Trust. The Corporation shall at all
times remain liable to carry out its obligations under this Appendix A.



10.4. Distributions from the Trust. The Corporation’s obligations under this Appendix A
may be satisfied with Trust assets distributed pursuant to the terms of the Trust, and any such
distribution shall reduce the Corporation’s obligation under this Appendix A.



11. Payment of Benefit for Disabled or Incapacitated Person. If the Corporation
determines, in its discretion, that Employee or Employee’s Beneficiary or surviving spouse is
under a legal disability or is incapacitated in any way so as to be unable to manage his
financial affairs, the Corporation may make any payment otherwise due under the terms
of this Appendix A to such person or to his legal representative or to a friend or relative of such
person as the Corporation considers advisable. Any payment under this Section 11 shall be a
complete discharge of any liability for the making of such payment under this Appendix A. Nothing
contained in this Section 11, however, should be deemed to impose upon the Corporation any
liability for paying a benefit to any person who is under such a legal



14









 







disability or is so incapacitated unless it has received notice of such disability or incapacity
from a competent source.



12. Nonassignability. Neither Employee nor any other person shall have any right to
commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer,
hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable
hereunder, or any part thereof, which are, and all rights to which are expressly declared to be,
unassignable and non-transferable. No part of the amounts payable shall, prior to actual payment,
be subject to seizure, attachment, garnishment or sequestration for the payment of any debts,
judgments, alimony or separate maintenance owed by Employee or any other person, be transferable by
operation of law in the event of Employee’s or any other person’s bankruptcy or insolvency or be
transferable to a spouse as a result of a property settlement or otherwise. The Corporation is authorized to make any payments directed by court
order.



13. Claim Procedure.



13.1. Presentation of Claim. Employee, or the surviving spouse of Employee after
Employee’s death, or Employee’s Beneficiary (such Employee, surviving spouse, or Beneficiary being
referred to below as a “Claimant”) may deliver to the Corporation a written claim for a
determination with respect to the amounts distributable to such Claimant under this Appendix A. If
such a claim relates to the contents of a notice received by the Claimant, the claim must be made
within sixty (60) days after such notice was received by the Claimant. All other claims must be
made within 180 days of the date on which the event that caused the claim to arise occurred. The
claim must state with particularity the determination desired by the Claimant.



13.2. Notification of Decision.



(a) Claim for benefits other than Disability benefits. The Corporation shall consider a
Claimant’s claim within a reasonable time, but no later than ninety (90) days after receiving the
claim. If the Corporation determines that special circumstances require an extension of time for
processing the claim, written notice of the extension shall be furnished to the Claimant prior to
the termination of the initial ninety (90) day period. In no event shall such extension exceed a
period of ninety (90) days from the end of the initial period. The extension notice shall indicate
the special circumstances requiring an extension of time and the date by which the Corporation
expects to render the benefit determination.



15









 




(b) Claim for Disability benefits. If the claim relates to benefits in connection with
Disability, the Corporation shall consider a Claimant’s claim within a reasonable time, but no
later than forty-five (45) days after receiving the claim. If the Corporation determines that, due to
matters beyond the control of the Plan, the Corporation will not be able to respond to the claim
within such 45-day period, the Corporation may extend the response period for one or two additional
periods of up to 30 days each by providing the Claimant with notice describing the circumstances
that necessitate the extension and the date as of which the Corporation anticipates that it will
render its decision. Each such notice must be conveyed to the Claimant prior to the commencement of
an extension.



(c) Notification. The Corporation shall notify the Claimant, in writing, within the time
periods specified in Section 13.2(a) or (b), as applicable:




(1) that the Claimant’s requested determination has been made, and that the claim has been
allowed in full; or




(2) that the Corporation has reached a conclusion contrary, in whole or in part, to the
Claimant’s requested determination, and such notice must set forth in a manner calculated to
be understood by the Claimant:




(A) the specific reason(s) for the denial of the claim, or any part of it;




(B) specific reference(s) to pertinent provisions of this Appendix A upon which such
denial was based;




(C) a description of any additional material or information necessary for the
Claimant to perfect the claim, and an explanation of why such material or information
is necessary;




(D) an explanation of the claim review procedure set forth in Section 13.3 below; and




(E) a statement of the Claimant’s right to bring a civil action under ERISA Section
502(a) following an adverse benefit determination on review.



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13.3. Review of a Denied Claim.



(a) Claim for benefits other than Disability benefits. On or before sixty (60) days after
receiving a notice from the Corporation that a claim has been denied, in whole or in part, a
Claimant (or the Claimant’s duly authorized representative) may file with the Corporation a written
request for a review of the denial of the claim. The Claimant (or the Claimant’s duly authorized
representative):




(a) may, upon request and free of charge, have reasonable access to, and copies of, all
documents, records and other information relevant to the claim for benefits;




(b) may submit written comments or other documents; and/or




(c) may request a hearing, which the Corporation, in its sole discretion, may grant.



The Corporation shall render its decision on review promptly, and no later than sixty (60) days
after the Corporation receives the Claimant’s written request for a review of the denial of the
claim. If the Corporation determines that special circumstances require an extension of time for
processing the claim, written notice of the extension shall be furnished to the Claimant prior to
the termination of the initial sixty (60) day period. In no event shall such extension exceed a
period of sixty (60) days from the end of the initial period. The extension notice shall indicate
the special circumstances requiring an extension of time and the date by which the Corporation
expects to render the benefit determination. In rendering its decision, the Corporation shall take
into account all comments, documents, records and other information submitted by the Claimant
relating to the claim, without regard to whether such information was submitted or considered in
the initial benefit determination. The decision must be written in a manner calculated to be
understood by the Claimant, and it must contain:




(1) specific reasons for the decision;




(2) specific reference(s) to the pertinent provisions of this Appendix A upon which the
decision was based;




(3) a statement that the Claimant is entitled to receive, upon request and free of charge,
reasonable access to and copies of, all documents, records and other information relevant
(as defined in applicable ERISA regulations) to the Claimant’s claim for



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benefits; and




(4) a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a).



(b) Claim for Disability benefits. If the claim relates to benefits in connection with
Disability, the procedure described in Section 13.3(a) above shall apply, modified as follows:




(1) All references to 60 days shall be changed to 45 days, except that a Claimant shall
have 180 days to file an appeal.




(2) The Corporation shall designate an individual to conduct the review who is not the
individual who made the initial adverse determination, and is not a subordinate of such
individual.




(3) The notice of extension shall describe the circumstances that require the extension;
must include the date as of which the Corporation anticipates that it will render its
decision; and must be communicated to the Claimant prior to the commencement of the
extension.




(4) The review shall not afford deference to the initial adverse benefit determination.




(5) When the appeal is based on a medical judgment, the Corporation shall consult with a
health care professional who has appropriate experience and training in the field involved
in determining the Claimant’s Disability and shall identify all medical and vocational
experts whose advice was obtained in connection with the appeal. A health care professional
may not be consulted under this Section 7.10(b)(3)(ii)(E) if the health care professional
(or a subordinate of such individual) was consulted in connection with the initial claim for
benefits.




(6) If the Corporation makes an adverse benefit determination on review, the Corporation
shall provide the Claimant with a statement that the Claimant is entitled to receive or
request reasonable access to, and copies of, all information relevant to the claim for
benefits, including internal rules, guidelines, and protocols (to the extent relied upon)
and a statement regarding voluntary alternative dispute resolution options.



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13.4. Disability Benefits. For purposes of this Article 13, “Disability benefits” means a
benefit payable under this Appendix A that is conditioned upon the Corporation’s determination that
Employee is Permanently and Totally Disabled. If the Corporation does not make such determination,
but instead relies solely upon the determination of the Social Security Administration’s
determination that Employee is disabled, then Sections 13.2(b) and 13.3(b) shall not apply, and any
claims by Employee shall instead be reviewed under the provisions of this Article 13 for benefits
other than Disability benefits.



13.5. Legal Action. A Claimant’s compliance with the foregoing provisions of this Article
13 is a mandatory prerequisite to a Claimant’s right to commence any legal action with respect to
any claim for benefits under this Appendix A.



14. Tax Withholding and Reporting; Section 280G Excise Taxes.



(a) General. The Corporation shall have the right to deduct any required withholding
taxes from any payment made under this Appendix A. Except as provided in Section 14(b), the
Corporation shall not be obligated to pay or reimburse Employee, or his surviving spouse or
Beneficiary, for any income or other taxes or penalties that may be imposed on such person by the
Internal Revenue Service or any state or other taxing authority as a result of benefits paid under
this Appendix A.



(b) Excise Tax Payment. In the event that any payment or benefit (within the meaning of
Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the “Code”)), to Employee or
for his benefit paid or payable or distributed or distributable pursuant to the terms of this
Employment Agreement (including this Appendix A) or otherwise in connection with, or arising out
of, his employment with the Corporation or a Change in Control of the Corporation (a “Payment” or
“Payments”), would be subject to the excise tax imposed by Section 4999 of the Code or any interest
or penalties are incurred by the Employee with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively referred to as the
“Excise Tax”), then Employee will be entitled to immediately receive an additional payment (a
“Gross-Up Payment”) from the Corporation in an amount such that after payment by Employee of all
taxes (including any interest or penalties, other than interest and penalties imposed by reason of
Employee’s failure to file timely a tax return or pay taxes shown due on his return, imposed with
respect to such taxes and the Excise Tax), including any Excise Tax imposed upon the Gross-Up
Payment,



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Employee retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.



15. Successors. The provisions of this Appendix A shall bind and inure to the benefit of
the Corporation and its successors and assigns and Employee and Employee’s surviving spouse and
designated beneficiaries.



16. Amendment. This Appendix A may be amended only by written agreement between Employee
and the Corporation.



Agreed to and executed this 10th day of November, 2008.



	 	 	 	 	 
	MKS Instruments, Inc. 

 	 	 
	By:  	/s/ Leo Berlinghieri
 	 	 
	 	Leo Berlinghieri, CEO & President           	 	 
	 	 	 	 
	 	 	 
	/s/ Gerald G. Colella
 	 	 
	Gerald G. Colella                           	 	 
	 	 	 
	 




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