exv10w2





Exhibit 10.2




MKS INSTRUMENTS, INC.




2004 STOCK INCENTIVE PLAN




(amended and restated as of February 24, 2011)



1. Purpose




     The purpose of this 2004 Stock Incentive Plan (the “Plan”) of MKS Instruments, Inc., a
Massachusetts corporation (the “Company”), is to advance the interests of the Company’s
stockholders by enhancing the Company’s ability to attract, retain and motivate persons who are
expected to make important contributions to the Company and by providing such persons with equity
ownership opportunities and performance-based incentives that are intended to better align their
interests with those of the Company’s stockholders. Except where the context otherwise requires,
the term “Company” shall include any of the Company’s present or future subsidiary corporations as
defined in Section 424(f) of the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder (the “Code”) and any other business venture (including, without limitation,
joint venture or limited liability company) in which the Company has a controlling interest, as
determined by the Board of Directors of the Company (the “Board”).


2. Eligibility




     All of the Company’s employees, officers, directors, consultants and advisors are eligible to
receive options, restricted stock awards, stock appreciation rights and other stock-based awards
(each, an “Award”) under the Plan. Each person who receives an Award under the Plan is deemed a
“Participant”.


3. Administration and Delegation




    (a) Administration by Board of Directors. The Plan will be administered by the Board.
The Board shall have authority to grant Awards and to adopt, amend and repeal such administrative
rules, guidelines and practices relating to the Plan as it shall deem advisable. The Board may
correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in
the manner and to the extent it shall deem expedient to carry the Plan into effect and it shall be
the sole and final judge of such expediency. All decisions by the Board shall be made in the
Board’s sole discretion and shall be final and binding on all persons having or claiming any
interest in the Plan or in any Award. No director or person acting pursuant to the authority
delegated by the Board shall be liable for any action or determination relating to or under the
Plan made in good faith.



    (b) Appointment of Committees.



          (1) To the extent permitted by applicable law, the Board may delegate any or all of its powers
under the Plan to one or more committees or subcommittees of the Board (a “Committee”). During
such time as the common stock, no par value per share, of the Company (the “Common Stock”) is
registered under the Securities Exchange Act of 1934 (the “Exchange Act”), the Board shall appoint
one such Committee of not less than two members, each member



 









 




of which shall be an “outside director” within the meaning of Section 162(m) of the Code and a
“non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act.




          (2) To the extent permitted by applicable law, the Board may delegate to one or more officers
of the Company, who, if required by law, are also members of the Board, the power to make Awards
and exercise such other powers under the Plan as the Board shall determine, provided that the Board
shall fix the maximum number of shares subject to Awards to be made by any such person and such
other terms as the Board may determine are appropriate.



          (3) All references in the Plan to the “Board” shall mean the Board, a Committee of the Board
or any person described in subsection (2) above, to the extent that the Board’s powers or authority
under the Plan have been delegated to such Committee or person.


4. Stock Available for Awards




    (a) Number of Shares. Subject to adjustment under Section 9, the number of shares of
Common Stock available for Awards under the Plan: (i) shall annually increase by 5% of the total
shares of the Company’s outstanding Common Stock on January 1 of each year; and (ii) in the event
of an increase in the total shares of the Company’s Common Stock after January 1 of any such year
in connection with the acquisition of any corporation, partnership or other business entity by the
Company (whether by merger, stock purchase or otherwise), shall increase by 5% of such increased
amount. Such increases shall occur until such time as the aggregate number of shares of Common
Stock which may be issued under the Plan is 15,000,000 shares, subject to adjustment under Section
9. If any Award expires or is terminated, surrendered or canceled without having been fully
exercised or is forfeited in whole or in part (including as the result of shares of Common Stock
subject to such Award being repurchased by the Company at the original issuance price pursuant to a
contractual repurchase right) or results in any Common Stock not being issued, the unused Common
Stock covered by such Award shall again be available for the grant of Awards under the Plan,
subject, however, in the case of Incentive Stock Options (as hereinafter defined), to any
limitations under the Code. Shares issued under the Plan may consist in whole or in part of
authorized but unissued shares or treasury shares.



     (b) Per-Participant Limit. Subject to adjustment under Section 9, the maximum number
of shares of Common Stock with respect to which Awards may be granted to any Participant under the
Plan shall be 900,000 per calendar year. The per-Participant limit described in this Section 4(b)
shall be construed and applied consistently with Section 162(m) of the Code.


5. Stock Options




     (a) General. The Board may grant options to purchase Common Stock (each, an “Option”)
and determine the number of shares of Common Stock to be covered by each Option, the exercise price
of each Option and the conditions and limitations applicable to the exercise of each Option,
including conditions relating to applicable federal or state securities laws, as it considers
necessary or advisable. An Option which is not intended to be an Incentive Stock Option (as
hereinafter defined) shall be designated a “Nonstatutory Stock Option”.



     (b) Incentive Stock Options. An Option that the Board intends to be an “incentive
stock option” as defined in Section 422 of the Code (an “Incentive Stock Option”) shall only be



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granted to employees of MKS Instruments, Inc., any of MKS Instruments, Inc.’s present or
future subsidiary corporations as defined in Section 424(f) of the Code, and any other entities the
employees of which are eligible to receive Incentive Stock Options under the Code, and shall be
subject to and shall be construed consistently with the requirements of Section 422 of the Code.
The Company shall have no liability to a Participant, or any other party, if an Option (or any part
thereof) that is intended to be an Incentive Stock Option is not an Incentive Stock Option or for
any action taken by the Board pursuant to Section 10(f), including without limitation the
conversion of an Incentive Stock Option to a Nonstatutory Stock Option.




     (c) Exercise Price. The Board shall establish the exercise price of each Option and
specify such exercise price in the applicable option agreement.



     (d) Duration of Options. Each Option shall be exercisable at such times and subject
to such terms and conditions as the Board may specify in the applicable option agreement; provided,
however, that no Option will be granted for a term in excess of 10 years.



     (e) Exercise of Option. Options may be exercised by delivery to the Company of a
written notice of exercise signed by the proper person or by any other form of notice (including
electronic notice) approved by the Board together with payment in full as specified in Section 5(f)
for the number of shares for which the Option is exercised.



     (f) Payment Upon Exercise. Common Stock purchased upon the exercise of an Option
granted under the Plan shall be paid for as follows:



          (1) in cash or by check, payable to the order of the Company;



          (2) except as the Board may otherwise provide in an option agreement, by (i) delivery of an
irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the
Company sufficient funds to pay the exercise price and any required tax withholding or (ii)
delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions
to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the
exercise price and any required tax withholding;



          (3) to the extent permitted by applicable law and by the Board, by (i) delivery of a
promissory note of the Participant to the Company on terms determined by the Board, or (ii) payment
of such other lawful consideration as the Board may determine; or



          (4) by any combination of the above permitted forms of payment.



     (g) Option Exchange. The Board may authorize a one-time option exchange program (the
“Exchange Offer”) to be completed prior to November 4, 2009. Under the Exchange Offer, employee
holders (who are not members of the Board or executive officers (as such term is defined under Rule
3b-7 of the Securities Exchange Act of 1934, as amended)) (the “Exchange Act”) of outstanding stock
options having an exercise price in excess of the highest closing price for the Common Stock on the
Nasdaq Global Select Market in the 52 week period preceding the commencement of the Exchange Offer
(the “Old Options”) would have the right to elect to exchange such Old Options for a lesser number
of restricted stock units (the “New RSUs”). The number of New RSUs to be granted in exchange for
each Old Option would be that number of



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RSUs (rounded down to the nearest whole) that would be derived by dividing the fair value of
such Old Option by the closing sale price of the Common Stock at the close of the Exchange Offer.
The New RSUs would have a new vesting period of one year (provided that if the Old Option is still
subject to vesting at the time of surrender, the vesting period shall be one year plus such
remaining vesting period) and would be granted promptly after cancellation of the Old Options.



6. Stock Appreciation Rights.




     (a) Nature of Stock Appreciation Rights. A Stock Appreciation Right, or SAR, is an
Award entitling the holder on exercise to receive an amount in cash or Common Stock or a
combination thereof (such form to be determined by the Board) determined in whole or in part by
reference to appreciation, from and after the date of grant, in the fair market value of a share of
Common Stock. SARs may be based solely on appreciation in the fair market value of Common Stock or
on a comparison of such appreciation with some other measure of market growth such as (but not
limited to) appreciation in a recognized market index. The date as of which such appreciation or
other measure is determined shall be the exercise date unless another date is specified by the
Board in the SAR Award.



     (b) Grants. Stock Appreciation Rights may be granted in tandem with, or independently
of, Options granted under the Plan.



     (c) Exercise. Any exercise of a Stock Appreciation Right must be in writing, signed
by the proper person and delivered or mailed to the Company, accompanied by any other documents
required by the Board.


7. Restricted Stock.




    (a) Grants. The Board may grant Awards entitling recipients to acquire shares of
Common Stock, subject to the right of the Company to repurchase all or part of such shares at their
issue price or other stated or formula price (or to require forfeiture of such shares if issued at
no cost) from the recipient in the event that conditions specified by the Board in the applicable
Award are not satisfied prior to the end of the applicable restriction period or periods
established by the Board for such Award (each, a “Restricted Stock Award”).



     (b) Terms and Conditions. The Board shall determine the terms and conditions of a
Restricted Stock Award, including the conditions for repurchase (or forfeiture) and the issue
price, if any.



     (c) Stock Certificates. Any stock certificates issued in respect of a Restricted
Stock Award shall be registered in the name of the Participant and, unless otherwise determined by
the Board, deposited by the Participant, together with a stock power endorsed in blank, with the
Company (or its designee). At the expiration of the applicable restriction periods, the Company
(or such designee) shall deliver the certificates no longer subject to such restrictions to the
Participant or if the Participant has died, to the beneficiary designated, in a manner determined
by the Board, by a Participant to receive amounts due or exercise rights of the Participant in the
event of the Participant’s death (the “Designated Beneficiary”). In the absence of an effective
designation by a Participant, “Designated Beneficiary” shall mean the Participant’s estate.



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     (d) Deferred Delivery of Shares. The Board may, at the time any Restricted Stock
Award is granted, provide that, at the time Common Stock would otherwise be delivered pursuant to
the Award, the Participant shall instead receive an instrument evidencing the right to future
delivery of Common Stock at such time or times, and on such conditions, as the Board shall specify.
The Board may at any time accelerate the time at which delivery of all or any part of the Common
Stock shall take place.


8. Other Stock-Based Awards.




    Other Awards of shares of Common Stock, and other Awards that are valued in whole or in part
by reference to, or are otherwise based on, shares of Common Stock or other property, may be
granted hereunder to Participants (“Other Stock Unit Awards”), including without limitation Awards
entitling recipients to receive shares of Common Stock to be delivered in the future. Such Other
Stock Unit Awards shall also be available as a form of payment in the settlement of other Awards
granted under the Plan or as payment in lieu of compensation to which a Participant is otherwise
entitled. Other Stock Unit Awards may be paid in shares of Common Stock or cash, as the Board
shall determine. Subject to the provisions of the Plan, the Board shall determine the conditions
of each Other Stock Unit Award, including any purchase price applicable thereto. At the time any
Award is granted, the Board may provide that, at the time Common Stock would otherwise be delivered
pursuant to the Award, the Participant will instead receive an instrument evidencing the
Participant’s right to future delivery of the Common Stock.


9. Adjustments for Changes in Common Stock and Certain Other Events.




    (a) Changes in Capitalization. In the event of any stock split, reverse stock split,
stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or
other similar change in capitalization or event, or any distribution to holders of Common Stock
other than an ordinary cash dividend, (i) the number and class of securities available under this
Plan, (ii) the per-Participant limit set forth in Section 4(b), (iii) the number and class of
securities and exercise price per share of each outstanding Option, (iv) the repurchase price per
share subject to each outstanding Restricted Stock Award and (v) the share- and per-share-related
provisions of each outstanding Stock Appreciation Right and Other Stock Unit Award, shall be
appropriately adjusted by the Company (or substituted Awards may be made, if applicable) to prevent
enlargement or dilution of rights to the extent determined by the Board.



     (b) Reorganization Events.



          (1) Definition. A “Reorganization Event” shall mean: (a) any merger or consolidation
of the Company with or into another entity as a result of which all of the Common Stock of the
Company is converted into or exchanged for the right to receive cash, securities or other property,
(b) any exchange of all of the Common Stock of the Company for cash, securities or other property
pursuant to a share exchange transaction or (c) any liquidation or dissolution of the Company.



          (2) Consequences of a Reorganization Event on Awards Other than Restricted Stock
Awards. In connection with a Reorganization Event, the Board shall take any one or more



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of the following actions as to all or any outstanding Awards on such terms as the Board
determines: (i) provide that Awards shall be assumed, or substantially equivalent Awards shall be
substituted, by the acquiring or succeeding corporation (or an affiliate thereof), (ii) upon
written notice to a Participant, provide that the Participant’s unexercised Options or other
unexercised Awards shall become exercisable in full and will terminate immediately prior to the
consummation of such Reorganization Event unless exercised by the Participant within a specified
period following the date of such notice, (iii) provide that outstanding Awards shall become
realizable or deliverable, or restrictions applicable to an Award shall lapse, in whole or in part
prior to or upon such Reorganization Event, (iv) in the event of a Reorganization Event under the
terms of which holders of Common Stock will receive upon consummation thereof a cash payment for
each share surrendered in the Reorganization Event (the “Acquisition Price”), make or provide for a
cash payment to a Participant equal to (A) the Acquisition Price times the number of shares of
Common Stock subject to the Participant’s Options or other Awards (to the extent the exercise price
does not exceed the Acquisition Price) minus (B) the aggregate exercise price of all such
outstanding Options or other Awards, in exchange for the termination of such Options or other
Awards, (v) provide that, in connection with a liquidation or dissolution of the Company, Awards
shall convert into the right to receive liquidation proceeds (if applicable, net of the exercise
price thereof) and (vi) any combination of the foregoing.




          For purposes of clause (i) above, an Option shall be considered assumed if, following
consummation of the Reorganization Event, the Option confers the right to purchase, for each share
of Common Stock subject to the Option immediately prior to the consummation of the Reorganization
Event, the consideration (whether cash, securities or other property) received as a result of the
Reorganization Event by holders of Common Stock for each share of Common Stock held immediately
prior to the consummation of the Reorganization Event (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of the outstanding
shares of Common Stock); provided, however, that if the consideration received as a result of the
Reorganization Event is not solely common stock of the acquiring or succeeding corporation (or an
affiliate thereof), the Company may, with the consent of the acquiring or succeeding corporation,
provide for the consideration to be received upon the exercise of Options to consist solely of
common stock of the acquiring or succeeding corporation (or an affiliate thereof) equivalent in
fair market value to the per share consideration received by holders of outstanding shares of
Common Stock as a result of the Reorganization Event.



          To the extent all or any portion of an Option becomes exercisable solely as a result of clause
(ii) above, the Board may provide that upon exercise of such Option the Participant shall receive
shares subject to a right of repurchase by the Company or its successor at the Option exercise
price; such repurchase right (x) shall lapse at the same rate as the Option would have become
exercisable under its terms and (y) shall not apply to any shares subject to the Option that were
exercisable under its terms without regard to clause (ii) above.



          (3) Consequences of a Reorganization Event on Restricted Stock Awards. Upon the
occurrence of a Reorganization Event other than a liquidation or dissolution of the Company, the
repurchase and other rights of the Company under each outstanding Restricted Stock Award shall
inure to the benefit of the Company’s successor and shall apply to the cash, securities or other
property which the Common Stock was converted into or exchanged for pursuant to such Reorganization
Event in the same manner and to the same extent as they applied



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to the Common Stock subject to such Restricted Stock Award. Upon the occurrence of a
Reorganization Event involving the liquidation or dissolution of the Company, except to the extent
specifically provided to the contrary in the instrument evidencing any Restricted Stock Award or
any other agreement between a Participant and the Company, all restrictions and conditions on all
Restricted Stock Awards then outstanding shall automatically be deemed terminated or satisfied.



10. General Provisions Applicable to Awards




     (a) Transferability of Awards. Except as the Board may otherwise determine or provide
in an Award, Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by
the person to whom they are granted, either voluntarily or by operation of law, except by will or
the laws of descent and distribution or, other than in the case of an Incentive Stock Option,
pursuant to a qualified domestic relations order, and, during the life of the Participant, shall be
exercisable only by the Participant. References to a Participant, to the extent relevant in the
context, shall include references to authorized transferees.



     (b) Documentation. Each Award shall be evidenced in such form (written, electronic or
otherwise) as the Board shall determine. Each Award may contain terms and conditions in addition to
those set forth in the Plan.



     (c) Board Discretion. Except as otherwise provided by the Plan, each Award may be
made alone or in addition or in relation to any other Award. The terms of each Award need not be
identical, and the Board need not treat Participants uniformly.



     (d) Termination of Status. The Board shall determine the effect on an Award of the
disability, death, retirement, authorized leave of absence or other change in the employment or
other status of a Participant and the extent to which, and the period during which, the
Participant, or the Participant’s legal representative, conservator, guardian or Designated
Beneficiary, may exercise rights under the Award.



     (e) Withholding. Each Participant shall pay to the Company, or make provision
satisfactory to the Company for payment of, any taxes required by law to be withheld in connection
with an Award to such Participant. The Company may, to the extent permitted by law, deduct any
such tax obligations from any payment of any kind otherwise due to a Participant.



     (f) Amendment of Award. Subject to Section (g) below, the Board may amend, modify or
terminate any outstanding Award, including but not limited to, substituting therefor another Award
of the same or a different type, changing the date of exercise or realization, and converting an
Incentive Stock Option to a Nonstatutory Stock Option, provided that the Participant’s consent to
such action shall be required unless the Board determines that the action, taking into account any
related action, would not materially and adversely affect the Participant.



     (g) Limitation on Repricing and Cash Buyouts. Unless such action is approved by the
Company’s stockholders, the Company may not (except as provided for under Section 9): (1) amend
any outstanding Option granted under the Plan to provide an exercise price per share that is lower
than the then-current exercise price per share of such outstanding Option, (2) cancel any



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outstanding option (whether or not granted under the Plan) and grant in substitution therefor
new Awards under the Plan covering the same or a different number of shares of Common Stock and
having an exercise price per share lower than the then-current exercise price per share of the
cancelled option, (3) cancel in exchange for a cash payment any outstanding Option with an exercise
price per share above the then-current Fair Market Value, other than pursuant to Section 9, or (4)
take any other action under the Plan that constitutes a “repricing” within the meaning of the rules
of the NASDAQ Stock Market.




     (h) Conditions on Delivery of Stock. The Company will not be obligated to deliver any
shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously
delivered under the Plan until (i) all conditions of the Award have been met or removed to the
satisfaction of the Company, (ii) in the opinion of the Company’s counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied, including any
applicable securities laws and any applicable stock exchange or stock market rules and regulations,
and (iii) the Participant has executed and delivered to the Company such representations or
agreements as the Company may consider appropriate to satisfy the requirements of any applicable
laws, rules or regulations.



     (i) Acceleration. The Board may at any time provide that any Award shall become
immediately exercisable in full or in part, free of some or all restrictions or conditions, or
otherwise realizable in full or in part, as the case may be.


11. Miscellaneous




     (a) No Right To Employment or Other Status. No person shall have any claim or right
to be granted an Award, and the grant of an Award shall not be construed as giving a Participant
the right to continued employment or any other relationship with the Company. The Company
expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a
Participant free from any liability or claim under the Plan, except as expressly provided in the
applicable Award.



     (b) No Rights As Stockholder. Subject to the provisions of the applicable Award, no
Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any
shares of Common Stock to be distributed with respect to an Award until becoming the record holder
of such shares. Notwithstanding the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock dividend and the exercise price of and the number of shares
subject to such Option are adjusted as of the date of the distribution of the dividend (rather than
as of the record date for such dividend), then an optionee who exercises an Option between the
record date and the distribution date for such stock dividend shall be entitled to receive, on the
distribution date, the stock dividend with respect to the shares of Common Stock acquired upon such
Option exercise, notwithstanding the fact that such shares were not outstanding as of the close of
business on the record date for such stock dividend.



     (c) Effective Date and Term of Plan. The Plan shall become effective on the date on
which it is adopted by the Board, but no Award may be granted unless and until the Plan has been
approved by the Company’s stockholders. No Awards shall be granted under the Plan after the
completion of 10 years from the earlier of (i) the date on which the Plan was adopted by the



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Board or (ii) the date the Plan was approved by the Company’s stockholders, but Awards
previously granted may extend beyond that date.




     (d) Amendment of Plan. The Board may amend, suspend or terminate the Plan or any
portion thereof at any time; provided that, to the extent determined by the Board, no amendment
requiring stockholder approval under any applicable legal, regulatory or listing requirement shall
become effective until such stockholder approval is obtained. No Award shall be made that is
conditioned upon stockholder approval of any amendment to the Plan.



     (e) Provisions for Foreign Participants. The Board may modify Awards or Options
granted to Participants who are foreign nationals or employed outside the United States or
establish subplans or procedures under the Plan to recognize differences in laws, rules,
regulations or customs of such foreign jurisdictions with respect to tax, securities, currency,
employee benefit or other matters.



     (f) Governing Law. The provisions of the Plan and all Awards made hereunder shall be
governed by and interpreted in accordance with the laws of the Commonwealth of Massachusetts,
without regard to any applicable conflicts of law.




	 	 	 	As approved by the Board of Directors
on March 4, 2004 and by the
stockholders on May 13, 2004; amended
by the Board of Directors on October
25, 2006; amended by the Board of
Directors on February 9, 2009 and by
the stockholders on May 4, 2009; and
amended by the Compensation Committee
of the Board of Directors on February
24, 2011






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