Document:

exv4w1

EXHIBIT 4.1

THE JABIL CIRCUIT, INC.

EXECUTIVE DEFERRED COMPENSATION PLAN

Effective as of January 1, 2011.

 

 

JABIL CIRCUIT, INC.

EXECUTIVE DEFERRED COMPENSATION PLAN

ARTICLE I — PURPOSE; EFFECTIVE DATE

	1.1.	 	Purpose. The purpose of the Jabil Circuit, Inc. Executive Deferred Compensation Plan
(hereinafter, the “Plan”) is to permit a select group of management or highly compensated
employees of JABIL CIRCUIT, INC. (and its selected subsidiaries and/or affiliates) to
defer the receipt of income which would otherwise become payable to them. It is intended that
this Plan, by providing these eligible individuals an opportunity to defer the receipt of
income, will assist in retaining and attracting individuals of exceptional ability.
	 
	1.2.	 	Effective Date. It is the intent that all of the amounts deferred and benefits
provided under this Plan will be subject to the terms of Section 409A of the Code, and the
terms of this Plan shall be effective as of January 1, 2011 (the “Effective Date”).
	 
	1.3.	 	Plan Type. For purposes of Section 409A, the portion of the amounts deferred by the
Participants and benefits attributable thereto, shall be considered an elective account
balance plan as defined in Treas. Reg. §1.409A -1(c)(2)(i)(A), or as otherwise provided by the
Code; the portion of the amounts deferred as matching or employer contributions and benefits
attributable thereto, shall be considered a nonelective account balance plan as defined in
Treas. Reg. §1.409A -1(c)(2)(i)(B), or as otherwise provided by the Code.

ARTICLE II — DEFINITIONS

     For the purpose of this Plan, the following terms shall have the meanings indicated, unless
the context clearly indicates otherwise:

	2.1.	 	Account(s). “Account(s)” means the account or accounts maintained on the books of
the Company used solely to calculate the amount payable to each Participant under this Plan
and shall not constitute a separate fund of assets. Account(s) shall be deemed to exist from
the time amounts are first credited to such Account(s) until such time that the entire amount
credited to that Account has been distributed in accordance with this Plan. The Accounts
available for each Participant shall be identified as:

	 	a)	 	Separation Account; and,
	 
	 	b)	 	In-Service Account; each Participant may maintain up to two (2) In-Service
Accounts based on selecting different times and/or form of payments as selected under
Article V, below.

	2.2.	 	Beneficiary. “Beneficiary” means the person, persons or entity as designated by the
Participant, entitled under Article VI to receive any Plan benefits payable after the
Participant’s death.
	 
	2.3.	 	Board. “Board” means the Board of Directors of Jabil Circuit, Inc.
	 
	2.4.	 	Change in Control. “Change in Control” shall mean the happening of any of the
following after the Effective Date:

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	 	a)	 	the direct or indirect sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the properties or assets of Jabil and its
Subsidiaries taken as a whole to any person (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) other than Jabil or one of its Subsidiaries, provided, for
the avoidance of doubt, that the sale of a Subsidiary shall not constitute a Change in
Control if the Subsidiary does not represent substantially all of the properties or
assets of Jabil and its Subsidiaries taken as a whole; or
	 
	 	b)	 	the adoption of a plan relating to Jabil’s liquidation or dissolution, with all
material contingencies satisfied or waived, and the taking of a substantial step to
implement such liquidation or dissolution; or
	 
	 	c)	 	the consummation of any transaction (including, without limitation, any merger
or consolidation) the result of which is that any person other than Jabil or its
Subsidiaries, becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of more than 50% of the combined voting power of Jabil’s
voting stock or other voting stock into which Jabil’s voting stock is reclassified,
consolidated, exchanged or changed, measured by voting power rather than number of
            shares; or
	 
	 	d)	 	Jabil consolidates with, or merges with or into, any person, or any person
consolidates with, or merges with or into, Jabil, in any such event pursuant to a
transaction in which any of the voting stock of Jabil or such other person is converted
into or exchanged for cash, securities or other property, other than any such
transaction where the shares of voting stock of Jabil outstanding immediately prior to
such transaction directly or indirectly constitute, or are converted into or exchanged
for, a majority of the voting stock of the surviving person immediately after giving
effect to such transaction; or
	 
	 	e)	 	the first day on which a majority of the members of the Board are not
Continuing Directors.

     For purposes of this Section 2.4, the following terms shall have the meanings indicated:

	 	i)	 	“Continuing Director” means any member of the Board who (1) was a member of the
Board on the Effective Date; or (2) was nominated for election or elected to the Board
with the approval of a majority of the Continuing Directors who were members of the
Board at the time of such nomination or election.
	 
	 	ii)	 	“Exchange Act” means the Securities Exchange Act of 1934, as amended.
References to any provision of the Exchange Act or regulation includes regulations and
applicable guidance thereunder.
	 
	 	iii)	 	“Jabil” means Jabil Circuit, Inc., a Delaware corporation.
	 
	 	iv)	 	“Subsidiary” means a corporation, domestic or foreign, of which not less than
50 percent of the voting shares are held by Jabil or a Subsidiary, whether or not such
corporation now exists or is hereafter organized or acquired by Jabil or a Subsidiary.

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	2.5.	 	Code. “Code” means the Internal Revenue Code of 1986, as may be amended from time to
time. Any reference in this Plan to “applicable guidance”, “further guidance” or other
similar terms shall include any
proposed, temporary or final regulations, or any other guidance, promulgated with respect to
or in connection with Section 409A of the Code by the U.S. Department of Treasury or the
Internal Revenue Service.
	 
	2.6.	 	Committee. “Committee” means the Committee appointed by the Compensation Committee
to administer the Plan pursuant to Article VII.
	 
	2.7.	 	Compensation Committee. “Compensation Committee” means the Compensation Committee of
the Board.
	 
	2.8.	 	Company. “Company” means Jabil Circuit, Inc. and any directly or indirectly
affiliated subsidiary corporations, any other affiliate designated by the Board, or any
successor to the business thereof.
	 
	2.9.	 	Compensation. “Compensation” means the base salary payable to and bonus or incentive
compensation earned by a Participant with respect to employment services performed for the
Company by the Participant and considered to be “wages” for purposes of federal income tax
withholding. For purposes of this Plan only, Compensation shall be calculated before
reduction for any amounts deferred by the Participant pursuant to the Company’s plans
maintained under Section 401(k) or Section 125 of the Code, or pursuant to this Plan or any
other non-qualified plan which permits the voluntary deferral of compensation. Inclusion of
any other forms of compensation is subject to Committee approval.
	 
	2.10.	 	Deferral Commitment. “Deferral Commitment” means a commitment made by a Participant
to defer a portion of Compensation as set forth in Article III and as permitted by the
Committee in its sole discretion. The Deferral Commitment shall apply to each payment of
Compensation payable to a Participant, and the Committee is empowered to group the various
types of Compensation (salary or bonus) together for purposes of effecting the election to
defer. By way of example: the Committee may apply the election to defer “salary” to salary,
commissions, and any other regularly occurring form of compensation; or the Committee may
apply the election to defer “bonus” to annual bonuses, short-term bonus, long term bonus
arrangements and other forms of incentive based compensation. Such determination shall be
made by the Committee prior to the time that such Deferral Commitment becomes irrevocable
under this Plan. The Deferral Commitment shall specify the Account or Accounts to which the
Compensation deferred shall be credited. Except as otherwise provided in this Plan, such
designation shall be made in the form of a whole percentage; and in the case of a deferral of
bonuses, the designation may also be made in the form of a whole percentage in excess of a
stated dollar amount, or an exact stated dollar amount. A Deferral Commitment with respect to
any Compensation which is determined by the Committee to be Performance Based Compensation
shall be made as provided by the Committee, but no later than six (6) months prior to the end
of such performance period. Any Deferral Commitment shall be made in a form and at a time
deemed acceptable to the Committee, and the Committee may limit the type of Compensation that
is permitted to be deferred under this Plan at any time and/or may restrict the Participants
or group of Participants eligible to defer any type of Compensation at any time.
	 
	2.11.	 	Deferral Period. “Deferral Period” means each calendar year, except that if a
Participant first becomes eligible after the beginning of a calendar year, the initial
Deferral Period shall be the date the Participant first becomes eligible to participate in
this Plan through and including December 31st of that calendar year.
	 
	2.12.	 	Determination Date. “Determination Date” means each calendar day.

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	2.13.	 	Disability. “Disability” means a physical or mental condition whereby the
Participant: (i) is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months, or (ii) is, by reason of any
medically determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than twelve (12)
months, receiving income replacement benefits for a period of not less than three (3) months
under an accident and health plan covering employees of the Participant’s employer.
	 
	2.14.	 	Distribution Election. “Distribution Election” means the form prescribed by the
Committee and completed by the Participant, indicating the chosen form of payment for benefits
payable from each Account under this Plan, as elected by the Participant.
	 
	2.15.	 	Discretionary Contribution. “Discretionary Contribution” means the Company
contribution, if any, credited to a Participant’ Account(s) under Section 4.5, below, as
determined by the Committee in its sole discretion.
	 
	2.16.	 	ERISA. “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended.
	 
	2.17.	 	Financial Hardship. “Financial Hardship” means a severe financial hardship to the
Participant described in Code Section 409A and other applicable guidance, including a severe
financial hardship resulting from an illness or accident of the Participant, the Participant’s
spouse, the Participant’s beneficiary or a dependent (as defined in Section 152(a) of the
Code) of the Participant, loss of the Participant’s property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result of events beyond the control
of the Participant.
	 
	2.18.	 	401(k) Plan. “401(k) Plan” means the “Jabil 401(k) Retirement Plan”, or any other
successor defined contribution plan maintained by the Company that qualifies under Section
401(a) of the Code and satisfies the requirements of Section 401(k) of the Code.
	 
	2.19.	 	Interest. “Interest” means the amount credited to or charged against a
Participant’s Separation and/or In-Service Account(s) on each Determination Date, which shall
be based on the Valuation Funds chosen by the Participant as described in Section 2.25, below
and in a manner consistent with Section 4.3, below. Such credits or charges to a Participant’s
Account may be either positive or negative to reflect the increase or decrease in value of the
Account in accordance with the provisions of this Plan.
	 
	2.20.	 	Matching Contribution. “Matching Contribution” means the Company contribution, if
any, credited to a Participant’s Separation or In-Service Account(s) under Section 4.4, below,
as determined by the Committee in its sole discretion.
	 
	2.21.	 	Participant. “Participant” means any individual who is eligible to participate in
this Plan and whose participation in this Plan has become effective pursuant to Section 3.1,
below. Such individual shall remain a Participant in this Plan for the period of deferral, or
credit, and until such time as all benefits payable under this Plan to or on behalf of such
individual have been paid in accordance with the provisions hereof.
	 
	2.22.	 	Performance Based Compensation. “Performance Based Compensation” means the portion
of Compensation determined by the Committee to satisfy the requirements set forth in Treas.
Reg. §1.409A-1(e), and such Performance Based Compensation may be determined on a fiscal or
calendar year basis.
	 
	2.23.	 	Plan. “Plan” means the Jabil Circuit, Inc. Executive Deferred Compensation Plan as
amended from time to
time.

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	2.24.	 	Termination. “Termination”, “terminates employment” or any other similar such
phrase means a Participant’s “separation from service” with the Company, for any reason,
within the meaning of Section 409A of the Code, and Treas. Reg. §1.409A-1(h) and other
applicable guidance; except for purposes of determining whether a Participant has had a
“separation from service” as described under Code Section 409A, the term “Company” means the
Company and any affiliate with which the Company would be considered a single employer under
Sections 414(b) or 414(c) of the Code, provided that in applying Sections 1563(a)(1), (2), and
(3) of the Code for purposes of determining a controlled group of corporations under Section
414(b) of the Code, the language “at least 50 percent” is used instead of “at least 80
percent” each place it appears in Sections 1563(a)(1), (2) and (3) of the Code, and in
applying Treas. Reg. §1.414(c)-2 for purposes of determining trades or businesses (whether or
not incorporated) that are under common control for purposes of Section 414(c) of the Code,
“at least 50 percent” is used instead of “at least 80 percent” each place it appears in Treas.
Reg. §1.414(c)-2.
	 
	2.25.	 	Valuation Funds. “Valuation Funds” means one or more of the funds or indices that
are identified and listed by the Committee. These Valuation Funds are used solely to
calculate the Interest that is credited to or charged against each Participant’s Separation
and/ or In-Service Account(s) in accordance with Article IV, below, and do not represent, nor
create or convey any beneficial interest on the part of the Participant in any asset or other
property of the Company. The determination of the increase or decrease in the performance of
each Valuation Fund shall be made by the Committee in its reasonable discretion. The
Committee shall select the various Valuation Funds available to the Participants with respect
to this Plan and shall set forth a list of these Valuation Funds attached hereto as Exhibit A,
which may be amended from time to time in the discretion of the Committee.

ARTICLE III — ELIGIBILITY AND PARTICIPATION

	3.1.	 	Eligibility and Participation.

	 	a)	 	Eligibility. Eligibility to participate in the Plan shall be limited to
those select key management and highly compensated employees of the Company who are
designated in writing by the Committee from time to time.
	 
	 	b)	 	Participation. An eligible individual’s participation in the Plan
shall become effective, and the individual shall become a Participant, upon the first
to occur of (i) an amount being credited to an Account on behalf of the individual or
(ii) the completion and submission of a Deferral Commitment, an Allocation Form, and a
Distribution Election to the Committee at a time and in a form determined by the
Committee, but in no event later than the time prescribed under Section 409A of the
Code and applicable guidance.
	 
	 	c)	 	First-Year Participation. When an individual first becomes eligible to
participate in this Plan, and is not a participant in another plan maintained by the
Company which is considered to be of a similar type as defined in Treas. Reg. §1.409A
-1(c)(2)(i)(A) or (B), or as otherwise provided by the Code, a Deferral Commitment may
be submitted to the Committee within thirty (30) days after the individual becomes
eligible to participate in this Plan. Such Deferral Commitment will be effective only
with regard to Compensation earned and payable with respect to services performed
following submission of the Deferral Commitment to the Committee.

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	3.2.	 	Form of Deferral Commitment. A Participant may elect to make a Deferral Commitment
at such time and
in such form as determined by the Committee, but in no event later than the date on which
the election is required to become irrevocable as set forth in this Plan or as otherwise
required by Section 409A of the Code and applicable guidance. The Deferral Commitment shall
specify the following:

	 	a)	 	Timing of Deferral Election. The Participant shall make an election to
defer Compensation by filing a Deferral Commitment with the Committee, and such
election shall become irrevocable no later than the last day of the calendar year prior
to the Deferral Period with respect to which the right to such Compensation arises,
except as provided in Section 3.1(c), above. In addition, notwithstanding anything to
the contrary in this Plan, a Deferral Commitment with respect to Performance Based
Compensation may be filed with the Committee and such election shall become irrevocable
no later than six months before the end of the performance period with respect to which
the right to such Performance Based Compensation arises, provided such Participant has
been continuously employed with the Company from the later of the beginning of the
performance period or the date on which the performance criteria for such Performance
Based Compensation was established.
	 
	 	b)	 	Deferral Amounts; Accounts. A Deferral Commitment may be made with
respect to each payment and/or type of Compensation payable by the Company to a
Participant and shall designate the portion of each deferral that shall be credited to
each of the various Accounts. In addition, no amounts shall be deferred into an
In-Service Account during a Deferral Period when amounts are scheduled to be paid with
respect to such Account. Notwithstanding anything to the contrary, for purposes of
this Plan only, base salary attributable to the final pay period of any calendar year
shall be deemed to be earned in the subsequent calendar year, provided the amounts are
in fact paid (or payable) in the subsequent calendar year under the Company’s normal
compensation practices. The Participant shall set forth the amount to be deferred in
the manner provided by the Committee.
	 
	 	c)	 	Allocation to Valuation Funds. The Participant shall specify in a
separate form (known as the “Allocation Form”) filed with the Committee, the portion of
each of the Separation or In-Service Accounts to be credited to the various available
Valuation Funds.
	 
	 	d)	 	Maximum Deferral. The maximum amount of Compensation that is salary
that may be deferred shall be seventy-five percent (75%); the maximum amount of
Compensation that is bonus or incentive compensation that may be deferred shall be one
hundred percent (100%).

	3.3.	 	Period of Commitment. Any Deferral Commitment made by a Participant at the times
provided by this Plan, shall remain in effect for the Deferral Period during which the right
to such Compensation arises. A Participant must make a separate Deferral Commitment with
respect to each type of Compensation for each Deferral Period at the time provided; no
Deferral Commitment with respect to a type of Compensation with respect to one Deferral Period
shall be effective for a subsequent Deferral Period. Notwithstanding, if a Participant
suffers a Disability prior to the end of the Deferral Period, the Deferral Period shall end as
of the date of Disability.
	 
	3.4.	 	Irrevocability of Deferral Commitment. Except as provided in Section 3.3, above, or
Section 5.4, a Deferral Commitment shall become irrevocable as of the last day on which an
election may be made with respect to such Deferral Commitment under the terms of this Plan.
	 
	3.5.	 	Change in Status. If the Committee determines that a Participant’s employment
performance is no longer at a level that warrants reward through participation in this Plan,
but does not terminate the Participant’s employment with the Company, no new Deferral
Commitment may be made by such Participant after notice of such determination is given by the
Committee, unless the Participant later satisfies the requirements of
Section 3.1.

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	3.6.	 	Defaults in Event of Incomplete or Inaccurate Deferral Documentation. In the event
that a Participant submits a Deferral Commitment, Allocation Form or Distribution Election to
the Committee that, in the sole discretion of the Committee, lacks information necessary to
the efficient operation of this Plan or contains inaccurate information, the Committee shall
be authorized to treat such form as if the following elections had been made by the
Participant, and such information shall be communicated to the Participant:

	 	a)	 	If no Account is listed — treat as if the Separation Account was elected;
	 
	 	b)	 	If amounts to be credited to the Accounts equal less than 100% of the Deferral
Commitment — treat as if the balance was deferred into the Separation Account;
	 
	 	c)	 	If amounts to be credited to the Accounts equal more than 100%
—proportionately reduce the amount to be credited to each Account to equal, in the
aggregate, 100%;
	 
	 	d)	 	If an In-Service Account is listed, but no deferrals can be made into that
Account due to the fact that benefits are scheduled to be paid or are being paid from
that In-Service Account during the Deferral Period, then the amounts elected to be
deferred shall be credited to another In-Service Account, if such other In-Service
Account is available for deferral, and if not, then to the Separation Account;
	 
	 	e)	 	If no Valuation Fund is selected — treat as if the Stable Value Fund was
elected;
	 
	 	f)	 	If the amounts to be credited to the Valuation Fund(s) selected equal less than
100% — treat as if the Stable Value Fund was elected for the remaining balance;
	 
	 	g)	 	If the amounts to be credited to the Valuation Fund(s) selected equal more than
100% — proportionately reduce the amounts to be credited to each Valuation Fund to
equal 100%;
	 
	 	h)	 	If no Distribution Election is chosen —treat as if a lump sum payment was
elected for the In-Service Account and treat as if installments payable over a period
of three (3) years was elected for the Separation Account; and,
	 
	 	i)	 	If no time of payment is chosen for the In-Service Account —treat as if the
earliest possible date available under the provisions of Section 5.2, below, was
elected.

ARTICLE IV — SEPARATION AND IN-SERVICE ACCOUNTS

	4.1.	 	Accounts. The salary and incentive bonus Compensation deferred by a Participant
under the Plan, any Matching or Discretionary Contributions and Interest shall be credited to
the Participant’s Separation and/or In-Service Account(s) as selected by the Participant, or
as otherwise provided in this Article. Separate accounts may be maintained on the books of
the Company to reflect the different Accounts chosen by the Participant, and the Participant
shall designate the portion of each deferral that will be credited to each Account as set
forth in Section 3.2(b), above. These Accounts shall be used solely to calculate the amount
payable to each Participant under this Plan and shall not constitute a separate fund of
assets.
	 
	4.2.	 	Timing of Credits; Withholding. A Participant’s deferred Compensation shall be
credited to each Account designated by the Participant as soon as practical after the date the
Compensation deferred would have otherwise been payable to the Participant. Matching and
Discretionary Contributions shall be credited to the appropriate Account(s) as provided by the
Committee. Any withholding of taxes or other amounts with respect to the Participant’s
deferred Compensation or other amounts credited to the Participant under this Plan that is
required by local, state, federal or foreign law shall be withheld from the Participant’s
non-deferred compensation to the maximum extent possible, and any remaining amount shall
reduce the amount credited to the Participant’s Accounts in a manner specified by the
Committee.

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	4.3.	 	Valuation Funds. A Participant shall designate, at a time and in a manner acceptable
to the Committee, one or more Valuation Funds for each Separation or In-Service Account for
the sole purpose of determining the amount of Interest to be credited or charged to such
Account. Such election shall designate the portion of each such Account (and of each deferral
of Compensation credited to that Account) that shall be allocated among the available
Valuation Fund(s), and such election shall continue to apply until such time as the
Participant shall file a new election with the Committee. The manner in which such elections
shall be made, the frequency with which such elections may be changed and the manner in which
such elections shall become effective shall be determined in accordance with the procedures to
be adopted by the Committee or its delegates from time to time. As of the Effective Date,
such elections may be made on a daily basis electronically, and such elections shall become
effective on the date made or the next available Determination Date.
	 
	4.4.	 	Matching Contributions. The Company may make a Matching Contribution to the Account
of any Participant designated by the Committee, which is intended to replace any matching
contribution which is not permitted to be made into the 401(k) Plan due solely to
participation in this Plan. For purposes of this provision, the Participant shall be deemed
to have elected to defer into the 401(k) Plan the percentage of eligible compensation
necessary to receive the maximum matching contribution under the 401(k) Plan. Further, for
purposes of determining the amount of the matching contribution to be restored, the applicable
limitations under Code Sections 401(a)(17) and 415 shall be considered. The Committee shall
determine the amount of Matching Contribution under this Section, in its sole discretion, as
soon as is practical following the close of the calendar year, and unless otherwise provided
by the Committee, such amount shall be credited to the Separation Account at that time.
	 
	4.5.	 	Discretionary Contributions. In its sole discretion, the Company may make
Discretionary Contributions to a Participant’s Account. Discretionary Contributions shall be
credited at such times, in such amounts, and to such Separation and In-Service Accounts as
determined by the Committee and approved by the Compensation Committee.
	 
	4.6.	 	Determination of Accounts. Each Participant’s Separation and In-Service Accounts as
of each Determination Date shall consist of the balance of that Account as of the immediately
preceding Determination Date, adjusted as follows:

	 	a)	 	New Deferrals. Each Account shall be increased by any deferred
Compensation credited since such prior Determination Date in the proportion chosen by
the Participant, except that no amount of new deferrals shall be credited to an
In-Service Account during or after the Deferral Period that a distribution is to be
made from that Account.
	 
	 	b)	 	Company Contributions. Each Account shall be increased by any
Discretionary and/or Matching Contributions credited since such prior Determination
Date as set forth above in Sections 4.4 and 4.5 or as otherwise directed by the
Committee.
	 
	 	c)	 	Distributions. Each Account shall be reduced by the amount of each
benefit payment made with respect to that Account since the prior Determination Date.
Distributions shall be deemed to have been made proportionally from each of the
Valuation Funds maintained within such Account based on the proportion that such
Valuation Fund bears to the sum of all Valuation Funds maintained within such Account
for that Participant as of the Determination Date immediately preceding the date of
payment.
	 
	 	d)	 	Interest. Each Account shall be increased or decreased (but not below
zero) by the Interest credited or charged to such Account since such prior
Determination Date.

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	4.7.	 	Vesting of Accounts. Each Participant shall be one hundred percent (100%) vested in
the amounts credited to such Participant’s Separation and In-Service Accounts, except as may
be otherwise provided by the Committee with respect to Discretionary Contributions.
	 
	4.8.	 	Statement of Accounts. To the extent that the Company does not arrange for Accounts
to be accessible online by the Participant, the Committee shall provide to each Participant a
statement showing the amounts credited or charged to such Participant’s Accounts no less
frequently than annually.

ARTICLE V — PLAN BENEFITS

	5.1.	 	Separation Account. The vested portion of a Participant’s Separation Account shall
be distributed to the Participant upon termination of employment with the Company.

	 	a)	 	Timing of Payment. Subject to Section 5.6, benefits payable with
respect to the Separation Account shall commence as soon as practical after the date of
the Participant’s termination, but no later than ninety (90) days following the
Participant’s termination; provided, however, the Participant may not, directly or
indirectly, designate the taxable year of the payment.
	 
	 	b)	 	Form of Payment. The form of benefit payment upon termination of
employment with the Company (other than by reason of death) shall be that form selected
by the Participant in the first Deferral Commitment which designated a portion of the
Compensation deferred be allocated to the Separation Account, and as permitted pursuant
to Section 5.7. If the form of payment selected provides for installment payments,
subsequent installment payments shall be made on or about the anniversary of the
initial installment payment.

	5.2.	 	In-Service Account. The vested portion of a Participant’s In-Service Account shall be
distributed to the Participant upon the date specified by the Participant, except as otherwise
provided under the terms of this Plan.

	 	a)	 	Timing of Payment. Subject to Section 5.6, benefits payable with
respect to the In-Service Account shall commence in April of the year specified in the
first Deferral Commitment which designated a portion of the Compensation deferred be
allocated to the In-Service Account. In no event shall the year selected be earlier
than the fourth calendar year following the initial filing of the Deferral Commitment
with respect to that In-Service Account, provided that if the Deferral Commitment
relates to the Participant’s fiscal year 2011 bonus Compensation, the Participant may
select the third calendar year following the initial filing of the Deferral Commitment
with respect to that In-Service Account. In the event that the Participant terminates
employment with the Company prior to the date of payment in the year so specified, the
benefits under this Section shall commence as soon as administratively practical after
termination of employment, but in no event later than ninety (90) days following the
Participant’s termination; provided, however, the Participant may not, directly or
indirectly, designate the taxable year of the payment.
	 
	 	b)	 	Form of Payment. The form of benefit payment from the In-Service
Account shall be that form selected by the Participant pursuant to Section 5.7, below,
except that if the Participant terminates employment with the Company prior to the
distribution date so specified, then the In-Service Account shall be paid in the same
form applicable to the payment of the Separation Account. If the form of payment
selected provides for installment payments, subsequent installment payments shall be
made on or about the anniversary of the initial installment payment.

9

 

	 	c)	 	Change of Time and/or Form of Payment. The Participant may
subsequently amend the form of payment or the intended date of payment of an In-Service
Account to a date later than that date of payment in force immediately prior to the
filing of such request, by filing such amendment with the
Committee no later than twelve (12) months prior to the current date of payment. The
Participant may file this amendment, provided that each amendment must provide for a
payout as otherwise permitted under this Section at a date no earlier than five (5)
years after the date of payment in force immediately prior to the filing of such
request, and the amendment may not take effect for twelve (12) months after the
request is made. For purposes of this Article, a payment of annual installments over
a number of years shall be treated as a single payment, as provided in Treas. Reg.
§1-409A-2(b)(2)(iii).

	5.3.	 	Death Benefit. Upon the death of a Participant prior to the commencement of benefits
under this Plan from any particular Account, the Company shall pay to the Participant’s
Beneficiary the vested amount credited to that Account in the form of a lump sum payment as
soon as administratively possible; provided, however, the Beneficiary may not, directly or
indirectly, designate the taxable year of the payment. In the event of the death of the
Participant after the commencement of benefits under this Plan from any Separation or
In-Service Account, the benefits payable with respect to that Account(s) shall be paid to the
Participant’s designated Beneficiary at the same time and in the same manner as if the
Participant had survived.
	 
	5.4.	 	Hardship Distributions. Upon a finding that a Participant has suffered a Financial
Hardship, the Committee may, in its sole discretion, terminate the existing Deferral
Commitment, and/or make distributions with respect to the vested amount credited to any or all
of the Participant’s Separation and In-Service Accounts. The amount of any distribution shall
be limited to the amount reasonably necessary to meet the Participant’s needs resulting from
the Financial Hardship plus amounts necessary to pay taxes reasonably anticipated as a result
of the distribution, after taking into account the extent to which such Financial Hardship is
or may be relieved through the reimbursement or compensation by insurance, or otherwise or by
liquidation of the Participant’s assets (to the extent that liquidation of such assets would
not itself cause severe financial hardship). The amount of such distribution will not exceed
the vested amount credited to the Participant’s Separation and In-Service Accounts. If
payment is made due to Financial Hardship, the Participant’s deferrals under this Plan shall
cease for the period of the Financial Hardship. If the Participant is again eligible to
participate, any resumption of the Participant’s deferrals under the Plan after the period of
Financial Hardship shall be made only at the election of the Participant in accordance with
Article III herein.
	 
	5.5.	 	Disability Distributions. Upon a finding that a Participant has suffered a
Disability, the Committee shall make a distribution of all of the vested amounts credited to
the Participant’s Separation and In-Service Accounts. The distribution shall be made in the
form of a lump sum and shall be paid as soon as administratively practical after the
determination of such Disability.
	 
	5.6.	 	Payment Due to Termination. Notwithstanding anything else to the contrary, payments
of benefits with respect to the Separation Account, and benefits payable with respect to an
In-Service Account caused by the termination of employment of a Participant, shall be payable
as otherwise provided, except that the initial payment shall be made no earlier than the
earlier to occur of the death of the Participant or the date that is six (6) months and one
day following the Participant’s termination of employment with the Company.
	 
	5.7.	 	Form of Payment. Unless otherwise specified in this Article, the benefits payable
from any Separation or In-Service Account under this Plan shall be paid in the form of benefit
as provided below, and specified by the Participant in the Distribution Election applicable to
that Account at the time of the initial deferral or credit to that Account. The permitted
forms of benefit payments are:

	 	a)	 	A lump sum amount which is equal to the vested amount credited to the Account;
and
	 
	 	b)	 	Annual installments for a period of up to ten (10) years (or in the event of
payment with respect
to an In-Service Account, a maximum of five (5) years) where the annual payment shall
be equal to the vested amount credited to the Account immediately prior to the
payment, multiplied by a fraction, the numerator of which is one (1) and the
denominator of which commences at the number of annual payments initially chosen and
is reduced by one (1) in each succeeding year. Interest on the vested unpaid amount
credited to the Account shall be based on the most recent allocation among the
available Valuation Funds chosen by the Participant, made in accordance with Section
4.3, above.

10

 

	5.8.	 	Small Account. If the vested unpaid amount credited to the Participant’s Separation
Account as of the time payments are to commence with respect to the Separation Account is less
than $50,000, such amount shall be paid in a lump sum, notwithstanding any election by the
Participant to the contrary; and, if the vested unpaid amount credited to the Participant’s
In-Service Account as of the time payments are to commence with respect to such In-Service
Account is less than $50,000, such amount shall be paid in a lump sum, notwithstanding any
election by the Participant to the contrary.
	 
	5.9.	 	Withholding. The Company shall withhold from any payment made pursuant to this Plan
any taxes required to be withheld from such payment under local, state, federal or foreign
law.
	 
	5.10.	 	Payments in Connection with a Domestic Relations Order. Notwithstanding anything to
the contrary, the Company may make distributions to someone other than the Participant if such
payment is necessary to comply with a domestic relations order, as defined in Code Section
414(p)(1)(B), involving the Participant. Where the domestic relations order permits
discretion on the part of the non-Participant spouse and such discretion has not been
exercised, the Company shall distribute to the non-Participant spouse the amounts subject to
the order as soon as practical.
	 
	5.11.	 	Payment to Guardian. If a Plan benefit is payable to a minor or a person declared
incompetent or to a person incapable of handling the disposition of the property, the
Committee may direct payment to the guardian, legal representative or person having the care
and custody of such minor, incompetent or person. The Committee may require such proof of
incompetency, minority, incapacity or guardianship as it may deem appropriate prior to
distribution. Such distribution shall completely discharge the Committee and the Company from
all liability with respect to such benefit. 
	 
	5.12.	 	Effect of Payment. The full payment of the applicable benefit under this Article V
shall completely discharge all obligations on the part of the Company to the Participant (and
the Participant’s Beneficiary) with respect to the operation of this Plan, and the
Participant’s (and Participant’s Beneficiary’s) rights under this Plan shall terminate.
	 
	5.13.	 	Prohibition on Acceleration of Payments; Separate Payment Rule. The time or
schedule of any payment or amount scheduled to be paid hereunder may not be accelerated except
as otherwise permitted under Code Section 409A and applicable guidance. For purposes of
applying the provisions of Code Section 409A, each separately identified amount to which a
Participant is entitled to payment on a determinable date under the Plan shall be treated as a
separate payment for purposes of applying the provisions of Code Section 409A, except that
installment payments of a separately identified amount shall be treated as a single payment.

11

 

ARTICLE VI — BENEFICIARY DESIGNATION

	6.1.	 	Beneficiary Designation. Subject to applicable law, each Participant shall have the
right, at any time, to designate one (1) or more persons or entity as Beneficiary (both
primary as well as secondary) to whom benefits under this Plan shall be paid in the event of
the Participant’s death prior to complete distribution of the vested amount credited to the
Participant’s Account. Each Beneficiary designation shall be in a written form prescribed by
the Committee and shall be effective only when filed with the Committee during the
Participant’s lifetime.
	 
	6.2.	 	Changing Beneficiary. Subject to applicable law, any Beneficiary designation may be
changed by a Participant without the consent of the previously named Beneficiary by the filing
of a new Beneficiary designation with the Committee.
	 
	6.3.	 	No Beneficiary Designation. If any Participant fails to designate a Beneficiary in
the manner provided above, if the designation is void or not recognized under applicable law,
or if the Beneficiary designated by a deceased Participant dies before the Participant or
before complete distribution of the Participant’s benefits, the Participant’s Beneficiary
shall be the person in the first of the following classes in which there is a survivor:

	 	a)	 	The Participant’s surviving spouse;
	 
	 	b)	 	The Participant’s children in equal shares, except that if any of the children
predeceases the Participant but leaves surviving issue, then such issue shall take by
right of representation the share the deceased child would have taken if living;
	 
	 	c)	 	The Participant’s estate.

	6.4.	 	Effect of Payment. Payment to the Beneficiary shall completely discharge the
Company’s obligations under this Plan.

ARTICLE VII — ADMINISTRATION

	7.1.	 	Committee; Duties. This Plan shall be administered by the Committee, which shall
consist of those individuals named by the Compensation Committee, except in the event of a
Change in Control as provided in Section 7.6 below. The Committee shall have the authority,
in its sole discretion, to make, amend, interpret and enforce all appropriate rules and
regulations for the administration of the Plan and decide or resolve any and all questions,
including interpretations of the Plan, as they may arise in such administration. A majority
vote of the Committee members shall control any decision. Members of the Committee may be
Participants under this Plan.
	 
	7.2.	 	Compliance with Section 409A of the Code. It is intended that the Plan comply with
the provisions of Section 409A of the Code, so as to prevent the inclusion in gross income of
any amounts deferred hereunder in a taxable year that is prior to the taxable year or years in
which such amounts would otherwise actually be paid or made available to the Participants or
their Beneficiaries. This Plan shall be construed, administered, and governed in a manner
that effects such intent, and the Committee shall not take any action that would be
inconsistent with such intent. Although the Committee shall use its best efforts to avoid the
imposition of taxation, interest and penalties under Section 409A of the Code, the tax
treatment of deferrals under this Plan is not warranted or guaranteed. Neither the Company,
the Compensation Committee, any director, officer, employee or advisor of the Company, nor the
Committee (nor its designee) shall be held liable for any taxes, interest, penalties or other
monetary amounts owed by any Participant, Beneficiary or other taxpayer as a result of the
Plan. For purposes of the Plan, the phrase “permitted by Section 409A of the Code,” or words
or
phrases of similar import, shall mean that the event or circumstance shall only be permitted
to the extent it would not cause an amount deferred or payable under the Plan to be
includible in the gross income of a Participant or Beneficiary under Section 409A(a)(1) of
the Code.

12

 

	7.3.	 	Agents. The Committee may, from time to time, employ agents and delegate to them
such administrative duties as it sees fit, and may from time to time consult with counsel who
may be counsel to the Company.
	 
	7.4.	 	Binding Effect of Decisions. The decision or action of the Committee with respect to
any question arising out of or in connection with the administration, interpretation or
application of the Plan or the rules and regulations promulgated hereunder shall be final,
conclusive and binding upon all persons having any interest in the Plan.
	 
	7.5.	 	Indemnity of Committee. The Company shall indemnify and hold harmless the members of
the Committee against any and all claims, loss, damage, expense or liability arising from any
action or failure to act with respect to this Plan on account of such member’s service on the
Committee, except in the case of gross negligence or willful misconduct.
	 
	7.6.	 	Election of Committee After Change in Control. After a Change in Control, vacancies
on the Committee shall be filled by majority vote of the remaining Committee members and
Committee members may be removed only by such a vote. If no Committee members remain, a new
Committee shall be elected by majority vote of the Participants in the Plan immediately
preceding such Change in Control. After a Change in Control, no amendment shall be made to
this Article VII or any other Plan provisions regarding the Committee’s authority with respect
to the Plan without prior approval by the Committee.

ARTICLE VIII — CLAIMS PROCEDURE

	8.1.	 	Claim. Any person or entity claiming a benefit, requesting an interpretation or
ruling under the Plan, or requesting information under the Plan (hereinafter referred to as
“Claimant”) shall present the request in writing to the Committee, which shall respond in
writing as soon as practical, but in no event later than ninety (90) days after receiving the
initial claim or request (or no later than forty-five (45) days after receiving the initial
claim or request regarding a Disability under this Plan).
	 
	8.2.	 	Denial of Claim. If the claim or request is denied, the written notice of denial
shall state:

	 	a)	 	The reasons for denial, with specific reference to the Plan provisions on which
the denial is based;
	 
	 	b)	 	A description of any additional material or information required and an
explanation of why it is necessary, in which event the time frames listed in Section
9.1 shall be one hundred and eighty (180) and seventy-five (75) days, respectively,
from the date of the initial claim; and
	 
	 	c)	 	An explanation of the Plan’s claim review procedure, including a statement of
the Claimant’s right to bring a civil action under Section 502(a) of ERISA following an
adverse benefit determination on review.

13

 

	8.3.	 	Review of Claim. Any Claimant whose claim or request is denied or who has not
received a response within sixty (60) days (or one hundred and eighty (180) days in the event
of a claim regarding a Disability) may request a review by notice given in writing to the
Committee. Such request must be made within sixty (60) days (or one hundred and eighty (180)
days in the event of a claim regarding a Disability) after receipt by the Claimant of the
written notice of denial, or in the event Claimant has not received a response sixty (60) days
(or one hundred and eighty (180) days in the event of a claim regarding a Disability) after
receipt by the Committee of the Claimant’s claim or request. The claim or request shall be
reviewed by the Committee which may, but shall not be required to, grant the Claimant a
hearing. On review, the Claimant may have representation, examine pertinent documents, and
submit issues and comments in writing.
	 
	8.4.	 	Final Decision. The decision on review shall normally be made within sixty (60) days
(or forty-five (45) days in the event of a claim regarding a Disability) after the Committee’s
receipt of the Claimant’s claim or request. If an extension of time is required for a hearing
or other special circumstances, the Claimant shall be notified and the time limit shall be one
hundred twenty (120) days (or ninety (90) days in the event of a claim regarding a
Disability). The decision shall be in writing and shall state the reasons and the relevant
Plan provisions. The decision on review shall also include (i) 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 to the Claimant’s claim for benefits,
(ii) a statement describing any voluntary appeal procedures offered by the Plan, and (iii) a
statement of the Claimant’s right, if any, to bring an action under Section 502(a) of ERISA.
All decisions on review shall be final and binding on all parties concerned.

ARTICLE IX — AMENDMENT AND TERMINATION OF PLAN

	9.1.	 	Amendment and Termination of the Plan. The Compensation Committee may at any time
amend the Plan by written instrument, except that no amendment shall reduce the vested amount
credited to any Account, as of the date the amendment is adopted, as such Account may be
adjusted for Interest credited or charged after the date of the amendment according to the
terms of this Plan. The Compensation Committee may, in its sole discretion, terminate all or
any portion of the Plan by written instrument. Upon termination of the Plan, each affected
Participant’s Accounts shall be distributed in accordance with Code Section 409A and
applicable guidance.

ARTICLE X — MISCELLANEOUS

	 
	10.1.	 	Unfunded Plan. This plan is an unfunded plan maintained primarily to provide
deferred compensation benefits for a select group of “management or highly-compensated
employees” within the meaning of Sections 201, 301, and 401 of ERISA, and therefore is exempt
from the provisions of Parts 2, 3 and 4 of Title I of ERISA.
	 
	10.2.	 	Unsecured General Creditor. Notwithstanding any other provision of this Plan,
Participants and their Beneficiaries shall be unsecured general creditors, with no secured or
preferential rights to any assets of the Company or any other party for payment of benefits
under this Plan. Any property held by the Company for the purpose of generating the cash flow
for benefit payments shall remain its general, unpledged and unrestricted assets. The
Company’s obligation under the Plan shall be an unfunded and unsecured promise to pay money in
the future.
	 
	10.3.	 	Trust Fund. The Company shall be responsible for the payment of all benefits
provided under the Plan. At its discretion, the Company may establish one (1) or more trusts,
with such trustees as the Committee may approve, for the purpose of assisting in the payment
of such benefits. The assets of any such trust shall be held for the payment of the Company’s
general creditors in the event of insolvency or bankruptcy. To the extent any benefits
provided under the Plan are paid from any such trust, the Company shall have no further
obligation to pay them. If not paid from the trust, such benefits shall remain the obligation
of the Company.

14

 

	10.4.	 	Nonassignability. No Participant nor any other person shall have any right to
commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer,
hypothecate 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
nonassignable and non-transferable. No part of the amounts payable shall, prior to actual
payment, be subject to seizure or sequestration for the payment of any debts, judgments,
alimony or separate maintenance owed by a Participant or any other person, nor be transferable
by operation of law in the event of a Participant’s or any other person’s bankruptcy or
insolvency.
	 
	10.5.	 	Not a Contract of Employment. This Plan shall not constitute a contract of
employment between the Company and the Participant. Nothing in this Plan shall give a
Participant the right to be retained in the service of the Company or interfere with the right
of the Company to discipline or discharge a Participant at any time, for any reason, and with
or without cause.
	 
	10.6.	 	Protective Provisions. As a condition of participation in the Plan, each
Participant agrees to cooperate with the Company by furnishing any and all information
requested by the Committee in order to facilitate the payment of benefits hereunder, and by
taking such physical examinations and completing such other actions as the Committee may deem
necessary or desirable.
	 
	10.7.	 	Governing Law. The provisions of this Plan shall be construed and interpreted
according to the laws of the State of Florida, other than its conflict of laws principles,
except to the extent preempted by federal law.
	 
	10.8.	 	Validity. If any provision of this Plan shall be held illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts hereof, but this
Plan shall be construed and enforced as if such illegal and invalid provision had never been
inserted herein.
	 
	10.9.	 	Notice. Any notice required or permitted under the Plan shall be sufficient if in
writing and hand delivered or sent by registered or certified mail. Such notice shall be
deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown
on the postmark or the receipt for registration or certification. Mailed notice to the
Committee shall be directed to the Company’s principal business address. Mailed notice to a
Participant or Beneficiary shall be directed to the individual’s last known address in the
Company’s records.
	 
	10.10.	 	Successors. The provisions of this Plan shall bind and inure to the benefit of the
Company and its successors and assigns. The term successors as used herein shall include any
corporate or other business entity which shall, whether by merger, consolidation, purchase or
otherwise acquire all or substantially all of the business and assets of the Company, and
successors of any such corporation or other business entity.

15exv10w2

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

-2-

 

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

-3-

 

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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