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APPENDIX A Supplemental Retirement Benefits

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APPENDIX A Supplemental Retirement Benefits | Document Parties: MKS INSTRUMENTS INC You are currently viewing:
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MKS INSTRUMENTS INC

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Title: APPENDIX A Supplemental Retirement Benefits
Date: 2/27/2009
Industry: Semiconductors     Sector: Technology

APPENDIX A Supplemental Retirement Benefits, Parties: mks instruments inc
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Exhibit 10.21

Whereas, MKS Instruments, Inc. (“the “Company”) and Leo Berlinghieri (“Employee”) have entered into an employment agreement dated July 1, 2005, Appendix A of which includes deferred compensation benefits, and

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

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

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

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

APPENDIX A
Supplemental Retirement Benefits

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

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

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

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

 


 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2.14. “ Permanent and Total Disability ” means (a) Employee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (b) Employee is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Corporation. Employee shall be conclusively presumed to be Permanently and Totally Disabled upon determination that he is disabled by the Social Security Administration.

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

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

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

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

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

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

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

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

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

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

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

3.  Eligibility for Retirement Benefits .

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

4. Vesting .

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

(a) attains age 60, and

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

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

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

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

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

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

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

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

5.  Retirement Benefits .

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

(a)  Married on Retirement Date : If Employee is married on his Retirement Date, Employee’s N


 
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