Exhibit 10.12
MKS INSTRUMENTS, INC.
Performance Based Restricted Stock Unit Agreement
Granted Under the 2004 Stock Incentive Plan
AGREEMENT made this __day of ____ 20__ (the "Grant Date"), between MKS
Instruments, Inc., a Massachusetts corporation (the "Company"), and (FIRST_NAME)
(LAST_NAME) (the "Participant").
For valuable consideration, receipt of which is acknowledged, the parties
hereto agree as follows:
1. General.
The Company has granted to the Participant restricted stock units ("RSUs")
with respect to the number of shares set forth in Exhibit A hereto (the
"Shares") of common stock, no par value, of the Company ("Common Stock"),
subject to the terms and conditions set forth in this Agreement and in the
Company's 2004 Stock Incentive Plan (the "Plan"). The RSUs represent a promise
by the Company to deliver Shares upon vesting.
2. Vesting Period.
Upon the determination of the level of achievement by the Participant of
the performance goals established by the Compensation Committee of the Board of
Directors set forth in Exhibit A in the manner and on the date (the
"Determination Date") described therein, the number of RSUs to which the
Participant will be entitled to receive under this Agreement, subject to the
vesting periods described in this Section 2, will be set in accordance with the
table contained in Exhibit A. Subject to the terms and conditions of this
Agreement (including the Forfeiture provisions described in Section 3 below),
the RSUs shall vest in three (3) equal installments as follows: (a) the first
third will vest upon the achievement of certain performance goals as determined
on the Determination Date in the manner set forth in Exhibit A, (b) an
additional one third will vest on the first anniversary of the Determination
Date, and (c) the final one third will vest on the second anniversary of the
Determination Date. The date upon which each installment vests shall be
considered a "Vesting Date" for the portion of the RSUs vesting on that date. As
soon as practicable after the Vesting Date, but in any event, within the period
ending on the later to occur of the date that is 2 1/2 months from the end of
(i) the Participant's tax year that includes the Vesting Date, or (ii) the
Company's tax year that includes the Vesting Date, the Company shall instruct
its transfer agent to deposit the Shares subject to the RSUs into the
Participant's existing stock option account (the "Account") at Fidelity Stock
Plan Services, LLC, or such other broker with which the Company has established
a relationship ("Broker"), subject to payment (through sale of a portion of the
Shares, or otherwise, in accordance with Section 7) of all applicable
withholding taxes.
3. Forfeiture.
(a) Definitions. For purposes of this Agreement, "Forfeiture" shall
mean any forfeiture of RSUs pursuant to Section 3(b) and Section 3(d) below. For
purposes of this Agreement, "employ" or "employment" with the Company shall
include employment with a
parent or subsidiary of the Company as defined in Sections 424(e) or (f) of the
Internal Revenue Code.
(b) Cessation of Employment. In the event that the Participant ceases
to be employed by the Company for any reason or no reason, with or without
cause, prior to the Vesting Date, all of the Participant's unvested RSUs shall
automatically be forfeited as of such cessation. In the event that the
Participant ceases to provide services to the Company by reason of death or
disability prior to the Vesting Date, then 100% of the Participant's RSUs shall
become immediately and fully vested and shall no longer be subject to the
Forfeiture provisions under this Agreement. For the purpose of this Section 3,
"disability" shall mean disability as defined in Section 216(i)(1) of the U.S.
Social Security Act.
(c) Change in Control. Notwithstanding the foregoing, upon the
effectiveness of a Change in Control, (as defined below) that precedes the
Determination Date, the performance goals set forth in Exhibit A will deemed to
have been fully achieved as of the Determination Date. The RSUs shall continue
to vest thereafter in accordance with Section 2. If the Participant, within two
years of the effectiveness of a Change in Control (as defined below), is (i)
terminated by the Company without Cause (as defined below) or (ii) terminates
his employment for Good Reason (as defined below), then, 100% of the
Participant's RSUs shall become immediately and fully vested and shall no longer
be subject to the Forfeiture provisions under this Agreement. For purposes of
this section "Change in Control" means the first to occur of any of the
following events: (I) 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; (II) 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; or (III) 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. For purposes of
this Agreement, "Cause" shall mean conviction for the commission of a felony,
willful failure by the Participant to perform his responsibilities to the
Company, or willful misconduct by the Employee. For purposes of this section,
"Good Reason" shall mean termination of the Participant's employment by the
Participant within 90 days following (I) a material diminution in the
Participant's positions, duties and responsibilities from those described in
this Employment Agreement, (II) a material reduction in the Participant's base
salary (other than a reduction which is part of a general salary reduction
program affecting senior executives of the Company), (III) a material reduction
in the aggregate value of the pension and welfare benefits provided to the
Participant from those in effect prior to the Change in Control (other than a
reduction which is proportionate to the reductions applicable to other senior
executives pursuant to a cost-saving plan that includes all senior executives),
(IV) a material breach of any provision of this Employment Agreement by the
Company or (V) the Company's requiring the Participant to be based at a location
that creates for the Participant a one way commute in excess of 60 miles from
his primary residence, except for required travel on the Company's business to
an extent
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substantially consistent with the business travel obligations of the Participant
under this Employment Agreement. Notwithstanding the foregoing, a termination
shall not be treated as a termination for Good Reason (I) if the Participant
shall have consented in writing to the occurrence of the event giving rise to
the claim of termination for Good Reason or (II) unless the Participant shall
have delivered a written notice to the Company within 30 days of his having
actual knowledge of the occurrence of one of such events stating that he intends
to terminate his employment for Good Reason and specifying the factual basis for
such termination, and such event, if capable of being cured, shall not have been
cured within 30 days of the receipt of such notice.
(d) Failure to Achieve Performance Vesting Criteria. In the event that
the Participant fails to achieve the minimal performance goal set forth in
Exhibit A in the time periods specified therein, all RSUs shall automatically be
forfeited.
4. Restrictions on Transfer.
The Participant shall not sell, assign, transfer, pledge, hypothecate or
otherwise dispose of, by operation of law or otherwise (collectively "transfer")
any RSUs, or any interest therein, except that the Participant may transfer such
RSUs (i) to or for the benefit of any spouse, children, parents, uncles, aunts,
siblings, grandchildren and any other relatives approved by the Board of
Directors (collectively, "Approved Relatives") or to a trust established solely
for the benefit of the Participant and/or Approved Relatives, provided that such
RSUs shall remain subject to this Agreement (including without limitation the
terms of Forfeiture and the restrictions on transfer set forth in this Section
4) and such permitted transferee shall, as a condition to such transfer, deliver
to the Company a written instrument confirming that such transferee shall be
bound by all of the terms and conditions of this Agreement.
5. Provisions of the Plan.
This Agreement is subject to the provisions of the Plan, a copy of which is
furnished to the Participant with this Agreement.
6. No Compensation Deferral. Neither the Plan nor this Agreement is
intended to provide for an elective deferral of compensation that would be
subject to Section 409A ("Section 409A") of the U.S. Internal Revenue Code of
1986, as amended. The Company reserves the right, to the extent the Company
deems necessary or advisable in its sole discretion, to unilaterally amend or
modify the Plan and/or this Agreement to ensure that no awards (including
without limitation, the RSUs) become subject to the requirements of Section
409A.
7. Withholding Taxes.
(a) The Company's obligation to deliver Shares to the Participant upon
the vesting of the RSUs shall be subject to the satisfaction of all income tax
(including federal, state and local taxes), social insurance, payroll tax,
payment on account or other tax related withholding requirements ("Withholding
Taxes"). In order to satisfy all Withholding Taxes due upon vesting of the
Participant's RSUs, the Participant agrees to the following:
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(b) As a condition to receiving any Shares upon vesting of the RSUs,
on the date of this Agreement, the Participant must execute the Irrevocable
Standing Order to Sell Shares attached hereto, which authorizes the Company and
Broker to take the actions described in this subsection 7(b) (the "Standing
Order"). The Participant authorizes Broker to sell, at the market price and on
the Vesting Date the number of Shares that the Company has instructed Broker is
necessary to obtain proceeds sufficient to satisfy the Withholding Taxes. The
Participant understands and agrees that the number of Shares that Broker will
sell will be based on the closing price of the Common Stock on the last trading
day before the Vesting Date. The Participant agrees to execute and deliver such
documents, instruments and certificates as may reasonably be required in
connection with the sale of the Shares pursuant to this Section 7.
(c) The Participant agrees that the proceeds received from the sale of
Shares pursuant to Section 7(b) will be used to satisfy the Withholding Taxes
and, accordingly, the Participant hereby authorizes Broker to pay such proceeds
to the Company for such purpose. The Participant understands that to the extent
that the proceeds obtained by such sale exceed the amount necessary to satisfy
the Withholding Taxes, such excess proceeds shall be deposited into the Account.
The Participant further understands that any remaining Shares shall be deposited
into the Account.
(d) The Participant acknowledges and agrees that (i) in the event that
there is not a market in the Common Stock or (ii) the Company determines in its
sole discretion that the procedure described in Section 7(b) is not advisable or
sufficient, the Company will have the right to make other arrangements to
satisfy the Withholding Taxes due upon vesting of the RSUs, including, but not
limited to, the right to deduct amounts from salary or payments of any kind
otherwise due to the Participant or withhold in Shares, provided that the
Company only withholds the amount of Shares necessary to satisfy the minimum
withholding amount.
(e) The Participant has reviewed with the Participant's own tax
advisors the federal, state, local and foreign tax consequences of this grant
and the transactions contemplated by this Agreement. The Participant is relying
solely on such advisors and not on any statements or representations of the
Company or any of its agents. The Participant understands that the Participant
(and not the Company) shall be responsible for the Participant's own tax
liability that may arise as a result of this grant or the transactions
contemplated by this Agreement.
(f) The Participant represents to the Company that, as of the date
hereof, he is not aware of any material nonpublic information about the Company
or the Common Stock. The Participant and the Company have structured this
Agreement to constitute a "binding contract" relating to the sale of Common
Stock pursuant to this Section 7, consistent with the affirmative defense to
liability under Section 10(b) of the Securities Exchange Act of 1934 under Rule
10b5-1(c) promulgated under such Act.
8. Nature of the Grant. In signing this Agreement, the Participant
acknowledges that:
(a) the Plan is established voluntarily by the Company, it is discretionary
in nature and may be modified, amended, suspended or terminated by the
Company at any time, unless otherwise provided in the Plan and this
Agreement;
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(b) the grant of RSUs is voluntary and occasional and does not create any
contractual or other right to receive future awards of RSUs, or benefits in
lieu of RSUs even if RSUs have been awarded repeatedly in the past;
(c) all decisions with respect to future grants of RSUs, if any, will be at
the sole discretion of the Company;
(d) the Participant's participation in the Plan is voluntary;
(e) RSUs are an extraordinary item that do not constitute compensation of
any kind for services of any kind rendered to the Company or to the
Participant's employer, and RSUs are outside the scope of the Participant's
employment contract, if any;
(f) RSUs are not part of normal or expected compensation or salary for any
purpose, including, but not limited to, calculation of any severance,
resignation, termination, redundancy, end of service payments, bonuses,
long-service awards, pension or retirement benefits or similar payments and
in no event should be considered as compensation for, or relating in any
way to, past services for the Company or the Participant's employer;
(g) the future value of the underlying Shares is unknown and cannot be
predicted with certainty;
(h) if the Participant receives Shares upon vesting, the value of such
Shares acquired on vesting of RSUs may increase or decrease in value;
(i) in consideration of the grant of RSUs, no claim or entitlement to
compensation or damages arises from termination of the RSUs or diminution
in value of the RSUs or Shares received upon vesting of RSUs resulting from
termination of the Participant's employment by the Company or the
Participant's employer (for any reason whatsoever and whether or not in
breach of local labor laws) and the Participant irrevocably releases the
Company and his or her employer from any such claim that may arise; if,
notwithstanding the foregoing, any such claim is found by a court of
competent jurisdiction to have arisen, then, by signing this Agreement, the
Participant shall be deemed irrevocably to have waived his or her
entitlement to pursue such claim; and
(j) further, if the Participant ceases to be an employee (whether or not in
breach of local labor laws), the Participant's right to receive RSUs and
vest under the Plan, if any, will terminate effective as of the date that
the Participant is no longer actively employed by the Company and will not
be extended by any notice period mandated under local law (e.g., active
employment would not include a period of "garden leave" or similar period
pursuant to local law); the Committee shall have the exclusive discretion
to determine when the Participant is no longer actively employed for
purposes of the Plan.
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9. Data Privacy Notice and Consent. The Participant hereby explicitly and
unambiguously consents to the collection, use and transfer, in electronic or
other form, of his or her personal data as described in this paragraph, by and
among, as applicable, and the Company and its subsidiaries and affiliates for,
among other purposes, implementing, administering and managing the Participant's
participation in the Plan. The Participant understands that the Company and its
subsidiaries hold certain personal information about the Participant, including
the Participant's name, home address, date of birth, social security number or
identification number, salary, job title, any Shares or directorships held in
the Company, details of all options or any other entitlement to Shares awarded,
canceled, exercised, vested, unvested or outstanding in the Participant's favor,
for the purpose of managing and administering the Plan ("Data"). The Participant
further understands that the Company and/or its subsidiaries will transfer Data
amongst themselves as necessary for employment purposes, including
implementation, administration and management of the Participant's participation
in the Plan, and that the Company and/or any of its subsidiaries may each
further transfer Data to Broker or such other stock plan service provider or
other third parties assisting the Company with processing of Data. The
Participant understands that these recipients may be located in the United
States, and that the recipient's country may have different data privacy laws
and protections than in the Participant's country. The Participant authorizes
them to receive, possess, use, retain and transfer the Data, in electronic or
other form, for the purposes described in this section, including any requisite
transfer to Broker or such other stock plan service provider or other third
party as may be required for the administration of the Plan and/or the
subsequent holding of Shares of stock on the Participant's behalf. The
Participant understands that he or she may, at any time, request access to the
Data, request any necessary amendments to it or refuse or withdraw the consents
herein, in any case without cost, by contacting the Company in writing. The
Participant understands, however, that withdrawal of consent may affect the
Participant's ability to participate in or realize benefits from the Plan. For
more information on the consequences of refusal to consent or withdrawal of
consent, the Participant understands that he or she may contact the Company.
10. Miscellaneous.
(a) No Rights to Employment. The Participant acknowledges and agrees
that the vesting of the RSUs pursuant to Section 2 hereof is earned only in
accordance with the terms of such section. The Participant further acknowledges
and agrees that the transactions contemplated hereunder and the vesting schedule
set forth herein do not constitute an express or implied promise of continued
employment with the Company or any subsidiary of the Company for the vesting
period, for any period, or at all.
(b) Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, and each other provision of this Agreement shall be
severable and enforceable to the extent permitted by law.
(c) Waiver. Any provision for the benefit of the Company contained in
this Agreement may be waived, either generally or in any particular instance, by
the Board of Directors of the Company.
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(d) Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the Company and the Participant and their respective heirs,
executors, administrators, legal representatives, successors and assigns,
subject to the restrictions on transfer set forth in Section 4 of this
Agreement.
(e) Notice. All notices required or permitted hereunder shall be in
writing and deemed effectively given upon personal delivery or five days after
deposit in the United States Post Office, by registered or certified mail,
postage prepaid, addressed to the other party hereto at the address shown
beneath his or its respective signature to this Agreement, or at such other
address or addresses as either party shall designate to the other in accordance
with this Section 10(e).
(f) Pronouns. Whenever the context may require, any pronouns used in
this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns and pronouns shall include the plural, and
vice versa.
(g) Language. If the Participant has received this Agreement or any
other document related to the Plan translated into a language other than English
and if the translated version is different than the English version, the English
version will control.
(h) Electronic Delivery. The Company may, in its sole discretion,
decide to deliver any documents related to participation in the Plan, RSUs
granted under the Plan or future RSUs that may be granted under the Plan by
electronic means or to request the Participant's consent to participate in the
Plan by electronic means. The Participant hereby consents to receive such
documents by electronic delivery and, if requested, to agree to participate in
the Plan through an on-line or electronic system established and maintained by
the Company or another third party designated by the Company.
(i) Entire Agreement. This Agreement and the Plan constitute the
entire agreement between the parties, and supersedes all prior agreements and
understandings, relating to the subject matter of this Agreement.
(j) Amendment. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the Participant.
(k) Governing Law. This Agreement shall be construed, interpreted and
enforced in accordance with the internal laws of the Commonwealth of
Massachusetts without regard to any applicable conflicts of laws.
(l) The Participant's Acknowledgments. The Participant acknowledges
that he or she: (i) has read this Agreement; (ii) has been represented in the
preparation, negotiation, and execution of this Agreement by legal counsel of
the Participant's own choice or has voluntarily declined to seek such counsel;
and (iii) understands the terms and consequences of this Agreement; and (iv) is
fully aware of the legal and binding effect of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
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MKS INSTRUMENTS, INC.
By:
------------------------------------
Title: Chief Executive Officer &
President
00 Xxxxxxxxxx Xxx
Xxxxxxxxxx, XX 00000
(First_Name) (Last_Name)
Participants Signature:
----------------
Address: (Street), (BoxApt)
(City), (State) (Zip_Code)
(Country)
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Exhibit A
Participant: (...Executive's Name...)
Grant Date: XXXXXX
Restricted Stock Units Granted: x,xxx
MKS Instruments, Inc. has granted you Restricted Stock Units (RSU's) with
respect to x,xxx shares of common stock. According to the provisions of this
Restricted Stock Unit Agreement, the number of shares you will be entitled to
receive, subject to the vesting period described in Section 2 of this agreement,
will be determined on [one year anniversary of grant] (the "Determination Date")
based on the schedule shown in the table below.
% PERFORMANCE BASED
RSU'S ATTAINED
200_ IBBT SUBJECT TO VESTING
(000) PERIOD
--------- -------------------
IBBT IS DEFINED AS INCOME EARNED BEFORE BONUS AND TAX.
ALL SHARES EARNED ACCORDING TO THIS TABLE WILL ALSO BE SUBJECT TO THE VESTING
PERIOD AND OTHER TERMS AND CONDITIONS OF THIS AGREEMENT.
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Exhibit B
IRREVOCABLE STANDING ORDER TO SELL SHARES
I, (FIRST_NAME) (LAST_NAME), have been granted restricted stock units
("RSUs") with respect to 000000 shares of stock by MKS Instruments, Inc.
("MKS"), which is evidenced by a Restricted Stock Unit Agreement between me and
MKS (the "Agreement," copy attached). Provided that I remain employed by MKS (or
one of its subsidiaries) on each vesting date, the RSUs vest according to the
schedule set forth in the Agreement.
I understand that on the vesting date, MKS shares (the "Shares") will be
deposited into my account at Fidelity Stock Plan Services, LLC (the "Broker")
and that I may recognize taxable income as a result. Pursuant to the terms of
the Agreement and as a condition of my receipt of the Shares, I understand and
agree that, for each vesting date, I must sell a number of shares sufficient to
satisfy all withholding taxes applicable to that income. Therefore, I HEREBY
DIRECT BROKER TO SELL, AT THE MARKET PRICE AND ON EACH VESTING DATE (OR THE
FIRST BUSINESS DAY THEREAFTER IF A VESTING DATE SHOULD FALL ON A DAY WHEN THE
MARKET IS CLOSED), THE NUMBER OF SHARES THAT MKS INFORMS BROKER IS SUFFICIENT TO
SATISFY THE APPLICABLE WITHHOLDING TAXES, WHICH SHALL BE CALCULATED BASED ON THE
CLOSING PRICE OF MKS' COMMON STOCK ON THE LAST TRADING DAY BEFORE THE VESTING
DATE. I understand that Broker will remit the proceeds to MKS for payment of the
withholding taxes.
I hereby agree to indemnify and hold Broker harmless from and against all
losses, liabilities, damages, claims and expenses, including reasonable
attorneys' fees and court costs, arising out of any (i) negligent act, omission
or willful misconduct by MKS in carrying out actions pursuant to the third
sentence of the preceding paragraph and (ii) any action taken or omitted by
Broker in good faith reliance upon instructions herein or upon instructions or
information transmitted to Broker by MKS pursuant to the third sentence of the
preceding paragraph.
I understand and agree that by signing below, I am making an Irrevocable
Standing Order to Sell Shares which will remain in effect until all of the RSUs
have vested. I also agree that this Irrevocable Standing Order to Sell Shares is
in addition to and subject to the terms and conditions of any existing Account
Agreement that I have with Broker.
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Signature Signature (Additional Account Holder)
Print name: Print name:
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Dated: , 20 Dated: , 20
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