EXHIBIT 10.26 SUMMARY OF COMPENSATORY ARRANGEMENTS WITH NON-EMPLOYEE DIRECTORS CASH COMPENSATION Directors who are not employees of the Company are paid cash compensation as follows: TYPE OF FEE ROLE AMOUNT FOR EACH ----------- ---- ------ -------- Annual Board member $20,000 year of service retainer Attendance Board member $2,000 board meeting Attendance Audit Committee Chair $2,500 committee meeting Attendance Other Audit Committee members $1,500 committee meeting Attendance Compensation Committee Chair $1,500 committee meeting Attendance Other Compensation Committee $750 committee meeting members Attendance Nominating and Corporate $1,500 committee meeting Governance Committee Chair Attendance Other Nominating and Corporate $750 committee meeting Governance Committee members Directors of MKS are reimbursed for expenses incurred in connection with their attendance at board meetings and committee meetings. STOCK COMPENSATION Non-employee directors participate in the Company's Second Amended and Restated 1997 Director Stock Option Plan (the "1997 Director Plan"). Under this plan, non-employee directors receive options to purchase the Company's common stock as follows: NUMBER OF TYPE OF GRANT DATE OF GRANT SHARES VESTING SCHEDULE ------------- ------------- ------ ---------------- Initial Option Date of initial 20,000 vests in 12 equal quarterly Grant election to installments over a board three-year period Annual* Date of each 12,000 Fully vests on the day prior Annual Meeting to the first annual meeting of Shareholders of shareholders following the date of grant (or if no such meeting is held within 13 months after the date of grant, on the 13 month anniversary of the date of grant) - ---------------- * A Non-Employee Director is eligible to receive annual grants if the director has been in office for at least six months prior to the date of the respective annual meeting of shareholders. The exercise price of all options granted under the 1997 Director Plan is equal to the fair market value of the Common Stock on the date of grant. Options granted under the 1997 Director Plan terminate upon the earlier of (i) 10 years after the grant date and (ii) with respect to options granted prior to May 17, 2000, three months after the optionee ceases to be a director of MKS, or, with respect to options granted on or after May 17, 2000, three years after the optionee ceases to be a director of MKS. In the event of a change in control of MKS, the vesting of all options then outstanding would be accelerated in full and any restrictions on exercising outstanding options would terminate.