10-Q

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 27, 2003

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the transition period from              to             

COMMISSION FILE NUMBER 001-16611

Mykrolis Corporation

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation or organization)

04-3536767

(I.R.S. Employer Identification No.)

129 Concord Road

Billerica, Massachusetts 01821

(Address of principal executive offices)

Registrant’s telephone number, include area code (978) 436-6500

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes  x    No  ¨

The Company had 40,335,672 shares of common stock outstanding as of October 28, 2003.

Mykrolis Corporation

INDEX TO FORM 10-Q

		Page No.
Part I.	Financial Information	3
Item 1.	Condensed Financial Statements	3
	Consolidated Statements of Operations - Three and Nine Months Ended September 27, 2003 and September 28, 2002	3
	Consolidated Balance Sheets - September 27, 2003 and December 31, 2002	4
	Consolidated Statements of Shareholders’ Equity and Comprehensive Income (Loss)- Nine Months Ended September 27, 2003	5
	Consolidated Statements of Cash Flows - Nine Months Ended September 27, 2003 and September 28, 2002	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Results of Operations and Financial Condition	16
Item 3.	Quantitative and Qualitative Disclosures about Market Risks	38
Item 4.	Controls and Procedures	38
Part II.	Other Information	39
Item 1.	Legal Proceedings	39
Item 6.	Exhibits and Reports on Form 8-K	39
	Signatures	40
	Exhibit Index	41

2

PART I - FINANCIAL INFORMATION

Item 1. Condensed Financial Statements

Mykrolis Corporation

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 27, 2003			September 28, 2002			September 27, 2003			September 28, 2002
Net sales	$	44,529		$	47,740		$	127,715		$	131,985
Cost of sales		24,383			29,628			72,431			86,708
Gross profit		20,146			18,112			55,284			45,277
Research & development expenses		4,362			5,133			13,519			14,653
Selling, general & administrative expenses		15,712			18,719			48,251			53,467
Restructuring and other charges		532			—			2,289			—
Operating loss		(460	)		(5,740	)		(8,775	)		(22,843	)
Other income (expense), net		(184	)		4			1,650			1,871
Loss before income taxes		(644	)		(5,736	)		(7,125	)		(20,972	)
Income tax expense (benefit)		224			(1,400	)		4,635			2,570
Net loss	$	(868	)	$	(4,336	)	$	(11,760	)	$	(23,542	)
Basic and diluted loss per share	$	(0.02	)	$	(0.11	)	$	(0.30	)	$	(0.59	)
Shares used in computing basic and diluted loss per share		39,874			39,655			39,799			39,595

The accompanying notes are an integral part of the consolidated financial statements.

3

Mykrolis Corporation

Consolidated Balance Sheets

(In thousands, except per share data)

	September 27, 2003			December 31, 2002
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	61,566		$	74,085
Accounts receivable (less allowance for doubtful accounts of $874 at September 27, 2003 and $1,224 at December 31, 2002)		41,651			39,971
Inventories		40,756			41,821
Deferred income taxes		786			786
Assets held for sale		—			72
Other current assets		6,322			4,088
Total current assets		151,081			160,823
Marketable securities		14,362			—
Restricted cash		1,780			1,608
Property, plant and equipment, net		70,759			74,833
Deferred income taxes		5,816			5,400
Goodwill		14,454			14,454
Other intangible assets (less accumulated amortization of $22,066 at September 27, 2003 and $20,947 at December 31, 2002)		3,834			4,949
Other assets		5,892			5,122
Total assets	$	267,978		$	267,189
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of capital lease obligation	$	78		$	78
Accounts payable		11,807			10,288
Accrued income taxes		13,875			9,416
Accrued other expenses		24,176			24,756
Total current liabilities		49,936			44,538
Long-term portion of capital lease obligation		74			131
Other liabilities		10,672			9,815
Minority interest		67			61
Commitments and contingencies (note 14)
Shareholders’ equity:
Preferred stock, par value $.01 per share, 5,000,000 shares authorized; no shares issued and outstanding		—			—
Common stock, par value $.01 per share, 250,000,000 shares authorized: 39,912,982 and 39,723,648 shares issued and outstanding, respectively		399			397
Additional paid-in capital		321,539			320,061
Accumulated deficit		(105,111	)		(93,351	)
Accumulated other comprehensive loss		(9,598	)		(14,463	)
Total shareholders’ equity		207,229			212,644
Total liabilities and shareholders’ equity	$	267,978		$	267,189

The accompanying notes are an integral part of the consolidated financial statements.

4

Mykrolis Corporation

Consolidated Statements of Shareholders’ Equity

and Comprehensive Income (Loss)

(In thousands)

	Common Shares			Additional Paid-in Capital		Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity			Comprehensive Income (Loss)
	Shares	Amount
Balance December 31, 2002	39,724	$	397	$	320,061	$	(93,351	)	$	(14,463	)	$	212,644
Issuance of common stock-employee stock purchase plan and exercise of stock options*	189		2		1,461		—			—			1,463
Stock-based compensation*	—		—		17		—			—			17
Net loss*	—		—		—		(11,760	)		—			(11,760	)		(11,760	)
Foreign currency translations*	—		—		—		—			4,901			4,901			4,901
Unrealized loss on marketable securities*	—		—		—		—			(36	)		(36	)		(36	)
Comprehensive loss*															$	(6,895	)
Balance September 27, 2003*	39,913	$	399	$	321,539	$	(105,111	)	$	(9,598	)	$	207,229

* Unaudited

The accompanying notes are an integral part of the consolidated financial statements.

5

Mykrolis Corporation

Consolidated Statement of Cash Flows

(In thousands)

(Unaudited)

	Nine months ended
	September 27, 2003			September 28, 2002
Cash flows from operating activities:
Net loss	$	(11,760	)	$	(23,542	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Income on investments		(445	)		(58	)
Depreciation and amortization		8,392			9,066
Restructuring and other charges		2,289			—
Impairment of assets		148			—
Stock-based compensation		—			1,103
Change in operating assets and liabilities:
Decrease (increase) in accounts receivable, net		33			(3,897	)
Decrease in inventories		2,294			8,514
Decrease in accounts payable—Millipore Corporation		—			(1,929	)
Increase in accounts payable		1,140			13,560
Decrease (increase) in other operating assets		654			(951	)
Increase in other operating liabilities		2,560			6,870
Net cash provided by operating activities		5,305			8,736
Cash flows from investing activities:
Purchase of marketable securities		(14,477	)		—
Deposit relating to purchase of intellectual property		(3,002	)		—
Additions to property, plant and equipment		(2,867	)		(13,313	)
Net cash used in investing activities		(20,346	)		(13,313	)
Cash flows from financing activities:
Assignment of restricted cash		—			(1,608	)
Net transfers from Millipore Corporation		—			1,770
Payments under capital leases		(57	)		(6	)
Proceeds from issuance of common stock for employee stock purchase plan and stock option exercises		1,463			1,504
Net cash provided by financing activities		1,406			1,660
Effect of foreign exchange rates on cash and cash equivalents		1,116			240
Net decrease in cash and cash equivalents		(12,519	)		(2,677	)
Cash and cash equivalents at beginning of period		74,085			82,831
Cash and cash equivalents at end of period	$	61,566		$	80,154

The accompanying notes are an integral part of the consolidated financial statements.

6

Mykrolis Corporation

Notes to Consolidated Financial Statements

(In thousands except share and per share data)

1. Background and Basis of Presentation

Background

On October 3, 2000, Millipore Corporation (“Millipore”) announced its plan to spin-off its microelectronics business, which served the semiconductor industry and certain related industries with products needed to manufacture semiconductor devices as well as a range of other products that now comprises Mykrolis Corporation (“the Company”). On October 16, 2000, the Company was incorporated in Delaware as a wholly owned subsidiary of Millipore to receive Millipore’s microelectronics business and to be the spun-off company. Prior to March 31, 2001, the Company’s business was operated as a fully integrated business unit of Millipore. On March 31, 2001, Millipore transferred to the Company substantially all of the assets and liabilities associated with its microelectronics business (the “Separation”). The Company completed its initial public offering of 7.0 million shares of common stock on August 9, 2001 receiving net proceeds of approximately $94.0 million, after deducting underwriting commissions and offering expenses. The Company retained $75.0 million of the net proceeds and paid the balance to Millipore as repayment of amounts outstanding as intercompany loans incurred by the Company in connection with the Separation. After the initial public offering, Millipore owned 32.5 million shares or approximately 82.3% of the Company’s total outstanding common stock. On February 27, 2002 (the “Distribution Date”), Millipore completed the spin-off of the Company through the distribution to its shareholders of all of the 32.5 million shares of the Company’s common stock owned by Millipore on that date. Effective February 28, 2002, the Company became a fully independent company.

Interim Financial Statements

The accompanying consolidated financial statements have been prepared in accordance with the rules of the Securities and Exchange Commission for interim financial statements and do not include all disclosures required by generally accepted accounting principles in the United States of America. The financial information included herein, other than the consolidated balance sheet at December 31, 2002, has been prepared without audit. The consolidated balance sheet at December 31, 2002 has been derived from, but does not include all the disclosures contained in the audited consolidated financial statements for the year ended December 31, 2002. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Form 10–K for the year ended December 31, 2002. The financial information as of September 27, 2003 and September 28, 2002 is unaudited, but includes all adjustments that management considers necessary for a fair presentation of the Company’s consolidated results of operations, financial position and cash flows. All of these adjustments are of a normal recurring nature. Results for the three and nine-month periods ended September 27, 2003 are not necessarily indicative of results to be expected for the full fiscal year 2003 or for any other future periods.

2. Restructuring and Other Charges

During 2001, the Company initiated several worldwide cost-reduction programs in connection with the separation from Millipore, to improve its manufacturing asset utilization and to resize its overall cost structure in response to the semiconductor industry downturn. As a result, the Company recorded restructuring and other charges of $17,478 during 2001. These restructuring and other charges included $13,755 of severance costs for 358 employees, a $1,712 write-off of equipment and leasehold improvements and $2,011 of lease costs at the vacated Bedford, MA facility.

In addition, to further respond to the prolonged semiconductor industry downturn, during the fourth quarter of 2002 the Company recorded restructuring and other charges of $5,182. Of this amount, $1,708 related to severance costs for 42 employees, $1,683 of non-cash asset writedowns due to asset impairments and

7

Mykrolis Corporation

Notes to Consolidated Financial Statements—(Continued)

(In thousands except share and per share data)

$1,791 of additional facility exit costs in Bedford, MA and Swindon, England. During 2002, several changes to prior estimates occurred resulting in the reversal of $1,638 in accrued employee severance costs and a charge of $1,638 for additional facility exit costs. These changes in estimate were primarily due to the higher than expected level of attrition of 55 employees, lower than expected severance benefits paid and continued deterioration in the real estate market conditions.

In the second quarter of 2003, the Company initiated an additional restructuring program to streamline its worldwide organization by eliminating 42 positions or approximately 4 percent of its permanent workforce and exited its service facility in Swindon, England. These actions were taken in accordance with the Company’s goal of achieving profitability in the near term despite the continued downturn in the semiconductor industry. Because of these actions and in conjunction with changes in prior estimates, the Company recorded restructuring and other charges of $1,757. Of this amount, $1,176 related to employee severance costs, $39 to non-cash asset writedowns due to impairments, $267 to facility exit costs at the Swindon facility and $275 to a change in estimate of future costs associated with the vacated Bedford, MA facility.

In the third quarter of 2003, the Company recorded additional restructuring and other charges of $532 for non-cash write offs of machinery and leasehold improvements. These charges related to changes in estimate for prior restructuring programs associated with the closing of certain service centers and relocation of manufacturing operations.

As of September 27, 2003, the accrued restructuring costs totaled $4,358. Of this amount, $687 of severance costs for terminated employees will be paid by the end of the first quarter of 2005. The facility exit costs of $3,671 will be substantially paid by the fourth quarter of 2005.

Below is a table summarizing the restructuring reserve activity for the year ended 2002 and the first nine months of 2003:

	2003 Activity
	Balance December 31, 2002		2003 Expense		Cash Activity			Non- Cash Activity			Adjustments			Balance September 27, 2003
Workforce	$	1,992	$	1,176	$	(2,464	)	$	(17	)	$	—		$	687
Leasehold/Other		3,789		542		(851	)		191			—			3,671
Asset Impairment		—		571		—			(571	)		—			—
	$	5,781	$	2,289	$	(3,315	)	$	(397	)	$	—		$	4,358
	2002 Activity
	Balance December 31, 2001		2002 Expense		Cash Activity			Non- Cash Activity			Adjustments			Balance December 31, 2002
Workforce	$	3,813	$	1,708	$	(1,891	)	$	—		$	(1,638	)	$	1,992
Leasehold/Other		1,987		1,791		(1,627	)		—			1,638			3,789
Asset Impairment		—		1,683		—			(1,683	)		—			—
	$	5,800	$	5,182	$	(3,518	)	$	(1,683	)	$	—		$	5,781

8

Mykrolis Corporation

Notes to Consolidated Financial Statements—(Continued)

(In thousands except share and per share data)

3. Stock Plans

Options for the purchase of the Company’s stock have been granted to officers, directors and key employees under various nonqualified stock option agreements. The Company accounts for these grants under the recognition and measurement principles of APB Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. No stock-based employee compensation cost is recorded as a charge to operations for options granted under those plans where the exercise price equals the market value of the underlying common stock on the date of grant. During the first quarter of 2002, the Company recognized $1,103 in stock based compensation expense comprised of $515 associated with the accelerated vesting of all restricted shares of Millipore common stock held by certain employees of the Company and $588 related to the accelerated vesting of employee stock options in connection with the termination of two executives.

If the recognition provisions of FASB Statement No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure - an Amendment of FASB Statement No. 123, had been adopted, the effect on net loss and basic and diluted net loss per share would have been as follows:

	Three Months Ended						Nine Months Ended
	September 27, 2003			September 28, 2002			September 27, 2003			September 28, 2002
Net loss, as reported	$	(868	)	$	(4,336	)	$	(11,760	)	$	(23,542	)
Add: stock-based compensation included in net loss, net of related tax effects		—			—			17			588
Deduct: total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects		(3,588	)		(5,043	)		(10,536	)		(13,379	)
Pro forma net loss	$	(4,456	)	$	(9,379	)	$	(22,279	)	$	(36,333	)
Earnings per share:
Basic and diluted-as reported	$	(0.02	)	$	(0.11	)	$	(0.30	)	$	(0.59	)
Basic and diluted-pro forma	$	(0.11	)	$	(0.24	)	$	(0.56	)	$	(0.92	)

During the third quarter of 2003, the Company established the 2003 Employment Inducement and Acquisition Stock Option Plan (the “Employment Inducement Plan”). The Employment Inducement Plan provides for the issuance of stock options and other stock-based awards to newly-hired employees and to employees of companies acquired by the Company. The Employment Inducement Plan has a term of ten years. Options granted under the Employment Inducement Plan have a maximum term of ten years and an exercise price equal to the fair market value of the Company’s common stock on the date of grant. The Board of Directors determines other terms of option grants including, number of shares, restrictions and the vesting period. The Employment Inducement Plan reserves 350,000 shares of common stock. The number of reserved shares automatically increases annually by 0.25% of the number of shares of common stock outstanding on the date of the Annual Meeting of Stockholders unless otherwise determined by the Board of Directors.

4. Earnings Per Share

For the three months and nine months ended September 2003 and 2002, basic and diluted loss per common share was calculated by dividing net loss by the weighted average number of common shares outstanding during the respective period. The weighted average basic and diluted shares outstanding calculation excluded those stock options for which the impact was antidilutive due to the Company’s net loss. The number of antidilutive stock options at September 27, 2003 and September 28, 2002 were 7,338,697 and 6,657,469, respectively.

9

Mykrolis Corporation

Notes to Consolidated Financial Statements—(Continued)

(In thousands except share and per share data)

As of September 27, 2003, Mykrolis had outstanding options to purchase an aggregate of 7,338,697 shares of its common stock at a weighted average price per share of $9.90. Of these options, options to purchase an aggregate of 2,937,233 shares at a weighted average price per share of $10.69 were fully vested and exercisable.

5. Other Intangible Assets

Components of the Company’s identifiable other intangible assets are as follows:

	September 27, 2003 unaudited				December 31, 2002
	Gross carrying Amount		Accumulated Amortization		Gross carrying Amount		Accumulated Amortization
Patents	$	14,207	$	10,697	$	14,207	$	10,007
Unpatented technology		8,505		8,384		8,505		8,019
Trademarks / tradenames		2,906		2,893		2,906		2,892
Other		282		92		278		29
	$	25,900	$	22,066	$	25,896	$	20,947

The Company recorded amortization expense for its other intangible assets of $315 and $396 for the three months ended September 27, 2003 and September 28, 2002, respectively, and $1,120 and $1,257 for the nine months ended September 27, 2003 and September 28, 2002, respectively. Estimated amortization expense for the fiscal years 2003 to 2008 is $1,492, $1,002, $937, $815, $570 and $61, respectively.

6. Product Warranty Costs

At the time revenue is recognized, the Company provides for estimated cost of product warranties as required under contractual arrangements. Warranty obligations are affected by product failure rates and service delivery costs incurred in correcting a product failure. Should such failure rates or costs differ from these estimates, accrued warranty costs would be adjusted in the period that such events or costs become known.

Changes in the warranty reserves during the first nine months of 2003 were as follows:

Balance at December 31, 2002	$	1,566
Accruals for warranty during 2003		299
Accruals related to pre-existing warranties (including changes in estimate)		83
Settlements made during 2003		(543	)
Balance at September 27, 2003	$	1,405

7. Cash, cash equivalents and long-term marketable securities

The Company considers currency on hand, demand deposits, and all highly liquid marketable securities with an original purchase maturity of three months or less to be cash and cash equivalents. The carrying amounts of cash and cash equivalents approximate estimated fair value because of the short maturities of those financial instruments. Cash and cash equivalents at September 27, 2003 and December 31, 2002 were $61,566 and $74,085, respectively.

10

Mykrolis Corporation

Notes to Consolidated Financial Statements—(Continued)

(In thousands except share and per share data)

Long-term investments consist of high-grade corporate bonds that are more than twelve months in maturity. All long-term marketable securities have been classified as available-for-sale and are carried at fair market value. Unrealized gains or losses on the Company’s available-for-sale securities are included in accumulated other comprehensive loss as a component of shareholders’ equity. Long-term investments at September 27, 2003 were $14,362.

8. Restricted Cash

The Company has provided cash collateral totaling $1,780 on standby letters of credit in connection with the lease for its corporate headquarters, research and development and manufacturing facility in Billerica, MA and other security deposits. At September 27, 2003, this cash collateral was invested in U.S. federal agency securities, certificates of deposit and money market funds.

In the third quarter of 2003, the Company made a deposit of $3,002 in conjunction with certain strategic initiatives relating to the purchase of intellectual property that was completed in the fourth quarter of 2003. This amount is classified as other current assets in the consolidated balance sheet dated September 27, 2003.

9. Other Income (Expense), Net

Other income (expense) is summarized below:

	Three Months Ended						Nine Months Ended
	September 27, 2003			September 28, 2002			September 27, 2003		September 28, 2002
	(unaudited)						(unaudited)
Gains (losses) on foreign currency transactions	$	(604	)	$	(462	)	$	304	$	561
Royalty income from Millipore		125			129			394		399
Income from equity method investments		147			57			509		57
Interest income and other		148			280			443		854
Total	$	(184	)	$	4		$	1,650	$	1,871

10. Inventories

Inventories are summarized as follows:

	September 27,2003			December 31, 2002
	(unaudited)
Raw materials	$	30,300		$	34,971
Work in process		7,961			7,318
Finished goods		22,769			21,382
		61,030			63,671
Inventory reserves		(20,274	)		(21,850	)
Total	$	40,756		$	41,821

11. Income Taxes

For the three months ended September 27, 2003, the Company recorded income tax expense of $224 with respect to certain foreign operations on a consolidated pre-tax loss of $644, yielding an effective tax rate of

11

Mykrolis Corporation

Notes to Consolidated Financial Statements—(Continued)

(In thousands except share and per share data)

negative 34.8%. For the three months ended September 28, 2002, the Company recorded an income tax benefit of $1,400 on a consolidated pre-tax loss of $5,736, yielding an effective tax rate of 24.4%. The change in our effective tax rate for the quarter ended September 27, 2003 compared to the quarter ended September 28, 2002 resulted from changes in the expected full year pre-tax loss and the overall geographic mix of foreign operations pre-tax income and loss.

For the nine months ended September 27, 2003, the Company recorded income tax expense of $4,635 with respect to certain foreign operations on a consolidated pre-tax loss of $7,125 yielding an effective annual tax rate of negative 65.1%. For the nine months ended September 28, 2002, the Company recorded income tax expense of $2,570 with respect to certain foreign operations on a consolidated pre-tax loss of $20,972, yielding an effective annual tax rate of negative 12.3%. The income tax expense recorded during the second quarter of 2002 included $1,100 in settlements resulting from foreign tax audits for which the Company is responsible under its tax sharing agreement with Millipore. The change in the effective tax rate for the nine months ended September 27, 2003 compared to the nine months ended September 28, 2002 resulted from changes in the expected full year pre-tax loss and the overall geographic mix of foreign operations pre-tax income and loss.

12. Business Segment Information

The Company operates in one reportable segment that develops, manufactures and sells consumables and capital equipment to semiconductor fabrication companies and other companies using similar manufacturing processes, as well as OEM suppliers to those companies. The Company also provides capital equipment repair services to customers in this segment. The Company’s products include membrane and metal based filters, housings, precision liquid dispense filtration pumps, resin based gas purifiers and mass flow and pressure controllers. The products are used by customers in manufacturing operations to remove contaminants in liquid and gas processes, to purify liquids and gases, to measure and control flow rates and to control and monitor pressure and vacuum levels during the manufacturing process. The Company’s products are sold worldwide through a direct sales force and through distributors in selected regions.

The Company attributes net sales to different geographic areas as presented in the table below.

	Three Months Ended				Nine Months Ended
Net sales	September 27, 2003		September 28, 2002		September 27, 2003		September 28, 2002
	(unaudited)				(unaudited)
United States	$	11,687	$	13,234	$	34,054	$	42,160
Japan		15,826		18,512		45,349		46,023
Asia		12,101		11,354		34,546		30,543
Europe		4,915		4,640		13,766		13,259
Total net sales	$	44,529	$	47,740	$	127,715	$	131,985

13. Significant Customers and Concentration of Risk

Historically, the Company has relied on a limited number of customers for a substantial portion of its net sales. During the three and nine month periods ended September 27, 2003, there was one customer who represented approximately 11.8% and 10.8% of revenues respectively. For the three and nine month periods ended September 28, 2002, one customer represented approximately 15.8% and 13.2% of net sales respectively.

12

Mykrolis Corporation

Notes to Consolidated Financial Statements—(Continued)

(In thousands except share and per share data)

14. Commitments and Contingencies

The Company is subject to a number of claims and legal proceedings, which, in the opinion of the Company’s management, are incidental to the Company’s normal business operations. In the opinion of the Company’s management, although final settlement of these suits and claims may impact the Company’s financial statements in a particular period, they will not, in the aggregate, have a material adverse effect on the Company’s financial position, results of operations or cash flows.

On March 3, 2003 the Company filed a lawsuit against Pall Corporation in the United States District Court for the District of Massachusetts alleging infringement of two of the Company’s U.S. Patents by a fluid separation device known as the Pall Photo Kleen EZD-2 filter assembly manufactured and sold by the defendant. The Company’s lawsuit also seeks a preliminary injunction preventing the defendant from the manufacture, use, sale, offer for sale or importation into the U.S. of the infringing product. On March 24, 2003, the defendant filed an answer denying that its fluid separation device infringed the Company’s patents; defendant also filed a counterclaim seeking a dismissal of the Company’s lawsuit, a decree that the Company’s patents are invalid and/or not infringed and costs incurred in conducting the litigation. A hearing on the Company’s motion for a preliminary injunction and on claim construction of the Company’s patents that are the subject of the litigation was held on August 8 -12, 2003.

The Company enters into a variety of indemnification commitments in the ordinary course of its business including the following:

Ø Indemnification commitments that are embedded in commercial agreements for the purchase or sale of products or services and provide that the Company agrees to indemnify the indemnified party for losses suffered by reason of the infringement by the Company’s products of the intellectual property rights of third parties. These indemnification commitments generally do not contain restrictions as to amount or duration.

Ø Indemnification commitments in connection with business acquisition/divestiture transactions where the Company agrees to indemnify the indemnified party for losses suffered by reason of the breach of representations and warranties that the Company has made pursuant to the transaction. Typically these indemnities will have a one or two year duration and will be subject to minimum claim levels but do not contain restrictions as to amount.

Ø Indemnification commitments to officers and directors of the Company against liabilities that they may incur in the performance of their duties on behalf of the Company which do not contain limitations as to duration or amount but are subject a number of conditions.

The Company has never incurred costs to defend lawsuits or settle claims related to these types of indemnification commitments. As a result, the Company’s management believes the estimated fair value of these commitments is minimal. Accordingly, the Company has no liabilities recorded for these commitments as of September 27, 2003.

During the period ended September 27, 2003, the Company entered into a relocation agreement with the vice president of worldwide sales and marketing, with respect to a relocation. As a part of this agreement the Company entered into standard third party employee relocation administration arrangements which included an indemnification commitment whereby the Company agreed to indemnify the third party relocation administrator against any deterioration in the market value of the property located in the United States between the sale to the third party relocation administrator and resale to a third party at the estimated fair market value. In connection with this commitment, the Company has recorded a liability of $92.

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Mykrolis Corporation

Notes to Consolidated Financial Statements—(Continued)

(In thousands except share and per share data)

15. Recently Issued Accounting Pronouncements

In August 2001, the Financial Accounting Standards Board (the “FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 143, “Accounting for Asset Retirement Obligations” which provides the accounting requirements for retirement obligations associated with tangible long–lived assets. This Statement requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. The Company adopted SFAS 143 on January 1, 2003. The adoption of this pronouncement did not have a material impact on the Company’s consolidated results of operations, financial position or cash flows.

In June 2002, the FASB issued SFAS No. 146, “Accounting for Exit or Disposal Activities”. SFAS 146 addresses significant issues regarding the recognition, measurement and reporting of costs that are associated with exit and disposal activities, including restructuring activities that were previously accounted for under Emerging Issues Task Force (“EITF”) No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)”. The scope of SFAS 146 also includes costs related to terminating a contract that is not a capital lease and termination benefits that employees who are involuntarily terminated receive under the terms of a one-time benefit arrangement that is not an ongoing benefit arrangement or an individual deferred compensation contract. The Company adopted the provisions of SFAS 146 effective for exit or disposal activities initiated after December 31, 2002. The provisions of EITF No. 94-3 shall continue to apply for any exit activity initiated under an exit plan that met the criteria of EITF No. 94-3 prior to adoption of SFAS 146. The adoption of SFAS 146 changes, on a prospective basis, the timing of recording restructuring charges from the commitment date to when the liability is incurred.

In November 2002, the FASB issued FASB Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others” (“FIN 45”). FIN 45 clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The initial recognition and initial measurement provisions of FIN 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The disclosure requirements of FIN 45 are applicable for financial statements of interim periods ending after December 15, 2002. The Company adopted FIN 45 in the fourth quarter of 2002 and has included the new disclosure requirements in the Notes to the Consolidated Financial Statements (see Note 6 and Note 14).

In November 2002, the EITF issued No. 00-21, “Accounting for Revenue Arrangements with Multiple Deliverables.” EITF No. 00-21 addresses certain aspects of the accounting by a vendor for arrangements under which it will perform multiple revenue-generating activities. EITF No. 00-21 establishes three principles: revenue should be recognized separately for separate units of accounting, revenue for a separate unit of accounting should be recognized only when the arrangement consideration is reliably measurable and the earnings process is substantially complete, and consideration should be allocated among the separate units of accounting in an arrangement based on their fair values. EITF No. 00-21 is effective for all revenue arrangements entered into in fiscal periods beginning after June 15, 2003. The adoption of this pronouncement did not have any material impact on the Company’s consolidated results of operations, financial position or cash flows.

In January 2003, the FASB issued FASB Interpretation No. 46 “Consolidation of Variable Interest Entities, an interpretation of ARB 51” (“FIN 46”). FIN 46 provides guidance on the identification of entities for which control is achieved through means other than through voting rights called “variable interest entities” or “VIEs” and how to determine when and which business enterprise should consolidate the VIE (the “primary beneficiary”). This new model for consolidation applies to an entity which either (1) the equity investors (if any) do not have a controlling financial interest or (2) the equity investment at risk is insufficient to finance that

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Mykrolis Corporation

Notes to Consolidated Financial Statements—(Continued)

(In thousands except share and per share data)

entity’s activities without receiving additional subordinated financial support from other parties. In addition, FIN 46 requires that both the primary beneficiary and all other enterprises with a significant variable interest in a VIE make additional disclosures. Certain transitional disclosures are required in financial statements initially issued after January 31, 2003, if it is reasonably possible that once this guidance is effective the enterprise will either be required to consolidate a variable interest entity or will hold a significant variable interest in a variable interest entity. The Company does not have any equity interests that would change its current reporting or require additional disclosures outlined in FIN 46.

In April 2003, the FASB issued SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities” (“SFAS 149”). This statement amends SFAS 133 to provide clarification on the financial accounting and reporting of derivative instruments and hedging activities and requires contracts with similar characteristics to be accounted for on a comparable basis. The adoption of SFAS 149, which became effective for contracts entered into or modified after June 30, 2003, did not have any impact on the Company’s consolidated results of operations, financial position or cash flows.

In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity” (“SFAS 150”). SFAS 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). SFAS 150 became effective for financial instruments entered into or modified after May 31, 2003, and otherwise became effective at the beginning of the first interim period beginning after June 15, 2003. The adoption of SFAS 150 did not have any impact on the Company’s consolidated results of operations, financial position or cash flows.

16. Subsequent Events

On October 27, 2003, the Company completed the acquisition of certain net assets of privately held Aeronex, Inc., a manufacturer of gas purification products used in photolithography and other semiconductor manufacturing applications with sales of less than $10 million annually.

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Item 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition

You should read the following discussion of the Company’s financial condition and results of operations along with the consolidated financial statements and accompanying notes included herein. This discussion contains forward-looking statements and involves numerous risks and uncertainties, which are described under “Forward Looking Statements” below. The Company’s actual results may differ materially from those contained in any forward-looking statements.

Overview and Financial Condition

On October 3, 2000, Millipore announced its plan to spin-off its microelectronics business, which served the semiconductor industry and certain related industries with products needed to manufacture semiconductor devices as well as a range of other products that now comprises Mykrolis Corporation. On October 16, 2000, the Company was incorporated in Delaware as a wholly owned subsidiary of Millipore to receive Millipore’s microelectronics business and to be the spun-off company. Unless the context otherwise requires, the terms “Mykrolis”, “we”, “our”, or the “Company” mean Mykrolis Corporation and its subsidiaries and the term “Millipore” means Millipore Corporation and its subsidiaries when referring to periods prior to March 31, 2001 and Millipore Corporation and its subsidiaries other than Mykrolis when referring to periods subsequent to March 31, 2001. Prior to March 31, 2001, our business was operated as a fully integrated business unit of Millipore. On March 31, 2001, Millipore transferred to us substantially all of the assets and liabilities associated with its microelectronics business (the “Separation”). We completed our initial public offering of 7.0 million shares of common stock on August 9, 2001 receiving net proceeds of approximately $94.0 million, after deducting underwriting commissions and offering expenses. We retained $75.0 million of the net proceeds and paid the balance to Millipore as repayment of amounts outstanding as intercompany loans incurred by us in connection with the Separation. After the initial public offering, Millipore owned 32.5 million shares or approximately 82.3% of our total outstanding common stock. On February 27, 2002 (the “Distribution Date”), Millipore completed the spin-off of Mykrolis through the distribution to its shareholders of all of the 32.5 million shares of Mykrolis’ common stock owned by Millipore on that date. Effective February 28, 2002, Mykrolis became a fully independent company.

In connection with our separation from Millipore, we entered into agreements with Millipore under which Millipore agreed to provide services to us during a transition period after the Separation date. The agreements related to facilities services, information technology services, distribution, accounting, finance and other services and arrangements. Under these agreements, we reimbursed Millipore for the cost of these services. The duration of each of the different transition service agreements varied depending on the anticipated time it would take for us to replace the service, but was generally for a one–year period. All of these transition service agreements expired without renewal, and we have been able to provide these services ourselves or through various third parties at costs at least as favorable as those paid to Millipore for these services. During the second quarter of 2003, we terminated the use of Millipore’s Information Technology (“IT”) Data Center, which had hosted our IT system operations since our separation from Millipore in accordance with our original transition service agreement. In addition, we have other agreements with Millipore for membrane manufacturing and supply, research and development, product distribution and contract manufacturing, generally for a five–year period ending March 31, 2006. The foregoing agreements do not necessarily reflect the costs of obtaining the services from unrelated third parties or of our providing the applicable services ourselves. However, we believe that purchasing these products and services from Millipore provides us with an efficient means of obtaining these products and services. In addition, we provide certain transition services to Millipore, for which we are reimbursed at our cost, including facilities and an intellectual property arrangement for which we are paid a royalty.

Critical Accounting Policies and Significant Judgments and Accounting Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally

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accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our judgments and estimates, including those related to revenues, accounts receivable, inventories, long-lived assets and goodwill, deferred income tax assets, income tax contingencies, warranty obligations, restructuring and other charges, pension and other post-retirement benefit obligations, and litigation contingencies. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of the consolidated financial statements. The Company has reviewed these policies with its Audit and Finance Committee.

Net Sales

Our net sales consist of revenue from sales of products net of trade discounts and allowances. We recognize revenue when evidence of an arrangement exists, contractual obligations have been satisfied, title and risk of loss have been transferred to the customer and collection of the resulting receivable is reasonably assured. In the event significant post-shipment obligations or uncertainties remain, revenue is recognized when we fulfill such obligations or the uncertainties are resolved. We provide for estimated product returns under limited contractual obligations. Amounts billed to customers that relate to shipping costs are included in net sales and in cost of sales. Revenue from services, which is less than approximately 3% of total net sales for each of the periods reported, is recognized when the services are provided and is included in our consumable product sales.

Accounts Receivable

We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments based upon specific identification, by customer. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances would be required.

Inventories

We adjust the cost basis of inventory that has been written down to reflect its net realizable value. We provide reserves for estimated excess and obsolete inventory equal to the difference between the cost of inventory and the estimated net realizable value based upon assumptions about future demand and market conditions. We fully reserve for inventories deemed obsolete. We perform quarterly reviews of all inventory items to identify excess and obsolete inventory on-hand by comparing on-hand balances to recent historical usage as well as forecasted demand, based upon input from sales, R&D and marketing functions. If estimates of demand diminish further or actual market conditions are less favorable than those projected, additional inventory write-downs may be required.

Long-Lived Assets and Goodwill

We periodically evaluate the recoverability of long-lived assets whenever events and changes in circumstances indicate that the carrying value of an asset or class of assets may not be fully recoverable and exceeds its fair value. For long-lived assets we intend to hold and use, if the carrying amount of the asset exceeds the sum of undiscounted cash flows expected to result from the use of the asset over its useful life, an impairment loss will be recorded. The amount of the impairment loss is measured as the amount by which the carrying amount of the long-lived asset exceeds its fair value. Assets held for sale are valued at fair value less costs to sell the asset.

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For goodwill, we assess fair value by measuring discounted cash flows and comparable company analysis for the applicable underlying reporting unit and test for impairment as the difference between the resulting implied fair value of goodwill compared to its recorded carrying value. Goodwill impairment is tested annually in the fourth quarter or whenever events and changes in circumstances occur.

The estimates of useful lives and expected cash flows require us to make significant judgments regarding future periods that are subject to some factors outside our control. Changes in these estimates can result in significant revisions to the carrying value of these assets and may result in material charges to the results of operations.

Deferred Income Tax Assets

Our valuation allowance against the U.S. deferred income tax assets is based on our assessment of historical pre-tax income and projected pre-tax income for early future periods. In addition, there is no valuation allowance against the deferred income tax assets in foreign subsidiaries based on our assessment of historical pre-tax income and projected pre-tax income for early future periods.

Income Tax Contingencies

Tax contingencies are recorded to address potential exposures involving tax positions we have taken that could be challenged by taxing authorities. These potential exposures result from the varying application of statutes, rules, regulations and interpretations. Our estimate of the value of our tax contingencies contains assumptions based on past experiences and judgments about potential actions by taxing jurisdictions. It is reasonably likely that the ultimate resolution of these matters may be greater or less than the amount that we have accrued.

Warranty Obligations

At the time revenue is recognized, we provide for the estimated cost of product warranties as provided for under our contractual arrangements. The amount of these warranty costs is affected by product failure rates and service delivery costs incurred in correcting a product failure. Should such failure rates or costs differ from these estimates, accrued warranty costs would be adjusted in the period that such events or costs become known.

Restructuring and Other Charges

During 2003, 2002 and 2001, we recorded charges to operations in connection with restructuring programs. The related reserves reflect estimates, including those pertaining to severance, facility exit costs and asset impairments. We reassess the reserve requirements to complete each restructuring program at the end of each reporting period. Actual experience may be different from these estimates.

Pension and Post Retirement Benefit Obligations

We have significant pension and post retirement benefit costs and credits, which are developed from actuarial valuations. Inherent in these valuations are key assumptions, including discount rates and expected return on plan assets, which are usually updated on an annual basis at the beginning of each fiscal year. We are required to consider current market conditions, including changes in interest rates, in making theses assumptions. Changes in the related pension and post retirement benefit costs or credits may occur in the future due to changes in assumptions.

Litigation Contingencies

We are subject to proceedings, lawsuits and other claims, including proceedings under laws and government regulations related to securities, environmental, labor, product and other matters. We are required to assess the

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likelihood of any adverse judgments or outcomes to these matters, as well as potential ranges of probable losses. A determination of the amount of reserves required, if any, for these contingencies is based on a careful analysis of each individual issue with the assistance of legal counsel. The required reserves may change in the future due to new developments in each matter or changes in approach such as a change in settlement strategy in dealing with these matters.

Results of Operations

We operate in one reportable business segment that develops, manufactures and sells consumables and capital equipment products to semiconductor fabrication companies and other companies using similar manufacturing processes, as well as OEM suppliers to those companies. The principal market we serve is the global semiconductor industry, a highly cyclical business. Since early 2001, this industry has faced a downturn of unprecedented magnitude, and as a result, we have experienced significant variations in net sales and results of operations in the periods presented.

Our liquid and gas equipment products have been impacted the most by current industry conditions and we have experienced weak demand for these products since 2001. However, semiconductor and related industry capacity utilization started to improve slightly in late 2002 and this trend has continued modestly through 2003, which to some extent, benefited our consumable products. We believe, however, that the business environment remains uncertain. We continue to take actions to reduce capital expenditures as well as operating costs and expenses in response to these uncertain business conditions, and we will continue to control our cost structure to align it with our near term revenue expectations and our expected break-even point.

Restructuring and Other Charges

During 2001, we initiated several worldwide cost-reduction programs in connection with the separation from Millipore, to improve our manufacturing asset utilization and to resize our overall cost structure in response to the semiconductor industry downturn. As a result, we recorded restructuring and other charges of $17.5 million during 2001. These restructuring and other charges included $13.8 million of severance costs for 358 employees, a $1.7 million write-off of equipment and leasehold improvements and $2.0 million of lease costs at our vacated Bedford, MA facility.

In addition, to further respond to the prolonged semiconductor industry downturn, during the fourth quarter of 2002 we recorded restructuring and other charges of $5.2 million. Of this amount, $1.7 million related to severance cost for 42 employees, $1.7 million of non-cash asset writedowns due to asset impairments and $1.8 million of additional facility exit costs in Bedford, MA and Swindon, England. During 2002, several changes to prior estimates occurred resulting in the reversal of $1.6 million in employee severance costs and a $1.6 million increase in leasehold and other costs. These changes in estimate were primarily due to the higher than expected level of attrition of 55 employees, lower than expected severance benefits paid and continued deterioration in the real estate market conditions.

In the second quarter of 2003, we initiated an additional restructuring program to streamline our worldwide organization by eliminating 42 positions or approximately 4 percent of our permanent workforce and exited our service facility in Swindon, England. These actions were taken in order to reach profitability in the near term despite the continued downturn in the semiconductor industry. As a result of these actions and in conjunction with changes in prior estimates, we recorded restructuring and other charges of $1.8 million. Of this amount, $1.2 million related to employee severance costs, $0.3 million to facility exit costs at the Swindon facility and $0.3 million to a change in estimate of future costs associated with the vacated Bedford, MA facility.

In the third quarter of 2003, we recorded additional restructuring and other charges of $0.5 million for non-cash write offs of machinery and leasehold improvements. These charges related to changes in estimate for prior restructuring programs associated with the closing of certain service centers and relocation of manufacturing operations.

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As of September 27, 2003, the accrued restructuring costs totaled $4.4 million. Of this amount, $0.7 million of severance costs for terminated employees will be paid by the end of the first quarter of 2005. The facility exit costs of $3.7 million will be substantially paid by the fourth quarter of 2005. These 2003 programs are expected to generate annual cost savings of approximately $2.3 million.

Three months ended September 27, 2003 compared to three months ended September 28, 2002

Net Sales

Net sales were $44.5 million for the three months ended September 27, 2003, which represented a 6.7%, or $3.2 million, decrease from the three months ended September 28, 2002. The decrease in revenue during the third quarter 2003 versus the third quarter 2002 was primarily attributable to a decrease in equipment product sales. This is a result of lower capital spending at semiconductor fabrication plants. The two geographical areas most affected by this trend were the United States and Japan where we conduct most of our business with toolmakers. Our equipment product lines represented, in aggregate, 29% and 36% of our worldwide revenues for the three months ended September 27, 2003 and September 28, 2002, respectively. Improved front-end capacity utilization rates at most of our major Asian customers’ manufacturing sites, benefited our consumable product lines in Asia. The impact of stronger Japanese Yen and Euro exchange rates increased net sales by approximately $0.6 million in the 2003 period compared to the 2002 period.

Sales by geography are summarized in the table below.

	In Millions of U.S. Dollars				As a Percentage of Total Net Sales
	Three Months Ended				Three Months Ended
Net Sales	September 27, 2003		September 28, 2002		September 27, 2003		September 28, 2002
	(unaudited)				(unaudited)
United States	$	11.7	$	13.2	26.3	%	27.7	%
Japan		15.8		18.5	35.5		38.8
Asia		12.1		11.3	27.2		23.8
Europe		4.9		4.7	11.0		9.7
Total	$	44.5	$	47.7	100.0	%	100.0	%

Gross Profit Margins

Our gross profit as a percentage of net sales was 45.2% for the three months ended September 27, 2003, as compared to 37.9% for the three months ended September 28, 2002. Gross profit was positively impacted by the completion of several programs to relocate and restructure manufacturing and distribution operations, lower excess and obsolete inventory charges and the change in product mix. Efficiency gains in manufacturing and distribution operations contributed $1.5 million to the improvement in gross profit during the three months ended September 27, 2003. In addition, during the three months ended September 28, 2002, we recorded a net charge of $0.5 million of excess and obsolete inventory reserves to account for lower forecasted demand versus a benefit of $0.6 million during the three months ended September 27, 2003 primarily due to sale of products previously deemed excess and written down to net realizable value. Lastly, our consumable products represented, in aggregate, approximately 71% and 64% of our worldwide revenues for the three months ended September 27, 2003 and September 28, 2002, respectively.

Operating Expenses

Research and development expenses were $4.3 million in the three months ended September 27, 2003 a decrease of 15.5% or $ 0.8 million compared to $5.1 million for the three months ended September 28, 2002. The decrease is mostly due to the timing of spending on key R&D project materials and the delay in staffing open positions. Despite the uncertainties of the current business environment, we continue to fund research and development on targeted programs to ensure that our products meet customers’ needs for future semiconductor manufacturing processes.

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Selling, general and administrative expenses decreased 16.1% or $3.0 million, to $15.7 million for the three months ended September 27, 2003 compared to $18.7 million in the three months ended September 28, 2002. This decrease is primarily attributable to cost savings resulting from the 2002 and 2003 restructuring programs as well as additional actions to reduce discretionary spending including a one-week furlough for most U.S. employees taken without pay during the third quarter of 2003.

On a normalized basis absent any unforeseen events, we expect our quarterly operating expenses to fluctuate between $20 and $22 million. Our operating expenses will not be materially impacted by the Aeronex acquisition that was completed on October 27, 2003.

Other Income (Expense) - net

Other income (expense), net decreased $0.2 million, to $(0.2) million for the three months ended September 27, 2003 from $0.0 million for the three months ended September 28, 2002. The decrease was largely due to an increase in losses on foreign currency transactions of $0.1 million and lower interest income of $0.1 million.

Income Tax Expense (Benefit)

For the three months ended September 27, 2003, we recorded income tax expense of $0.2 million with respect to certain foreign operations on a consolidated pre-tax loss of $0.6 million, yielding an effective tax rate of negative 34.8%. For the three months ended September 28, 2002, we recorded income tax benefit of $1.4 million on a consolidated pre-tax loss of $5.7 million, yielding an effective tax rate of 24.4%. The change in our effective tax rate for the quarter ended September 27, 2003 compared to the quarter ended September 28, 2002 resulted from changes in the expected full year pre-tax loss and the overall geographic mix of foreign operations pre-tax income and loss.

Nine months ended September 27, 2003 compared to nine months ended September 28, 2002

Net Sales

Net sales were $127.7 million for the nine months ended September 27, 2003, which represented a 3.2%, or $4.3 million, decrease from the nine months ended September 28, 2002. The decrease in revenue was primarily attributable to a decrease in our equipment product sales. This is a result of lower capital spending at semiconductor fabrication plants. Our equipment products represented, in aggregate, 28% and 35% of our worldwide revenues for the nine months ended September 27, 2003 and September 28, 2002, respectively. Improved front-end capacity utilization rates at most of our major Asian customers’ manufacturing sites, benefited our consumable product lines in Asia. The impact of stronger Japanese Yen and Euro exchange rates increased sales by approximately $5.5 million in the 2003 period compared to the 2002 period.

Sales by geography are summarized in the table below.

	In Millions of U.S. Dollars				As a Percentage of Total Net Sales
	Nine Months Ended				Nine Months Ended
Net Sales	September 27, 2003		September 28, 2002		September 27, 2003		September 28, 2002
	(unaudited)				(unaudited)
United States	$	34.0	$	42.2	26.6	%	31.9	%
Japan		45.3		46.0	35.5		34.9
Asia		34.6		30.5	27.1		23.1
Europe		13.8		13.3	10.8		10.1
Total	$	127.7	$	132.0	100.0	%	100.0	%

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Gross Profit Margins

Our gross profit as a percentage of net sales was 43.3% for the nine months ended September 27, 2003 as compared to 34.3% for the nine months ended September 28, 2002. Gross profit was positively impacted by the completion of several programs to relocate and restructure manufacturing and distribution operations, lower excess and obsolete inventory and the change in product mix. During the nine months ended September 28, 2002, we recorded a net charge of $7.2 million of excess and obsolete inventory reserves to account for depressed market conditions versus $0.8 million during the nine months ended September 27, 2003. In addition, efficiency gains in manufacturing and distribution operations contributed approximately $1.4 million to the improvement in gross profit during the nine months ended September 27, 2003. Lastly, our consumable products represented, in aggregate, 72% and 65% of our worldwide revenues for the nine months ended September 27, 2003 and September 28, 2002 respectively.

Operating Expenses

Research and development expenses were $13.5 million in the nine months ended September 27, 2003 a decrease of 7.7% or $1.2 million compared to $14.7 million for the nine months ended September 28, 2002. The decrease is mostly due to the timing of spending on key R&D project materials and the delay in staffing open positions. Despite the uncertainties of the current business environment, we continue to fund research and development on targeted programs to ensure that our products meet customers’ needs for future semiconductor manufacturing processes.

Selling, general and administrative expenses decreased 9.8% or $5.2 million, to $48.3 million for the nine months ended September 27, 2003 compared to $53.5 million in the nine months ended September 28, 2002. This decrease was the result of 2003 and 2002 restructuring initiatives as well as additional actions to reduce discretionary spending.

Other Income (Expense) - net

Other income (expense), net decreased $0.2 million, to $1.7 million for the nine months ended September 27, 2003 from $1.9 million for the nine months ended September 28, 2002. The decrease was due to a reduction in gains on foreign currency transactions of $0.7 million, lower interest income of $0.1 million, offset by an increase of $0.5 million on investments in entities accounted for under the equity method and $0.1 million in royalty income.

Income Tax Expense

For the nine months ended September 27, 2003, we recorded income tax expense of $4.6 million with respect to certain foreign operations on a consolidated pre-tax loss of $7.1 million yielding an effective annual tax rate of negative 65.1%. For the nine months ended September 28, 2002, we recorded income tax expense of $2.6 million with respect to certain foreign operations on a consolidated pre-tax loss of $21.0 million, yielding an effective annual tax rate of negative 12.3%. The income tax expense during the 2002 period includes $1.1 million in settlements resulting from foreign tax audits for which we are responsible under our tax sharing agreement with Millipore. The change in our effective tax rate for the nine months ended September 27, 2003 compared to the nine months ended September 28, 2002 resulted from changes in the expected full year pre-tax loss and the overall geographic mix of foreign operations pre-tax income and loss.

Liquidity and Capital Resources

During the nine months ended September 27, 2003, we generated $5.3 million of cash from operations as compared to $8.7 million during the nine months ended September 28, 2002. The decrease in net cash from operations is primarily attributable to unfavorable changes in working capital offset by a reduced net loss in the nine months ended September 27, 2003 in comparison with the nine months ended September 28, 2002. Cash provided by operating activities during the nine months ended September 27, 2003 was derived primarily from

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our net loss of $11.8 million offset by the increase in accounts payable of $1.1 million, a decrease in inventory of $2.3 million and non-cash charges for depreciation and amortization of $8.4 million, and restructuring and other charges of $2.3 million. The net cash provided by operating activities during the nine months ended September 28, 2002 resulted primarily from our net loss of $23.5 million and the increase in accounts receivable of $3.9 million, offset by the decrease in inventory of $8.5 million, the increase in accounts payable of $13.6 million, and non-cash charges for depreciation and amortization of $9.1 million. Net working capital (defined as current assets minus current liabilities) at September 27, 2003 totaled $101.1 million including $61.6 million in cash and cash equivalents.

Over the past two years, our principal cash requirements have been to fund our operations and additions to property, plant and equipment that supported our separation from Millipore. During the nine months ended September 27, 2003, cash flows used for additions to property, plant and equipment were $2.9 million compared to $13.3 million during the nine months ended September 28, 2002. Most of our separation-related programs have now been completed and we believe that our future quarterly capital expenditure levels will be between $1.0 million and $2.0 million. We expect our total capital expenditures for 2003 to be approximately $4.0 million to $5.0 million. In addition, during the nine months ended September 27, 2003, we used $14.5 million for the purchase of long-term marketable securities as we began investing in longer-term high-grade instruments.

During the nine months ended September 27, 2003, cash flows provided by financing activities were derived primarily from $1.5 million from the issuance of common stock under our employee stock purchase and stock option plans. Cash flows provided by financing activities for the nine months ended September 28, 2002 were $1.7 million and resulted from net transfers of $1.8 million from Millipore as reimbursement of expenses and $1.5 million generated by the issuance of common stock under our employee stock purchase and stock option plans. This was offset by $1.6 million in cash collateratization related to a security deposit under a lease for our corporate headquarters, research and development and manufacturing facility and other security deposits.

We believe that our cash, cash equivalents, long-term marketable securities and expected future cash flows from operations will be sufficient to meet our working capital, capital expenditure, and research and development investment requirements for the next 12 months. However, in order to take advantage of growth opportunities, including potential acquisitions, joint ventures, alliances or other business arrangements, we may elect to raise capital through additional equity or debt financing. During the third quarter of 2003, we made cash commitments of $7.0 million to purchase certain net assets of privately held Aeronex, a manufacturer of gas purification products and to purchase the intellectual property of another company. The timing and amount of future potential capital requirements cannot be determined at this time and will depend on a number of factors, including the nature and size of the strategic business opportunities we may elect to pursue. There can be no assurance that any such financing would be available on commercially acceptable terms.

Under accounting principles generally accepted in the United States of America, certain obligations and commitments are not required to be included in the consolidated balance sheet and statement of operations. These obligations and commitments, while entered into in the normal course of business, may have a material impact on liquidity. The following operating lease commitments as of September 27, 2003 have not been included in the consolidated balance sheet and statement of operations included under Part 1 “Financial Information”; however, they have been disclosed in the following table in order to provide a more accurate picture of our financial position and liquidity.

	Payments Due by Period
	(In Millions)
	Total		Less than 1 Year		1-3 Years		4-5 Years		After 5 Years
Operating leases	$	51.5	$	8.0	$	21.2	$	7.5	$	14.7

We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the

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purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As such, we are not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.

Pursuant to the terms of the lease for our vacated Bedford, Massachusetts facility, the landlord has an option to sell the facility to us at any time prior to November 2005, the end of the lease term, at 90% of the then current market value, excluding the value of the lease. We estimate that the current fair market value of the facility is between $8.5 million and $10.0 million.

Recently Issued Accounting Pronouncements

In August 2001, the Financial Accounting Standards Board (the “FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 143, “Accounting for Asset Retirement Obligations” which provides the accounting requirements for retirement obligations associated with tangible long–lived assets. This Statement requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. We adopted SFAS 143 on January 1, 2003. The adoption of this pronouncement did not have a material impact on our consolidated results of operations, financial position or cash flows.

In June 2002, the FASB issued SFAS No. 146, “Accounting for Exit or Disposal Activities”. SFAS 146 addresses significant issues regarding the recognition, measurement and reporting of costs that are associated with exit and disposal activities, including restructuring activities that were previously accounted for under Emerging Issues Task Force (“EITF”) No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)”. The scope of SFAS 146 also includes costs related to terminating a contract that is not a capital lease and termination benefits that employees who are involuntarily terminated receive under the terms of a one-time benefit arrangement that is not an ongoing benefit arrangement or an individual deferred compensation contract. We adopted the provisions of SFAS 146 effective for exit or disposal activities initiated after December 31, 2002. The provisions of EITF No. 94-3 shall continue to apply for any exit activity initiated under an exit plan that met the criteria of EITF No. 94-3 prior to adoption of SFAS 146. The adoption of SFAS 146 changes, on a prospective basis, the timing of recording restructuring charges from the commitment date to when the liability is incurred.

In November 2002, the FASB issued FASB Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others” (“FIN 45”). FIN 45 clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The initial recognition and initial measurement provisions of FIN 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The disclosure requirements of FIN 45 are applicable for financial statements of interim periods ending after December 15, 2002. We adopted FIN 45 in the fourth quarter of 2002 and have included the new disclosure requirements in the Notes to the Consolidated Financial Statements (see Note 6 and Note 14 included in the accompanying financial statements).

In November 2002, the EITF issued No. 00-21, “Accounting for Revenue Arrangements with Multiple Deliverables.” EITF No. 00-21 addresses certain aspects of the accounting by a vendor for arrangements under which it will perform multiple revenue-generating activities. EITF No. 00-21 establishes three principles: revenue should be recognized separately for separate units of accounting, revenue for a separate unit of accounting should be recognized only when the arrangement consideration is reliably measurable and the earnings process is substantially complete, and consideration should be allocated among the separate units of accounting in an arrangement based on their fair values. EITF No. 00-21 is effective for all revenue arrangements entered into in fiscal periods beginning after June 15, 2003. The adoption of this pronouncement did not have any material impact on our consolidated results of operations, financial position or cash flows.

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In January 2003, the FASB issued FASB Interpretation No. 46 “Consolidation of Variable Interest Entities, an interpretation of ARB 51” (“FIN 46”). FIN 46 provides guidance on the identification of entities for which control is achieved through means other than through voting rights called “variable interest entities” or “VIEs” and how to determine when and which business enterprise should consolidate the VIE (the “primary beneficiary”). This new model for consolidation applies to an entity which either (1) the equity investors (if any) do not have a controlling financial interest or (2) the equity investment at risk is insufficient to finance that entity’s activities without receiving additional subordinated financial support from other parties. In addition, FIN 46 requires that both the primary beneficiary and all other enterprises with a significant variable interest in a VIE make additional disclosures. Certain transitional disclosures are required in financial statements initially issued after January 31, 2003; if it is reasonably possible that once this guidance is effective, the enterprise will either be required to consolidate a variable interest entity or will hold a significant variable interest in a variable interest entity. We do not have any equity interests that would change its current reporting or require additional disclosures outlined in FIN 46.

In April 2003, the FASB issued SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities” (“SFAS 149”). This statement amends SFAS 133 to provide clarification on the financial accounting and reporting of derivative instruments and hedging activities and requires contracts with similar characteristics to be accounted for on a comparable basis. The adoption of SFAS 149, which became effective for contracts entered into or modified after June 30, 2003, did not have any impact on our consolidated results of operations, financial position or cash flows.

In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity” (“SFAS 150”). SFAS 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). SFAS 150 became effective for financial instruments entered into or modified after May 31, 2003, and otherwise became effective at the beginning of the first interim period beginning after June 15, 2003. The adoption of SFAS 150 did not have any impact on our consolidated results of operations, financial position or cash flows.

Forward Looking Statement Disclaimer

The matters discussed in this report include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current management expectations and are subject to substantial risks and uncertainties, which could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. When used herein or in such statements, the words “anticipate”, “believe”, “estimate”, “expect”, “may”, “will”, “should” or the negative thereof and similar expressions as they relate to Mykrolis or its management are intended to identify such forward-looking statements. Potential risks and uncertainties that could affect our future operating results include the risk factors described elsewhere in this report as well as the following:

RISKS RELATING TO OUR BUSINESS AND INDUSTRY

Our business depends substantially on semiconductor industry capital spending, which is characterized by periodic fluctuations that may cause a reduction in demand for our products.

Our business depends substantially upon the capital expenditures of semiconductor device manufacturers, which in turn depend upon the demand for semiconductors and other products utilizing semiconductors. We estimate that approximately 90% of our sales during 2000, 2001 and 2002 were to semiconductor capital equipment manufacturers and semiconductor device manufacturers, and we expect that sales to such customers will continue to account for a substantial majority of our sales. Reductions in demand for the products manufactured by semiconductor capital equipment manufacturers and semiconductor device manufacturers will

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restrict our ability to grow our business and cause our sales and profitability to decline. Historically, the semiconductor market has been highly cyclical and has experienced periods of over capacity, resulting in significantly reduced demand for capital equipment used to make semiconductors. For example, during fiscal 2001 and 2002 the semiconductor industry has experienced a significant decline, which has caused a number of our customers to reduce their orders. Our net sales for 2002 were $178.4 million, representing a decline of $36.8 million, or 17.1% from our net sales in 2001. Our net sales for 2001 were $215.3 million, representing a $140.3 million, or 39.4%, decline from our net sales in 2000. We also experienced downturns in 1996 and 1998. During the 1998 downturn, our annual net sales declined approximately $82.9 million, or 31% from the prior year. There is typically a three to six month lag between a change in capital expenditures within the semiconductor industry and the related impact on the demand for our products. If the current downturn continues for any additional significant period of time, it will further inhibit our growth and cause our sales and profitability to decline significantly.

The semiconductor industry is subject to rapid demand shifts which are difficult to predict. As a result, our inability to meet demand in response to these rapid shifts may cause a reduction in our market share.

Our ability to increase sales of our products, particularly our capital equipment products, depends in part upon our ability to ramp up the use of our manufacturing capacity for such products in a timely manner and to mobilize our supply chain. In order to meet the demands of our customers, we may be required to ramp up our manufacturing capacity in as little as a few months. If we are unable to expand our manufacturing capacity on a timely basis or manage such expansion effectively, our customers could seek such products from other suppliers, and our market share could be reduced. Because demand shifts in the semiconductor industry are rapid and difficult to foresee, we may not be able to increase capacity quickly enough to respond to such an increase in demand.

Our annual and quarterly operating results are subject to fluctuations as a result of rapid demand shifts and our insignificant level of backlog and if we fail to meet the expectations of securities analysts or investors, the market price of our securities may decrease significantly.

Our sales and operating results can vary significantly from quarter to quarter and year to year. Because our expense levels are relatively fixed in the short-term, an unanticipated decline in revenue in a particular quarter could disproportionately affect our net income in that quarter. In addition, we make a substantial portion of our shipments shortly after we receive the order, and therefore we operate with an insignificant level of backlog. As a consequence of the just-in-time nature of shipments and the low level of backlog, our results of operations may decline quickly and significantly in response to changes in order patterns or rapid decreases in demand for our products. We anticipate that fluctuations in operating results will continue in the future. Such fluctuations in our results could cause us to fail to meet the expectations of securities analysts or investors, which could cause the market price of our securities to decline substantially. We believe that period-to-period comparisons of our results of operations may not be meaningful, and you should not rely upon them as indicators of our future performance.

We may not be able to accurately forecast demand for our products.

As noted above, we typically operate our business on a just-in-time shipment basis with a low level of backlog and we order supplies and plan production based on internal forecasts of demand. Due to these factors, we have, in the past, and may again in the future, fail to accurately forecast demand for our products, in terms of both volume and specific products for which there will be demand. This has lead to, and may in the future lead to, delays in product shipments, disappointment of customer expectations, or, alternatively, an increased risk of excess inventory and of inventory obsolescence. If we fail to accurately forecast demand for our products, our business, financial condition and operating results could be materially and adversely affected.

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If the semiconductor industry rebounds, it may not rebound to historic levels but instead may reflect a lower rate of long-term growth, similar to the electronics industry.

Notwithstanding the current severe and prolonged downturn in the semiconductor industry and the related reduction in manufacturing operations, there may still be excess manufacturing capacity. In addition, there is no new application to drive growth in the semiconductor industry, as was the case in 1998 with telecommunications and internet applications. Accordingly, some analysts have predicted that the semiconductor industry may experience lower growth rates during a recovery cycle than has historically been the case and that its longer-term performance may reflect this lower growth rate, which would be similar to the growth rate of the electronics industry.

If we are unable to maintain our technological expertise in design and manufacturing processes, we will not be able to successfully compete.

We believe that our future success will depend upon our ability to develop and provide products that meet the changing needs of our customers, including the transition from the use of 200 millimeter wafers to 300 millimeter wafers, the shrinking of integrated circuit line-widths and the use of new classes of materials, such as copper, titanium nitride and organic and inorganic dielectric materials, which are materials that have either a low or high resistance to the flow of electricity. This requires that we successfully anticipate and respond to technological changes in manufacturing processes in a cost-effective and timely manner. Our inability to develop the technical specifications for any of our new products or enhancements to our existing products or to manufacture and ship these products or enhancements in volume in a timely manner could harm our business prospects and significantly reduce our sales. In addition, if new products have reliability or quality problems, we may experience reduced orders, higher manufacturing costs, delays in acceptance and payment, additional service and warranty expense and damage to our reputation.

Our competitive position will be weakened if semiconductor device manufacturers do not require semiconductor capital equipment manufacturers to design our products into new generations of their equipment.

New products designed by semiconductor capital equipment manufacturers typically have a lifespan of five to ten years. Our competitive success depends on our products being designed into new generations of equipment for the semiconductor industry. In some cases, semiconductor device manufacturers may direct semiconductor capital equipment manufacturers to use a specified supplier’s product in their equipment. Accordingly, our success will depend in part on our ability to have semiconductor device manufacturers specify that our products be used at their semiconductor fabrication facilities. If our products are not specified by semiconductor equipment manufacturers, our net sales may be reduced during the lifespan of our customers’ products.

Because our sales are concentrated on a small number of key customers, our revenue and profitability may materially decline if one or more of our key customers do not continue to purchase our existing and new products in significant quantities.

We depend and expect to continue to depend on a small number of customers for a large portion of our business, and changes in our customers’ orders have had a significant impact on our operating results. In 2002, 2001 and 2000, our top customer accounted for approximately 13%, 14% and 18%, respectively, of our net sales. In those same periods, net sales to our ten largest customers accounted for approximately 35%, 33% and 39%, respectively, of our net sales. In addition, we sell products to systems integrators who then sell components, which include our products, to some of our major customers. If any one of our key customers decides to purchase significantly less from us or to terminate its relationship with us, our revenue and profitability may decline significantly. We could lose our key customers or significant sales to our key customers because of factors beyond our control, such as a significant disruption in our customers’ businesses generally or in a specific product line. For example, we are currently experiencing softening demand for our products as a result of the

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downturn in the semiconductor industry. These customers may stop incorporating our products into their products with limited notice to us and suffer little or no penalty for doing so. In addition, if any of our customers merge, we may experience lower overall sales from the merged companies. Because one of our strategies has been to develop long-term relationships with a few key customers in the product areas in which we focus and because we have a long product design and development cycle for most of our products and prospective customers typically require lengthy product qualification periods prior to placing volume orders, we may be unable to replace these customers quickly or at all.

Because we are subject to order and shipment uncertainties and many of our costs are fixed, any significant changes, cancellations or deferrals could cause our revenue and profitability to decline or fluctuate.

As is typical in the microelectronics industry, we do not usually obtain long-term purchase orders or commitments from our customers. Instead, we work closely with our customers to develop non-binding forecasts of the future volume of orders. Customers may cancel their orders, change production quantities from forecasted volumes or delay production for reasons beyond our control. Order cancellations or deferrals could cause us to hold inventory for longer than anticipated, which could reduce our profitability, restrict our ability to fund our operations and cause us to incur unanticipated reductions or delays in our revenue. Our customers often change their orders multiple times between initial order and delivery. Such changes usually relate to quantities or delivery dates, but sometimes relate to the specifications of the products we are supplying. If a customer does not timely pay for these products, we could incur significant charges against our income. In addition, our profitability may be affected by the generally fixed nature of our costs. Because a substantial portion of our costs are fixed, we may experience deterioration in gross margins when volumes decline. From time to time, we make capital investments in anticipation of future business opportunities. If we are unable to obtain the anticipated business, our revenue and profitability may decline.

Competition from existing or new companies in the microelectronics industry could cause us to experience downward pressure on prices, fewer customer orders, reduced margins, the inability to take advantage of new business opportunities and the loss of market share.

We operate in a highly competitive industry. We compete against many domestic and foreign companies that have substantially greater manufacturing, financial, research and development and marketing resources than we do. In addition, some of our competitors may have more developed relationships with our existing customers than we do, which may enable them to have their products specified for use more frequently by these customers. We also face competition from the manufacturing operations of our current and potential customers, who continually evaluate the benefits of internal manufacturing versus outsourcing. As more original equipment manufacturers dispose of their manufacturing operations and increase the outsourcing of their products to liquid and gas delivery system and other component companies, we may face increasing competitive pressures to grow our business in order to maintain our market share. If we are unable to maintain our competitive position, we could experience downward pressure on prices, fewer customer orders, reduced margins, the inability to take advantage of new business opportunities and a loss of market share.

If we are unable to successfully adjust our business strategy for some of our product lines to reflect the increasing price sensitivity on the part of our customers, our business and financial condition could be harmed.

Our business strategy for many of our product lines has been focused on product performance, technological innovations that provide enhanced efficiencies, and customer service, rather than simply price. As a result of current economic conditions and changes in various markets that we serve, our customers have experienced significant cost pressures and, as a result, we have observed increased price sensitivity on the part of our customers. If competition for any of our product lines should come to focus solely on price rather than on product

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performance, technological innovations and customer service, we will need to adjust our business strategy and/or product offerings accordingly and, if we are unable to do so, our business, financial condition and operating results could be materially and adversely affected.

We conduct a significant amount of our sales activity and manufacturing efforts outside the United States, which subjects us to additional business risks and may cause our profitability to decline due to increased costs.

Sales by our international subsidiaries to customers outside the United States accounted for approximately 69% of our net sales in 2002, 67% of our net sales in 2001, 61% of our net sales in 2000. We anticipate that international sales will continue to account for a majority of our net sales. In addition, a number of our key domestic customers derive a significant portion of their revenues from sales in international markets. We also manufacture a significant portion of our products outside the United States and are dependent on international suppliers for many of our parts. We intend to continue to pursue opportunities in both sales and manufacturing internationally. Our international operations are subject to a number of risks and potential costs that could adversely affect our revenue and profitability, including:

• unexpected changes in regulatory requirements that could impose additional costs on our operations or limit our ability to operate our business;

• greater difficulty in collecting our accounts receivable and longer payment cycles than is typical in domestic operations;

• changes in labor conditions and difficulties in staffing and managing foreign operations;

• liability for foreign taxes assessed at rates higher than those applicable to our domestic operations; and

• political and economic instability.

In the past, we have incurred costs or experienced disruptions due to the factors described above and expect to do so in the future. For example, our operations in Asia, and particularly Korea, Taiwan and Japan, have been negatively impacted in the past as a result of regional economic instability, most recently in 1998. In addition, Taiwan and Korea account for a growing portion of the world’s semiconductor manufacturing. There are currently strained relations between China and Taiwan and there are growing tensions between North Korea and South Korea and the United States. Any adverse developments in those relations could significantly disrupt the worldwide production of semiconductors, which would lead to reduced sales of our products.

Fluctuations in the value of the US dollar in relation to other currencies may lead to lower net income or may cause us to raise prices, which could result in reduced net sales.

Foreign currency exchange rate fluctuations could have an adverse effect on our net sales and results of operations. Approximately 69% of our net sales in 2002, 67% of our net sales in 2001 and 61% of our net sales in 2000 were denominated in foreign currencies. Unfavorable foreign currency fluctuations could require us to increase prices to foreign customers, which could result in lower net sales by us to such customers. Alternatively, if we do not adjust the prices for our products in response to unfavorable foreign currency fluctuations, our profitability could decline. In addition, sales made by our foreign subsidiaries are denominated in the currency of the country in which these products are sold, and the currency we receive in payment for such sales could be less valuable at the time of receipt versus the time of sale as a result of foreign currency exchange rate fluctuations.

We incur significant cash outlays over lengthy time periods in order to research, develop, manufacture and market new products, which may never reach market or may have limited market acceptance.

We make significant cash expenditures to research, develop and market new products. For example, we incurred $19.7 million of research and development expense in 2002, $19.8 million in 2001 and $23.2 million in

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2000. The development period for a product can be as long as five years. Following development, it may take an additional two to three years for the market size of that product to reach a substantial level. We cannot be certain of the success of a new product. A product concept may never progress beyond the development stage or may only achieve limited acceptance in the marketplace. If this occurs, we do not receive a direct return on our expenditures and may not even realize any indirect benefits. Additionally, capacity expansion may be necessary in order to manufacture a new product. If sales levels do not increase to offset the additional fixed operating expenses associated with any such expansion, our revenue and profitability could decline and our prospects could be harmed.

We depend on our suppliers for our raw materials and components, and our production would be substantially curtailed if these suppliers are not able to meet our demands and alternative sources are not available.

We purchase raw materials and components from third parties to complete our customers’ orders, and some of these raw materials and components may, in the future, need to be ordered from sole-source suppliers. Although we work with our customers and suppliers to minimize the impact of shortages in raw materials and components, we sometimes experience short-term adverse effects due to price fluctuations and delayed shipments. In the past, there have been industry-wide shortages of electronic components, particularly memory and logic devices. If a significant shortage of raw materials or components were to occur, we may have to delay shipment. Supply shortages of particular components will likely substantially curtail production of products using these components. In addition, while many of our significant customer contracts permit periodic reviews of pricing based on decreases and increases in the prices of raw materials and components, we are not always able to pass on price increases to our customers and significant price increases from our suppliers could cause our profitability to decline. The loss of any of these or other significant suppliers, delays in shipments, the inability of a supplier to meet performance and quality specifications or delivery schedules or our inability to pass along price increases could cause our revenue and profitability to decline significantly.

We may acquire other businesses or form joint ventures that could negatively affect our profitability, increase our debt and dilute your ownership of our company.

As part of our business strategy, we have, and we expect to continue to address gaps in our product offerings, diversify into complementary product markets or pursue additional technology and customers through acquisitions, joint ventures or other types of collaborations. As a result, we may enter markets in which we have no or limited prior experience. Competition for acquiring attractive businesses in our industry is substantial. In executing this part of our business strategy, we may experience difficulty in identifying suitable acquisition candidates or in completing selected transactions at appropriate valuations. We intend to pay for these acquisitions with cash and/or our common stock which could impair our liquidity and dilute your ownership of our company. Further, we may not be able to successfully integrate any acquisitions that we do make into our existing business operations and we could assume unknown or contingent liabilities or experience negative effects on our reported results of operations from dilutive results from operations and/or from future potential impairment of acquired assets including goodwill related to future acquisitions. We may experience difficulties in operating in foreign countries or over significant geographical distances and in retaining key employees or customers of an acquired business, and our management’s attention could be diverted from other business issues. We may not identify or complete these transactions in a timely manner, on a cost effective basis or at all, and we may not realize the benefits of any acquisition or joint venture.

We may not be able to obtain financing to fund our future capital requirements, including strategic acquisitions, on favorable terms or at all, and the amount of equity that we can issue may likewise be limited. This could prevent us from addressing gaps in our product offerings, improving our technology or increasing our manufacturing capacity.

If our cash flows from operations are less than we expect, we may need to issue additional equity or incur debt. There can be no assurance that we will be able to obtain necessary short-term or other financing on favorable terms or at all. If we are unable to obtain necessary financing, we may not have sufficient cash to

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operate our business. In particular, we expect to fund future acquisitions in whole or in part by issuing additional equity. Any equity issued would be dilutive to existing stockholders. If the price of our equity is low or volatile, we may not be able to issue equity to acquire other companies and our acquisition strategy could require us to incur substantial amounts of indebtedness. While we currently have no debt outstanding, potential future levels of indebtedness could have consequences for our business, including:

• greater vulnerability to the cyclical nature of our industry and the effects of rapid demand shifts affecting our business;

• dedication of a substantial portion of our cash flow from operations to repayment of debt, limiting the availability of cash for working capital, capital expenditures or acquisitions which may be attractive to us; and

• reduced flexibility in planning for, or reacting to, changes in our business and industry.

Furthermore, if we raise funds through the issuance of debt, the debt securities issued will likely have rights, preferences and privileges senior to those of holders of our common stock in the event of a liquidation or otherwise, and the terms of the debt securities may impose restrictions on our operations. We cannot assure you that financing for acquisitions will be available on terms acceptable to us, or at all.

Loss of any of our key personnel could hurt our business because of their experience in the microelectronics industry and their technological expertise. Similarly, our inability to attract and retain new qualified personnel could inhibit our ability to operate and grow our business successfully.

We depend on the services of our key senior executives and other technological experts because of their experience in the microelectronics industry and their technical expertise. The loss of the services of one or several of our key employees or an inability to attract, train and retain qualified and skilled employees, specifically research and development and engineering personnel, could result in the loss of customers or otherwise inhibit our ability to operate and grow our business successfully. In particular, since our separation from Millipore, we have had to develop and implement a new administrative and managerial infrastructure. Our future success depends on the successful development and implementation of this infrastructure and our ability to expand, integrate and retain our management team. We have also had to impose salary reductions on our senior employees and freeze merit increases in order to maintain our financial position during the current extended downturn in the semiconductor industry; this may make it more difficult to attract and retain key personnel. In addition, our ability to successfully integrate acquired facilities or businesses depends, in part, on our ability to retain and motivate key management and employees hired by us in connection with the acquisition.

If we are unable to protect our intellectual property rights, our business and prospects could be harmed.

Our future success and competitive position depend in part upon our ability to obtain and maintain proprietary technology used in our principal product families. We rely, in part, on patent, trade secret and trademark law to protect that technology. We routinely enter into confidentiality agreements with our employees. However, there can be no assurance that these agreements will not be breached, that we will have adequate remedies for any breach or that our confidential and proprietary information and technology will not be independently developed by or become otherwise known to third parties. We have obtained a number of patents relating to our products and have filed applications for additional patents. We cannot assure you that any of our pending patent applications will be approved, that we will develop additional proprietary technology that is patentable, that any patents owned by or issued to us will provide us with competitive advantages or that these patents will not be challenged by third parties. Patent filings by third parties, whether made before or after the date of our filings, could render our intellectual property less valuable. Competitors may misappropriate our intellectual property, and disputes as to ownership of intellectual property may arise. In addition, if we do not obtain sufficient international protection for our intellectual property, our competitiveness in international markets could be significantly impaired, which would limit our growth and future revenue. Furthermore, there can be no assurance that third parties will not design around our patents.

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Protection of our intellectual property rights has and may continue to result in costly litigation.

We may from time to time be required to institute litigation in order to enforce our patents, copyrights or other intellectual property rights, to protect our trade secrets, to determine the validity and scope of the proprietary rights of others or to defend against claims of infringement. Such litigation could result in substantial costs and diversion of resources and could negatively affect our sales, profitability and prospects regardless of whether we are able to successfully enforce our rights. For example, in 1998, we settled a patent lawsuit in which each party claimed infringement of a patent by the other. In connection with the settlement, we incurred a charge of approximately $3.7 million and agreed to a cross-license of the two patents at issue. More recently, on March 3, 2003 we filed a lawsuit against Pall Corporation in the United States District Court for the District of Massachusetts alleging infringement of two of our U.S. patents. Our lawsuit also seeks a preliminary injunction preventing Pall Corporation from manufacturing, using, selling, offering for sale or importing into the United States the infringing product. To date, the court has not issued a ruling on these matters. We expect that this litigation will continue for an extended period and that we will incur substantial costs in pursuing this litigation.

Our ability to manufacture and sell our products and develop new products in response to competitive pressures could be restricted or delayed, and we could incur significant expenses, if we are unable to obtain necessary licenses to the proprietary technology of others.

We license and will continue to license technology used in the manufacture and distribution of our products from third parties. Our inability to acquire any third-party licenses, or integrate the related third-party technologies into our products, could result in delays in our product developments and enhancements until equivalent technologies can be identified, licensed or integrated. We may also require new licenses in the future as our business grows and technology evolves. We cannot assure you that these licenses will be available to us on commercially reasonable terms, if at all.

If we infringe on the proprietary technology of others, our business and prospects could be harmed.

Our commercial success will depend, in part, on our ability to avoid infringing or misappropriating any patents or other proprietary rights owned by third parties. If we are found to infringe or misappropriate a third party’s patent or other proprietary rights, we could be required to pay damages to such third party, alter our products or processes, obtain a license from the third party or cease activities utilizing such proprietary rights, including making or selling products utilizing such proprietary rights. If we are required to obtain a license from a third party, there can be no assurance that we will be able to do so on commercially favorable terms, if at all.

We are subject to a variety of environmental laws which could cause us to incur significant expenses.

In addition to other regulatory requirements affecting our business, we are subject to a variety of federal, state, local and foreign regulatory requirements relating to the use, disposal, clean-up of, and human exposure to, hazardous chemicals. We generate and handle materials that are considered hazardous waste under applicable law. If we fail to comply with any present or future regulations, we could be subject to future liabilities or the suspension of production. In addition, compliance with these or future laws could restrict our ability to expand our facilities or build new facilities or require us to acquire costly equipment, incur other significant expenses or modify our manufacturing processes.

We are currently consolidating manufacturing operations from our Yonezawa, Japan facility into our Billerica, Massachusetts headquarters, research and development and manufacturing facility. If we are unable to successfully manage this consolidation, our ability to deliver product to our customers could be disrupted and our business, financial condition and results of operations could be adversely affected.

In order to enhance the efficiency and cost effectiveness of our manufacturing operations we are moving several product lines from our Yonezawa, Japan plant to our Billerica facility. These product lines involve

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technically complex manufacturing processes that require considerable expertise to operate. If we are unable to complete this transfer in a systematic manner within established schedules or if we are unable to successfully operate these manufacturing processes in Billerica, production may be disrupted and we may not be able to deliver these products to meet customer orders in a timely manner, which could harm our business.

Terrorist attacks, such as the attacks that occurred in New York and Washington, D.C. on September 11, 2001, and other acts of violence or war may affect the markets in which we operate and hurt our profitability.

Terrorist attacks may negatively affect our operations and your investment. There can be no assurance that there will not be further terrorist attacks against the United States or United States businesses. These attacks or armed conflicts may directly impact our physical facilities or those of our suppliers or customers. Our primary facilities include headquarters, research and development and manufacturing facilities in the United States, sales, research and development and manufacturing facilities in Japan and sales and service facilities in Europe and Asia. Also these attacks have disrupted the global insurance and reinsurance industries with the result that we may not be able to obtain insurance at historical terms and levels for our facilities. Furthermore, these attacks may make travel and the transportation of our supplies and products more difficult and more expensive and may ultimately affect the sales of our products in the United States and overseas. As a result of terrorism the United States may enter into an armed conflict, which could have a further impact on our domestic and international sales, our supply chain, our production capacity and our ability to deliver products to our customers. The consequences of these armed conflicts and instability are unpredictable and we may not be able to foresee events that could have an adverse effect on our business and your investment.

Risks Related to the Securities Markets and Ownership of our Securities

Our securities have had only a limited market, and we cannot assure you that our stock price will not decline.

There has been only a limited public market for our common stock, and an active public market for our common stock may not be sustained. The market price of our common stock has been and may continue to be subject to significant fluctuations. Among the factors that could affect our stock price are:

• quarterly variations in our operating results;

• changes in revenue or earnings estimates or publication of research reports by analysts;

• speculation in the press or investment community;

• strategic actions by us or our competitors, such as acquisitions or restructurings;

• actions by institutional stockholders;

• general market conditions; and

• domestic and international economic factors unrelated to our performance.

The stock markets in general, and the markets for high technology stocks in particular, have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. These broad market fluctuations may cause the trading price of our common stock to decrease.

Recently enacted changes in the securities laws and regulations are likely to increase our costs.

The Sarbanes-Oxley Act of 2002 that became law in July 2002 has required changes in some of our corporate governance, securities disclosure and compliance practices. In response to the requirements of that Act, the Securities and Exchange Commission and the New York Stock Exchange have promulgated new rules on a variety of subjects. Compliance with these new rules has increased our legal and financial and accounting costs,

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and we expect these increased costs to continue indefinitely. We also expect these developments to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be forced to accept reduced coverage or incur substantially higher costs to obtain coverage. Likewise, these developments may make it more difficult for us to attract and retain qualified members of our board of directors or qualified executive officers.

If our independent auditors are unable to provide us with the attestation of the adequacy of our internal control over financial reporting as of December 31, 2004 and future year-ends as required by Section 404 of the Sarbanes-Oxley Act of 2002, investors could lose confidence in the reliability of our financial statements, which could result in a decrease in the value of your shares.

As directed by Section 404 of the Sarbanes-Oxley Act of 2002, the Securities and Exchange Commission adopted rules requiring public companies to include a report of management on the company’s internal control over financial reporting in their annual reports on Form 10-K that contains an assessment by management of the effectiveness of the company’s internal control over financial reporting. In addition, the public accounting firm auditing the company’s financial statements must attest to and report on management’s assessment of the effectiveness of the company’s internal control over financial reporting. While we intend to conduct a rigorous review of our internal control over financial reporting in order to assure compliance with the Section 404 requirements, if our independent auditors interpret the Section 404 requirements and the related rules and regulations differently from us or if our independent auditors are not satisfied with our internal control over financial reporting or with the level at which it is documented, operated or reviewed, they may decline to attest to management’s assessment or issue a qualified report. This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements, which could cause the market price of our shares to decline.

Changes to financial accounting standards may affect our reported results of operations and could result in a decrease in the value of your shares.

There has been an ongoing public debate as to whether employee stock option and employee stock purchase plan shares should be treated as a compensation expense and, if so, how to properly value such charges. If we are required to record an expense for our stock-based compensation plans using the fair value method, we would incur significant compensation charges. Although we are currently not required to record any compensation expense using the fair value method in connection with option grants that have an exercise price at or above fair market value of our common stock and for shares issued under our employee stock purchase plan, if future laws and regulations require us to treat all stock-based compensation as a compensation expense using the fair value method our results of operations could be adversely affected.

Provisions in our charter documents, Delaware law, the Internal Revenue Code and our shareholder rights plan may delay or prevent an acquisition of us, which could decrease the value of your shares.

Our certificate of incorporation and By-Laws, Delaware law and our shareholder rights plan contain provisions that could make it harder for a third party to acquire us without the consent of our board of directors. These provisions include a classified board of directors and limitations on actions by our stockholders by written consent. In addition, our board of directors has the right to issue preferred stock without stockholder approval, which could be used to dilute the stock ownership of a potential hostile acquirer. Our shareholder rights plan will permit our stockholders to purchase shares of our common stock at a 50% discount upon the occurrence of specified events, including the acquisition by anyone of 15% or more of our common stock, unless such event is approved by our board of directors. Delaware law also imposes restrictions on mergers and other business combinations between us and any holder of 15% or more of our outstanding common stock. Although we believe these provisions provide for an opportunity to receive a higher bid by requiring potential acquirers to negotiate with our board of directors, these provisions apply even if the offer may be considered beneficial by stockholders. If a change of control or change in management is delayed or prevented, the market price of our

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common stock could suffer. In addition, an acquisition or further issuance of our common stock could trigger the application of Section 355(e) of the Internal Revenue Code. Under our tax sharing agreement with Millipore, we would be required to indemnify Millipore for the resulting tax and this indemnity obligation might discourage, delay or prevent a change of control that stockholders may consider favorable.

Your percentage ownership in us may be diluted by future issuances of capital stock, which could reduce your influence over matters on which stockholders vote.

Our board of directors has the authority, without action or vote of our stockholders, to issue all or any part of our authorized but unissued shares. Issuances of common stock or the exercise of employee and director stock options would dilute your percentage ownership interest, which will have the effect of reducing your influence over matters on which our stockholders vote. In addition, if the issuances are made at prices that reflect a discount from the then current trading price of our common stock, your interest in the book value of our common stock might be diluted.

Risks Related to our Separation from Millipore

Our pre-separation historical financial information may not be representative of our results as a stand-alone company and, therefore, may not be reliable as an indicator of our historical or future results.

We have only a limited operating history as an independent company. Prior to our separation from Millipore, Millipore did not account for us, and we were not operated, as a stand-alone entity. The historical combined financial information included in reports incorporated into this prospectus were derived in part from Millipore’s consolidated financial statements and may not be indicative of our financial position, results of operations or cash flows in the future nor is it necessarily indicative of what our financial position, results of operations or cash flows would have been had we been a stand-alone entity for all of the periods presented. This is primarily a result of the following factors:

• our historical combined financial statements reflect allocations for periods prior to our separation from Millipore, primarily with respect to general corporate and research expenses; these allocations may be less than the general corporate and research expenses we will incur in the future as a stand-alone company; and

• our historical combined financial statements do not fully reflect the significant changes that have occurred and that we expect to occur in the future as a result of our separation from Millipore, including changes in how we fund our operations, conduct research and tax planning and manage employee matters.

Following our separation from Millipore, we have incurred incremental non-recurring operating costs and expenses associated with increased marketing expenses related to establishing a new brand identity, legal fees, retention bonuses, increased depreciation due to decreases in the estimated useful lives of fixed assets and leasehold improvements and other separation related costs.

We currently use Millipore’s membrane manufacturing infrastructure, and our ability to meet our customer’s demands will suffer if we do not successfully transition our membrane manufacturing requirements to our own facilities.

We have entered into transition agreements with Millipore relating to the manufacture and distribution of specified products for limited periods of time. The manufacture of our membrane products is highly complex and requires sophisticated and costly equipment. While we are entitled to continue to manufacture membrane in Millipore’s plant until March of 2006, we might not be able to successfully transition the membrane production to a different facility after that date. As a result, any prolonged disruption in the operations of any of our manufacturing facilities or any unforeseen delays in shifting membrane manufacturing operations to a new facility, whether due to technical or labor difficulties, destruction or damage to the facility or other reasons, could result in increased costs and reduced revenues and profitability and could harm our prospects.

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Following our separation from Millipore, we do not have access to the membrane research and development resources that were previously available to us, which could limit our research and development activities, thereby inhibiting our ability to develop new membrane products in response to competitive pressures and harming our business and prospects.

Prior to our separation from Millipore, many research and development projects were conducted through the centralized Millipore research group. Following our separation from Millipore, while our research and development personnel have been transferred to us in accordance with the terms of the separation agreements, we do not have access to any other resources or personnel in Millipore’s research group other than in specific limited circumstances outlined in our research agreement with Millipore. As a result, we will not have access to all of the research and development facilities and resources, including membrane research resources, that were previously available to us, and we may not be able to manage projects as successfully as we have in the past. If we are unable to continue to successfully develop new membrane products and technology through internal research and development activities, we may not be able to maintain our market position or successfully grow our business and our business and prospects may be harmed.

Our agreements with Millipore limit our ability to use Millipore’s technology to fields of use in the microelectronics industry and may prevent us from expanding our business beyond the microelectronics industry.

Our use of Millipore’s technology is governed by the agreements governing our separation from Millipore, such as the master patent license agreement and the master trade secret and know-how agreement. The licenses granted by these agreements prohibit our use of Millipore’s technology in fields of use outside of the microelectronics industry. In general, where technology is used both by Millipore in the manufacture of its products and by us in the manufacture of our products, Millipore retained ownership of the technology and granted us a license to use the technology limited to fields of use in the microelectronics industry. In some cases, Millipore transferred ownership of the technology to us and retained an exclusive license to the technology in its fields of use in the biopharmaceutical and related industries. Under the master patent license agreement and the master trade secret and know-how agreement, we may sell products using Millipore’s technology only to customers in the microelectronics industry, as defined in the agreements, and we may not transfer the technology except in limited circumstances. These restrictions could limit our ability to expand our business into markets outside the microelectronics industry, which could limit our growth.

We may have potential business conflicts of interest with Millipore with respect to our past and ongoing relationships.

Conflicts of interest may arise between Millipore and us in a number of areas relating to our past and ongoing relationships, including:

• labor, tax, employee benefit, intellectual property, indemnification and other matters arising from our separation from Millipore;

• employee retention and recruiting;

• the nature, quality and pricing of membrane manufacturing services Millipore has agreed to provide us;

• business opportunities that may be attractive to both Millipore and us; and

• the terms of the non-competition provisions contained in the separation agreements between Millipore and us, which govern Millipore’s ability to compete with us.

• competition between Millipore and us in areas outside of our separation agreements, especially if Millipore chooses to reestablish a microelectronics business unit, or work with third party to establish a competitive capability.

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We may not be able to resolve any potential conflicts, and even if we do, the resolution may be less favorable because of our prior affiliation with Millipore and our continuing reliance on Millipore to provide transitional manufacturing services.

In addition, Millipore may terminate transitional arrangements that currently generate income for us..

Our ability to engage in acquisitions and other strategic transactions using our stock is subject to limitations because of the federal income tax requirements for a tax-free distribution.

In order for the distribution of our stock by Millipore to continue to qualify as tax-free to Millipore and its stockholders, there must not be a change in ownership of 50% or more in either the voting power or value of either our stock or Millipore’s stock that is considered to be part of a plan or a series of related transactions related to Millipore’s distribution of our stock to its stockholders. For this purpose, a change in ownership may include the issuance of our common stock or Millipore’s common stock in acquisitions and other similar strategic transactions or for compensation of employees and others. If there is a direct or indirect acquisition of our stock or Millipore’s stock by one or more persons during the four-year period beginning two years prior to and ending two years after the spin-out distribution of our shares, it may be presumed to be part of a plan or a series of related transactions related to Millipore’s distribution of our stock, and the distribution will be taxable to Millipore unless the presumption is successfully rebutted. The direct or indirect acquisition of our stock can include open market transactions. As a result, if within two years of the distribution any person or group of persons acting pursuant to a coordinated plan acquires 50% or more of our common stock, including through open market transactions, that is part of a plan or series of related transactions with the distribution by Millipore of our common stock, the distribution will be taxable to Millipore. Pursuant to our tax sharing agreement with Millipore, we may be responsible for the tax imposed on Millipore if the distribution fails to qualify as tax-free. For the above reasons, we are limited in our ability to use our stock for acquisitions and other similar strategic transactions or for compensation of employees and others. Many of our competitors have issued their stock to complete acquisitions, to expand their product offerings and speed the development of new technology, and to attract and retain employees and other key personnel. Therefore, these competitors may have a significant competitive advantage over us.

We may be responsible for income tax liabilities that relate to the distribution of shares of our common stock by Millipore and for other tax liabilities.

Millipore has received a tax ruling from the Internal Revenue Service to the effect that the distribution will qualify as a tax-free distribution for U.S. federal income tax purposes. The tax ruling is binding on the IRS, and can be relied upon by Millipore provided that the factual representations and assumptions made in Millipore’s request are true. We are not aware of any facts or circumstances that would cause such representations and assumptions to be untrue. Our tax sharing agreement with Millipore provides that we will be responsible for certain taxes imposed on Millipore, us or our respective subsidiaries if (i) we or one or more of our shareholders are responsible for the distribution’s failure to qualify for tax-free treatment, or (ii) the distribution of our shares subsequently becomes taxable to Millipore as a result of a change of ownership of 50% or more of the voting power or value of our stock. The process for determining whether a change of ownership has occurred under the tax rules is complex. If we do not carefully monitor our compliance with these rules we might inadvertently cause or permit a change of ownership to occur, triggering our obligation to indemnify Millipore pursuant to the tax sharing agreement. In addition, our obligation to indemnify Millipore in the event that a change of ownership causes the distribution not to be tax-free could discourage or prevent a third party from making a proposal to acquire our company. If the distribution by Millipore was determined to be taxable, the U.S. federal income tax payable by Millipore as a result of the distribution for which we have agreed to indemnify Millipore would be equal to 35% of the difference between the market value of the distributed stock on the date of the distribution and the tax basis of such stock. Assuming a market value of $10.50 per share for the distributed stock, the U.S. federal income tax payable by Millipore would equal approximately $63.5 million. If we were required to pay any of the taxes described above, the payment would significantly harm our business, financial position, results

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of operations and cash flow. In addition, under the tax sharing agreement that we entered into with Millipore, we are responsible for tax liabilities and adjustments to tax liabilities with respect to those Millipore foreign subsidiaries which we acquired pursuant to our separation from Millipore for periods prior to that separation. As we operate independently of Millipore we may adopt tax strategies different from those Millipore has followed which could impact our tax liability.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to foreign currency exchange rate risk inherent in our sales commitments, anticipated sales, and assets and liabilities denominated in currencies other than the U.S. dollar. We sell our products in many countries and a substantial portion of our net sales and a portion of our costs and expenses are denominated in foreign currencies. Approximately 73% of our net sales for the nine months ended September 27, 2003 were derived from customers located outside of the U.S., principally in Asia and Japan. This exposes us to risks associated with changes in foreign currency that can adversely impact revenues, net income and cash flow. In addition, we are potentially subject to concentrations of credit risk, principally in accounts receivable, as historically we have relied on a limited number of customers for a substantial portion of our net sales. We perform ongoing credit evaluations of our customers and we generally do not require collateral. Our major customers are large, well-established microelectronics companies that have historically paid their account balances in a timely manner. We do not currently hold derivative financial instruments and continue to evaluate our future hedging strategy.

Item 4. Controls and Procedures

The Company’s Chairman and Chief Executive Officer, C. William Zadel, and Vice President and Chief Financial Officer, Bertrand Loy, performed an evaluation of the effectiveness of the Company’s Disclosure Controls and Procedures (as that term is defined in Rule 13a-15(e) under the Securities Exchange of 1934, as amended) as of the end of the period covered by this report. Based on that evaluation, Messrs. Zadel and Loy concluded that the Company’s Disclosure Controls and Procedures were effective.

During the quarterly period ended September 27, 2003 there have been no changes in the Company’s internal controls over financial reporting that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

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PART II

OTHER INFORMATION

Item 1. Legal Proceedings

There have been no material developments in the patent litigation as previously reported in Part II, Item 1 of the Company’s Form 10-Q Report for the period ended March 29, 2003; see also Part I, Item 1, Note 14 of the Notes to Consolidated Financial Statements on page 11 of this Report.

Item 6. Exhibits and Reports on Form 8-K

a.	Exhibits
		The following exhibits are filed with:
		Exhibit 10.1	Executive Termination (Change Of Control) Agreement with Gerry Mackay
		Exhibit 10.2	Indemnification Agreement with Gerry Mackay
		Exhibit 10.3	Executive Termination (Change Of Control) Agreement with Jieh-Hwa Shyu
		Exhibit 10.4	Indemnification Agreement with Jieh-Hwa Shyu
		Exhibit 10.5	Letter Agreement with Gerry Mackay
		Exhibit 10.6	2003 Employment Inducement and Acquisition Stock Option Plan
		Exhibit 31.1	Certification Required by Rule 13a-14(a) by C. William Zadel
		Exhibit 31.2	Certification Required by Rule 13a-14(a) by Bertrand Loy
		The following exhibit is furnished as an exhibit to the report in accordance with Rules 13a – 14 and 15d – 14:
		Exhibit 32.1	Certification of Chief Executive Officer and of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
b.	Reports on Form 8-K
		Report on Form 8-K, dated July 28, 2003, furnishing Item 9 and 12 disclosures with respect to a press release announcing earnings for the second quarter of fiscal year 2003.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

MYKROLIS CORPORATION

Registrant

Date	November 3, 2003	/s/    Bertrand Loy         Bertrand Loy Vice President and Chief Financial Officer
Date	November 3, 2003	/s/    Robert Hammond         Robert Hammond Corporate Controller

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EXHIBIT INDEX

Exhibit #	Description
10.1	Executive Termination (Change Of Control) Agreement with Gerry Mackay
10.2	Indemnification Agreement with Gerry Mackay
10.3	Executive Termination (Change Of Control) Agreement with Jieh-Hwa Shyu
10.4	Indemnification Agreement with Jieh-Hwa Shyu
10.5	Letter Agreement with Gerry Mackay
10.6	2003 Employment Inducement and Acquisition Stock Option Plan
31.1	Certification Required by Rule 13a-14(a) by C. William Zadel
31.2	Certification Required by Rule 13a-14(a) by Bertrand Loy
32.1	Certification of Chief Executive Officer and of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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EX-10.1

Exhibit 10.1

EXECUTIVE TERMINATION (CHANGE OF CONTROL) AGREEMENT

Agreement between MYKROLIS CORPORATION, a Delaware corporation with offices at 129 Concord Road, Billerica, MA 01821 (“Mykrolis” or the “Company”) and Gerry Mackay (the “Executive”) dated May 1, 2003.

RECITALS

A. The Executive is an officer and key member of Mykrolis’ management.

B. Mykrolis believes that it is in its best interests, as well as those of its stockholders, to assure the continuity of management in general and the Executive in particular, for a fixed period of time in the event of actual or threatened Change of Control of the Company and whether or not such Change of Control is thought by Mykrolis’ Board of Directors to be in the best interest of its stockholders.

C. This Agreement is not intended to alter materially the compensation, benefits or terms of employment that the Executive could reasonably expect in the absence of a Change of Control of Mykrolis, but is intended to encourage and reward his compliance with the wishes of the Mykrolis Board of Directors whatever they may be in the event that a Change of Control occurs or is threatened.

NOW THEREFORE, in consideration of the foregoing premises, of the mutual promises of the Parties made herein and of other consideration, the receipt and adequacy of which is hereby acknowledged, the Parties hereby agree as follows:

SECTION 1. DEFINITIONS. The following terms when used in this Agreement or any Exhibit hereto with initial capital letters shall have the meanings assigned to them below. Other terms defined elsewhere in this Agreement shall have the respective meanings assigned to them at the location of their definition. Except where the context otherwise requires, words imparting the singular number shall include the plural number and vice versa, words denoting any gender shall include all genders and words denoting persons shall include bodies corporate and vice versa.

1.01. The term “Change of Control” shall have the meaning set forth in Exhibit A attached hereto.

1.02. The term “Impending Change of Control” refers to any event or circumstances which gives rise to a threat or a likelihood of Change of Control, whether or not supported or approved by Mykrolis’ management or directors. A determination made by Mykrolis’ Board of Directors that an event constituting an Impending Change of Control has occurred shall be binding and conclusive if such determination is made by the Board in good faith.

1.03. The term “Period of Employment” shall mean the period which begins when an Impending Change of Control occurs and which shall continue until the close of business on the 180^th day subsequent to any Change of Control.

1.04. The term “Involuntary Termination” shall mean the following:

(a) Any Discharge of Executive by Mykrolis or by any corporation succeeding to the business and assets of Mykrolis (a “Successor”) if effected during the Period of Employment or after the Period of Employment but within two years after any Change of Control;

(b) Any resignation by Executive if such resignation shall have been requested by Mykrolis or by a Successor if made within the period described in Clause (a);

(c) Any resignation by Executive if such resignation shall follow: (i) any reduction in the annual base salary, incentive compensation under the Mykrolis Incentive Plan or other incentive program, perquisites, life, health accident, or disability benefits or other fringe benefits, equity incentive programs and the like applicable to Executive as compared to those in effect immediately prior to the beginning of the Period of Employment, or (ii) any material adverse change in the duties, status, responsibilities, scope, employment conditions or authority associated with Executive’s employment by Mykrolis, if the foregoing events shall not have been approved in advance by Executive; or (iii)

the failure by the Company to comply with the provisions of Section 11.06(b) of this Agreement and if the resignation shall be tendered within the periods referred to in Clause (a), provided, however, that changes in fringe benefit programs and perquisites shall not be regarded as reductions if Mykrolis’ Board of Directors determines in good faith that benefits and perquisites of equivalent value are substituted, and reductions in payout or other benefits in incentive programs shall not be regarded as reductions if Mykrolis’ Board of Directors determines in good faith that the differences are attributable to changing base levels and changing performance criteria and goals;

(d) Any voluntary termination by Executive if, by notice given within the Period of Employment, the Executive elects to treat a Change of Control as an Involuntary Termination.

2. Employment; Period of Employment

2.01. If an Impending Change of Control should occur while Executive is employed by Mykrolis, Executive agrees to remain in the employ of Mykrolis for at least the Period of Employment in the position and with the duties and responsibilities he then currently carries, with such changes therein as may from time to time be made by the Mykrolis Board of Directors, and upon the other terms and conditions hereinafter stated.

2.02. Executive agrees that during the Period of Employment, and prior to any Change of Control, he will exercise his best efforts to bring about whatever result the Board of Directors determines to be in the best interests of Mykrolis and its stockholders relative to any Impending Change of Control, i.e., to help in the resistance to any such Change of Control if the Board determines that to be in the best interests of the Company and its stockholders, and to bring about such Change of Control if the Board determines that to be the preferable alternative. The Executive agrees to use his best efforts at and after the occurrence of a Change of Control to effect an orderly and beneficial transfer of control to the party or parties comprising the new control group.

2.03. Nothing in this Agreement shall be deemed to prevent the Executive from remaining in the employ of Mykrolis or any Successor beyond the Period of Employment either on the terms and conditions set forth herein or on others that may be mutually agreed upon.

3. Compensation and Benefit Plans

3.01. For all services rendered by the Executive in any capacity during the Period of Employment, including, without limitation, services as an executive officer, director or member of any committee of Mykrolis or of any subsidiary, division or affiliate thereof, the Executive shall be paid as base compensation the salary he is receiving immediately prior to the beginning of the Period of Employment, payable not less often than monthly.

3.02. The executive shall continue to be a participant in the Mykrolis Incentive Plan, and its 2001 Equity Incentive Plan as in effect immediately prior to the beginning of the Period of Employment, and any and all other incentive plans in which key employees of the Company participate that are in effect.

3.03. The Executive, his dependents and beneficiaries shall be entitled to all payments and benefits and service credit for benefits during the Period of Employment to which officers of Mykrolis, their dependents and beneficiaries are entitled immediately prior to the beginning of the Period of Employment under the terms of the then effective employee plans and practices of Mykrolis.

3.04. For the two year period commencing immediately after the Period of Employment, the Executive and his family shall be entitled to and receive all medical, dental and life insurance benefits to which they had been entitled immediately prior to the beginning of the Period of Employment.

4. Effect of Involuntary Termination of Employment on the Pension and Retirement Program

4.01. The term “Mykrolis’ Retirement Program” shall mean the Mykrolis Corporation Savings and Investment Plan and any other supplemental, early retirement and similar plan or plans of Mykrolis and its subsidiaries providing for pension or retirement benefits that may be applicable to the Executive immediately prior to the beginning of the Period of Employment.

4.02. In the event of Involuntary Termination of Executive, Executive shall be entitled to payment by Mykrolis which will supplement benefits under Mykrolis’ Retirement Program. The provisions of this Section 4 shall not affect in any way the terms of Mykrolis’ Retirement Program or the rights of Executive thereunder. Separate and apart from Mykrolis’ Retirement Program, however, Mykrolis agrees to pay to Executive, in the event of Involuntary Termination, the difference between the benefits payable to Executive under Mykrolis’ Retirement Program and the amounts that would be payable thereunder if Mykrolis’ Retirement Program were adjusted as follows:

(a) “Compensation” as defined in the Retirement Program shall be the highest Annual Compensation paid to the Executive within the three years prior to Involuntary Termination;

(b) the Executive shall be credited for the purpose of determining “years of service” (up the maximum of 30 years) with 2.5 times the actual number of years served, with a minimum of 10 years of such credited service for purposes of determining both vesting and benefit amounts;

(c) The Executive shall be entitled to receive his actuarially determined benefit at any time he elects subsequent to Involuntary Termination without regard to his age at the time of such election.

5. Involuntary Termination Payment

5.01. In the event of Involuntary Termination of Executive’s employment, Mykrolis shall provide the Executive with a lump sum severance payment (the “Termination Payment”) in an amount equal to two years compensation at the highest annual rate of total cash compensation including base salary plus target incentive compensation under the Mykrolis Incentive Program to the Executive during the three years prior to Involuntary Termination.

5.02. To assure Executive’s receipt of the Termination Payment as against a possibly hostile successor control group, Mykrolis shall pay Executive an amount equal to the Termination Payment just prior to a Change in Control. At the time of the receipt of such payment, Executive shall issue his six month non-interest bearing note to the Company in an amount equal to such payment. Such note shall be deemed canceled if an event constituting an “Involuntary Termination” should occur within the Period of Employment.

5.03. If no event constituting an Involuntary Termination shall have occurred within the Period of Employment, then executive’s note referred to in Section 5.02 will become immediately due and payable as of the day following the Period of Employment.

5.04. Executive’s entitlement to receive the Termination Payment called for by this Section 5 shall be conditioned upon his having complied to the best of his abilities with the commitments contained in Sections 2.01 and 2.02. In the event of an Involuntary Termination described in Clauses (a), (b) or (c) of Section 1.04, he shall be deemed to have so complied if he shall have complied to the best of his abilities with the requirements of those sections until the time of his discharge or resignation pursuant to such clauses; in the event of an Involuntary Termination described in Clause (d) of Section 1.04, he shall be deemed to have complied only if his employment continues through the Period of Employment and if his compliance shall have continued throughout the Period of Employment.

6. Purchase by Mykrolis of Executive’s Shares

6.01. Executive is hereby granted the right and option to sell to Mykrolis all shares of common stock of Mykrolis owned by him at the time of, or acquired by him within 90 days after, the closing of any transaction constituting a Change of Control. The purchase price to be paid by Mykrolis to Executive for such shares shall be the highest price paid within 90 days prior to the date of exercise by Executive of his right under this Section 6 by the party taking control. Executive’s right to exercise this right and option shall be

subject to his being in the employ of Mykrolis at the date of commencement of the tender offer or exchange offer giving rise to the Change of Control.

6.02. The right and option granted to the Executive under this Section 6 shall begin at the date of closing of the event constituting a Change of Control and shall continue for a period of 90 days thereafter.

6.03. In the event of an Impending Change of Control Executive will become immediately entitled to exercise any and all stock options previously granted to him by Mykrolis and any and all restricted stock shall become free of any restrictions notwithstanding any provision to the contrary in the option agreement, the restricted stock agreement or any plans under which they were granted.

7. Confidential Information

7.01. The Executive agrees not to disclose, either while in Mykrolis’ employ or at any time thereafter, to any person not employed by Mykrolis, or not engaged to render services to Mykrolis, any confidential information obtained by him while in the employ of Mykrolis, including without limitation, any of Mykrolis’ inventions, processes, methods of distribution or customers or trade secrets, provided, however, that this provision shall not preclude the Executive from use or disclosure of information known generally to the public or for information not considered confidential by persons engaged in the business conducted by Mykrolis or from disclosure required by law or Court order.

7.02. The Executive also agrees that upon leaving Mykrolis’ employ he will not take with him, without the prior written consent of an officer authorized to act in the matter by Mykrolis’ Board of Directors any drawing, blueprint, specification or other document of Mykrolis, its subsidiaries, affiliates and divisions, which is of a confidential nature relating to Mykrolis, its subsidiaries, affiliates, and divisions, or without limitation, relating to its or their methods of distribution, or any description of any formulae or secret processes.

8. Limitation

8.01. Notwithstanding any other provision of this Agreement, and except as provided in Section 8.02 below, the payments or benefits to which Executive will be entitled under this Agreement will be reduced to the extent necessary so that Executive will not be liable for the federal excise tax levied on certain “excess parachute payments” under section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”).

8.02. The limitation of Section 8.01 will not apply if -

(a) the difference between (i) the present value of all payments to which Executive is entitled under this Agreement determined without regard to Section 8.01 less (ii) the present value of all federal, state and other income and excise taxes for which Executive is liable as a result of such payment; exceeds

(b) the difference between (i) the present value of all payments to which executive is entitled under this Agreement calculated as if the limitation of Section 8.01 applies, less (ii) the present value of all federal, state, and other income and excise taxes for which executive is liable as a result of such reduced payments.

Present values will be determined using the interest rate specified in Section 280G of the Code and will be the present values as of the date on which an event of Impending Change of Control occurs.

8.03.      (a) Whether payments to the Executive are to be reduced pursuant to Section 8.01, and the extent to which they are to be so reduced, will be determined by the Executive. Executive may, at the expense of Mykrolis, hire an accounting firm, law firm or employment consulting firm selected by Executive to assist him in such determination.

(b) If a reduction is made pursuant to Section 8.01, Executive will have the right to determine which payments and benefits will be reduced.

8.04. Notwithstanding anything to the contrary in this Agreement, and at the Executive’s option, in lieu of the reduction contemplated by Section 8.01, the Executive may elect to receive an additional payment from Mykrolis of an amount that is equal to the product of (1) the excise tax payable by the Executive pursuant to Section 280G of the Code on payments made to him under this Agreement, excluding

payments to be made to him pursuant to this Section 8.04 and (2) a fraction the numerator of which is the total target cash compensation payable to the Executive under this Agreement and the denominator of which is the value of the total payments and benefits payable to the Executive under this Agreement, excluding payments to be made to him pursuant to this Section 8.04. Mykrolis will gross up all payments required under this Section 8.04 so as to offset any excise tax payable with respect thereto.

9. Notices

All notices, requests, demands and other communications provided for by this Agreement shall be in writing and shall be sufficiently given when mailed in the continental United States by registered or certified mail or personally delivered to the party entitled thereto at the address stated below or to such changed address as the addressee may have given by a similar notice:

To Mykrolis:	Mykrolis Corporation
	129 Concord Road
	Billerica, MA 01823
	Attn:  Vice president &  General Counsel

To the Executive:	Mr. Gerry Mackay
	c/o Mykrolis Corporation,                     with an additional copy to the Executive’s home address

10. No Mitigation and No Offset

10.01. The amounts payable to Executive hereunder shall be absolutely owing, and not subject to reduction or mitigation as a result of employment by Executive elsewhere after his employment with Mykrolis is terminated.

10.02. There shall be no right of set-off or counterclaim in respect of any claim, debt or obligation against any payments to the Executive, his dependents, beneficiaries or estate, provided for in this Agreement.

11. General Provisions

11.01. Should the Executive’s employment be terminated either on a voluntary or involuntary basis other than as provided for in this Agreement, then any and all termination payments and other provisions associated with any such severance of employment shall be determined in accordance with Mykrolis’ policies and procedures then in effect and not in accordance with this Agreement. Except as specifically provided for herein, nothing shall be deemed to give the Executive the right to continue in the employ of Mykrolis.

11.02. Mykrolis and the Executive recognize that each party will have no adequate remedy at law for breach by the other of any of the agreements contained herein and, in the event of any such breach, Mykrolis (with respect to Sections 3, 4, 5 and 6) and the Executive (with respect to Section 7) hereby agree and consent that the other shall be entitled to a decree of specific performance, or other appropriate remedy to enforce performance of such agreements.

11.03. No right or interest to or in any payments shall be assignable by the Executive; provided, however, that this provision shall not preclude him from designating one or more beneficiaries to receive any amount that may be payable after his death and shall not preclude the legal representative of his estate from assigning any right hereunder to the person or persons entitled thereto under his will or, in the case of intestacy, to the person or persons entitled thereto under the laws of intestacy applicable to his estate.

11.04. No right, benefit or interest hereunder shall be subject to anticipation, alienation, sale, assignment, encumbrance, charge, pledge, hypothecation, or set-off in respect of any claim, debt or obligation, or to execution, attachment, levy or similar process, or assignment by operation of law. Any attempt, voluntary or involuntary, to effect any action specified in the immediately preceding sentence shall, to the full extent permitted by law, be null, void and of no effect.

11.05. The titles to sections in this Agreement are intended solely for the convenience and no provision of this Agreement is to be construed by reference to the title of any section. This Agreement shall be binding

upon and shall inure to the benefit of the Executive, his heirs and legal representatives, and Mykrolis and its successors.

11.06. (a) Mykrolis will indemnify the Executive for all costs and expenses (including fees and expenses of counsel) incurred by the Executive in connection with an action to enforce his rights under this Agreement (including any action to enforce this right of indemnity) in which action the Executive prevails.

(b) Mykrolis must require that any entity with which it merges or consolidates or to which it agrees to transfer a substantial portion of its assets expressly assume the obligations of the Company under this Agreement and that any successor or successors of such an entity, whether by merger, consolidation or transfer of assets, also expressly assume such obligations.

11.07 No provision of this Agreement may be amended, modified or waived unless such amendment, modification or waiver shall be authorized by the Board of Directors of Mykrolis or any authorized committee of the Board of Directors and shall be agreed to in writing, signed by the Executive and by an officer of Mykrolis thereunto duly authorized. Except as otherwise specifically provided in this Agreement, no waiver by either party hereto of any breach by the other party hereto of any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of a subsequent breach of such condition or provision or a waiver of a similar or dissimilar provision or condition at the same time or at any prior or subsequent time.

11.08. The validity, interpretation, construction performance and enforcement of this Agreement shall be governed by the laws of the Commonwealth of Massachusetts as applied to transactions taking place wholly within Massachusetts between Massachusetts residents.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

MYKROLIS CORPORATION
By	/s/ Jean-Marc Pandraud.
	Executive
	/s/ Gerry Mackay.
	Gerry Mackay

EXHIBIT A

“Change of Control” means the occurrence of any of the following events:

(1) any Person (other than an Inadvertent Acquiring Person”, as defined below) becomes the owner of 15% or more of the Company’s Common Stock; or

(2) individuals who, as of the Effective Date, constitute the Board of Directors of the Company (the “Continuing Directors”) cease for any reason to constitute at least a majority of such Board (a “Board Change”); provided, however, that any individual becoming a director after the Effective Date whose election or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the Continuing Directors will be considered as though such individual were a Continuing Director, but excluding for this purpose any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”)) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board.

(3) execution of an agreement of acquisition, merger, reorganization, consolidation of or other transaction which contemplates either (i) that all or substantially all of the business and/or assets of the Company will be owned or controlled by a Person or Persons (as those terms are used in Section 13(d) of the Exchange Act) other than the Persons owning or controlling such business and assets on the Effective Date or (ii) that a Board Change will occur, provided, however, that if such agreement requires, as a condition precedent, approval by the Company’s shareholders, a Change of Control will not be deemed to have occurred until such approval has been obtained; or

(4) liquidation or dissolution of the Company or sale of all or substantially all of the Company’s assets;

provided, however, that in no event shall the distribution by Millipore Corporation of the Common Stock of Mykrolis to the stockholders of Millipore Corporation in accordance with the Master Separation and Distribution Agreement, dated March 28, 2001 between Mykrolis and Millipore Corporation, constitute a Change of Control or Impending Change of Control for the purposes of this Agreement solely by virtue of the ownership of Mykrolis Common Stock by the stockholders of Millipore immediately following such distribution.

In addition, for purposes of this definition the term “Inadvertent Acquiring Person” means a Person that (i) the Company, upon the affirmative vote of two-thirds of the Continuing Directors then in office, determines in good faith has become the beneficial owner (as such term is defined in Rule 13d-3 under the Exchange Act)₌of 15% or more of the Company’s Common Stock inadvertently and without any intention of changing or influencing the control, management or policies of the Company or of engaging in any of the actions specified in Item 4 of Schedule 13D under the Exchange Act, and (ii) within 10 business days following receipt of request by the Company to advise it regarding the same, certifies affirmatively to the Company with respect to the matters set forth in clause (i) above; and (iii) as promptly as practicable divests himself, herself or itself of beneficial ownership of a sufficient number of shares of Common Stock of the Company so that such Person would no longer be the beneficial owner of 15% or more of the Company’s Common Stock.

EX-10.2

Exhibit 10.2

INDEMNIFICATION AGREEMENT

This Agreement, made and entered into this 1^st day of May, 2003 (“Agreement”), by and between Mykrolis Corporation, a Delaware corporation (“Company”), and Gerry Mackay (“Indemnitee”):

WHEREAS, it is reasonable, prudent and necessary for the Company to obligate itself to indemnify, and to advance expenses on behalf of, its directors and executive officers to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified; and

WHEREAS, Indemnitee is willing to serve, continue to serve the Company as a director and/or executive officer and to take on additional service for or on its behalf on the condition that he be so indemnified;

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

Services by Indemnitee. Indemnitee agrees to serve as a director and/or executive officer of the Company. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law).

Indemnification - General. The Company shall indemnify, and advance Expenses (as hereinafter defined) to, Indemnitee (a) as provided in this Agreement and (b) (subject to the provisions of this Agreement) to the fullest extent permitted by applicable law in effect on the date hereof and as amended from time to time. The rights of Indemnitee provided under the preceding sentence shall include, but shall not be limited to, the rights set forth in the other Sections of this Agreement.

Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 3 if, by reason of his Corporate Status (as hereinafter defined), he is, or is threatened to be made, a party to or a participant in any threatened, pending or completed Proceeding (as hereinafter defined), other than a Proceeding by or in the right of the Company. Pursuant to this Section 3, Indemnitee shall be indemnified against all Expenses, judgments, penalties, fines and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, penalties, fines and amounts paid in settlement) actually and reasonably incurred by him or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, with respect to any criminal Proceeding, had no reasonable cause to believe his conduct was unlawful.

Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or a participant in any threatened, pending or completed Proceeding brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section, Indemnitee shall be indemnified against all Expenses (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses) actually and reasonably incurred by him or on his behalf in connection with such Proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company; provided, however, that indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company if and only to the extent that the Court of Chancery of the State of Delaware, or the court in which such Proceeding shall have been brought or is pending, shall determine that such indemnification may be made.

Partial Indemnification. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a party to (or a participant in) and is successful, on the merits or otherwise, in defense of any Proceeding, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in defense of such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him

or on his behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter. If Indemnitee is entitled under any provision of this agreement to indemnification by the Company for some or a portion of the Expenses, judgments, penalties, fines and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, penalties, fines and amounts paid in settlement) actually and reasonably incurred by him or on his behalf in connection with such Proceeding or any claim, issue or matter therein, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion to which the Indemnitee is entitled.

Indemnification for Additional Expenses.

The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within seven (7) business days of such request) advance such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for (i) indemnification or advance payment of Expenses by the Company under this Agreement or any other agreement or by-law of the Company now or hereafter in effect; or (ii) recovery under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advance expense payment or insurance recovery, as the case may be.

Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.

Advancement of Expenses. The Company shall advance all reasonable Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding within seven (7) days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Notwithstanding the foregoing, the obligation of the Company to advance Expenses pursuant to this Section 7 shall be subject to the condition that, if, when and to the extent that the Company determines that Indemnitee would not be permitted to be indemnified under applicable law, the Company shall be entitled to be reimbursed, within thirty (30) days of such determination, by Indemnitee (who hereby agrees to reimburse the Company) for all such amounts theretofore paid; provided, however, that if Indemnitee has commenced or thereafter commences legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee should be indemnified under applicable law, any determination made by the Company that Indemnitee would not be permitted to be indemnified under applicable law shall not be binding and Indemnitee shall not be required to reimburse the Company for any advance of Expenses until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed).

Procedure for Determination of Entitlement to Indemnification.

To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.

Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 8(a) hereof, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case: (i) if a Change in Control (as hereinafter defined) shall have occurred, by Independent Counsel (as hereinafter defined) in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (ii) if a Change of Control shall not have occurred, (A) by a majority vote of the Disinterested Directors (as hereinafter defined), even though less than a quorum of the Board, or (B) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (C) if so directed by the Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within

seven (7) days after such determination. The Company and the Indemnitee shall each cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification), and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 8(b) hereof, the Independent Counsel shall be selected as provided in this Section 8(c). If a Change of Control shall not have occurred, the Independent Counsel shall be selected by the Board of Directors, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected. If a Change of Control shall have occurred, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board of Directors, in which event the preceding sentence shall apply), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may be, may, within 10 days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 17 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within 20 days after submission by Indemnitee of a written request for indemnification pursuant to Section 8(a) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware for resolution of any objection which shall have been made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 8(b) hereof. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 8(b) hereof, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 8(c), regardless of the manner in which such Independent Counsel was selected or appointed, and if such Independent Counsel was selected or appointed by the Indemnitee or the Court, shall provide such Independent Counsel with such retainer as may requested by such counsel. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 10(a)(iii) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

The Company shall not be required to obtain the consent of the Indemnitee to the settlement of any Proceeding which the Company has undertaken to defend if the Company assumes full and sole responsibility for such settlement and the settlement grants the Indemnitee a complete and unqualified release in respect of the potential liability. The Company shall not be liable for any amount paid by the Indemnitee in settlement of any Proceeding that is not defended by the Company, unless the Company has consented to such settlement, which consent shall not be unreasonably withheld.

Presumptions and Effect of Certain Proceedings.

In making a determination with respect to entitlement to indemnification or the advancement of expenses hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification or advancement of expenses under this Agreement if Indemnitee has submitted a request for indemnification or the advancement of expenses in accordance with Section 8(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including its board of directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company

(including its board of directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

If the person, persons or entity empowered or selected under Section 8 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 9(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 8(b) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board of Directors has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 8(b) of this Agreement.

The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.

Reliance as Safe Harbor. For purposes of any determination of Good Faith, Indemnitee shall be deemed to have acted in Good Faith if Indemnitee’s action is based on the records or books of account of the Company or relevant enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Company or relevant enterprise in the course of their duties, or on the advice of legal counsel for the Company or relevant enterprise or on information or records given in reports made to the Company or relevant enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Company or relevant enterprise. The provisions of this Section 9(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

Actions of Others. The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Company or relevant enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

Remedies of Indemnitee.

In the event that (i) a determination is made pursuant to Section 8 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 7 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 8(b) of this Agreement within 90 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5 or 6 of this Agreement within ten (10) days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication by the Court of Chancery of the State of Delaware, or any other court of competent jurisdiction, of his entitlement to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association.

In the event that a determination shall have been made pursuant to Section 8(b) of this Agreement that Indemnitee is

not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 10 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. If a Change of Control shall have occurred, in any judicial proceeding or arbitration commenced pursuant to this Section 10, the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

If a determination shall have been made pursuant to Section 8(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 10, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

In the event that Indemnitee, pursuant to this Section 10, seeks a judicial adjudication of or an award in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company against, any and all expenses (of the types described in the definition of Expenses in Section 17 of this Agreement) actually and reasonably incurred by him in such judicial adjudication or arbitration, but only if he prevails therein. If it shall be determined in said judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advancement of expenses sought, the expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated. The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance such expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors’ or officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.

The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 10 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement.

Non-Exclusivity; Survival of Rights; Insurance; Subrogation.

The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the By-Laws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in the General Corporation Law of the State of Delaware, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Company’s By-Laws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees or agents of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies.

In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit or enforce such rights.

The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

The Company’s obligation to indemnify or advance expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.

Duration of Agreement.

This Agreement shall continue until and terminate upon the later of: (i) 10 years after the date that Indemnitee shall have ceased to serve as a director and/or executive officer of the Company (or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee served at the request of the Company); or (ii) the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advancement of expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 10 of this Agreement relating thereto.

This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries) and Indemnitee. Indemnitee specifically acknowledges that Indemnitee’s employment with the Company (or any of its subsidiaries), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director or officer of the Company, by the Company’s Certificate of Incorporation, By-laws, and the General Corporation Law of the State of Delaware. The foregoing notwithstanding, this Agreement shall continue in force as provided above after Indemnitee has ceased to serve as a director and/or executive officer of the Company.

This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs, executors and administrators.

Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

Exception to Right of Indemnification or Advancement of Expenses. Except as provided in Section 6(a) of this Agreement, Indemnitee shall not be entitled to indemnification or advancement of Expenses under this Agreement with respect to any Proceeding brought by Indemnitee (other than a Proceeding by Indemnitee to enforce his rights under this Agreement), or any claim therein, unless the bringing of such Proceeding or making of such claim shall have been approved by the Board of Directors.

Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

Definitions. For purposes of this Agreement:

“Change in Control” shall have the meaning set forth on Exhibit A.

“Corporate Status” describes the status of a person who is or was a director, officer, employee, fiduciary or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the request of the Company.

“Disinterested Director” means a director of the company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

“Effective Date” means May 1, 2003.

“Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness, in, or otherwise participating in, a Proceeding.

“Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party, or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

“Proceeding” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Corporation or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is, may be or will be involved as a party or otherwise, by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by him or of any inaction on his part while acting as director or officer of the Company, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise; in each case whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification or advancement of expenses can be provided under this Agreement; except one (i) initiated by an Indemnitee pursuant to Section 10 of this Agreement to enforce his right under this Agreement or (ii) pending on or before the Effective Date.

Enforcement.

The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director and/or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director and/or officer of the Company.

This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.

Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of

Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.

Notices. All notices, requests, demands or other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been direct, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:

If to Indemnitee to:	Gerry Mackay
	c/o Mykrolis Corporation
	129 Concord Road
	Billerica, Massachusetts 01821
If to the Company to:	Mykrolis Corporation
	129 Concord Road
	Billerica, Massachusetts 01821
	Attention: General Counsel

or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

Contribution. To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

Governing Law; Submission to Jurisdiction; Appointment of Agent for Service of Process. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 10(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not a resident of the State of Delaware, irrevocably Corporation Service Company as its agent in the State of Delaware for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or otherwise inconvenient forum.

Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.

ATTEST:	MYKROLIS CORPORATION
/s/ Peter W. Walcott.	By: /s/ Jean-Marc Pandraud.
Name: Peter W. Walcott	Name: Jean-Marc Pandraud
	Title: President & Chief Operating Officer
ATTEST:	INDEMNITEE
/s/ Peter W. Walcott.	/s/ Gerry Mackay.
Name:	Name: Gerry Mackay

EXHIBIT A

Change of Control. For the purposes of this Agreement, a “Change of Control” means:

(a) The acquisition by any person, corporation, partnership, limited liability company or other entity (a “Person”, which term shall include a group within the meaning of section 13(d) of the Securities Exchange Act of 1934 (the “Exchange Act”)) of ultimate beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act), directly or indirectly of 30% or more of either (i) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any such acquisition directly from the Company, except for acquisition of securities upon conversion of other securities of the Company (ii) any such acquisition by the Company, (iii) any such acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any such acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Exhibit A; or

(b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election, by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(c) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company in one or a series of transactions (a “Business Combination”), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, immediately following such Business Combination more than 50% of, respectively, the outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) ultimately beneficially owns, directly or indirectly, 30% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(d) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

EX-10.3

Exhibit 10.3

EXECUTIVE TERMINATION (CHANGE OF CONTROL) AGREEMENT

Agreement between MYKROLIS CORPORATION, a Delaware corporation with offices at 129 Concord Road, Billerica, MA 01821 (“Mykrolis” or the “Company”) and Jieh Hwa Shyu (the “Executive”) dated May 1, 2003.

RECITALS

A. The Executive is an officer and key member of Mykrolis’ management.

B. Mykrolis believes that it is in its best interests, as well as those of its stockholders, to assure the continuity of management in general and the Executive in particular, for a fixed period of time in the event of actual or threatened Change of Control of the Company and whether or not such Change of Control is thought by Mykrolis’ Board of Directors to be in the best interest of its stockholders.

C. This Agreement is not intended to alter materially the compensation, benefits or terms of employment that the Executive could reasonably expect in the absence of a Change of Control of Mykrolis, but is intended to encourage and reward his compliance with the wishes of the Mykrolis Board of Directors whatever they may be in the event that a Change of Control occurs or is threatened.

NOW THEREFORE, in consideration of the foregoing premises, of the mutual promises of the Parties made herein and of other consideration, the receipt and adequacy of which is hereby acknowledged, the Parties hereby agree as follows:

SECTION 1. DEFINITIONS. The following terms when used in this Agreement or any Exhibit hereto with initial capital letters shall have the meanings assigned to them below. Other terms defined elsewhere in this Agreement shall have the respective meanings assigned to them at the location of their definition. Except where the context otherwise requires, words imparting the singular number shall include the plural number and vice versa, words denoting any gender shall include all genders and words denoting persons shall include bodies corporate and vice versa.

1.01. The term “Change of Control” shall have the meaning set forth in Exhibit A attached hereto.

1.02. The term “Impending Change of Control” refers to any event or circumstances which gives rise to a threat or a likelihood of Change of Control, whether or not supported or approved by Mykrolis’ management or directors. A determination made by Mykrolis’ Board of Directors that an event constituting an Impending Change of Control has occurred shall be binding and conclusive if such determination is made by the Board in good faith.

1.03. The term “Period of Employment” shall mean the period which begins when an Impending Change of Control occurs and which shall continue until the close of business on the 180^th day subsequent to any Change of Control.

1.04. The term “Involuntary Termination” shall mean the following:

(a) Any Discharge of Executive by Mykrolis or by any corporation succeeding to the business and assets of Mykrolis (a “Successor”) if effected during the Period of Employment or after the Period of Employment but within two years after any Change of Control;

(b) Any resignation by Executive if such resignation shall have been requested by Mykrolis or by a Successor if made within the period described in Clause (a);

(c) Any resignation by Executive if such resignation shall follow: (i) any reduction in the annual base salary, incentive compensation under the Mykrolis Incentive Plan or other incentive program, perquisites, life, health accident, or disability benefits or other fringe benefits, equity incentive programs and the like applicable to Executive as compared to those in effect immediately prior to the beginning of the Period of Employment, or (ii) any material adverse change in the duties, status, responsibilities, scope, employment conditions or authority associated with Executive’s employment

by Mykrolis, if the foregoing events shall not have been approved in advance by Executive; or (iii) the failure by the Company to comply with the provisions of Section 11.06(b) of this Agreement and if the resignation shall be tendered within the periods referred to in Clause (a), provided, however, that changes in fringe benefit programs and perquisites shall not be regarded as reductions if Mykrolis’ Board of Directors determines in good faith that benefits and perquisites of equivalent value are substituted, and reductions in payout or other benefits in incentive programs shall not be regarded as reductions if Mykrolis’ Board of Directors determines in good faith that the differences are attributable to changing base levels and changing performance criteria and goals;

(d) Any voluntary termination by Executive if, by notice given within the Period of Employment, the Executive elects to treat a Change of Control as an Involuntary Termination.

2. Employment; Period of Employment

2.01. If an Impending Change of Control should occur while Executive is employed by Mykrolis, Executive agrees to remain in the employ of Mykrolis for at least the Period of Employment in the position and with the duties and responsibilities he then currently carries, with such changes therein as may from time to time be made by the Mykrolis Board of Directors, and upon the other terms and conditions hereinafter stated.

2.02. Executive agrees that during the Period of Employment, and prior to any Change of Control, he will exercise his best efforts to bring about whatever result the Board of Directors determines to be in the best interests of Mykrolis and its stockholders relative to any Impending Change of Control, i.e., to help in the resistance to any such Change of Control if the Board determines that to be in the best interests of the Company and its stockholders, and to bring about such Change of Control if the Board determines that to be the preferable alternative. The Executive agrees to use his best efforts at and after the occurrence of a Change of Control to effect an orderly and beneficial transfer of control to the party or parties comprising the new control group.

2.03. Nothing in this Agreement shall be deemed to prevent the Executive from remaining in the employ of Mykrolis or any Successor beyond the Period of Employment either on the terms and conditions set forth herein or on others that may be mutually agreed upon.

3. Compensation and Benefit Plans

3.01. For all services rendered by the Executive in any capacity during the Period of Employment, including, without limitation, services as an executive officer, director or member of any committee of Mykrolis or of any subsidiary, division or affiliate thereof, the Executive shall be paid as base compensation the salary he is receiving immediately prior to the beginning of the Period of Employment, payable not less often than monthly.

3.02. The executive shall continue to be a participant in the Mykrolis Incentive Plan, and its 2001 Equity Incentive Plan as in effect immediately prior to the beginning of the Period of Employment, and any and all other incentive plans in which key employees of the Company participate that are in effect.

3.03. The Executive, his dependents and beneficiaries shall be entitled to all payments and benefits and service credit for benefits during the Period of Employment to which officers of Mykrolis, their dependents and beneficiaries are entitled immediately prior to the beginning of the Period of Employment under the terms of the then effective employee plans and practices of Mykrolis.

3.05. For the two year period commencing immediately after the Period of Employment, the Executive and his family shall be entitled to and receive all medical, dental and life insurance benefits to which they had been entitled immediately prior to the beginning of the Period of Employment.

4. Effect of Involuntary Termination of Employment on the Pension and Retirement Program

4.01. The term “Mykrolis’ Retirement Program” shall mean the Mykrolis Corporation Savings and Investment Plan and any other supplemental, early retirement and similar plan or plans of Mykrolis and its subsidiaries providing for pension or retirement benefits that may be applicable to the Executive immediately prior to the beginning of the Period of Employment.

4.02. In the event of Involuntary Termination of Executive, Executive shall be entitled to payment by Mykrolis which will supplement benefits under Mykrolis’ Retirement Program. The provisions of this Section 4 shall not affect in any way the terms of Mykrolis’ Retirement Program or the rights of Executive thereunder. Separate and apart from Mykrolis’ Retirement Program, however, Mykrolis agrees to pay to Executive, in the event of Involuntary Termination, the difference between the benefits payable to Executive under Mykrolis’ Retirement Program and the amounts that would be payable thereunder if Mykrolis’ Retirement Program were adjusted as follows:

(a) “Compensation” as defined in the Retirement Program shall be the highest Annual Compensation paid to the Executive within the three years prior to Involuntary Termination;

(b) the Executive shall be credited for the purpose of determining “years of service” (up the maximum of 30 years) with 2.5 times the actual number of years served, with a minimum of 10 years of such credited service for purposes of determining both vesting and benefit amounts;

(c) The Executive shall be entitled to receive his actuarially determined benefit at any time he elects subsequent to Involuntary Termination without regard to his age at the time of such election.

5. Involuntary Termination Payment

5.01. In the event of Involuntary Termination of Executive’s employment, Mykrolis shall provide the Executive with a lump sum severance payment (the “Termination Payment”) in an amount equal to two years compensation at the highest annual rate of total cash compensation including base salary plus target incentive compensation under the Mykrolis Incentive Program to the Executive during the three years prior to Involuntary Termination.

5.02. To assure Executive’s receipt of the Termination Payment as against a possibly hostile successor control group, Mykrolis shall pay Executive an amount equal to the Termination Payment just prior to a Change in Control. At the time of the receipt of such payment, Executive shall issue his six month non-interest bearing note to the Company in an amount equal to such payment. Such note shall be deemed canceled if an event constituting an “Involuntary Termination” should occur within the Period of Employment.

5.03. If no event constituting an Involuntary Termination shall have occurred within the Period of Employment, then executive’s note referred to in Section 5.02 will become immediately due and payable as of the day following the Period of Employment.

5.04. Executive’s entitlement to receive the Termination Payment called for by this Section 5 shall be conditioned upon his having complied to the best of his abilities with the commitments contained in Sections 2.01 and 2.02. In the event of an Involuntary Termination described in Clauses (a), (b) or (c) of Section 1.04, he shall be deemed to have so complied if he shall have complied to the best of his abilities with the requirements of those sections until the time of his discharge or resignation pursuant to such clauses; in the event of an Involuntary Termination described in Clause (d) of Section 1.04, he shall be deemed to have complied only if his employment continues through the Period of Employment and if his compliance shall have continued throughout the Period of Employment.

6. Purchase by Mykrolis of Executive’s Shares

6.01. Executive is hereby granted the right and option to sell to Mykrolis all shares of common stock of Mykrolis owned by him at the time of, or acquired by him within 90 days after, the closing of any transaction constituting a Change of Control. The purchase price to be paid by Mykrolis to Executive for such shares shall be the highest price paid within 90 days prior to the date of exercise by Executive of his right under this Section 6 by the party taking control. Executive’s right to exercise this right and option shall be

subject to his being in the employ of Mykrolis at the date of commencement of the tender offer or exchange offer giving rise to the Change of Control.

6.02. The right and option granted to the Executive under this Section 6 shall begin at the date of closing of the event constituting a Change of Control and shall continue for a period of 90 days thereafter.

6.03. In the event of an Impending Change of Control Executive will become immediately entitled to exercise any and all stock options previously granted to him by Mykrolis and any and all restricted stock shall become free of any restrictions notwithstanding any provision to the contrary in the option agreement, the restricted stock agreement or any plans under which they were granted.

7. Confidential Information

7.01. The Executive agrees not to disclose, either while in Mykrolis’ employ or at any time thereafter, to any person not employed by Mykrolis, or not engaged to render services to Mykrolis, any confidential information obtained by him while in the employ of Mykrolis, including without limitation, any of Mykrolis’ inventions, processes, methods of distribution or customers or trade secrets, provided, however, that this provision shall not preclude the Executive from use or disclosure of information known generally to the public or for information not considered confidential by persons engaged in the business conducted by Mykrolis or from disclosure required by law or Court order.

7.02. The Executive also agrees that upon leaving Mykrolis’ employ he will not take with him, without the prior written consent of an officer authorized to act in the matter by Mykrolis’ Board of Directors any drawing, blueprint, specification or other document of Mykrolis, its subsidiaries, affiliates and divisions, which is of a confidential nature relating to Mykrolis, its subsidiaries, affiliates, and divisions, or without limitation, relating to its or their methods of distribution, or any description of any formulae or secret processes.

8. Limitation

8.01. Notwithstanding any other provision of this Agreement, and except as provided in Section 8.02 below, the payments or benefits to which Executive will be entitled under this Agreement will be reduced to the extent necessary so that Executive will not be liable for the federal excise tax levied on certain “excess parachute payments” under section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”).

8.02. The limitation of Section 8.01 will not apply if -

(a) the difference between (i) the present value of all payments to which Executive is entitled under this Agreement determined without regard to Section 8.01 less (ii) the present value of all federal, state and other income and excise taxes for which Executive is liable as a result of such payment; exceeds

(b) the difference between (i) the present value of all payments to which executive is entitled under this Agreement calculated as if the limitation of Section 8.01 applies, less (ii) the present value of all federal, state, and other income and excise taxes for which executive is liable as a result of such reduced payments.

Present values will be determined using the interest rate specified in Section 280G of the Code and will be the present values as of the date on which an event of Impending Change of Control occurs.

8.03.      (a) Whether payments to the Executive are to be reduced pursuant to Section 8.01, and the extent to which they are to be so reduced, will be determined by the Executive. Executive may, at the expense of Mykrolis, hire an accounting firm, law firm or employment consulting firm selected by Executive to assist him in such determination.

(b) If a reduction is made pursuant to Section 8.01, Executive will have the right to determine which payments and benefits will be reduced.

8.04. Notwithstanding anything to the contrary in this Agreement, and at the Executive’s option, in lieu of the reduction contemplated by Section 8.01, the Executive may elect to receive an additional payment from Mykrolis of an amount that is equal to the product of (1) the excise tax payable by the Executive pursuant to Section 280G of the Code on payments made to him under this Agreement, excluding

payments to be made to him pursuant to this Section 8.04 and (2) a fraction the numerator of which is the total target cash compensation payable to the Executive under this Agreement and the denominator of which is the value of the total payments and benefits payable to the Executive under this Agreement, excluding payments to be made to him pursuant to this Section 8.04. Mykrolis will gross up all payments required under this Section 8.04 so as to offset any excise tax payable with respect thereto.

9. Notices

All notices, requests, demands and other communications provided for by this Agreement shall be in writing and shall be sufficiently given when mailed in the continental United States by registered or certified mail or personally delivered to the party entitled thereto at the address stated below or to such changed address as the addressee may have given by a similar notice:

To Mykrolis:	Mykrolis Corporation
	129 Concord Road
	Billerica, MA 01823
	Attn: Vice president & General Counsel
To the Executive:	Mr. Jieh Hwa Shyu
	c/o Mykrolis Corporation,
	with an additional copy to the Executive’s home address

10. No Mitigation and No Offset

10.01. The amounts payable to Executive hereunder shall be absolutely owing, and not subject to reduction or mitigation as a result of employment by Executive elsewhere after his employment with Mykrolis is terminated.

10.02. There shall be no right of set-off or counterclaim in respect of any claim, debt or obligation against any payments to the Executive, his dependents, beneficiaries or estate, provided for in this Agreement.

11. General Provisions

11.01. Should the Executive’s employment be terminated either on a voluntary or involuntary basis other than as provided for in this Agreement, then any and all termination payments and other provisions associated with any such severance of employment shall be determined in accordance with Mykrolis’ policies and procedures then in effect and not in accordance with this Agreement. Except as specifically provided for herein, nothing shall be deemed to give the Executive the right to continue in the employ of Mykrolis.

11.02. Mykrolis and the Executive recognize that each party will have no adequate remedy at law for breach by the other of any of the agreements contained herein and, in the event of any such breach, Mykrolis (with respect to Sections 3, 4, 5 and 6) and the Executive (with respect to Section 7) hereby agree and consent that the other shall be entitled to a decree of specific performance, or other appropriate remedy to enforce performance of such agreements.

11.03. No right or interest to or in any payments shall be assignable by the Executive; provided, however, that this provision shall not preclude him from designating one or more beneficiaries to receive any amount that may be payable after his death and shall not preclude the legal representative of his estate from assigning any right hereunder to the person or persons entitled thereto under his will or, in the case of intestacy, to the person or persons entitled thereto under the laws of intestacy applicable to his estate.

11.04. No right, benefit or interest hereunder shall be subject to anticipation, alienation, sale, assignment, encumbrance, charge, pledge, hypothecation, or set-off in respect of any claim, debt or obligation, or to execution, attachment, levy or similar process, or assignment by operation of law. Any attempt, voluntary or involuntary, to effect any action specified in the immediately preceding sentence shall, to the full extent permitted by law, be null, void and of no effect.

11.05. The titles to sections in this Agreement are intended solely for the convenience and no provision of this Agreement is to be construed by reference to the title of any section. This Agreement shall be binding

upon and shall inure to the benefit of the Executive, his heirs and legal representatives, and Mykrolis and its successors.

11.06. (a) Mykrolis will indemnify the Executive for all costs and expenses (including fees and expenses of counsel) incurred by the Executive in connection with an action to enforce his rights under this Agreement (including any action to enforce this right of indemnity) in which action the Executive prevails.

(b) Mykrolis must require that any entity with which it merges or consolidates or to which it agrees to transfer a substantial portion of its assets expressly assume the obligations of the Company under this Agreement and that any successor or successors of such an entity, whether by merger, consolidation or transfer of assets, also expressly assume such obligations.

11.07 No provision of this Agreement may be amended, modified or waived unless such amendment, modification or waiver shall be authorized by the Board of Directors of Mykrolis or any authorized committee of the Board of Directors and shall be agreed to in writing, signed by the Executive and by an officer of Mykrolis thereunto duly authorized. Except as otherwise specifically provided in this Agreement, no waiver by either party hereto of any breach by the other party hereto of any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of a subsequent breach of such condition or provision or a waiver of a similar or dissimilar provision or condition at the same time or at any prior or subsequent time.

11.08. The validity, interpretation, construction performance and enforcement of this Agreement shall be governed by the laws of the Commonwealth of Massachusetts as applied to transactions taking place wholly within Massachusetts between Massachusetts residents.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

MYKROLIS CORPORATION
By	/s/ Jean-Marc Pandraud.
	Executive
	/s/ Jieh-Hwa Shyu.
	Jieh Hwa Shyu

EXHIBIT A

“Change of Control” means the occurrence of any of the following events:

(1) any Person (other than an Inadvertent Acquiring Person”, as defined below) becomes the owner of 15% or more of the Company’s Common Stock; or

(2) individuals who, as of the Effective Date, constitute the Board of Directors of the Company (the “Continuing Directors”) cease for any reason to constitute at least a majority of such Board (a “Board Change”); provided, however, that any individual becoming a director after the Effective Date whose election or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the Continuing Directors will be considered as though such individual were a Continuing Director, but excluding for this purpose any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”)) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board.

(3) execution of an agreement of acquisition, merger, reorganization, consolidation of or other transaction which contemplates either (i) that all or substantially all of the business and/or assets of the Company will be owned or controlled by a Person or Persons (as those terms are used in Section 13(d) of the Exchange Act) other than the Persons owning or controlling such business and assets on the Effective Date or (ii) that a Board Change will occur, provided, however, that if such agreement requires, as a condition precedent, approval by the Company’s shareholders, a Change of Control will not be deemed to have occurred until such approval has been obtained; or

(4) liquidation or dissolution of the Company or sale of all or substantially all of the Company’s assets;

provided, however, that in no event shall the distribution by Millipore Corporation of the Common Stock of Mykrolis to the stockholders of Millipore Corporation in accordance with the Master Separation and Distribution Agreement, dated March 28, 2001 between Mykrolis and Millipore Corporation, constitute a Change of Control or Impending Change of Control for the purposes of this Agreement solely by virtue of the ownership of Mykrolis Common Stock by the stockholders of Millipore immediately following such distribution.

In addition, for purposes of this definition the term “Inadvertent Acquiring Person” means a Person that (i) the Company, upon the affirmative vote of two-thirds of the Continuing Directors then in office, determines in good faith has become the beneficial owner (as such term is defined in Rule 13d-3 under the Exchange Act) of 15% or more of the Company’s Common Stock inadvertently and without any intention of changing or influencing the control, management or policies of the Company or of engaging in any of the actions specified in Item 4 of Schedule 13D under the Exchange Act, and (ii) within 10 business days following receipt of request by the Company to advise it regarding the same, certifies affirmatively to the Company with respect to the matters set forth in clause (i) above; and (iii) as promptly as practicable divests himself, herself or itself of beneficial ownership of a sufficient number of shares of Common Stock of the Company so that such Person would no longer be the beneficial owner of 15% or more of the Company’s Common Stock.

EX-10.4

Exhibit 10.4

INDEMNIFICATION AGREEMENT

This Agreement, made and entered into this 1^st day of May, 2003 (“Agreement”), by and between Mykrolis Corporation, a Delaware corporation (“Company”), and Jieh Hwa Shyu (“Indemnitee”):

WHEREAS, it is reasonable, prudent and necessary for the Company to obligate itself to indemnify, and to advance expenses on behalf of, its directors and executive officers to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified; and

WHEREAS, Indemnitee is willing to serve, continue to serve the Company as a director and/or executive officer and to take on additional service for or on its behalf on the condition that he be so indemnified;

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

Services by Indemnitee. Indemnitee agrees to serve as a director and/or executive officer of the Company. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law).

Indemnification - General. The Company shall indemnify, and advance Expenses (as hereinafter defined) to, Indemnitee (a) as provided in this Agreement and (b) (subject to the provisions of this Agreement) to the fullest extent permitted by applicable law in effect on the date hereof and as amended from time to time. The rights of Indemnitee provided under the preceding sentence shall include, but shall not be limited to, the rights set forth in the other Sections of this Agreement.

Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 3 if, by reason of his Corporate Status (as hereinafter defined), he is, or is threatened to be made, a party to or a participant in any threatened, pending or completed Proceeding (as hereinafter defined), other than a Proceeding by or in the right of the Company. Pursuant to this Section 3, Indemnitee shall be indemnified against all Expenses, judgments, penalties, fines and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, penalties, fines and amounts paid in settlement) actually and reasonably incurred by him or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, with respect to any criminal Proceeding, had no reasonable cause to believe his conduct was unlawful.

Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or a participant in any threatened, pending or completed Proceeding brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section, Indemnitee shall be indemnified against all Expenses (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses) actually and reasonably incurred by him or on his behalf in connection with such Proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company; provided, however, that indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company if and only to the extent that the Court of Chancery of the State of Delaware, or the court in which such Proceeding shall have been brought or is pending, shall determine that such indemnification may be made.

Partial Indemnification. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a party to (or a participant in) and is successful, on the merits or otherwise, in defense of any Proceeding, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in defense of such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him

or on his behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter. If Indemnitee is entitled under any provision of this agreement to indemnification by the Company for some or a portion of the Expenses, judgments, penalties, fines and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, penalties, fines and amounts paid in settlement) actually and reasonably incurred by him or on his behalf in connection with such Proceeding or any claim, issue or matter therein, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion to which the Indemnitee is entitled.

Indemnification for Additional Expenses.

The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within seven (7) business days of such request) advance such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for (i) indemnification or advance payment of Expenses by the Company under this Agreement or any other agreement or by-law of the Company now or hereafter in effect; or (ii) recovery under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advance expense payment or insurance recovery, as the case may be.

Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.

Advancement of Expenses. The Company shall advance all reasonable Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding within seven (7) days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Notwithstanding the foregoing, the obligation of the Company to advance Expenses pursuant to this Section 7 shall be subject to the condition that, if, when and to the extent that the Company determines that Indemnitee would not be permitted to be indemnified under applicable law, the Company shall be entitled to be reimbursed, within thirty (30) days of such determination, by Indemnitee (who hereby agrees to reimburse the Company) for all such amounts theretofore paid; provided, however, that if Indemnitee has commenced or thereafter commences legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee should be indemnified under applicable law, any determination made by the Company that Indemnitee would not be permitted to be indemnified under applicable law shall not be binding and Indemnitee shall not be required to reimburse the Company for any advance of Expenses until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed).

Procedure for Determination of Entitlement to Indemnification.

To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.

Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 8(a) hereof, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case: (i) if a Change in Control (as hereinafter defined) shall have occurred, by Independent Counsel (as hereinafter defined) in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (ii) if a Change of Control shall not have occurred, (A) by a majority vote of the Disinterested Directors (as hereinafter defined), even though less than a quorum of the Board, or (B) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (C) if so directed by the Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within

seven (7) days after such determination. The Company and the Indemnitee shall each cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification), and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 8(b) hereof, the Independent Counsel shall be selected as provided in this Section 8(c). If a Change of Control shall not have occurred, the Independent Counsel shall be selected by the Board of Directors, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected. If a Change of Control shall have occurred, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board of Directors, in which event the preceding sentence shall apply), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may be, may, within 10 days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 17 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within 20 days after submission by Indemnitee of a written request for indemnification pursuant to Section 8(a) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware for resolution of any objection which shall have been made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 8(b) hereof. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 8(b) hereof, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 8(c), regardless of the manner in which such Independent Counsel was selected or appointed, and if such Independent Counsel was selected or appointed by the Indemnitee or the Court, shall provide such Independent Counsel with such retainer as may requested by such counsel. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 10(a)(iii) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

The Company shall not be required to obtain the consent of the Indemnitee to the settlement of any Proceeding which the Company has undertaken to defend if the Company assumes full and sole responsibility for such settlement and the settlement grants the Indemnitee a complete and unqualified release in respect of the potential liability. The Company shall not be liable for any amount paid by the Indemnitee in settlement of any Proceeding that is not defended by the Company, unless the Company has consented to such settlement, which consent shall not be unreasonably withheld.

Presumptions and Effect of Certain Proceedings.

In making a determination with respect to entitlement to indemnification or the advancement of expenses hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification or advancement of expenses under this Agreement if Indemnitee has submitted a request for indemnification or the advancement of expenses in accordance with Section 8(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including its board of directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including its board of directors or independent legal counsel) that Indemnitee has not met such applicable standard

of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

If the person, persons or entity empowered or selected under Section 8 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 9(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 8(b) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board of Directors has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 8(b) of this Agreement.

The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.

Reliance as Safe Harbor. For purposes of any determination of Good Faith, Indemnitee shall be deemed to have acted in Good Faith if Indemnitee’s action is based on the records or books of account of the Company or relevant enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Company or relevant enterprise in the course of their duties, or on the advice of legal counsel for the Company or relevant enterprise or on information or records given in reports made to the Company or relevant enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Company or relevant enterprise. The provisions of this Section 9(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

Actions of Others. The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Company or relevant enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

Remedies of Indemnitee.

In the event that (i) a determination is made pursuant to Section 8 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 7 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 8(b) of this Agreement within 90 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5 or 6 of this Agreement within ten (10) days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication by the Court of Chancery of the State of Delaware, or any other court of competent jurisdiction, of his entitlement to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association.

In the event that a determination shall have been made pursuant to Section 8(b) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 10 shall

be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. If a Change of Control shall have occurred, in any judicial proceeding or arbitration commenced pursuant to this Section 10, the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

If a determination shall have been made pursuant to Section 8(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 10, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

In the event that Indemnitee, pursuant to this Section 10, seeks a judicial adjudication of or an award in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company against, any and all expenses (of the types described in the definition of Expenses in Section 17 of this Agreement) actually and reasonably incurred by him in such judicial adjudication or arbitration, but only if he prevails therein. If it shall be determined in said judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advancement of expenses sought, the expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated. The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance such expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors’ or officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.

The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 10 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement.

Non-Exclusivity; Survival of Rights; Insurance; Subrogation.

The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the By-Laws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in the General Corporation Law of the State of Delaware, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Company’s By-Laws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees or agents of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies.

In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit or enforce such rights.

The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance

policy, contract, agreement or otherwise.

The Company’s obligation to indemnify or advance expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.

Duration of Agreement.

This Agreement shall continue until and terminate upon the later of: (i) 10 years after the date that Indemnitee shall have ceased to serve as a director and/or executive officer of the Company (or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee served at the request of the Company); or (ii) the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advancement of expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 10 of this Agreement relating thereto.

This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries) and Indemnitee. Indemnitee specifically acknowledges that Indemnitee’s employment with the Company (or any of its subsidiaries), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director or officer of the Company, by the Company’s Certificate of Incorporation, By-laws, and the General Corporation Law of the State of Delaware. The foregoing notwithstanding, this Agreement shall continue in force as provided above after Indemnitee has ceased to serve as a director and/or executive officer of the Company.

This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs, executors and administrators.

Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

Exception to Right of Indemnification or Advancement of Expenses. Except as provided in Section 6(a) of this Agreement, Indemnitee shall not be entitled to indemnification or advancement of Expenses under this Agreement with respect to any Proceeding brought by Indemnitee (other than a Proceeding by Indemnitee to enforce his rights under this Agreement), or any claim therein, unless the bringing of such Proceeding or making of such claim shall have been approved by the Board of Directors.

Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

Definitions. For purposes of this Agreement:

“Change in Control” shall have the meaning set forth on Exhibit A.

“Corporate Status” describes the status of a person who is or was a director, officer, employee, fiduciary or agent of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the request of the Company.

“Disinterested Director” means a director of the company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

“Effective Date” means May 1, 2003.

“Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness, in, or otherwise participating in, a Proceeding.

“Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party, or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

“Proceeding” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Corporation or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is, may be or will be involved as a party or otherwise, by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by him or of any inaction on his part while acting as director or officer of the Company, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise; in each case whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification or advancement of expenses can be provided under this Agreement; except one (i) initiated by an Indemnitee pursuant to Section 10 of this Agreement to enforce his right under this Agreement or (ii) pending on or before the Effective Date.

Enforcement.

The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director and/or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director and/or officer of the Company.

This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.

Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.

Notices. All notices, requests, demands or other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been direct, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:

If to Indemnitee to:	Gerry Mackay
	c/o Mykrolis Corporation
	129 Concord Road
	Billerica, Massachusetts 01821
If to the Company to:	Mykrolis Corporation
	129 Concord Road
	Billerica, Massachusetts 01821
	Attention: General Counsel

or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

Contribution. To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

Governing Law; Submission to Jurisdiction; Appointment of Agent for Service of Process. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 10(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not a resident of the State of Delaware, irrevocably Corporation Service Company as its agent in the State of Delaware for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or otherwise inconvenient forum.

Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.

ATTEST:	MYKROLIS CORPORATION
/s/ Peter W. Walcott.	By: /s/ Jean-Marc Pandraud.
Name: Peter W. Walcott	Name: Jean-Marc Pandraud
	Title: President & Chief Operating Officer
ATTEST:	INDEMNITEE
/s/ Peter W. Walcott.	/s/ Jieh-Hwa Shyu.
Name: Peter W. Walcott	Name: Jieh Hwa Shyu

EXHIBIT A

Change of Control. For the purposes of this Agreement, a “Change of Control” means:

(a) The acquisition by any person, corporation, partnership, limited liability company or other entity (a “Person”, which term shall include a group within the meaning of section 13(d) of the Securities Exchange Act of 1934 (the “Exchange Act”)) of ultimate beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act), directly or indirectly of 30% or more of either (i) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any such acquisition directly from the Company, except for acquisition of securities upon conversion of other securities of the Company (ii) any such acquisition by the Company, (iii) any such acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any such acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) of this Exhibit A; or

(b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election, by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(c) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company in one or a series of transactions (a “Business Combination”), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, immediately following such Business Combination more than 50% of, respectively, the outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) ultimately beneficially owns, directly or indirectly, 30% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(d) Approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

EX-10.5

Exhibit 10.5

Mr. John Gerald MacKay June 18 2003

9 Reeves St.

Acton, MA 01720

Dear Gerry:

As we have discussed, it has become apparent that the highest potential growth markets for Mykrolis Corporation (“Mykrolis”) are in Asia and it is therefore important that Mykrolis increase the presence of its senior management team in that region in order to direct and focus Mykrolis’ response to these market opportunities as they develop. In your current role as Vice President Worldwide Sales and Marketing, a major proportion of your efforts must be directed at Asia. For this reason you have proposed that you relocate to Asia and I have agreed to this proposal. Initially you will be relocated to Singapore, which will serve as a temporary base of your operations. We recognize that, as the Asian market evolves, it will be necessary for you to again relocate to another location closer to the center of the emerging Asian markets, possibly Shanghai, however, the timing and specific location of the next move can not be identified at this time. Consequently, it will be necessary for the base of operations for your position to be flexible in order to respond to the needs of the evolving global marketplace.

This relocation is not intended to change your overall position or status with the worldwide Mykrolis organization: while, as a formal matter, you will be an employee and a director of Mykrolis Singapore Pte. Ltd., you will retain your current title of Vice President Worldwide Sales and Marketing; you will continue to report to me; you will continue to serve as a member of the Corporate Executive Committee; you will continue to be an “executive officer” as defined in the Securities and Exchange Act of 1934 (“’34 Act”); you will continue to be entitled to the financial planning benefit and to benefit from the Executive Termination Agreement between Mykrolis and yourself on the same at-will basis as the other corporate executive officers of Mykrolis. In addition, as an executive officer under the ’34 Act, you will continue to be subject to the provisions of the corporate policy entitled “Trading Restrictions on Mykrolis Affiliates and Insiders” which permits you to trade in the stock of Mykrolis and to exercise options to acquire shares of Mykrolis Common Stock only during identified “open window” periods after pre-clearance with the General Counsel and compliance with all reporting requirements of Section 16 of the ’34 Act and of S.E.C. Rule 144. Subject to the foregoing restrictions and to the other applicable regulations of the S.E.C., during your employment you shall be entitled to exercise vested stock options to the same extent as other executive officers of Mykrolis.

Set forth below are the specific relocation accomodations and benefits Mykrolis is offering to you relating to your move to Singapore. The terms and conditions of these relocation arrangements are contingent upon your obtaining the necessary residence visa and work permits and accepting this offer by countersigning this letter in the space indicated below.

1. Transfer Date. Your base of operations will officially transfer to Singapore on July 1, 2003 (the “Transfer Date”); we will periodically review the appropriate base for your operations, based upon the needs of the business.

2. Salary, Retirement and Benefits. As you know, the Management Development & Compensation Committee of the Mykrolis Board of Directors (the “MD&CC”) has approved an increase in your base salary to $200,000, effective as of the first day of the quarter immediately following the first quarter in which Mykrolis achieves profitability. The MD&CC has also approved an increase in your the Mykrolis Incentive Plan (“MIP”) target incentive amount to 50% of your annual base salary, effective for 2003 and subsequent years. As of the Transfer Date your annual base salary will be the equivalent of U.S.$180,000.00, you will become an employee of Mykrolis Singapore Pte. Ltd., will transfer onto the Singapore payroll, and will be paid in Singapore Dollars; this base salary will continue until profitability is achieved as described above. The exchange rate listed in the Wall Street Journal on the Transfer Date will be used to convert this U.S. Dollar amount into a Singapore Dollar amount which shall be used as your salary for the duration of your foreign assignment. On an ongoing basis, as an executive officer, you will be subject to the same salary review, increase and reduction procedures that apply to other executive

officers. You and your family will be eligible to participate in the health and dental benefit programs applicable to Singapore offered by CIGNA under the current indemnity plan as applied to Singapore or a mutually satisfactory alternative plan. You will be responsible for making any employee contributions for those benefits; in lieu of the salary withholding of the employee contribution for this coverage, you agree to make quarterly payments of that amount directly to Mykrolis Corporation on or before the last day of each fiscal quarter. Additionally, you will be provided with the SOS Emergency Assistance services.

You have earned a payment under the Mykrolis MIP with respect to your services to Mykrolis in the U.S. during 2002. While a portion of this award has been paid to you, the MD&CC has determined that payment of the balance of that award shall be deferred until the quarter immediately following the first quarter in which Mykrolis achieves profitability, which will occur after you have relocated to Singapore. It is understood and agreed that payment of the balance of this MIP award for 2002 shall be payable by Mykrolis Corporation in U.S. Dollars and will constitute U.S. source income, subject to withholding of U.S. income taxes notwithstanding the fact that you may be resident in Singapore at the time that it is paid. In the event that through no fault of your own that you are assessed tax on this deferred payment in both the U.S. and Singapore, Mykrolis agrees to tax equalize the Singapore taxes assessed with respect thereto.

Mykrolis will continue the existing life insurance benefit to the extent possible. In the event that your relocation precludes the continuation of that life insurance policy, then Mykrolis will obtain a replacement life insurance policy with as nearly comparable coverage limits and terms as is reasonably available.

Since this move will make you ineligible to participate in the Mykrolis Corporation Savings and Investment Plan, you will be required to give up any right to receive benefits thereunder during the period of this assignment. In compensation for this loss of benefits Mykrolis agrees to pay you annually an amount equal to 10% of the sum of your base salary plus any cash awards paid under the MIP in lieu of retirement benefits at the same time that the retirement contribution is made to executive officers on the U.S. payroll. You agree that this payment shall be in full satisfaction of any and all retirement benefits that may be owed to you by Mykrolis and any subsidiary of Mykrolis and that you hereby waive any claims with respect to any such retirement benefits to the maximum extent permitted by law. In the event that at any time you become entitled to participate in the Singapore Central Provident Fund, then the payment in lieu of retirement benefits provided for herein shall immediately cease.

3. Assignment Completion Bonus; Foreign Service Incentive. Upon successful completion of your initial four year assignment, you will be entitled to an Assignment Completion Bonus (taxable income), equal to 5% of your annual base salary for each of the four years of your initial assignment. This bonus will be payable at Mykrolis’ discretion in a lump sum in Singapore Dollars on the fourth anniversary of the Transfer Date, based upon Mykrolis’ reasonable judgement that all of the terms and conditions of your assignment have been completed. In the event that you leave the employ of Mykrolis or one of its subsidiaries prior to the completion of this initial assignment, you shall immediately forfeit all right to this Assignment Completion Bonus. From and after the fourth anniversary of the Transfer Date you will be entitled to receive a Foreign Service Incentive Payment (taxable income), equal to 5% of your annual base salary for each year you are on foreign assignment. Payment of this 5% Foreign Service Incentive will be made to you upon completion of each year of service in Asia and shall be payable on the anniversary of the Transfer Date and will be based upon your salary at that time, until the assignment concludes; if the assignment concludes prior to the anniversary of the Transfer Date the final 5% incentive payment will be pro rated to reflect the duration of such service during the final year.

4. Sale of Acton Property. You will receive assistance with the sale of your home in Acton, MA in accordance with the Coldwell Banker Residential Brokerage (“CBRB”) relocation program, as modified as described herein. The terms and conditions of the CBRB relocation program are described on Appendix A attached hereto. Initially, the “Buyer Value Option” process described on Appendix A will be followed. If a bona fide buyer for your home has not been obtained by the specified date, then the “Guaranteed Buyout Offer” process described on Appendix A will be followed. In order to enable this “Guaranteed Buyout Offer” process to operate, you agree to cooperate with CBRB to promptly obtain two appraisals of your Acton home by independent appraisers satisfactory to Mykrolis. In connection with the operation of

the “Guaranteed Buyout Offer” process you represent to Mykrolis that the carrying costs of your Action home (mortgage, utilities, maintenance, etc.) do not exceed $4,000 per month and that you listed your home for sale on or about April 21, 2003. In the event that you incur liability for U.S. Income taxes through no fault of your own with respect to any of the benefits afforded by the CBRB Buyer Value Option or the Guaranteed Buyout Offer, Mykrolis agrees to tax equalize such liability.

5 Final Move Trip to Singapore. You will be reimbursed for the cost of air transportation to Singapore for you and your family members to make the initial move to Singapore. This reimbursement will be made in accordance with the Mykrolis Travel & Expense Reimbursement Policy & Procedures with by coach airfare and you and your family shall take the most economical fare available.

6 Shipment of Household Goods. Moving and Storage: Mykrolis will pay to ship “essential personal items and household goods” (as those terms are defined on Appendix 2 attached hereto) to Singapore. To the extent necessary, Mykrolis will also pay to store your household goods for up to 60 days in Singapore. Any costs incurred due to the shipping of items other than “essential personal items and household goods” or for storage beyond such 60 day period will be your responsibility. Mykrolis will not reimburse the cost of replacing any items confiscated by customs authorities.

Shipment to U.K.: Mykrolis will pay to ship up to a maximum of 1,000lbs of such “essential personal items and household goods” via ocean transport to the United Kingdom.

7 Relocation Benefits in Singapore. The following relocation benefits will be paid to you by Mykrolis Singapore Pte Ltd. The relocation benefits specified in paragraphs (A) and (B) below shall be paid as a monthly stipend; the reimbursement benefit specified in paragraph (C) shall be paid upon submission of receipts or other evidence of payment in accordance with the Mykrolis Travel & Expense Reimbursement Policy & Procedures; the relocation benefit specified in paragraph (D) shall be paid as a single payment at the first payroll run in Singapore following the Transfer Date. The exchange rate from the US dollars listed below to the equivalent Singapore dollars will be established based upon the exchange rate listed in the Wall Street Journal on July 1, 2003. This exchange rate will be used to calculate any benefit set up in local currency and will not fluctuate during the assignment, as it will be paid in local currency.

(A) SUBSIDIZED HOUSING ACCOMMODATION: You will be entitled to receive a subsidized housing accommodation equal to the equivalent of US$53,100.00 annually or US$4,425.00 monthly.

(B) RELOCATION AUTOMOBILE ALLOWANCE: You will be provided with a moderately priced automobile, in accordance with the plan applicable to eligible employees of Mykrolis Singapore Pte. Ltd.

(C) RELOCATION SCHOOLING REIMBURSEMENT: You will be entitled to be reimbursed for your actual eligible schooling expenses, for your three children up to a maximum of the equivalent of US$28,000 per year. This reimbursement is available only for children in elementary and secondary school; as each child graduates from secondary school this allowance shall be reduced by 1/3. As used herein “eligible schooling expenses” means tuition, school administrative charges, uniforms and transportation expenses associated with enrolling your three children in bilingual elementary or secondary school; but EXCLUDES the cost of books and recreational fees and expenses.

(D) RELOCATION ALLOWANCE FOR INCIDENTALS: An allowance equal to one month of base salary will be paid upon your arrival to Singapore and is subject to local payroll taxes. This allowance is intended to cover your incidental expenses not covered by the foregoing relocation allowances that may arise as a result of your relocation.

8. One-Way Relocation. Since it is our current intent that the Vice President Worldwide Sales and Marketing shall be based in Asia on a permanent basis, you recognize and agree that Mykrolis will not pay any expenses to relocate you or your family back to either the United States or Europe.

9. Subsequent Relocations. You recognize and agree that as the Mykrolis markets in Asia evolve it will be necessary for you to relocate again, possibly to Shanghai or some other location in China, and you agree to accept such a subsequent relocation. Mykrolis agrees to offer you relocation benefits for such

subsequent relocation which are generally consistent with the benefits offered in paragraphs 3, 5, 6 and 7 above; such subsequent relocation benefits shall be adjusted to reflect the difference in housing and living costs between Singapore and the destination of such subsequent relocation as calculated by Organization Resources Counselors, Inc.

10. Lease Cancellation Costs. In the event that you incur lease cancellation costs by reason of: (i) the termination of your employment without cause by Mykrolis; or (ii) a subsequent relocation directed by Mykrolis, then in either of such events, Mykrolis agrees to reimburse you for lease cancellation costs incurred by reason thereof in accordance with the Mykrolis Relocation Policy as applied to tier 3 employees. Lease cancellation costs arising out of any other circumstances shall be your responsibility.

11. Relocation Commitment. You recognize that by accepting your proposal to relocate you, Mykrolis will incur substantial additional cost as set forth in this letter. You agree that in consideration of the relocation benefits provided hereunder that you will remain in the employ of Mykrolis based in Singapore or such other location in Asia as shall be specified by the President of Mykrolis for at least four (4) years. In the event that you leave the employ of Mykrolis without Mykrolis’ consent or that your employment with Mykrolis is terminated for cause during that period you agree that you shall immediately forfeit all rights to the Assignment Completion Bonus specified in Paragraph 3 above. In the event that your employment is terminated by Mykrolis for reasons other than cause, then the provisions of the preceding sentence shall not apply.

12. No Contract of Employment. The terms of this letter agreement or of any modification hereof do not create an employment contract and do not give you the right to remain in the employ of Mykrolis or its subsidiaries, you shall continue to be an employee-at-will and shall remain subject to discharge at any time without cause, notice or payment in lieu of notice.

13. Governing Law. This letter agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts as applied to transactions taking place wholly within Massachusetts between Massachusetts residents.

I hope that the above is satisfactory to you. If you accept the relocation benefits specified in this letter and agree to the obligations set forth herein please evidence your acceptance of this agreement by countersigning this letter in space indicated below and returning one countersigned copy to the undersigned, whereupon this letter shall become the binding agreement between you and your representatives and Mykrolis and its successors.

Sincerely,

/s/ Jean-Marc Pandraud

Jean-Marc Pandraud

President & Chief Operating Officer

Mykrolis Corporation

Agreed and Accepted as of the above specified date:

  /s/ Gerry Mackay.

John Gerald MacKay

Appendix A

Coldwell Banker Residential Brokerage Relocation Program

Buyer Value Option (BVO) Process Flow	Guaranteed Buyout Offer (GBO) Process Flow	Remarks
1. CBRB provides a Managed Marketing Program to the employee with a qualified RE agent to assist in the procurement of a qualified buyer.	1. CBRB provides a Managed Marketing Program to the employee with a qualified RE agent to assist in the procurement of a qualified buyer.	Broker Price Opinion determines the initial listing price and takes into consideration the need of employee to sell their home in the least amount of time for the highest price possible.
	2. Two relocation appraisals, by independent appraisers, are completed on employee’s property and averaged to determine the basis for the employer’s buy out offer to the employee. Employee has a mandatory marketing period to sell home through BVO program of from April 21, 2003 through June 23, 2003 before being able to accept GBO (If an outside buyer is not found within this period, skip to # 10 in this process flow). Inspections will be ordered on property if needed.	This protects the company from generally overpaying for employees home. All appraisers are instructed to complete valuation based on a 90-120 day marketing time.
2. Once a bona fide buyer has been found and the offer is verbally negotiated, CBRB signs the Purchase and Sale agreement with the buyer on the employee’s home.	3. If a bona fide buyer has been found and the offer is verbally negotiated, CBRB signs the Purchase and Sale agreement with the buyer on the employee’s home.	Both process are the same at this juncture if an outside buyer has been identified. Since the employee has a mandatory 90-day marketing period the likelihood of obtaining an outside buyer is good.
3. CBRB extends an offer to the employee under the same terms and conditions as the outside buyer’s offer.	4. CBRB extends an offer to the employee under the same terms and conditions as the outside buyer’s offer.
4. Employee signs and returns the CBRB purchase agreements along with title documents to transfer ownership to CBRB.	5. Employee signs and returns the CBRB purchase agreements along with title documents to transfer ownership to CBRB.
5. CBRB takes possession of the property on behalf of the Employer until the closing.	6. CBRB takes possession of the property on behalf of the Employer until the closing
6. CBRB signs new listing agreement with agent obligating CBRB to pay the commission on behalf of Employer.	7. CBRB signs new listing agreement with agent obligating CBRB to pay the commission on behalf of Employer.

Buyer Value Option (BVO) Process Flow	Guaranteed Buyout Offer (GBO) Process Flow	Remarks
7. Equity due employee is calculated and disbursed per client policy.	8. Equity due employee is calculated and disbursed per client policy.
8. CBRB closes property with buyer and provides a final financial reporting to client detailing all expenditures to acquire and resell employee’s property.	9. CBRB closes property with buyer and provides a final financial reporting to client detailing all expenditures to acquire and resell employee’s property.
	10. An offer is made to the employee by CBRB on behalf of the Employer based on the average of the 2 appraisals. Contracts and a deed package are sent to the employee to be signed and returned to CBRB in the event an outside buyer is not identified within the mandatory marketing period.
	11. Once the employee accepts the GBO offer, CBRB funds employee equity on home prorated to vacate date.	Company now becomes responsible for paying carrying costs on employees home to include; mortgage, taxes, utilities and maintenance.
	12. CBRB lists property with qualified agent at recommended appraisal price for timely sale.	Company may or may not take a loss on sale on the home depending on present market conditions. We ask all appraisers to include forecasting in their original appraisals to identify either market increases or decreases to help offset any potential loss to the company.
	13. Once a bona fide buyer is found, CBRB enters in contract with buyer and manages home through to successful closing.
	14. CBRB closes property with buyer and provides a final financial reporting to client detailing all expenditures to acquire and resell employee’s property and will either invoice client for outstanding bills or refunds client any unused funds.

Appendix 2

List of Essential Personal Items and Household Goods

Essential Personal Items and Household Goods includes clothing, furniture, appliances, entertainment equipment, computers and peripherals, china, glassware, dinner ware, books, moveable rugs, personal effects and other personal property commonly found in the home but EXCLUDES the following:

Automobiles	Explosive, or flammable materials
Snowmobiles, jet skis,	Firearms and other weapons
motorcycles and ATVs	Items commonly treated as “fixtures”
Boats and yachts	livestock and pets
Trailers	Plants and perishable goods
Campers	Antique furniture and items and other
Jewelry, watches, precious	articles of extraordinary value
metals and gems, silver	Currency, stamp collections, rare coins
and silver service	Collectors items or documents
Heirlooms and articles of peculiar
sentimental value

EX-10.6

Exhibit 10.6

MYKROLIS CORPORATION

2003 EMPLOYMENT INDUCEMENT AND ACQUISITION STOCK OPTION PLAN

1.    NAME AND PURPOSE.    This plan shall be called the Mykrolis Corporation 2003 Employment Inducement and Acquisition Stock Option Plan (the “Plan”). The Plan has been established to advance the interests of Mykrolis Corporation (“Mykrolis”) by providing a form of stock-based compensation which will permit the Mykrolis to induce highly qualified individuals to accept employment with the Mykrolis or with any of its subsidiaries and will permit Mykrolis to retain qualified employees of companies acquired by Mykrolis or its subsidiaries.

2.    EFFECTIVE DATE AND TERM OF THE PLAN.    The Plan shall become effective as of July 1, 2003 (the “Effective Date”). Options may not be granted under the Plan after the tenth (l0th) anniversary of the Effective Date (the “Term”); provided, however, that all options outstanding as of that date shall remain or become exercisable pursuant to their terms and the terms of the Plan.

3.    ADMINISTRATION.    The Plan shall be administered by the Board of Directors of the Mykrolis (the “Board”) or by Management Development & Compensation Committee of the Board (the “Committee”) composed solely of two or more “Non-Employee Directors” (as such term is defined under Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). References herein to the Committee shall be deemed to refer to the Board in the event that the administration of the Plan has not been delegated to the Committee. The Committee may, from time to time, establish such regulations, provisions and procedures, within the terms of the Plan, as in the opinion of its members may be advisable in the administration of the Plan. A majority of the members of the Committee shall constitute a quorum, and the acts of a majority of a quorum at any meeting, or acts reduced to or approved in writing by a majority of the members of the Committee, shall be the valid acts of the Committee. The interpretation and construction by the Committee of any provisions of the Plan or of any option granted pursuant to the Plan shall be final and binding upon Mykrolis and any optionee. No member of the Board of Directors of Mykrolis or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any option granted pursuant thereto.

4.    STOCK AVAILABLE FOR AWARDS.    Subject to the adjustments as provided in Subsection 7.7, the aggregate number of shares of common stock, par value $.01 per share, of Mykrolis (the “Common Stock”) reserved for issue under the Plan shall be the aggregate of (1) 350,000 shares of Common Stock, plus (2) an annual increase to be added on the date of each annual meeting of the stockholders of Mykrolis, beginning with the 2004 annual meeting of the stockholders, equal to one quarter of one percent (0.25%) of the outstanding shares of Common Stock on such date or such lesser amount determined by the Board, The shares of Common Stock that may be delivered in satisfaction of Awards and Options under the Plan. may be authorized, but unissued, or reacquired shares of Common Stock (the “Shares”). Determinations as to the number of Shares that remain available for issuance under the Plan shall be made in accordance with such rules and procedures as the Committee shall determine from time to time.

If any outstanding option or other award under the Plan expires or is terminated for any reason before the end of the Term of the Plan, the Shares allocable to the unexercised portion of such option shall become available for the grant of other options under the Plan. No shares delivered to Mykrolis in full or partial payment upon exercise of an option pursuant to Subsection 7.3 or in full or partial payment of any withholding tax liability permitted under Section 11 shall become available for the grant of other awards under the Plan.

5.    PARTICIPATION.    Subject to the limitations contained in this Section 5, participants in the Plan (“Participants”) shall include: (i) any prospective or newly-hired employee or Rehire Employee (as defined in paragraph 6 below) of Mykrolis or any of its subsidiaries, in either case to the extent that an award under this Plan is a material inducement to such person’s acceptance of employment with Mykrolis or a subsidiary of Mykrolis; and (ii) any employee of a company (the “Target”) that Mykrolis or any subsidiary of Mykrolis acquires, to the extent that an award under this Plan is in connection with such person’s acceptance of employment with Mykrolis following the acquisition of Target by Mykrolis or a subsidiary of Mykrolis. Participants will be eligible to be granted options to purchase Shares in accordance and consistent with the terms and conditions of the Plan. Except as provided herein, terms and conditions of options granted to a Participant at any given time need not be the same for any other grant of options.

6.    AWARDS.    Awards under this Plan may consist of any or a combination of stock options, restricted stock awards, unrestricted stock awards, deferred stock awards, or awards of securities (other than stock options) convertible into or exchangeable for Shares on such terms as the Committee determines. Awards may be granted under this Plan: (i) as a material employment inducement to persons being hired by Mykrolis or any subsidiary of Mykrolis, and to persons rehired by Mykrolis or any subsidiary of Mykrolis following a bone fide period of interruption of employment (a “Rehire Employee”); or (ii) to convert, replace or adjust outstanding options held by a person employed by any Target to reflect the acquisition of Target by Mykrolis or a subsidiary of Mykrolis. Subject to the foregoing, the Committee shall be authorized to determine from time to time the Participants to be granted Awards, the number of Shares subject to such Awards, and the terms and conditions of the Awards to be granted. All Awards granted under this Section must be approved by either the Board or the Committee prior to such grant.

6.1.    Notice of Awards.    To the extent required by applicable regulations of the Securities & Exchange Commission and of the New York Stock Exchange, Mykrolis shall: (i) provide the New York Stock Exchange with written notice of each Award under this Plan; and (ii) promptly disclose all employment inducement Awards under this Plan in a press release describing the material terms of the award, including the recipient(s) of the Award and the number of shares involved in the Award. Failure to comply with the provisions of this Subsection 6.1 shall not invalidate any Award grant or in any way impair or invalidate the exercise thereof.

7.    TERMS AND CONDITIONS OF OPTIONS GRANTED UNDER THE PLAN.    All stock options granted under the Plan shall be non-statutory options not intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). Each stock option granted under the Plan shall provide that such option will not be treated as an “incentive stock option,” as that term is defined in Section 422(b) of the Code. All stock options granted under this Plan

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shall be evidenced by agreements in such form as the Committee shall from time to time approve, which agreements shall comply with and be subject to the following conditions:

7.1.    Term of Options.    The term of each option shall be for a period of not greater than ten (10) years from the date of grant of the option.

7.2.    Option Price.    The exercise price of each option shall be equal to one hundred percent (100%) of the Fair Market Value of the shares of Common Stock on the date of the grant of the option. As used herein the term “Fair Market Value” shall mean the closing price of a share of Mykrolis Common Stock on the New York Stock Exchange (“NYSE”) on the day the option is granted or if no sale of shares of Common Stock is reflected on the NYSE on that day, on the next preceding day on which there was a sale of shares of Common Stock reflected on the NYSE.

7.3.    Medium of Payment.    The option exercise price shall be payable to Mykrolis in United States dollars in cash or by check, bank draft, or money order payable to the order of Mykrolis or if permitted by the Committee: (i) through the delivery of shares of the Common Stock with a Fair Market Value on the date of the exercise equal to the option price, provided such shares are used as payment to acquire not less than 100 Shares, (ii) by delivery of an unconditional and irrevocable undertaking by a broker to deliver promptly to Mykrolis sufficient funds to pay the exercise price, or (iii) by a combination of the above. Fair Market Value will be determined in the manner specified in Subsection 7.2 except as to the date of determination.

7.4.    Exercise of Options.    Except, in the case of awards made pursuant to Section 6(ii), to the extent more favorable to the Participant than the terms of the Target award being converted, replaced or adjusted, the Committee shall have the authority to determine, at the time of grant of each option pursuant to Section 6, the times at which an option may be exercised and any conditions precedent to the exercise of an option. An option shall be exercisable upon written notice to the Chief Financial Officer of Mykrolis or his or her designee, as to any or all Shares covered by the option, until its termination or expiration in accordance with its terms or the provisions of the Plan. Notwithstanding the foregoing, an option shall not at any time be exercisable with respect to less than 100 Shares unless the remaining Shares covered by an option are less than 100 Shares. The option exercise price for the Shares purchased pursuant to an option shall be paid in full upon delivery to the optionee of certificates for such Shares. Exercise by an optionee’s heir or personal representative shall be accompanied by evidence of his or her authority to act, in a form reasonably satisfactory to Mykrolis.

7.5.    Termination of a Participant’s Service with Mykrolis for any Reason Other than Death, etc.    Except, in the case of awards made pursuant to Section 6(ii), to the extent more favorable to the Participant than the terms of the Target award being converted, replaced or adjusted, in the event an optionee shall cease to serve Mykrolis or any subsidiary of Mykrolis as an employee for any reason other than such optionee’s death or Permanent Disability (as defined in Subsection 7.6 below), each option held by such optionee shall, to the extent rights to purchase shares under the option have been accrued at the time such optionee ceases to serve as an employee, remain exercisable, in whole or in part, by the optionee, subject to prior expiration according to its terms and other limitations imposed by the Plan, for a period of ninety (90) days following the

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optionee’s cessation of service as an employee of Mykrolis. If the optionee dies after such cessation of service, the optionee’s options shall be exercisable in accordance with Subsection 7.6 hereof.

7.6.    Termination of Service for Death or Permanent Disability.    Except, in the case of awards made pursuant to Section 6(ii), to the extent more favorable to the Participant than the terms of the Target award being converted, replaced or adjusted, if an optionee ceases to be an employee by reason of death or Permanent Disability, each option held by such optionee shall immediately become exercisable and shall remain exercisable, in whole or in part, by (in the case of Permanent Disability) the optionee or (in the case of death) the personal representative of the optionee’s estate. If an optionee dies or a Permanent Disability occurs during the extended exercise period following cessation of service specified in Subsection 7.5 above, such option may be exercised any time within the longer of such extended period or one (1) year after death or Permanent Disability, subject to the prior expiration of the term of the option. For purposes of this Subsection, “Permanent Disability” shall mean a determination by the Social Security Administration or any similar successor agency that an optionee is “permanently disabled,” and the date on which a Permanent Disability is deemed to have occurred shall be the date on which such determination by such agency shall have been made.

7.7.    Adjustment in Shares Covered by an Option.    Shares covered by options shall be subject to adjustment as follows:

7.7.1.    Stock Splits and Dividends, etc.    The number of shares covered by each outstanding option, and the purchase price per share thereof, shall be proportionately adjusted for any increase or decrease in the number of issued and outstanding shares resulting from a split in or combination of shares or the payment of a stock dividend on the shares or any other increase or decrease in the number of such shares effected without receipt of consideration by Mykrolis.

7.7.2.    Acquisitions.    If Mykrolis shall be the surviving corporation in any merger or consolidation or if Mykrolis is merged into a wholly-owned subsidiary solely for purposes of changing Mykrolis’s state of incorporation, each outstanding option shall pertain to and apply to the securities to which a holder of the number of shares subject to the option would have been entitled to receive in such transaction.

7.7.3.    Merger or Consolidation where Mykrolis is not the Survivor.    In the event of: (i) a consolidation or merger in which Mykrolis is not the surviving corporation or which results in the acquisition of all or substantially all of Mykrolis’ then outstanding common stock by a single person or entity or by a group of persons and/or entities acting in concert; (ii) a sale or transfer of all or substantially all Mykrolis’ assets, or (iii) a dissolution or liquidation of Mykrolis; then all outstanding options shall vest and if relevant become exercisable and all deferrals, other than deferrals of amounts that are neither measured by reference to nor payable in shares of Stock, shall be accelerated, immediately prior to any such transaction and upon consummation of such transaction all options then outstanding and

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requiring exercise shall be forfeited unless assumed by an acquiring or surviving entity or its affiliate as provided in the following sentence. In the event of a any such transaction, unless otherwise determined by the Board, all Awards that are payable in shares of Stock and that have not been exercised, exchanged or converted, as applicable, shall be converted into and represent the right to receive the consideration to be paid in such transaction for each share of Stock into which such option is exercisable, exchangeable or convertible, less the applicable exercise price or purchase price for such option. In connection with any such transaction in which there is an acquiring or surviving entity, the Board may provide for substitute or replacement options from, or the assumption of options by, the acquiring or surviving entity or its affiliates, any such substitution, replacement or assumption to be on such terms as the Board determines, provided that no such replacement or substitution shall diminish in any way the acceleration of options provided for in this subsection.

7.7.4.    Change in Par Value.    In the event of a change in the shares as presently constituted, which is limited to a change of all of its authorized shares with par value into the same number of shares with a different par value or without par value, the shares resulting from any such change shall be deemed to be the Shares within the meaning of the Plan.

To the extent that the foregoing adjustments relate to stock or securities of Mykrolis, such adjustments shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Any such adjustment may provide for the elimination of any fractional share which might otherwise become subject to an option. Except as expressly provided in this Subsection 7.7, the optionee shall have no rights by reason of any split or combination of shares of stock of any class or the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class or by reason of any dissolution, liquidation, merger, or consolidation or spin-off of assets or stock of another corporation, and any issue by Mykrolis of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of stock subject to the option. The grant of an option pursuant to the Plan shall not affect in any way the right or power of Mykrolis to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure, or to merge or to consolidate or to dissolve, liquidate or sell, or transfer all or any part of its business or assets.

7.8.    Rights of a Stockholder.    An optionee shall have no rights as a stockholder with respect to any Shares covered by his or her option until the date on which the optionee becomes the holder of record of such Shares. No adjustment shall be made for dividends, distributions, or other rights for which the record date is prior to the date on which he or she shall have become the holder of record thereof, except as provided in Subsection 7.7.

7.9.    Postponement of Delivery of Shares and Representations.    Mykrolis, in its discretion, may postpone the issuance and/or delivery of Shares upon any exercise of an option until completion of the registration or other qualification of the Common Stock under any state and/or federal law, rule or regulation or the listing of the Common Stock

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on such securities exchange, as Mykrolis may consider appropriate, and may require any person exercising an option to make such representations, including a representation that it is the optionee’s intention to acquire Shares for investment and not with a view to distribution thereof, and furnish such information as it may consider appropriate in connection with the issuance or delivery of the Shares in compliance with applicable laws, rules, and regulations. In such event no Shares shall be issued to such optionee unless and until Mykrolis is satisfied with the accuracy of any such representations.

7.10.    Non-Transferability.    Except as the Committee otherwise expressly provides subject, in the case of awards made pursuant to Section 6(ii), to the extent more favorable to the Participant than the terms of the Target award being converted, replaced or adjusted, the options granted pursuant to the Plan may not be transferred by an optionee other than by will or by the laws of descent and distribution, and during an optionee’s lifetime an option may be exercised only by the optionee (or in the event of the optionee’s incapacity, the person or persons legally appointed to act on the optionee’s behalf).

7.11.    Other Provisions.    The option agreements authorized under the Plan shall contain such other provisions, including, without limitation, restrictions upon the exercise of the option, as the Committee shall deem advisable.

8.    ADDITION OF TARGET SHARES TO THE PLAN.    Shares available for grant under a pre-existing (within the meaning of the applicable New York Stock Exchange rules) stock option plan of a Target that was approved by the stockholders of the Target may be added to the pool of shares specified in Section 4 above subject to the following conditions:

• the number of shares added to the Plan shall be appropriately adjusted to reflect the acquisition transaction;

• the time during which the shares added to the Plan hereunder are available for grant is not extended beyond the period when they would have been available under the pre-existing Target plan, absent the transaction; and

• the options and other awards are not granted to individuals who were employed, immediately before the acquisition transaction, by Mykrolis or any subsidiary of Mykrolis existing prior to the acquisition transaction.

9.    ADJUSTMENTS IN SHARES AVAILABLE FOR OPTIONS.    The adjustments in number and kind of shares and the substitution of Shares, affecting outstanding options in accordance with Subsection 7.7 hereof, shall also apply to the number and kind of Shares issuable upon the exercise of options to be granted pursuant to Section 6 and the number and kind of Shares reserved for issuance pursuant to the Plan, but not yet covered by options.

10.    AMENDMENT OF THE PLAN.    The Board, insofar as permitted by law, shall have the right from time to time, with respect to any Shares at the time not subject to options, to suspend or discontinue the Plan or revise or amend it in any respect whatsoever.

11.    WITHHOLDING OF TAXES.    Mykrolis shall have the right to deduct from any payment to be made pursuant to this Plan, or to otherwise require, prior to the issuance or delivery of any Shares, payment by the optionee of any federal, state, or local taxes required by law to be

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withheld. Unless otherwise prohibited by the Committee, an optionee may satisfy any such withholding tax obligation by any of the following means or by a combination of such means: (i) tendering a cash payment; (ii) authorizing Mykrolis to withhold from the Shares otherwise issuable to the optionee a number of Shares having a Fair Market Value as of the Tax Date (as defined below) equal to the amount of withholding tax obligation; or (iii) delivering to Mykrolis unencumbered shares of Common Stock owned by the optionee having a Fair Market Value, as of the Tax Date, equal to the amount of the withholding tax obligation. The “Tax Date” shall be the date that the amount of tax to be withheld is determined. Fair Market Value shall be determined in the manner specified in Subsection 7.2, except as to the date of determination. An optionee’s election to pay the withholding tax obligation by either of (ii) or (iii) above shall be irrevocable, is subject to prior approval by the Committee, and must be made either six (6) months prior to the Tax Date or during the period beginning on the third business day following the date of release of Mykrolis’ quarterly or annual summary statement of sales and earnings and ending on the tenth business day following such date.

12.    RIGHT OF MYKROLIS TO TERMINATE PARTICIPANT’S SERVICE.    Nothing in this Plan or in the grant of any option hereunder shall in any way limit or affect the right of Mykrolis to terminate the employment of any Participant or optionee.

13.    APPLICATION OF FUNDS.    The proceeds received by Mykrolis from the sale of Shares pursuant to options will be used for general corporate purposes.

14.    NO OBLIGATION TO EXERCISE OPTION.    The granting of an option shall impose no obligation on the optionee to exercise such option.

15.    CONSTRUCTION.    This Plan shall be construed under the laws of the State of Delaware.

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EX-31.1

Exhibit 31.1

CERTIFICATIONS*

I, C. William Zadel, certify that:

(1) I have reviewed this Quarterly Report on Form 10-Q for the period ended September 27, 2003 of Mykrolis Corporation;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) [language deleted pursuant to Exchange Act Release No. 34 –47986] for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) [DELETED pursuant to Exchange Act Release No. 34-47986];

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 3, 2003

/s/    C. William Zadel        

C. William Zadel

Chairman of the Board and Chief Executive Officer

EX-31.2

Exhibit 31.2

I, Bertrand Loy, certify that:

(1) I have reviewed this Quarterly Report on Form 10-Q for the period ended September 27, 2003 of Mykrolis Corporation;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) [language deleted pursuant to Exchange Act Release No. 34 –47986] for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) [DELETED pursuant to Exchange Act Release No. 34-47986];

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 3, 2003

/s/    Bertrand Loy        

Bertrand Loy

Vice President and Chief Financial Officer

* Provide a separate certification for each principal executive officer and principal financial officer of the registrant. See Rules 13a-14(a) and 15d-14(a).

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES–OXLEY ACT OF 2002

In connection with the Quarterly Report of Mykrolis Corporation (the “Company”) on Form 10–Q for the period ending September 27, 2003 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), We, C. William Zadel, Chairman of the Board and Chief Executive Officer of the Company and Bertrand Loy, Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to §906 of the Sarbanes–Oxley Act of 2002, that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/    C. William Zadel

C. William Zadel

Chairman of the Board and Chief Executive Officer

November 3, 2003

/s/    Bertrand Loy

Bertrand Loy

Vice President and Chief Financial Officer

November 3, 2003