Exhibit 10.38


 


Veeco Instruments Inc.


Annual Report on Form 10-K for the Year Ended
December 31, 2004


 


VEECO
INSTRUMENTS INC.


100
Sunnyside Boulevard, Suite B


Woodbury, NY  11797


 


July 7, 2004


 


John Bulman


P.O. Box 494


36 Casey Lane


Mount Sinai, NY 11766


 


Dear John:


 


By letter dated April 1,
2003, I had previously informed you of certain enhanced severance benefits
which Veeco was making available to you in recognition of the valuable
contributions you have made to Veeco’s success. 
In light of your continued efforts at Veeco, the salary continuation
benefit referred to in the April 1, 2003 letter is hereby increased to 12
months.  The terms and conditions for the
payment of this benefit, as described in the April 1, 2003 letter, will
continue to apply.


 


I appreciate the
commitment you have made to Veeco and it is with that understanding that you
have been selected to receive this severance benefit.


 


If you agree with the
foregoing, please sign below to so indicate.


 


	
  Sincerely,

  	
  ACCEPTED AND AGREED:

  
	
   

  	
   

  
	
  /s/ Edward H. Braun

  	
   

  	
  /s/ John Bulman

  	
   

  
	
  Edward H. Braun

  	
  John Bulman

  
	
  Chairman and Chief
  Executive Officer

  	
   

  
				



 





















 


VEECO
INSTRUMENTS INC.


100
Sunnyside Boulevard, Suite B


Woodbury, NY  11797


 


April 1, 2003


 


John Bulman


P O Box 494


36 Casey Lane


Mount Sinai, NY 11766


 


Dear John:


 


On behalf of Veeco, I am
pleased to offer to you enhanced severance arrangements in recognition of the
valuable contributions you have made to Veeco’s success.


 


In the event you are
terminated without “Cause” or you resign for “Good Reason” (each as defined
below), the following would apply:


 


(a) Veeco will pay you at
least 6 months severance in the form of a salary continuation benefit based on
your annual base salary in effect immediately prior to such termination (but
without regard to any salary reduction program then in place), less applicable
deductions.


 


(b) Any options to
purchase shares of Veeco common stock granted to you on or after the date
hereof (“Options”) which are held by you as of the date of such termination
shall remain exerciseable until the earlier of (x) 12 months following the date
of such termination and (y) the expiration of the original term of such
Options.


 


(c) In addition, if such
termination or resignation occurs within 12 months following a “Change of
Control” (as defined below), any Options which are held by you as of the date
of such termination that were not vested as of such date shall become
immediately and fully vested as of such date.


 


Receipt of the benefits
described above is conditioned upon your execution (without revocation) of a
general release of claims in a form satisfactory to Veeco, including
non-competition and non-solicitation provisions for the duration of the period
during which salary continuation benefits are payable as described above.  Please see the attached page for certain
additional provisions of this letter.


 


I appreciate the
commitment you have made to Veeco and it is with that understanding that you
have been selected as a key member of the Veeco team to receive these severance
benefits.


 


If you agree with the
foregoing, please sign below to so indicate.


 


	
  Sincerely,

  	
  ACCEPTED AND AGREED:

  
	
   

  	
   

  
	
  /s/ Edward H. Braun

  	
   

  	
  /s/ John Bulman

  	
   

  
	
  Edward H. Braun

  	
  John Bulman

  
	
  Chairman and Chief
  Executive Officer

  	
   

  
				



 


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Additional
Provisions


 


Please note that this
letter does not alter the “at-will” nature of your employment with Veeco.  This means that your employment may be
terminated by you or by Veeco at any time, with or without cause.  As described above, however, you may be
entitled to severance benefits depending upon the circumstances of the
termination of employment.


 


As used above, the
following definitions shall apply:


 


“Cause” shall mean
(i) your willful and substantial misconduct, (ii) your repeated, after written
notice, neglect of duties or failure to perform your assigned duties, (iii)
your commission of any material fraudulent act with respect to Veeco or its
business, or (iv) your conviction of (or plea of no contest to) a crime
constituting a felony.


 


“Change of Control”
shall mean:  (a) any person or group of
persons becomes the beneficial owner of securities representing 50 percent or
more of Veeco’s outstanding voting securities, or (b) the approval by Veeco’s
stockholders of one of the following:


 


(i)  Any merger or statutory plan of exchange (“Merger”)
in which Veeco would not be the surviving corporation or pursuant to which
Veeco’s voting securities would be converted into cash, securities or other
property, other than a Merger in which the holders of Veeco’s voting securities
immediately prior to the Merger have the same proportionate ownership of voting
securities of the surviving corporation after the Merger;


 


(ii)  Any Merger in which the holders of
outstanding voting securities of Veeco prior to such Merger will not, in the
aggregate, own a majority of the outstanding voting securities of the combined
entity after such Merger; or


 


(iii)  Any sale or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the Veeco’s assets or the adoption of any plan or proposal for Veeco’s
liquidation or dissolution.


 


“Good Reason”
shall mean  a reduction of your base
salary, other than as part of a salary reduction program affecting management
employees generally.


 


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