Exhibit 10.38


 


AMENDMENT TO


EMPLOYMENT AGREEMENT


 


THIS AMENDMENT TO EMPLOYMENT AGREEMENT is by and
between Vecco Instruments Inc., a Delaware corporation (the “Company”), and
John R. Peeler (“Executive”).


 


RECITALS


 


A.            The
parties hereto entered into an Employment Agreement dated effective July 1,
2007 (the “Agreement”) and desire to amend the Agreement as set forth herein.


 


B.            Capitalized
terms used in this Amendment and not defined are defined in the Agreement.


 


NOW THEREFORE, the parties,
intending to be legally bound, hereby agree as follows, effective December 31,
2008; provided, however, that any provision below required to apply as of a
date prior to December 31, 2008 in order for the Agreement to comply with Code
Section 409A shall be effective as of such earlier date:


 


1.             Where
the Agreement requires the following payments to be made to the Executive, the
following rules shall apply, and any inconsistent provision in the Agreement
shall be superseded:


 


(a)                                  The general release
and waiver of claims in Section 4 of the Agreement must be signed by the
Executive and returned within the reasonable time period designated by the
Company, in order to assure that payment shall be made within 90 days after the
Executive’s termination of employment. The Executive may not designate the
taxable year of payment within such 90 day period.


 


(b)                                 Annual bonus or
incentive pay otherwise payable under the Agreement after the end of a bonus
plan performance period shall be paid within 21⁄2 months after the end of the
calendar year (or, if applicable, the fiscal year of the Company) to which such
bonus or incentive pay relates (or where performance is measured over more than
one year, within 21⁄2 months after the end of the last such year of the
performance period).


 


2.                                       Section
14 of the Agreement is modified by inserting the following paragraph at the
beginning:


 


Each of the
payments and benefits under Section 3 of this Agreement is designated as a separate
payment for purposes of the short-term deferral rules under Treasury Regulation
Section 1.409A-1(b)(4)(i)(F), the exemption for involuntary terminations under
separation pay plans under Treasury Regulation Section 1.409A-1(b)(9)(iii), and
the exemption for medical expense reimbursements under Treasury Regulation
Section 1.409A-1(b)(9)(v)(B). As a result, (1) any payments that become vested
as a result of a qualifying termination that are made on or before the 15th day
of the third month following the later of the end of the Company’s taxable year
or the end of the Executive’s taxable year during which the Executive’s
termination of employment occurs, (2) any 


 

















 


additional payments that
are made on or before the last day of the second calendar year following the
year of the Executive’s termination and do not exceed the lesser of two times
Base Salary or two times the limit under Code Section 401(a)(17) then in
effect, and (3) the payment of medical expenses within the applicable COBRA
period, are exempt from the requirements of Code Section 409A.


 


3.                                       Section
14 of the Agreement is further modified by inserting the following sentences at
the end:


 


Notwithstanding anything to the
contrary contained in this Section 14, if the Executive dies prior to the
expiration of  the six month period set
forth herein, payment of any amounts previously withheld due to application of
this Section shall be paid to the Executive’s beneficiary as soon as
practicable following the Executive’s death. Whether Executive is a “specified
employee” within
the meaning of Code Section 409A to which the six month delay period may apply will
be determined by Company policy.


 


IN WITNESS
WHEREOF, this Amendment is executed to be effective on the date and year first
above written.


 


	
  VEECO INSTRUMENTS INC.

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Authorized Signatory

  	
   

  	
  /s/ John R.
  Peeler

  
	
   

  	
   

  	
   

  
	
  DATE: December 31, 2008

  	
   

  	
  DATE: December 28, 2008

  
				



 


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