**Exhibit 10.1**

 

 

1 Terminal Drive, Plainview,New York 11803 · Phone (516)677-0200 · Fax (516) 719-1219 · Internet www.veeco.com

 

September 20,2010

 

Dr. MarkR. Munch

 

Re:Green Acres Transaction / Retention Incentive Arrangement

 

DearMark:

 

Asyou know, Veeco Instruments Inc. (“Veeco” or the “Company”) recently signed adefinitive agreement for the sale of its Metrology business (the “Green Acres”transaction).  You are a valued member ofthe Veeco team whose contributions were and are considered critical to thecontinued operations and the effective marketing, sale, transition andintegration of Green Acres.  In thisconnection, we are pleased to confirm the following incentives, offered to youas a means of securing your continued service to Veeco through the deal closingdate (your “Continued Employment”) and your assistance with the transition andintegration of the business to the buyer and to provide you additionalfinancial security during and after this period.

 

1.               Transaction Incentive.  In exchange for (i) your ContinuedEmployment with Veeco and (ii) provided that the Green Acres transactionis closed and generates sale proceeds of $180 million or more, you will receivea Transaction Incentive based on the value of the deal.  The Transaction Incentive amount is based ona formula tied to the value of the deal. The following examples are provided asa reference.

 
| **Deal Sale Proceeds** | ** ** | **Transaction Incentive** | ** ** |
|----------------------------------|------------|--------------------------------|------------|
| $250 million:                    |       | $                              | 1,440,000  |   |
| $229 million:                    |       | $                              | 1,137,600  |   |
| $200 million:                    |       | $                              | 720,000    |   |
| $180 million:                    |       | $                              | 540,000    |   |

 

 

Theactual Transaction Incentive will be determined between the amounts shown aboveand calculated based on the actual value of the deal.  Payment of the Transaction Incentive, ifearned, will be made in a single lump sum within thirty (30) days of the dealclosing date.

 

TheTransaction Incentive will expire if the Green Acres transaction is not closedon or before July 1, 2011.

 

2.               Equity Incentive.  In exchange for (i) your ContinuedEmployment with Veeco, and (ii) provided that the Green Acres transactionis closed and generates sale proceeds of $200 million or more, then on theclosing date of the transaction, you will receive an equity incentive (the “EquityIncentive”) that will provide for:

 

·                  The acceleration of vesting,by twelve (12) months, of any then current, outstanding and unvested Veecoequity award, and

 

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·                  A period of twelve (12)months, not to exceed the original term of the stock option award, during whichany outstanding, vested stock options may be exercised.

 

Additionally,provided that (i) you accept a comparable offer of employment (a “ComparableOffer”), as that term is defined below, with the acquiring entity (the “Acquirer”),and (ii) you remain in the Acquirer’s employment for a period of at leastsix (6) months following the closing date, then on the six (6) monthanniversary of the closing date you will receive an additional equity incentive(the “Additional Equity Incentive”) that will provide for:

 

·                  The acceleration of vestingof any current and outstanding Veeco equity award remaining unvested at suchtime, and

·                  A period of six (6) months,not to exceed the original term of the stock option award, during which anysuch outstanding, vested stock options may be exercised.

 

Forpurposes of this Additional Equity Incentive, a Comparable Offer is defined asany offer of employment by the Acquirer that does not trigger the Good Reasonprovisions contained in the Company’s Senior Executive Change in ControlPolicy.

 

TheEquity Incentive and Additional Equity Incentive will expire if the Green Acrestransaction is not closed on or before July 1, 2011.

 

3.               ManagementBonus.  As a participant in the VeecoManagement Bonus Plan, you will be entitled to receive pro-rated managementbonus awards, if earned (the “Earned Bonuses”), for the year in which yourVeeco employment terminates as a direct result of the sale of the Green Acrestransaction.  Payment of Earned Bonuseswill be made no later than the time at which bonuses are paid to Veeco’s bonusplan participants generally.

 

4.               SeniorExecutive Change in Control Policy.  You are a participant in the Veeco Sr.Executive Change in Control Policy (the “CIC Policy”).  In accordance with the terms and conditionsof the CIC Policy, if you accept employment with the Acquirer, then you may beentitled to certain severance benefits in the event of your termination ofemployment in connection with or during the eighteen (18) month periodfollowing a Group Change in Control.  Forpurposes of the CIC Policy, the Green Acres transaction qualifies as a GroupChange in Control.  In the event youqualify for and are paid benefits hereunder and later qualify for similarbenefits under the CIC Policy, you agree that no benefits will be payable underthe CIC Policy which are duplicative of the benefits payable hereunder.

 

5.               Eligibility / Requirements.  In order to receive the benefits describedherein, you must:

 

·                  Except as may be otherwise specified herein,remain employed by the Company (or the Acquirer, as the case may be) until suchbenefit is earned, and

·                  Devote your full-time working hours to youremployment with the Company (or the Acquirer, as the case may be), and

·                  Perform your job responsibilities and anyother duties that may be assigned in connection with the Green Acrestransaction and transition in good faith and to the best of your abilities, and

 

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·                  Execute (and not revoke) a general release ofclaims in a form satisfactory to Veeco (provided that you do not have torelease claims for payments or benefits to be provided hereunder at a futuredate).

 

6.               Employee at Will.  You and Veeco acknowledge that you are anemployee at will.  Nothing herein shallbe deemed to be an employment agreement or in any way create an obligation ofVeeco to offer or provide employment to you or for you to remain an employee ofVeeco.

 

7.               Tax Withholding.  Veeco shall be entitled to withhold from thepayments to be made hereunder all federal, state and local taxes that employersare required by law to withhold therefrom.

 

8.               Amendment; Waiver.  The provisions of this Agreement may not bemodified, amended or waived except in writing signed by both partieshereto.  The waiver of compliance withany provision of this Agreement shall not operate as a waiver of any otherprovision of this Agreement or of any subsequent breach of this Agreement.

 

9.               Cause. “Cause” shallmean (i) failure to carry out your duties, responsibilities andobligations as an employee, including your obligations under this Agreement, (ii) insubordination,(iii) the commission of an act of theft, fraud or embezzlement or (iv) thecommission of a crime punishable by imprisonment.

 

10.         Entire Agreement.  This Agreement sets forth the entireagreement between the parties pertaining to the subject matter herein andsupersedes any and all prior agreements or understandings between the partiespertaining to such subject matters.

 

11.         Severability.  Should any provision of this Agreement bedeclared illegal or unenforceable by any court of competent jurisdiction andcannot be modified to be enforceable, such provision shall immediately becomenull and void, leaving the remainder of this agreement in full force andeffect.

 

12.         Governing Law.  This Agreement shall be governed by andinterpreted in accordance with the laws of the State of California, withoutregard to the choice of law provisions thereof.

 

Mark,we sincerely appreciate your contributions to Veeco and look forward to yoursupport through this transition.  Pleasesign the acknowledgment below and return it to Veeco no later than the close ofbusiness on September 24, 2010, when this offer will expire if notpreviously accepted.

 
| VEECO INSTRUMENTS INC. | ACKNOWLEDGED  AND AGREED:            |
|------------------------|--------------------------------------|
|                   |                                 |   |
| By:                    | /s/  Robert W. Bradshaw              |   | Signed: | /s/  Mark R. Munch |
| Name:                  | Robert  W. Bradshaw                  |   | Name: | Mark  R. Munch |
| Title:                 | Sr.  Vice President, Human Resources |   | Date: | September  23, 2010 |

 

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