Exhibit 10.2


 


[LETTERHEAD]


 


October 31, 2005


 


Jeannine P.
Sargent


c/o Veeco Instruments Inc.


100 Sunnyside Boulevard, Suite B


Woodbury, NY  11797


 


Dear Jeannine:


 


We are pleased to provide this letter summarizing the proposed terms of
your promotion to the position of Executive Vice President, Metrology and
Instrumentation.  In addition, you will
continue to serve as Executive Vice President, Strategic Marketing and Business
Development, reporting to Ed Braun. 
Direction for Metrology and Instrumentation will be provided by Don
Kania.  The effective date of your promotion and
salary increase will be October 3, 2005; the effective date of your
participation in the long term incentive plan (described below) will coincide
with the implementation of this plan, currently targeted to be January 1,
2006.  The terms applicable to
your promotion are as follows:


 


•                            Your new bi-weekly salary will be
$12,115.39, which is equal to an annual salary rate of $315,000.


 


•                            You will be
eligible to participate in the annual Veeco Management Bonus Plan.  Your target bonus will be 60% of your base
earnings for the plan year.  Your 2005 bonus calculation will be based
on EBITA results vs. plan, apportioned at 75% Metrology and 25% Corporate.


 


•                            You will be eligible to participate in a
new long-term incentive plan.  Your
target bonus for this plan will be 75% of your actual annual bonus award.  Awards payable under this plan will be earned
over a three-year period and will be based on the achievement of performance
metrics to be defined.  We are currently
working to finalize the terms of this plan and will present the details to you
following its final approval.


 


•                            You will be granted a restricted stock
award in the amount of 25,000 shares of Veeco Common Stock under the Veeco 2000
Stock Incentive Plan. These shares will be subject to restrictions that will
lapse one-third, one-third and one-third on the first, second and third
anniversaries of the date of grant.


 


This letter, together with
the Additional Provisions attached hereto, sets forth the entire agreement
between the parties with respect to the subject matter hereof and supersedes
all prior agreements among the parties with respect thereto, except for any
employee confidentiality and/or assignment of inventions agreements which shall
continue in accordance with their terms.


 


 


 





















 


 


Jeannine, this promotion reflects your excellent contributions to the
growth of Veeco.  We look forward to a
long and rewarding relationship and to providing you with the challenge,
responsibility and opportunity that you desire.


 


 


	
  Sincerely,

  	
   

  
	
   

  	
   

  
	
  /s/ Edward H. Braun

  	
  /s/ Don R. Kania

  
	
  Edward H. Braun

  Chairman and Chief Executive Officer

  	
  Don R. Kania

  President and Chief Operating Officer

  



 


 


 


 


ACCEPTED AND AGREED:


 


 


	
  /s/ Jeannine P. Sargent

  	
  November 2, 2005

  
	
   

  	
   

  	
   

  	
   

  
	
  Jeannine P. Sargent

  	
   

  	
  Date

  



 


 


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Additional Provisions


 


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


 


Severance. 
Veeco will pay you a salary continuation benefit equal to 18 months of
your then current base salary, less applicable deductions.  You will also receive a pro rata portion of
the annual bonus and the long-term incentive bonus you would have received for
the year and applicable period, respectively, in which termination occurs under
plans in effect at the time of termination based on your and the Company’s
performance relative to the goals under such plans (less amounts previously
paid).  Such amount shall be payable with
respect to the annual bonus on the same date(s) that the Company makes its
annual bonus payments to employees generally with regard to such year and with
respect to the long term incentive bonus, as soon as practicable.  In addition, if you are enrolled in Veeco’s
medical and dental plans at the time of separation and elect to continue
coverage under COBRA, then your contribution amount during the period in which
salary continuation benefits are payable will be the normal employee
(Veeco-subsidized) contribution rate.


 


Extended
Exercise Period.  The exercise period for any Veeco stock
options granted to you on or after June 17, 2005 and held by you at the time of
such termination or resignation (“Options”) would continue until the earlier of
(x) 12 months following the date of such termination or resignation and (y) the
expiration of the original term of such Options.


 


Vesting Acceleration. 
In addition, if such termination or resignation occurs within 12 months
following a “Change of Control” (as defined below), (a) any unvested Options
shall become immediately and fully vested and exercisable as of such date, and
(b) any vesting requirements associated with the restricted shares will be
deemed satisfied as of such date.


 


Receipt of the separation
benefits described above is conditioned upon your execution (without
revocation) of a general release of claims, including non-competition and
non-solicitation provisions for the duration of the salary continuation period
described above, in the form attached as Annex A hereto.  If termination occurs as a result of a change
of control, the non-competition provisions shall apply to the Company as it
existed pre-acquisition.


 


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 


 


 


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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) a reduction of your base salary, other than as part of a salary
reduction program affecting management employees generally, (b) a material
reduction in the total benefits available to you under cash incentive, stock
incentive and other employee benefit plans, other than as part of a reduction
in benefits affecting similarly situated employees, generally, (c) an
involuntary diminution in your title, authority or responsibilities, including
a change in your immediate manager to a position other than the Company’s Chief
Executive Officer, or (d) the relocation of your primary place of work by more
than 50 miles from its then current location or your then current residence (it
being understood that your decision not to relocate would not be a basis for
Termination for Cause).


 


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.


 


 


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