Exhibit 10.3


VEECO INSTRUMENTS INC.


NOTICE OF RESTRICTED
STOCK AWARD


Veeco Instruments
Inc. (the “Company”), is pleased to confirm the award to the employee named
below (“Participant”) of restricted shares of common stock, par value $0.01 per
share, of the Company described below.


	
  Participant:

  	
  __________________

  
	
   

  	
   

  
	
  Award Date:

  	
  __________________

  
	
   

  	
   

  
	
  Aggregate number of shares of Restricted Stock
  subject to the Award (the “Award”):

  	
  ______________ Shares

  
	
   

  	
   

  
	
  Vesting/Lapsing of Restrictions:

  	
  One-third of the shares comprising the Award will
  vest on each of first three anniversaries of the Award Date.

  
	
   

  	
   

  
	
  Additional Provisions:

  	
  This Award shall be subject to the terms and
  conditions set forth in the Veeco Instruments Inc. Terms and Conditions of
  Restricted Stock Award (June 2006) (the “Terms and Conditions”). Unless
  Participant notifies Veeco within 10 days following receipt of this notice
  that he or she declines this Award, Participant will be deemed to have
  accepted and agreed to the Terms and Conditions. Any such notice should be in
  writing and sent to Veeco Instruments Inc., Attention: General Counsel, 100
  Sunnyside Boulevard, Suite B, Woodbury, NY 11797 or by facsimile to
  516-677-0380.

  



 


VEECO INSTRUMENTS INC.


By:________________________


Name:


Title:









 



 


VEECO
INSTRUMENTS INC.


TERMS
AND CONDITIONS OF RESTRICTED STOCK AWARD

(JUNE 2006)


These TERMS AND CONDITIONS OF RESTRICTED STOCK AWARD
(JUNE 2006) (these “Terms and Conditions”) apply to any award by Veeco
Instruments Inc., a Delaware corporation (the “Company”), of the Company’s
common stock, par value $0.01 per share (“Common Stock”), subject to
certain restrictions (“Restricted Stock”), pursuant to the Veeco
Instruments Inc. 2000 Stock Incentive Plan (as it may be amended from time to
time, the “Plan”), which specifically references these Terms and
Conditions.


ARTICLE
I

DEFINITIONS


Section 1.1             In General.  Capitalized terms used but not defined herein
shall have the meanings assigned to such terms in the Plan and/or the
applicable Notice of Restricted Stock Award. 
In addition, wherever the following term is used in these Terms and
Conditions, it shall have the meaning specified below, unless the context
clearly indicates otherwise.


Section 1.2             “Restrictions” shall mean
the restrictions on sale or other transfer set forth in Section 4.2 and the
exposure to forfeiture set forth in Section 3.1.


ARTICLE II.

RESTRICTED STOCK  AWARD


Section 2.1             Award of Restricted Stock.  The Award is made in consideration of the
Participant’s agreement to remain in the employ of the Company and for other
good and valuable consideration which the Committee has determined exceeds the
aggregate par value of the shares of Common Stock subject to the Award.


Section 2.2             Award Subject to Plan.  The Award is subject to the terms and
provisions of the Plan, including without limitation Section 8 thereof.


ARTICLE III.

RESTRICTIONS


Section 3.1             Forfeiture; Repurchase Right.  Unless otherwise provided by written
agreement between the Company and Participant, any shares of Restricted Stock
which are not vested at the time Participant’s employment with the Company or
one of its Subsidiaries terminates shall thereupon be forfeited immediately and
without any further action by the Company or the Participant.



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Section 3.2             Vesting and Lapse of
Restrictions.  Subject to Section
3.1, the Restrictions shall lapse with respect to the Restricted Stock subject
to the Award, and the Participant’s rights thereto shall vest, as follows: 




	
  Date:

  	
   

  	
  Restrictions Shall

  Lapse with Respect to:

  
	
  First Anniversary of Award Date

  	
   

  	
  One-third of the Award

  
	
  Second Anniversary of Award Date

  	
   

  	
  One-third of the Award

  
	
  Third Anniversary of Award Date

  	
   

  	
  One-third of the Award

  






 


provided,
in each case, that the Participant remains continuously employed in active
service from the Award Date through such vesting date.


Section 3.3             Legend.  Until such time as the Restrictions have
lapsed, the Company may instruct the transfer agent for the Common Stock and/or
other record-keepers to include a restrictive code or similar notation in its
records (or legend on stock certificates, if any) to denote the Restrictions
and any applicable federal and/or state securities laws restrictions relating
to Restricted Stock.  The notation or
legend may include the following:


“THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS SET FORTH IN THE
PLAN AND IN THE TERMS AND CONDITIONS APPLICABLE TO THE RESTRICTED STOCK AWARD,
COPIES OF WHICH ARE ON FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION.”


Section 3.4             Payment of Taxes; Issuance of
Shares.


(a)           Participant
understands, acknowledges and agrees that, unless a Section 83(b) election is
made (as described in Section 3.6), the difference between the Fair Market
Value of the Restricted Stock at the time it vests, and the amount, if any,
paid by the Participant for such stock is subject to state and federal income
taxes and Participant is responsible for paying such taxes.  If the Company is required to withhold any
such taxes, Participant hereby authorizes the Company to reduce the number of
vested shares of Restricted
Stock delivered to Participant at the time the restrictions lapse by the number of shares of Restricted
Stock required to satisfy such tax withholding requirements (based on the Fair
Market Value of shares at such time). 
Such shares of vested Restricted Stock shall be returned to the Company.


(b)           In
lieu of the reduction of shares delivered described in paragraph (a) above,
Participant may pay to the Company the amount of tax required to be withheld in
cash, by check or in other form satisfactory to the Company.  Such payment must be made by the date on
which the Restrictions lapse or such later date as is established by the
Company (not to exceed 15 days after the date on which the Restrictions lapse).


(c)           The
Shares will be deposited directly into Participant’s brokerage account with the
Company’s approved broker when vested and any applicable withholding
obligations have been satisfied.


Section 3.5             Certain Changes in
Capitalization.  If the shares of the
Company’s Common Stock as a whole are increased, decreased, changed into or
exchanged for a different number or kind of shares or securities of the
Company, whether through merger, consolidation, 



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reorganization, recapitalization, reclassification,
stock dividend, stock split, combination of shares, exchange of shares, change
in corporate structure or the like, the Committee, in its sole discretion,
shall have the discretion and power to determine and to make effective
provision for acceleration of the time or times at which any Restrictions shall
lapse or be removed.  In addition, in the
case of the occurrence of any event described in this Section 3.5, the Committee,
subject to the provisions of the Plan and these Terms and Conditions, shall
make an appropriate and proportionate adjustment in the number and kind of
shares of Restricted Stock, to the end that after such event the Participant’s
proportionate interest shall be maintained as before the occurrence of such
event.  Any such adjustment made by the
Committee shall be final and binding upon the Participant, the Company and all
other interested persons. In the event that the Participant receives any new or
additional or different shares or securities by reason of any transaction or
event described in this Section 3.5, such new or additional or different shares
or securities which are attributable to the Participant in his capacity as the
registered owner of the Restricted Stock then subject to Restrictions, shall be
considered to be Restricted Stock and shall be subject to all of the
Restrictions.


Section 3.6             Section 83(b) Election.  Participant understands that, under
Section 83(a) of the Internal Revenue Code of 1986, as amended (the “Code”),
the Participant will recognize as ordinary income the difference between the
amount, if any, paid for the shares of Common Stock and the Fair Market Value
of such shares at the time the Restrictions on such shares lapse.  Participant understands that, notwithstanding
the preceding sentence, Participant may elect to be taxed at the time of the
Award Date, rather that at the time the Restrictions lapse, by filing an
election under Section 83(b) of the Code (an “83(b) Election”) with
the Internal Revenue Service within 30 days of the Award Date. In the event
Participant files an 83(b) Election, Participant will recognize ordinary income
in an amount equal to the difference between the amount, if any, paid for the
shares of Common Stock and the Fair Market Value of such shares as of the Award
Date, and will be responsible for paying all such taxes, and, if applicable,
paying the Company the amount of any tax required to be withheld thereon at the
time of such election, in the manner set forth in Section 3.4.  Participant further understands that a copy
of such 83(b) Election form must be filed with his or her federal income tax
return for the calendar year in which the Award falls, and a copy delivered to
the Company.  Participant acknowledges
that the foregoing is only a summary of the effect of United States federal
income taxation with respect to the award of Restricted Stock hereunder, and
does not purport to be complete or to deal with any state local, or foreign tax
requirements that might apply.  PARTICIPANT
FURTHER ACKNOWLEDGES THAT THE COMPANY IS NOT RESPONSIBLE FOR FILING THE
PARTICIPANT’S 83(b) ELECTION, AND THE COMPANY HAS DIRECTED PARTICIPANT TO SEEK
INDEPENDENT ADVICE REGARDING THE APPLICABLE PROVISIONS OF THE CODE, THE INCOME
TAX LAWS OF ANY MUNICIPALITY, STATE OR FEDERAL GOVERNMENT OR FOREIGN COUNTRY IN
WHICH PARTICIPANT MAY RESIDE, AND THE TAX CONSEQUENCES OF PARTICIPANT’S DEATH.



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ARTICLE IV.

OTHER PROVISIONS


Section 4.1             Book Entry; Escrow.  The Shares representing the Restricted Stock
will be held in book-entry or global certificate form.  If the Company instead chooses to issue share
certificates representing the Restricted Stock, the certificates for the
Restricted Stock shall be deposited in escrow with the Secretary or Assistant
Secretary of the Company or such other escrow holder as the Company may
appoint; provided, however, that in no event
shall the Participant retain physical custody of any certificates representing
unvested Restricted Stock issued to him. 
The deposited certificates shall remain in escrow until all of the
Restrictions lapse or shall have been removed.


Section 4.2             Restricted Stock Not
Transferable.  No Restricted Stock or
any interest or right therein or part thereof shall be liable for the debts,
contracts or engagements of the Participant or his successors in interest or
shall be subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be
voluntary or involuntary or by operation of law by judgment, levy, attachment,
garnishment or any other legal or equitable proceedings (including bankruptcy),
and any attempted disposition thereof shall be null and void and of no effect; provided, however, that this Section 4.2
shall not prevent transfers by will or by applicable laws of descent and
distribution.


Section 4.3             Rights as Stockholder.  Except as otherwise provided herein, upon
issuance of the shares of Restricted Stock pursuant to Section 4.1, the
Participant shall have all the rights of a stockholder with respect to said
shares, subject to the Restrictions herein, including the right to vote the
shares and to receive all dividends or other distributions paid or made with
respect to the shares or Restricted Stock; provided,
however, that any and all shares
of Common Stock received by the Participant with respect to such Restricted
Stock as a result of stock dividends, stock splits or any other form of
recapitalization shall also be subject to the Restrictions until the
Restrictions on the underlying shares of Restricted Stock lapse or are removed
pursuant to these Terms and Conditions.


Section 4.4             No Right to Continued Employment.  Nothing in these Terms and Conditions or in
the Plan shall confer upon the Participant any right to continue in the employ
of the Company or any of its Subsidiaries or shall interfere with or restrict
in any way the rights of the Company or its Subsidiaries, which are hereby
expressly reserved, to discharge the Participant at any time for any reason
whatsoever, with or without cause, except as may otherwise be provided by any
written agreement entered into by and between the Company and the Participant.


Section 4.5             Governing Law.   The laws of the State of Delaware shall
govern the interpretation, validity, administration, enforcement and
performance of the terms of these Terms and Conditions regardless of the law
that might be applied under principles of conflicts of laws.


Section 4.6             Conformity to Securities Laws.  The Participant acknowledges that the Plan
and these Terms and Conditions are intended to conform to the extent necessary
with all provisions of the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), and
any and all regulations and rules promulgated thereunder by the Securities and
Exchange Commission, including without limitation Rule 16b-3 under the 



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Exchange Act. 
Notwithstanding anything herein to the contrary, the Plan shall be
administered, and the Awards are granted, only in such a manner as to conform
to such laws, rules and regulations.  To
the extent permitted by applicable law, the Plan and these Terms and Conditions
shall be deemed amended to the extent necessary to conform to such laws, rules
and regulations.


Section 4.7             Amendment, Suspension and Termination.  The Award and these Terms and Conditions may
be wholly or partially amended or otherwise modified, suspended or terminated
at any time or from time to time by the Committee or the Board, provided that, except as may otherwise
be provided by the Plan, neither the amendment, suspension nor termination of
the Award or these Terms and Conditions shall, without the consent of the
Participant, alter or impair any rights or obligations under any Award.


Section 4.8             Notices.  Notices required or permitted hereunder shall
be given in writing and shall be deemed effectively given upon personal
delivery or upon deposit in the United States mail by certified mail, with
postage and fees prepaid, addressed to the Participant to his address shown in
the Company records, and to the Company at its principal executive office.


Section 4.9             Severability. The invalidity
or unenforceability of any paragraph or provision of these Terms and Conditions
shall not affect the validity or enforceability of any other paragraph or provision,
and all other provisions shall remain in full force and effect.  If any provision of these Terms and
Conditions is held to be excessively broad, then such provision shall be
reformed and construed by limiting and reducing it so as to be enforceable to
the maximum extent permitted by law.


Section 4.10           Certain Provisions Applicable to Participants Employed at International
Locations.  The Company will assess its requirements
regarding tax, social insurance and any other payroll tax (“Tax-Related Items”)
withholding and reporting in connection with the shares of Restricted
Stock.  These requirements may change
from time to time as laws or interpretations change.  Regardless of the actions of the Company in
this regard, Participant hereby acknowledges and agrees that the ultimate
liability for any and all Tax-Related Items is and remains his or her
responsibility and liability and that the Company makes no representations nor
undertakings regarding treatment of any Tax-Related Items in connection with any
aspect of the grant of Restricted Stock and does not commit to structure the
terms of the grant or any aspect of the Restricted Stock to reduce or eliminate
the Participant’s liability regarding Tax-Related Items.  In the event that the Company must withhold
any Tax-Related Items as a result of the grant or vesting of the Restricted
Stock, Participant agrees to make arrangements satisfactory to the Company to
satisfy all withholding requirements. 
Participant authorizes the Company to withhold all applicable
Tax-Related Items legally due from the Participant from his or her wages or
other cash compensation paid him or her by the Company and/or to reduce the
number of vested shares of Restricted Stock delivered to Participant at the
time the restrictions lapse, as contemplated by Section 3.4(a) above, to
satisfy such Tax-Related Items.


Section 4.11           Data Privacy.  Participant
consents to the collection, use and transfer of personal data as described in
this Section.  Participant understands
that the Company and its Subsidiaries hold certain personal information about
the Participant, including the Participant’s name, home address and telephone
number, date of birth, social security number or identification number, salary,
nationality, job title, any shares of stock or directorships held in the 


 



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Company, details of all options or any other
entitlement to shares of stock (restricted or otherwise) awarded, cancelled,
exercised, vested, unvested or outstanding in Participant’s favor, for the
purpose of managing and administering the Plan (“Data”).  Participant further understands that the
Company and/or its Subsidiaries will transfer Data amongst themselves as
necessary for the purpose of implementation, administration and management of
Participant’s participation in the Plan, and that the Company and/or any of its
Subsidiaries may each further transfer Data to any third parties assisting the
Company in the implementation, administration and management of the Plan (“Data
Recipients”).  Participant understands
that these Data Recipients may be located in the Participant’s country of
residence, the European Economic Area, or elsewhere throughout the world, such
as the United States.  Participant
authorizes the Data Recipients to receive, possess, use, retain and transfer
the Data, in electronic or other form, for the purposes of implementing,
administering and managing Participant’s participation in the Plan, including
any transfer of such Data, as may be required for the administration of the
Plan and/or the subsequent holding of shares on the Participant’s behalf, to a
broker or other third party with whom Participant may elect to deposit any
shares of stock acquired upon vesting of the shares of Restricted Stock.  Participant understands that he or she may,
at any time, review the Data, require any necessary amendments to it or
withdraw the consent herein in writing by contacting the Company.  Withdrawal of consent may, however, affect
Participant’s ability to participate in the Plan.


*     *    
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