Document:

Exhibit 10.1

 

AMENDMENT NO. 2 TO

VEECO INSTRUMENTS INC.

FIRST AMENDED AND RESTATED

EMPLOYEE STOCK PURCHASE PLAN

 

Effective on May 7, 2004

 

Section 3.02(a) of the Veeco Instruments Inc. First Amended
and Restated Employee Stock Purchase Plan, as amended (the “Plan”), is hereby
amended to read, in its entirety, as follows:

 

3.02                        Number of
Shares Subject to Plan

 

(a)                                  The
total number of shares of Stock available for Offerings under the Plan shall be
2,000,000 shares, subject to adjustment as set forth in paragraph (b)
below. Such Stock may be authorized and unissued shares, treasury shares, or
shares previously issued and reacquired by the Company. Any shares for which an
Offering to purchase expires or is terminated or canceled may again be made
subject to Offerings under the Plan.

 

*    *    *    *    *

 

This Amendment was approved by Veeco’s Board of Directors on
March 30, 2004, and by its stockholders on May 7, 2004.Exhibit 10.2

 

VEECO INSTRUMENTS INC.

2000 STOCK INCENTIVE PLAN

(formerly
known as the 2000 STOCK OPTION PLAN, as amended)

 

1.             Purpose

 

The purpose of the Plan is to provide a means through which the Company
and its Affiliates may attract capable persons to enter and remain in the
employ of the Company and Affiliates and to provide a means whereby employees,
directors and consultants of the Company and its Affiliates can acquire and
maintain Common Stock ownership, thereby strengthening their commitment to the
welfare of the Company and Affiliates and promoting an identity of interest
between stockholders and these employees.

 

The Plan provides for granting Incentive Stock Options, Nonqualified
Stock Options and Restricted Stock.

 

2.             Definitions

 

The following definitions shall be applicable throughout the Plan.

 

“Affiliate” means (i) any entity that directly or indirectly is
controlled by, or is under common control with the Company, (ii) any entity in
which the Company has a significant equity interest, and (iii) any Subsidiary;
in each case as determined by the Committee.

 

“Annual Revenue” means the Company’s or a business unit’s net sales for
the fiscal year, determined in accordance with generally accepted accounting
principles; provided, however, that prior to the fiscal year, the Committee
shall determine whether any significant item(s) shall be excluded or included
from the calculation of Annual Revenue with respect to one or more
Participants.

 

“Board” means the Board of Directors of the Company or, to the extent
the Board of Directors of the Company has authorized a committee thereof to
take action with respect to the Plan on its behalf, the committee so
authorized.

 

“Cash Flow” means, as to any Fiscal Period, the operating cash flow of
the Company for such Fiscal Period, provided that prior to the Fiscal Period,
the Committee shall determine whether any significant item(s) shall be included
or excluded from the calculation of Cash Flow with respect to one or more
Participants.

 

“Cause” means the Company or an Affiliate having “cause” to terminate a
Participant’s employment or service, as defined in any existing employment,
consulting or any other agreement between the Participant and the Company or an
Affiliate or, in the absence of such an employment, consulting or other
agreement, upon (i) the determination by the Committee that the
Participant has ceased to perform his duties to the Company or an Affiliate
(other than as a result of his incapacity due to physical or mental illness or
injury), which failure amounts to an intentional and extended neglect of his
duties to such party, (ii) the Committee’s

 

 

determination that the Participant has engaged or is about to engage in
conduct materially injurious to the Company or an Affiliate, (iii) the
Participant having been convicted of, or pleaded guilty or no contest to, a
felony or a crime involving moral turpitude or (iv) the failure of the
Participant to follow instruction of the Board or his direct superiors.

 

“Change in Control, shall, unless in the case of a particular Plan
Award, the applicable Plan Award Agreement states otherwise or contains a
different definition of “Change in Control”, be deemed to occur upon:

 

(i)            the
acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) (each, a “Person”) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
30% or more (on a fully diluted basis) of either (A) the then outstanding
shares of Common Stock, taking into account as outstanding for this purpose
such Common Stock issuable upon the exercise of options or warrants, the
conversion of convertible stock or debt, and the exercise of any similar right to
acquire such common stock (the “Outstanding Company Common Stock”) or
(B) the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors (the
“Outstanding Company Voting Securities”); provided, however, that
for purposes of the Plan, the following acquisitions shall not constitute a
Change of Control: (I) any acquisition by the Company, (II) any
acquisition by any employee benefit plan sponsored or maintained by the Company
or any Affiliate, (III) any acquisition by any Person which complies with
clauses (A), (B) and (C) of subsection (v) of this Section 2(f), or
(IV) in respect of an Award held by a particular Participant, any
acquisition by the Participant or any “affiliate” (within the meaning of 17
C.F.R. §230.405) of the Participant (persons described in clauses (I), (II),
and (IV) being referred to hereafter as “Excluded Persons”);

 

(ii)           Individuals
who, on the date hereof, constitute the Board (the “Incumbent Directors”) cease
for any reason to constitute at least a majority of the Board, provided
that any person becoming a director subsequent to the date hereof, whose
election or nomination for election was approved by a vote of at least
two-thirds of the Incumbent Directors then on the Board (either by a specific
vote or by approval of the proxy statement of the Corporation in which such
person is named as a nominee for director, without written objection to such
nomination) shall be deemed to be an Incumbent Director; provided, however,
that no individual initially elected or nominated as a director of the
Corporation as a result of an actual or threatened election contest with
respect to directors or as a result of any other actual or threatened
solicitation of proxies or consents by or on behalf of any person other than
the Board shall be deemed to be an Incumbent Director;

 

(iii)          the
dissolution or liquidation of the Company;

 

(iv)          the
sale of all or substantially all of the business or assets of the Company; or

 

(v)           the
consummation of a merger, consolidation, statutory share exchange or similar
form of corporate transaction involving the Company that requires the approval
of the Company’s stockholders, whether for such transaction or the issuance of
securities in the transaction (a “Business Combination”), unless immediately
following such

 

2

 

Business Combination: (A) more than 50% of the total voting power of
(x) the corporation resulting from such Business Combination (the “Surviving
Corporation”), or (y) if applicable, the ultimate parent corporation that
directly or indirectly has beneficial ownership of sufficient voting securities
eligible to elect a majority of the directors of the Surviving Corporation (the
“Parent Corporation”), is represented by the Outstanding Company Voting
Securities that were outstanding immediately prior to such Business Combination
(or, if applicable, is represented by shares into which the Outstanding Company
Voting Securities were converted pursuant to such Business Combination), (B) no
Person (other than any Excluded Person), is or becomes the beneficial owner,
directly or indirectly, of 30% or more of the total voting power of the
outstanding voting securities eligible to elect directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving Corporation)
and (C) at least a majority of the members of the board of directors of the
Parent Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) following the consummation of the Business Combination were
Incumbent Directors.

 

“Code” means the Internal Revenue Code of 1986, as amended.  Reference in the Plan to any section of
the Code shall be deemed to include any amendments or successor provisions to
such section and any regulations under such section.

 

“Committee” means a committee of at least two people as the Board may
appoint to administer the Plan or, if no such committee has been appointed by
the Board, the Board.  Unless the Board
is acting as the Committee or the Board specifically determines otherwise, each
member of the Committee shall, at the time he takes any action with respect to
a Plan Award under the Plan, be an Eligible Director.  However, the mere fact that a Committee member shall fail to
qualify as an Eligible Director shall not invalidate any Plan Award granted by
the Committee which Plan Award is otherwise validly made under the Plan.

 

“Common Stock” means the common stock, par value $0.01 per share, of
the Company.

 

“Company” means Veeco Instruments Inc. With respect to the definitions
of the Performance Goals, the Committee may determine that “Company” means
Veeco Instruments Inc. and one or more of its Affiliates.

 

“Date of Grant” means the date on which the granting of a Plan Award is
authorized, or such other date as may be specified in such authorization or, if
there is no such date, the date indicated on the applicable Plan Award
Agreement.

 

“Disability” means, unless in the case of a particular Plan Award, the
applicable Plan Award Agreement states otherwise, the entitlement of a
Participant to receive benefits under the long-term disability plan of the
Company or an Affiliate, as may be applicable to the Participant in question,
or, in the absence of such a plan, the complete and permanent inability by
reason of illness or accident to perform the duties of the occupation at which
a Participant was employed or served when such disability commenced or, as
determined by the Committee based upon medical evidence acceptable to it.

 

3

 

“Earnings Per Share” means as to any Fiscal Period, the Company’s Net
Income divided by a weighted average number of shares of Stock outstanding and
dilutive common equivalent shares of Stock deemed outstanding.

 

“EBITA” means Net Income before interest, taxes and amortization, each
as determined under generally accepted accounting principles or as otherwise
defined hereunder.

 

“Effective Date” means the means the date on which the Plan is approved
by the Board, subject to the approval of the stockholders of the Company.

 

“Eligible Director” means a person who is (i) a “non-employee director”
within the meaning of Rule 16b-3 under the Exchange Act, or a person meeting
any similar requirement under any successor rule or regulation and (ii) an
“outside director” within the meaning of Section 162(m) of the Code, and
the Treasury Regulations promulgated thereunder; provided, however,
that clause (ii) shall apply only with respect to grants of Plan Awards with
respect to which the Company’s tax deduction could be limited by
Section 162(m) of the Code if such clause did not apply.

 

“Eligible Person” means any (i) individual regularly employed by the
Company or an Affiliate who satisfies all of the requirements of
Section 6; provided, however, that no such employee covered
by a collective bargaining agreement shall be an Eligible Person unless and to
the extent that such eligibility is set forth in such collective bargaining
agreement or in an agreement or instrument relating thereto; (ii) director of
the Company or an Affiliate or (iii) consultant or advisor to the Company or an
Affiliate who may be offered securities pursuant to Form S-8 (which, as of the
Effective Date, includes only those who (A) are natural persons and (B) provide
bona  fide services to the Company or an Affiliate other than in
connection with the offer or sale of securities in a capital-raising
transaction, and do not directly or indirectly promote or maintain a market for
the Company’s securities).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Fair Market Value”, on a given date means (i) if the Stock is listed
on a national securities exchange, the closing price on the primary exchange
with which the Stock is listed and traded on the date prior to such date, or,
if there is no such sale on that date, then on the last preceding date on which
such a sale was reported; (ii) if the Stock is not listed on any national
securities exchange but is quoted in the National Market System of the National
Association of Securities Dealers Automated Quotation System (“NASDAQ”) on a
last sale basis, the closing price reported on the date prior to such date, or,
if there is no such sale on that date, then on the last preceding date on which
a sale was reported; or (iii) if the Stock is not listed on a national
securities exchange nor quoted in the NASDAQ on a last sale basis, the amount
determined by the Committee to be the fair market value based upon a good faith
attempt to value the Stock accurately and computed in accordance with
applicable regulations of the Internal Revenue Service.

 

“Fiscal Period” means the fiscal year, quarter or other period of the
Company.

 

“Incentive Stock Option” means an Option granted by the Committee to a
Participant under the Plan which is designated by the Committee as an incentive
stock option as

 

4

 

described in Section 422 of the Code and which otherwise meets the
requirements set forth herein.

 

“Mature Shares” means shares of Stock owned by a Participant which are
not subject to any pledge or other security interest and have either been held
by the Participant for six months, previously acquired by the Participant on
the open market or meet such other requirements as the Committee may determine
necessary in order to avoid an accounting earnings charge on account of the use
of such shares to pay the Option Price or satisfy a withholding obligation in
respect of a Plan Award.

 

“Net Income” means as to any Fiscal Period, the income after taxes of
the Company for such Fiscal Period determined in accordance with generally
accepted accounting principles, provided that prior to the Fiscal Period, the
Committee shall determine whether any significant item(s) shall be included or
excluded from the calculation of Net Income with respect to one or more
Participants.

 

“New Orders” means as to any Fiscal Period, the firm orders for a
system, product, part, or service that are recorded for such Fiscal Period.

 

“Non-Employee Director” means a member of the Board who is not an
employee of the Company or any Affiliate.

 

“Nonqualified Stock Option” means an Option granted by the Committee to
a Participant under the Plan which is not designated by the Committee as an
Incentive Stock Option.

 

“Normal Termination” means termination of employment or service with
the Company or an Affiliate:

 

(i)            on account of death or Disability;

 

(ii)           by the Company or such Affiliate without
Cause; or

 

(iii)          in the case of Plan Awards granted to an
Eligible Director, a resignation from or a failure to be re-elected to the
Board.

 

“Option” means an award granted under Section 7.

 

“Option Period” means the period described in Section 7(d).

 

“Option Price” means the exercise price for an Option as described in
Section 7(a).

 

“Original Effective Date” shall mean April 3, 2000, the date on
which the Company’s 2000 Stock Option Plan was approved by the Board.

 

“Participant” means an Eligible Person who has been selected by the
Committee to participate in the Plan and to receive a Plan Award pursuant to
Section 6.

 

5

 

“Performance Goals” means the goal(s) (or combined goal(s)) determined
by the Committee (in its discretion) to be applicable to a Participant with
respect to an award of shares of Restricted Stock.  As determined by the Committee, the Performance Goals applicable
to an award of shares of Restricted Stock may provide for a targeted level or
levels of achievement using one or more of the following measures:
(a) Annual Revenue, (b) Cash Flow, (c) Earnings Per Share, (d) EBITA,
(e)  Net Income, (f) New Orders, (g) Personal Goals, (h) Return
on Assets, and (i) Return on Sales. 
The Performance Goals may differ from Participant to Participant and from
award to award.  Any criteria used may
be (i) measured in absolute terms, (ii) compared to another company
or companies, (iii) measured against the performance of the Company as a
whole or a segment of the Company and/or (iv) measured on a pre-tax or post-tax
basis (if applicable).

 

“Personal Goals” means as to a Participant, the objective and
measurable goals set by a “management by objectives” or other process and
approved by the Committee (in its discretion).

 

“Plan” means this Veeco Instruments Inc. 2000 Stock Incentive Plan.

 

“Plan Award” means an award of Options or Restricted Stock as the
Committee determines.

 

“Plan Award Agreement” means any agreement between the Company and a
Participant who has been granted a Plan Award pursuant to Section 7 or 8
which defines the rights and obligations of the parties thereto.

 

“Restricted Stock” means an award of Common Stock subject to
restrictions as provided in Section 8 of this Plan.

 

“Restricted Stock Agreement” means a Plan Award Agreement relating to
the grant of Restricted Stock.

 

“Return on Assets” means as to any Fiscal Period, the Net Income of the
Company divided by the average of beginning and ending assets.

 

“Return on Sales” means as to any Fiscal Period, the percentage equal
to the Company’s Net Income or the business unit’s EBITA, divided by the
Company’s or the business unit’s revenue for such Fiscal Period.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Stock” means the Common Stock or such other authorized shares of stock
of the Company as the Committee may from time to time authorize for use under
the Plan.

 

“Subsidiary” means any subsidiary of the Company as defined in
Section 424(f) of the Code.

 

6

 

3.             Effective
Date and Duration

 

The Plan is effective as of the Effective Date; provided that the
effectiveness of the Plan and the validity of any and all Plan Awards granted
pursuant to the Plan is contingent upon approval of the Plan by the
shareholders of the Company in a manner intended to comply with the shareholder
approval requirements of Sections 162(m) and 422(b)(i) of the Code.

 

The expiration date of the Plan, on and after which no Plan Awards may
be granted hereunder, shall be the tenth anniversary of the Original Effective
Date; provided, however, that the administration of the Plan
shall continue in effect until all matters relating to Plan Awards previously
granted have been settled.

 

4.             Administration

 

The Committee shall administer the Plan.  A majority of the members of the Committee shall constitute a
quorum.  The acts of a majority of the
members present at any meeting at which a quorum is present or acts approved in
writing by a majority of the Committee shall be deemed the acts of the
Committee.

 

(a)           Subject
to the provisions of the Plan and applicable law, the Committee shall have the
power, in addition to other express powers and authorizations conferred on the
Committee by the Plan, to: (i) designate Participants; (ii) determine the type
or types of Plan Awards to be granted to a Participant; (iii) determine the
number of Shares to be covered by, or with respect to which payments, rights,
or other matters are to be calculated in connection with, Plan Awards;
(iv) determine the terms and conditions of any Plan Awards; (v) determine
whether, to what extent, and under what circumstances Plan Awards may be
settled or exercised in cash, Stock, other securities, other Plan Awards or
other property, or canceled, forfeited or suspended and the method or methods
by which Plan Awards may be canceled, forfeited, suspended or, if applicable,
settled or exercised; (vi) determine whether, to what extent, and under what
circumstances cash, Stock, other securities, other Plan Awards, other property
and other amounts payable with respect to a Plan Award shall be deferred either
automatically or at the election of the holder thereof or of the Committee;
(vii) interpret, administer reconcile any inconsistency, correct any default
and/or supply any omission in the Plan and any instrument or agreement relating
to, or Plan Award granted under, the Plan; (viii) establish, amend, suspend, or
waive such rules and regulations and appoint such agents as it shall deem
appropriate for the proper administration of the Plan; and (ix) make any other
determination and take any other action that the Committee deems necessary or
desirable for the administration of the Plan.

 

(b)           Unless
otherwise expressly provided in the Plan, all designations, determinations,
interpretations and other decisions under or with respect to the Plan or any
Plan Award or any documents evidencing Plan Awards shall be within the sole
discretion of the Committee, may be made at any time and shall be final,
conclusive and binding upon all parties, including, without limitation, the
Company, any Affiliate, any Participant, any holder or beneficiary of any Plan
Award, and any shareholder.

 

(c)           Notwithstanding
the above, no Committee member holding Options granted pursuant to
Section 7(a)(ii) hereof may participate in any action of the Committee
with respect to any claim or dispute regarding only that Committee member.

 

7

 

5.             Grant of
Awards; Shares Subject to the Plan

 

The Committee may, from time to time, grant Plan Awards to one or more
Eligible Persons; provided, however, that:

 

(a)           Subject
to Section 10, the aggregate number of shares of Stock in respect of which
Plan Awards may be granted under the Plan shall not exceed 7,030,000, of which
no more than 200,000 may be in the form of Restricted Stock;

 

(b)           Shares
of Stock authorized under the Plan shall be deemed to have been used in
settlement of Plan Awards whether or not they are actually delivered.  In the event any Plan Award shall be
surrendered, terminate, expire, or be forfeited, the number of shares of Stock
no longer subject thereto shall thereupon be released and shall thereafter be
available for new grants under the Plan;

 

(c)           Shares
of Stock delivered by the Company in settlement of Plan Awards granted under
the Plan may be authorized and unissued Stock or Stock held in the treasury of
the Company or may be purchased on the open market or by private purchase;

 

(d)           Subject
to Section 10, (i) no person may be granted Options under the Plan
during any calendar year with respect to more than 300,000 shares of Stock; provided
that such number shall be adjusted pursuant to Section 10 only in a manner
which will not cause Options granted under the Plan to fail to qualify as
“performance-based compensation” under Section 162(m) of the Code; and
(ii) no person may be granted Restricted Stock under the Plan during any
calendar year with respect to more than 50,000 shares of Stock;  provided that, in the case of (i)
above, such number shall be adjusted pursuant to Section 10 only in a
manner which will not cause the Plan Awards granted under the Plan to qualify
as “performance-based compensation” under Section 162(m) of the Code and
in the case of Plan Awards referred to in (ii) which were intended to qualify
as performance-based compensation, such number shall be adjusted as provided
above.

 

(e)           Without
limiting the generality of the preceding provisions of this Section 5, the
Committee may, but solely with the Participant’s consent, agree to cancel any
Plan Award under the Plan and issue a new Plan Award in substitution therefor
upon such terms as the Committee may in its sole discretion determine, provided
that the substituted Plan Award satisfies all applicable Plan requirements as
of the date such new Award is made, provided  further that,
without shareholder approval, no such action may lower the exercise price of a
previously granted Option.

 

6.             Eligibility

 

Participation shall be limited to Eligible Persons who have received
written notification from the Committee, or from a person designated by the
Committee, that they have been selected to participate in the Plan.

 

8

 

7.             Terms of
Options

 

(a)           Option
Grants.

 

(i)            Eligible
Persons.  The Committee is
authorized to grant one or more Incentive Stock Options or Nonqualified Stock
Options to any Eligible Person; provided, however, that no
Incentive Stock Options shall be granted to any Eligible Person who is not an
employee of the Company or a Subsidiary. 
Each Option so granted shall be subject to the following conditions of
this Section 7, or to such other conditions as may be reflected in the
applicable Plan Award Agreement.

 

(ii)           Eligible
Directors.  In addition to
discretionary grants of Options pursuant to Section 7(a)(i), each Participant
who is a Non-Employee Director of the Company shall receive upon initial
election to office and thereafter annually on the date of the Company’s annual
meeting of stockholders (provided that such date is at least 6 months
following such Eligible Director’s initial election to office) an Option to
acquire 10,000 shares of Stock at a price equal to the Fair Market Value of the
shares of Stock subject to such Option on the Date of Grant.

 

(b)           Option
Price.  The exercise price
(“Option Price”) per share of Stock for each Option shall be set by the
Committee at the time of grant but shall not be less than the Fair Market Value
of a share of Stock on the Date of Grant subject, in the case of an
Incentive Stock Option, to Section 7(g).

 

(c)           Manner of
Exercise and Form of Payment.  No shares of Stock shall be delivered pursuant to any exercise of
an Option until payment in full of the aggregate exercise price therefor is
received by the Company.  Options which
have become exercisable may be exercised by delivery of written notice of
exercise to the Committee accompanied by payment of the Option Price.  The Option Price shall be payable in cash
and/or, at the sole discretion of the Committee, shares of Stock valued at the Fair
Market Value at the time the Option is exercised (including by means of
attestation of ownership of a sufficient number of shares of Stock in lieu of
actual delivery of such shares to the Company), provided that such
shares of Stock are Mature Shares, or, in the discretion of the Committee, either
(i) in other property having a fair market value on the date of exercise equal
to the Option Price, (ii) by delivering to the Committee a copy of irrevocable
instructions to a stockbroker to deliver promptly to the Company an amount of
loan proceeds, or proceeds of the sale of the Stock subject to the Option,
sufficient to pay the Option Price or (iii) by such other method as the
Committee may allow.

 

(d)           Vesting.

 

(i)            In
General.  Unless otherwise provided
in a Stock Option Agreement or other written agreement between the Company and
a Participant, Options shall vest and become exercisable as follows:

 

(x)            with respect to one-third of the shares of
Stock covered by the Option, on the first anniversary of the Date of Grant;

 

9

 

(y)           with respect to an additional one-third of
the shares of Stock covered by the Option, on the second anniversary of the
Date of Grant;

 

(z)            with respect to the remaining one-third of
the shares of Stock covered by the Option, on the third anniversary of the Date
of Grant.

 

Notwithstanding the foregoing, the Committee may, in its sole
discretion, accelerate the exercisability of any Option, which acceleration
shall not affect the terms and conditions of any such Option other than with
respect to exercisability.  If an Option
is exercisable in installments, such installments or portions thereof which
become exercisable shall remain exercisable until the Option expires.

 

(ii)           Non-Employee
Directors.  Notwithstanding
Section 7(d)(i), Options granted to Eligible Directors shall be
immediately vested and exercisable as of the Date of Grant.

 

(e)           Option
Period and Termination.       An
Option may be exercised by the holder thereof in accordance with
Section 7(d) above; provided, however, that no Option shall
be exercisable later than seven years from the Date of Grant (the “Option
Period”).  Notwithstanding the
foregoing, unless the applicable Stock Option Agreement or other written
agreement between the Company and a Participant provides otherwise, an Option
shall expire earlier than the end of the Option Period in the following
circumstances:

 

(i)            If
prior to the end of the Option Period, the Participant shall undergo a Normal
Termination, the Option shall expire on the earlier of the last day of the
Option Period and the date that is three months after the date of such Normal
Termination; provided, however, that any Participant whose
employment with the Company or any Affiliate is terminated and who is
subsequently rehired by the Company or any Affiliate prior to the expiration of
the Option shall not be considered to have undergone a termination.  In the event of a Normal Termination, the
Option shall remain exercisable by the Participant for the period described in
the first sentence of this Section 7(e)(i), only to the extent the Option
was exercisable at the time of such Normal Termination.

 

(ii)           If
the Participant dies prior to the end of the Option Period and while still in
the employ or service of the Company or an Affiliate, or following a Normal
Termination but prior to the expiration of an Option, the Option shall expire
on the earlier of the last day of the Option Period and the date that is one
year after the date of death of the Participant.  In such event, the Option shall remain exercisable by the person
or persons to whom the Participant’s rights under the Option pass by will or
the applicable laws of descent and distribution until its expiration, only to
the extent the Option was exercisable by the Participant at the time of death.

 

(iii)          If
the Participant ceases employment or service with the Company and Affiliates
for reasons other than Normal Termination or death, the Option shall expire
immediately upon such cessation of employment or service.

 

10

 

(f)            Other Terms
and Conditions.  Except as
specifically provided otherwise in a Stock Option Agreement, each Option
granted under the Plan shall be subject to the following terms and conditions:

 

(i)            Each
Option or portion thereof that is exercisable shall be exercisable for the full
amount of such exercisable portion or for any part thereof.

 

(ii)           Each
Option shall cease to be exercisable, as to any share of Stock, when the
Participant purchases the share or when the Option expires.

 

(iii)          Subject
to Section 9(h), Options shall not be transferable by the Participant
except by will or the laws of descent and distribution and shall be exercisable
during the Participant’s lifetime only by the Participant.

 

(iv)          Each
Option shall vest and become exercisable by the Participant in accordance the
provisions of Section 7(d).

 

(v)           At
the time of any exercise of an Option, the Committee may, in its sole
discretion, require a Participant to deliver to the Committee a written
representation that the shares of Stock to be acquired upon such exercise are
to be acquired for investment and not for resale or with a view to the
distribution thereof.  Upon such a
request by the Committee, delivery of such representation prior to the delivery
of any shares of Stock issued upon exercise of an Option shall be a condition
precedent to the right of the Participant or such other person to purchase any
such shares.  In the event certificates
for Stock are delivered under the Plan with respect to which such investment
representation has been obtained, the Committee may cause a legend or legends
to be placed on such certificates to make appropriate reference to such
representation and to restrict transfer in the absence of compliance with
applicable federal or state securities laws.

 

(vi)          Each
Participant awarded an Incentive Stock Option under the Plan shall notify the
Company in writing immediately after the date he or she makes a disqualifying
disposition of any shares of Stock acquired pursuant to the exercise of such
Incentive Stock Option.  A disqualifying
disposition is any disposition (including any sale) of such Stock before the
later of (a) two years after the Date of Grant of the Incentive Stock Option
and (b) one year after the date the Participant acquired the Stock by
exercising the Incentive Stock Option.

 

(g)           Incentive
Stock Option Grants to 10% Stockholders.  Notwithstanding anything to the contrary in this Section 7,
if an Incentive Stock Option is granted to a Participant who owns stock
representing more than ten percent of the voting power of all classes of stock
of the Company or of a Subsidiary, the Option Period shall not exceed five
years from the Date of Grant of such Option and the Option Price shall be at
least 110 percent of the Fair Market Value (on the Date of Grant) of the Stock
subject to the Option.

 

(h)           $100,000 Per
Year Limitation for Incentive Stock Options.  To the extent the aggregate Fair Market
Value (determined as of the Date of Grant) of Stock for which Incentive Stock
Options are exercisable for the first time by any Participant during any
calendar year (under all plans of the Company) exceeds $100,000, such excess
Incentive Stock Options shall be treated as Nonqualified Stock Options.

 

11

 

(i)            Voluntary
Surrender.  The Committee may
permit the voluntary surrender of all or any portion of any Nonqualified Stock
Option granted under the Plan to be conditioned upon the granting to the
Participant of a new Option for the same or a different number of shares of
Stock as the Option surrendered or require such voluntary surrender as a
condition precedent to a grant of a new Option to such Participant.  Such new Option shall be exercisable at an
Option Price, during an Option Period, and in accordance with any other terms
or conditions specified by the Committee at the time the new Option is granted,
all determined in accordance with the provisions of the Plan without regard to
the Option Price, Option Period, or any other terms and conditions of the
Nonqualified Stock Option surrendered.

 

8.             Restricted Stock

 

(a)           Award of Restricted Stock.

 

(i)            The
Committee is authorized to award shares of Restricted Stock to any Eligible
Person.  Each award of Restricted Stock
shall be subject to the following conditions of this Section 8, or to such
other conditions as may be reflected in the applicable Restricted Stock
Agreement.

 

(ii)           The
Committee shall from time to time, in its sole and absolute discretion,
(A) select which Eligible Persons shall be awarded Restricted Stock,
(B) determine the purchase price, if any, and form of payment for
Restricted Stock; and (C) determine any other terms and conditions applicable
to such Restricted Stock, consistent with this Plan.

 

(iii)          Upon
the selection of a Participant to be awarded Restricted Stock, the Committee
shall instruct the Secretary of the Company to issue a certificate representing
such Restricted Stock and may impose such conditions on the issuance of such
Restricted Stock as it deems appropriate.

 

(b)           General Restrictions.

 

(i)            All
shares of Restricted Stock issued under this Plan (including any shares
received by holders thereof with respect to shares of Restricted Stock as a
result of stock dividends, stock splits or any other form of recapitalization)
shall, be subject to such restrictions as the Committee shall provide, which
restrictions shall be set forth in the applicable Restricted Stock Agreement
and may include, without limitation, restrictions concerning voting rights and
transferability and restrictions based on duration of employment with the
Company, Company performance and individual performance; provided, however,
that the Committee, on such terms and conditions as it determines to be
appropriate, may remove any or all of the restrictions imposed by the terms of
the Restricted Stock Agreement including, without limitation, upon a Change in
Control.  Restricted Stock may not be
transferred, sold or encumbered until all restrictions terminate or expire.

 

(ii)           The
Committee, in its sole discretion, may impose such other restrictions on Shares
of Restricted Stock as it may deem advisable or appropriate, in accordance with
this Section 8.

 

12

 

(iii)          The
Committee may set restrictions based upon the achievement of specific
performance objectives (Company-wide, divisional, or individual), applicable
federal or state securities laws, or any other basis determined by the
Committee in its discretion.

 

(c)           Section 162(m) Performance Restrictions.  For purposes of qualifying grants of
Restricted Stock as “performance-based compensation” under Section 162(m)
of the Code, the Committee, in its discretion, may set restrictions based upon
the achievement of Performance Goals. 
The Performance Goals shall be set by the Committee on or before the
latest date permissible to enable the Restricted Stock to qualify as
“performance-based compensation” under Section 162(m) of the Code.  In granting Restricted Stock which is intended
to qualify under Section 162(m) of the Code, the Committee shall follow
any procedures determined by it from time to time to be necessary or
appropriate to ensure qualification of the Restricted Stock under
Section 162(m) of the Code (e.g., in determining the Performance Goals).

 

(d)           Legend on Certificates.  The Committee, in its discretion, may legend
the certificates representing Restricted Stock to give appropriate notice of
such restrictions.  For example, the
Committee may determine that some or all certificates representing Shares of
Restricted Stock shall bear the following legend:

 

“The sale or other transfer of the shares of
stock represented by this certificate, whether voluntary, involuntary, or by
operation of law, is subject to certain restrictions on transfer as set forth
in the Veeco Instruments Inc. 2000 Stock Incentive Plan and in a Restricted
Stock Agreement.  A copy of the Plan and
such Restricted Stock Agreement may be obtained from the Secretary of Veeco
Instruments Inc.”

 

(e)           Termination of Employment.  Except as otherwise expressly provided for
herein or in the applicable Restricted Stock Agreement, any shares of
Restricted Stock which are subject to restriction at the time of an Employee’s
termination of employment with the Company for any reason, or when a director’s
service as director of the Company ends or when a consulting arrangement
terminates, as applicable, shall be forfeited upon such termination and the
Participant shall have no further rights to or with respect to such shares.

 

(f)            Repurchase of Restricted Stock.  The Committee shall provide in the terms of
each individual Restricted Stock Agreement that upon a termination of
employment of a Participant or, if applicable, upon a termination of any
consulting relationship between the restricted stockholder and the Company, the
Company shall have the right but not the obligation, to purchase any Restricted
Stock held by such Participant or consultant at a cash price per share equal to
the price paid by the Participant or consultant for such Restricted Stock;
provided, however, that provision may be made that no such right of repurchase
shall exist in the event of a Normal Termination or termination of consultancy
without Cause.

 

(g)           Restricted Stock Agreement.  Restricted Stock shall be issued only
pursuant to a written Restricted Stock Agreement, which shall be executed by
the Participant and an authorized officer of the Company and which shall
contain such terms and conditions as the Committee shall determine, consistent
with this Plan.

 

13

 

(h)           Escrow; Rights as a Stockholder.  The Secretary of the Company or such other
escrow holder as the Committee may appoint shall retain physical custody of
each certificate representing Restricted Stock until all of the restrictions
imposed under the Restricted Stock Agreement with respect to the shares
evidenced by such certificate expire or shall have been removed. While such
shares are held by the escrow holder, the Participant shall have, unless
otherwise provided by the Committee and subject to the provisions of this
Section 8, all the rights of a stockholder with respect to said shares,
subject to any restrictions among other shareholders of Common Stock, including
the right to receive all dividends and other distributions paid or made with
respect to the shares represented by such certificate; provided, however, that
in the discretion of the Committee, any extraordinary distributions with
respect to the Common Stock shall be subject to the restrictions set forth in
this Section 8.

 

(i)            Return of Restricted Stock to Company.  On the date set forth in the applicable
Restricted Stock Agreement, the Restricted Stock for which restrictions have
not lapsed shall revert to the Company and again shall become available for
grant under the Plan.

 

9.             General

 

(a)           Additional
Provisions of a Plan Award. 
Plan Awards granted to a Participant under the Plan also may be subject
to such other provisions (whether or not applicable to the benefit awarded to
any other Participant) as the Committee determines appropriate including,
without limitation, provisions to assist the Participant in financing the
purchase of shares of Stock upon the exercise of options, provisions for the
forfeiture of or restrictions on resale or other disposition of shares of Stock
acquired under any Plan Award, provisions giving the Company the right to
repurchase shares of Stock acquired under any Plan Award in the event the
Participant elects to dispose of such shares, provisions allowing the
Participant to elect to defer the receipt of shares of Stock upon the exercise
of Options for a specified time or until a specified event, and provisions to
comply with Federal and state securities laws and Federal and state tax
withholding requirements.  Any such
provisions shall be reflected in the applicable Plan Award Agreement.

 

(b)           Privileges
of Stock Ownership.  Except
as otherwise specifically provided in the Plan, no person shall be entitled to
the privileges of ownership in respect of shares of Stock which are subject to
Plan Awards hereunder until such shares have been issued to that person.

 

(c)           Government
and Other Regulations.  The
obligation of the Company to make payment of Plan Awards in shares of Stock or
otherwise shall be subject to all applicable laws, rules, and regulations, and
to such approvals by governmental agencies as may be required.  Notwithstanding any terms or conditions of
any Plan Award to the contrary, the Company shall be under no obligation to
issue, offer to sell or to sell and shall be prohibited from issuing, offering
to sell or selling any shares of Stock pursuant to a Plan Award unless such
shares have been properly registered for issuance or sale pursuant to the
Securities Act with the Securities and Exchange Commission or unless the
Company has received an opinion of counsel, satisfactory to the Company, that
such shares may be issued, offered or sold without such registration pursuant
to an available exemption therefrom and the terms and conditions of such
exemption have been fully complied with. 
The Company shall be under no obligation to register for issuance or
sale under the Securities Act any of the shares of Stock to be issued, offered
or

 

14

 

sold under the Plan.  If the
shares of Stock issued, offered for sale or sold under the Plan are issued,
offered or sold pursuant to an exemption from registration under the Securities
Act, the Company may restrict the transfer of such shares and may legend Stock
certificates representing such shares of Stock in such manner as it deems
advisable to ensure the availability of any such exemption.

 

(d)           Tax
Withholding.

 

(i)            A
Participant may be required to pay to the Company or any Affiliate and the
Company or any Affiliate shall have the right and is hereby authorized to
withhold from any shares of Stock or other property deliverable under any Plan
Award or from any compensation or other amounts owing to a Participant the
amount (in cash, Stock or other property) of any required tax withholding and
payroll taxes in respect of the issuance, vesting or exercise of any Plan
Award, or any payment or transfer under a Plan Award or under the Plan and to
take such other action as may be necessary in the opinion of the Company to
satisfy all obligations for the payment of such taxes.

 

(ii)           Without
limiting the generality of clause (i) above, the Committee may, in its sole
discretion, permit a Participant to satisfy, in whole or in part, the foregoing
withholding liability (but no more than the minimum required withholding
liability) by (A) delivery of shares of Stock owned by the Participant
(which shares must be Mature Shares) with a Fair Market Value equal to such
withholding liability or (B) having the Company withhold from the number of
shares of Stock otherwise issuable pursuant to the exercise of an Option or
from any Restricted Stock Award a number of shares of Stock with a Fair Market
Value equal to such withholding liability.

 

(e)           Claim to
Plan Awards and Employment Rights.  No
employee of the Company or any Affiliate, or other person, shall have any claim
or right to be granted a Plan Award under the Plan or, having been selected for
the grant of a Plan Award, to be selected for a grant of any other Award.  Neither the Plan nor any action taken
hereunder shall be construed as giving any Participant any right to be retained
in the employ or service of the Company or any Affiliate.

 

(f)            No Liability
of Committee Members.  No
member of the Committee shall be personally liable by reason of any contract or
other instrument executed by such member or on his behalf in his capacity as a
member of the Committee nor for any mistake of judgment made in good faith, and
the Company shall indemnify and hold harmless each member of the Committee and
each other employee, officer or director of the Company to whom any duty or
power relating to the administration or interpretation of the Plan may be
allocated or delegated, against any cost or expense (including counsel fees) or
liability (including any sum paid in settlement of a claim) arising out of any
act or omission to act in connection with the Plan unless arising out of such
person’s own fraud or willful bad faith; provided, however, that
approval of the Board shall be required for the payment of any amount in
settlement of a claim against any such person. 
The foregoing right of indemnification shall not be exclusive of any
other rights of indemnification to which such persons may be entitled under the
Company’s Articles of Incorporation or By-Laws, as a matter of law, or otherwise,
or any power that the Company may have to indemnify them or hold them harmless.

 

15

 

(g)           Governing
Law.  The Plan shall be
governed by and construed in accordance with the internal laws of the State of
Delaware without regard to the principles of conflicts of law thereof, or
principals of conflicts of law of any other jurisdiction which could cause the
application of the laws of any jurisdiction other than the State of Delaware.

 

(h)           Nontransferability.

 

(i)            Each
Option shall be exercisable only by the Participant during the Participant’s
lifetime, or, if permissible under applicable law, by the Participant’s legal
guardian or representative.  No Plan
Award may be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by a Participant otherwise than by will or by the
laws of descent and distribution and any such purported assignment, alienation,
pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable
against the Company or any Affiliate; provided that the designation of a
beneficiary shall not constitute an assignment, alienation, pledge, attachment,
sale, transfer or encumbrance.

 

(ii)           Notwithstanding
the foregoing, the Committee or its delegate may, in its sole discretion,
permit Nonqualified Stock Options or Restricted Stock to be transferred by a
Participant, without consideration, subject to such rules as the Committee may
adopt consistent with any applicable Plan Award Agreement to preserve the
purposes of the Plan, to:

 

(A)          any person who is a “family member” of the
Participant, as such term is used in the instructions to Form S-8
(collectively, the “Immediate Family Members”);

 

(B)           a trust solely for the benefit of the
Participant and his or her Immediate Family Members;

 

(C)           a partnership or limited liability company
whose only partners or shareholders are the Participant and his or her
Immediate Family Members; or

 

(D)          any other transferee as may be approved
either (a) by the Board or the Committee in its sole discretion, or
(b) as provided in the applicable Plan Award Agreement;

 

(each transferee described in clauses (A), (B), (C) and (D) above is
hereinafter referred to as a “Permitted Transferee”); provided that the
Participant gives the Committee advance written notice describing the terms and
conditions of the proposed transfer and the Committee notifies the Participant
in writing that such a transfer would comply with the requirements of the
Plan.  For purposes of this paragraph,
“delegate” shall refer to the Chief Executive Officer of the Company, except
with respect to the transfer of any of Chief Executive Officer’s own Plan
Awards.

 

(iii)          The
terms of any Plan Award transferred in accordance with the preceding paragraph
(ii) shall apply to the Permitted Transferee and any reference in the Plan, or
in any applicable Plan Award Agreement, to a Participant shall be deemed to
refer to the Permitted Transferee, except that (A) Permitted Transferees shall
not be entitled to transfer any

 

16

 

Plan Awards, other than by will or the laws of descent and
distribution; (B) Permitted Transferees shall not be entitled to exercise any
transferred Plan Awards unless there shall be in effect a registration
statement on an appropriate form covering the shares of Stock to be acquired
pursuant to the exercise of such Plan Award if the Committee determines,
consistent with any applicable Plan Award Agreement, that such a registration
statement is necessary or appropriate, (C) the Committee or the Company shall
not be required to provide any notice to a Permitted Transferee, whether or not
such notice is or would otherwise have been required to be given to the
Participant under the Plan or otherwise, and (D) the consequences of
termination of the Participant’s employment by, or services to, the Company or
any Affiliate under the terms of the Plan and the applicable Plan Award
Agreement shall continue to be applied with respect to the Participant,
following which the Plan Awards shall be exercisable by the Permitted
Transferee only to the extent, and for the periods, specified in the Plan and
the applicable Plan Award Agreement.

 

(i)            Reliance on
Reports.  Each member of the
Committee and each member of the Board shall be fully justified in relying,
acting or failing to act, and shall not be liable for having so relied, acted
or failed to act in good faith, upon any report made by the independent public
accountant of the Company and upon any other information furnished in
connection with the Plan by any person or persons other than himself.

 

(j)            Relationship
to Other Benefits.  No
payment under the Plan shall be taken into account in determining any benefits
under any pension, retirement, profit sharing, group insurance or other benefit
plan of the Company or any Affiliate, except as otherwise specifically provided
in such other plan.

 

(k)           Expenses.  The expenses of administering the
Plan shall be borne by the Company.

 

(l)            Pronouns.  Masculine pronouns and other
words of masculine gender shall refer to both men and women.

 

(m)          Titles and
Headings.  The titles and
headings of the sections in the Plan are for convenience of reference only, and
in the event of any conflict, the text of the Plan, rather than such titles or headings
shall control.

 

(n)           Termination
of Employment.  For all
purposes herein, a person who transfers from employment or service with the
Company to employment or service with an Affiliate or vice versa, or from
employment or service with one Affiliate to employment or service with another
Affiliate, shall not be deemed to have terminated employment or service with
the Company or any such Affiliate.

 

(o)           Severability.  If any provision of the Plan or any Plan
Award Agreement is or becomes or is deemed to be invalid, illegal, or
unenforceable in any jurisdiction or as to any person or Plan Award, or would
disqualify the Plan or any Plan Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to
the applicable laws, or if it cannot be construed or deemed amended without, in
the determination of the Committee, materially altering the intent of the Plan
or the Plan Award,

 

17

 

such provision shall be stricken as to such jurisdiction, person or
Plan Award and the remainder of the Plan and any such Plan Award shall remain
in full force and effect.

 

10.           Changes in
Capital Structure

 

Plan Awards granted under the Plan and any Plan Award Agreements, the
maximum number of shares of Stock subject to all Plan Awards and Incentive
Stock Options stated in Section 5(a) and the maximum number of shares of
Stock with respect to which any one person may be granted Plan Awards during
any period stated in Section 5(d) shall be subject to adjustment or
substitution, as determined by the Committee in its sole discretion, as to the
number, price or kind of a share of Stock or other consideration subject to
such Plan Awards or as otherwise determined by the Committee to be equitable
(i) in the event of changes in the outstanding Stock or in the capital
structure of the Company by reason of stock or extraordinary cash dividends,
stock splits, reverse stock splits, recapitalization, reorganizations, mergers,
consolidations, combinations, exchanges, or other relevant changes in
capitalization occurring after the Date of Grant of any such Plan Award or (ii)
in the event of any change in applicable laws or any change in circumstances
which results in or would result in any substantial dilution or enlargement of
the rights granted to, or available for, Participants, or which otherwise
warrants equitable adjustment because it interferes with the intended operation
of the Plan.  Any adjustment in
Incentive Stock Options under this Section 10 shall be made only to the
extent not constituting a “modification” within the meaning of
Section 424(h)(3) of the Code, and any adjustments under this
Section 10 shall be made in a manner which does not adversely affect the
exemption provided pursuant to Rule 16b-3 under the Exchange Act.  Further, with respect to Plan Awards
intended to qualify as “performance-based compensation” under
Section 162(m) of the Code, such adjustments or substitutions shall be
made only to the extent that the Committee determines that such adjustments or
substitutions may be made without causing the Company to be denied a tax
deduction on account of Section 162(m) of the Code.  The Company shall give each Participant
notice of an adjustment hereunder and, upon notice, such adjustment shall be
conclusive and binding for all purposes.

 

Notwithstanding the above, in the event of any of the following:

 

A.            The
Company is merged or consolidated with another corporation or entity and, in
connection therewith, consideration is received by shareholders of the Company
in a form other than stock or other equity interests of the surviving entity;

 

B.            All
or substantially all of the assets of the Company are acquired by another
person;

 

C.            The
reorganization or liquidation of the Company; or

 

D.            The
Company shall enter into a written agreement to undergo an event described in
clauses A, B or C above,

 

then the Committee may, in its discretion and upon at least 10 days
advance notice to the affected persons, cancel any outstanding Plan Awards and
pay to the holders thereof, in cash or Stock, or any combination thereof, the
value of such Plan Awards based upon the price per share of Stock received or
to be received by other shareholders of the Company in the event.  The

 

18

 

terms of this Section 10 may be varied by the Committee in any
particular Plan Award Agreement.

 

11.           Effect of
Change in Control

 

Except to the extent reflected in a particular Plan Award Agreement or
other written agreement between the Company and a Participant:

 

(a)           In
the event of a Change in Control, all Plan Awards shall become immediately
vested and exercisable and any restrictions applicable to shares of Restricted
Stock shall terminate with respect to 100 percent of the shares subject to such
Plan Award; provided, however, that no such vesting or
termination shall occur if provision has been made in writing in connection
with such transaction for (a) the continuation of the Plan and/or assumption of
such Plan Awards by a successor corporation (or a parent or subsidiary thereof)
or (b) the substitution for such Plan Awards of new options on Restricted Stock
awards covering the stock of a successor corporation (or a parent or subsidiary
thereof), with appropriate adjustments as to the number and kinds of shares and
exercise prices.  In the event of any
such continuation, assumption or substitution, the Plan and/or such Plan Awards
shall continue in the manner and under the terms so provided.

 

(b)           In
addition, in the event of a Change in Control, the Committee may in its
discretion and upon at least 10 days’ advance notice to the affected persons,
cancel any outstanding Plan Awards and pay to the holders thereof, in cash or
stock, or any combination thereof, the value of such Plan Awards based upon the
price per share of Stock received or to be received by other shareholders of
the Company in the event.

 

(c)           The
obligations of the Company under the Plan shall be binding upon any successor
corporation or organization resulting from the merger, consolidation or other
reorganization of the Company, or upon any successor corporation or
organization succeeding to substantially all of the assets and business of the
Company.  The Company agrees that it
will make appropriate provisions for the preservation of Participants’ rights
under the Plan in any agreement or plan which it may enter into or adopt to
effect any such merger, consolidation, reorganization or transfer of assets.

 

12.           Nonexclusivity
of the Plan

 

Neither the adoption of this Plan by the Board nor the submission of
this Plan to the stockholders of the Company for approval shall be construed as
creating any limitations on the power of the Board to adopt such other
incentive arrangements as it may deem desirable, including, without limitation,
the granting of stock options otherwise than under this Plan, and such
arrangements may be either applicable generally or only in specific cases.

 

19

 

13.           Amendments
and Termination

 

(a)           Amendment
and Termination of the Plan.  The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time; provided
that no such amendment, alteration, suspension, discontinuation or termination
shall be made without shareholder approval if such approval is necessary to
comply with any tax or regulatory requirement applicable to the Plan (including
as necessary to prevent the Company from being denied a tax deduction on
account of Section 162(m) of the Code); and provided  further
that any such amendment, alteration, suspension, discontinuance or termination
that would impair the rights of any Participant or any holder or beneficiary of
any Plan Award theretofore granted shall not to that extent be effective without
the consent of the affected Participant, holder or beneficiary.

 

(b)           Amendment of
Plan
Award Agreements.  The Committee may waive any conditions or
rights under, amend any terms of, or alter, suspend, discontinue, cancel or
terminate, any Plan Award theretofore granted or the associated Plan Award
Agreement, prospectively or retroactively; provided that any such
waiver, amendment, alteration, suspension, discontinuance, cancellation or
termination that would impair the rights of any Participant in respect of any
Plan Award theretofore granted shall not to that extent be effective without
the consent of the affected Participant.

 

(c)           Repricing.  Notwithstanding any other provision of this
Plan, no amendment or modification of the Plan or of any Stock Option Agreement
may lower the exercise price of a previously granted award, nor may the Board,
the Committee or the Company cancel and regrant an Option with the effect of
repricing an Option, without in either case shareholder approval.

 

*      
*       *

 

This plan was originally adopted as the “Veeco Instruments Inc. 2000
Stock Option Plan” by the Board of Directors of Veeco Instruments Inc. on
April 3, 2000 and approved by the stockholders of Veeco Instruments Inc.
on May 12, 2000 and later amended with the approval of the Board of Directors
and the stockholders of Veeco Instruments Inc. on May 11, 2001, May 10, 2002
and May 11, 2003.  On March 30,
2004, the Board of Directors approved, subject to stockholder approval, and on
May 7, 2004, the stockholders of Veeco approved, an amendment and restatement
of this plan, including a change in the name of this plan to the “Veeco
Instruments Inc. 2000 Stock Incentive Plan.”

 

20

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