Document:

Exhibit
10.2

FORM OF

AMENDMENT TO EMPLOYMENT AGREEMENT

	
  Date:

  	
   

  	
  June 9, 2006

  
	
   

  	
   

  	
   

  
	
  Prior Agreement:

  	
   

  	
  Employment Agreement effective April 1, 2003, by and
  between Veeco Instruments Inc. (the “Company”), and ___________________
  (“Executive”)

  
	
   

  	
   

  	
   

  
	
  Defined Terms:

  	
   

  	
  Capitalized terms used but not defined herein shall
  have the meanings assigned to such terms in the Prior Agreement.

  

 

The undersigned hereby
amend and supplement the Prior Agreement by adding the following provisions:

If Executive’s employment
with the Company terminates for any reason (including death or Disability),
other than pursuant to a termination of Executive’s employment for Cause or a
resignation by the Executive without Good Reason, and contingent upon Executive’s
compliance with the provisions of the Prior Agreement and satisfaction of any
conditions precedent to severance and similar payments under the Prior
Agreement (such as execution and non-revocation of a general release of
claims), the following would apply:

Restricted
Stock, Restricted Stock Units:

The Eligible Shares (as
defined below) shall become vested and the restrictions with regard thereto
shall lapse upon such termination.  As
used herein, “Eligible Shares” shall mean all shares of restricted stock or restricted
stock units which (a) were awarded to Executive on or after the date of this
Amendment, (b) are held by Executive as of the date of termination and (c)
continue to be subject to restrictions as of such date.

Long-term
Cash Incentive Awards:

Change in Control
Situation:  If such
termination occurs within 12 months following a “Change of Control,” then
Executive will be entitled to receive a pro-rated portion of any outstanding
long-term cash incentive awards, which portion will be calculated by the Compensation
Committee of the Company’s Board of Directors as of the later of the date of
Executive’s termination or the date of the Change of Control and based on the
Company’s performance measured from the beginning of the applicable performance
period to the end of the most recently completed fiscal quarter, and will be
pro-rated based on the length of service during the applicable performance
period as compared to the entire performance period, rounded to the nearest
whole month.  This award will be paid as
soon as practicable following the Change in Control (or, if later, the date of
such termination).

Non-Change in Control
Situation:  If such
termination occurs other than as a result of or within 12 months following a “Change
of Control,” then Executive will be entitled to receive a pro-rated portion of
any outstanding long-term cash incentive awards at the end of the applicable
performance period based on the Company’s cumulative performance for the
performance period and pro-rated based on the length of service during the
applicable performance period as compared to the entire performance period,
rounded to the nearest whole month.  This
award will be paid at the same time as awards are payable to participants generally
with respect to such performance period.

Except as amended
and supplemented hereby, the Prior Agreement shall remain in full force and
effect.

	
  VEECO INSTRUMENTS INC.

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  TitleExhibit 10.3

FORM OF

AMENDMENT TO LETTER AGREEMENT

	
  Date:

  	
   

  	
  June 9, 2006

  
	
   

  	
   

  	
   

  
	
  Prior Agreement:

  	
   

  	
  Letter Agreement effective [April 1, 2003], by and
  between Veeco Instruments Inc. (the “Company”), and ___________________
  (“Executive”)

  
	
   

  	
   

  	
   

  
	
  Defined Terms:

  	
   

  	
  Capitalized terms used but not defined herein shall
  have the meanings assigned to such terms in the Prior Agreement.

  

 

The undersigned hereby
amend and supplement the Prior Agreement by adding the following provisions:

In the event Executive’s
employment with the Company is terminated without “Cause” or Executive resigns
for “Good Reason,” and contingent upon Executive’s compliance with the
provisions of the Prior Agreement and satisfaction of any conditions precedent
to severance and similar payments under the Prior Agreement (such as execution
and non-revocation of a general release of claims), the following would apply:

Restricted
Stock, Restricted Stock Units:

The Eligible Shares (as
defined below) shall become vested and the restrictions with regard thereto
shall lapse upon such termination.  As
used herein, “Eligible Shares” shall mean all shares of restricted stock or
restricted stock units which (a) were awarded to Executive on or after the date
of this Amendment, (b) are held by Executive as of the date of termination and
(c) continue to be subject to restrictions as of such date.

Long-term
Cash Incentive Awards:

Change in Control
Situation:  If such
termination occurs within 12 months following a “Change of Control,” then
Executive will be entitled to receive a pro-rated portion of any outstanding
long-term cash incentive awards, which portion will be calculated by the
Compensation Committee of the Company’s Board of Directors as of the later of
the date of Executive’s termination or the date of the Change of Control and
based on the Company’s performance measured from the beginning of the
applicable performance period to the end of the most recently completed fiscal
quarter, and will be pro-rated based on the length of service during the
applicable performance period as compared to the entire performance period,
rounded to the nearest whole month.  This
award will be paid as soon as practicable following the Change in Control (or,
if later, the date of such termination).

Non-Change in Control
Situation:  If such
termination occurs other than as a result of or within 12 months following a “Change
of Control,” then Executive will be entitled to receive a pro-rated portion of
any outstanding long-term cash incentive awards at the end of the applicable
performance period based on the Company’s cumulative performance for the
performance period and pro-rated based on the length of service during the
applicable performance period as compared to the entire performance period,
rounded to the nearest whole month.  This
award will be paid at the same time as awards are payable to participants
generally with respect to such performance period.

Except as amended and
supplemented hereby, the Prior Agreement shall remain in full force and effect.

 

	
  VEECO INSTRUMENTS INC.

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:Exhibit
10.4

VEECO
INSTRUMENTS INC.

AMENDED AND RESTATED 2000 STOCK INCENTIVE PLAN

(formerly known as the
2000 STOCK OPTION PLAN)

Effective
July 20, 2006

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, Restricted
Stock and Restricted Stock Units.

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
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.

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“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.

“Dividend
Equivalent” means, on any dividend record date, consideration equivalent in
value and kind to the dividend on one share of Stock as declared by the Board
with respect to such record date; provided that “Dividend Equivalent” shall not
include any dividend with respect to which adjustment under Section 10(a) has
been made.

“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 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.

 3
 

 

“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
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:

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(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.

“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 or Restricted Stock Units.  As determined by the Committee, the Performance
Goals applicable to an award of shares of Restricted Stock or Restricted Stock
Units 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, Restricted Stock or Restricted Stock Units, as the
Committee determines.

“Plan Award
Agreement” means any agreement between the Company and a Participant who has
been granted a Plan Award that 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.

“Restricted Stock
Unit” means a contractual right described in Section 8A hereof, to receive
an amount based on the Fair Market Value of a share of Stock.

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

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“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.

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.

 6
 

 

(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 any provision of the
Plan to the contrary, in order to foster and promote achievement of the
purposes of the Plan or to comply with provisions of law in other countries in
which the Company or any of its Affiliates operates or has employees, the
Committee, in its sole discretion, shall have the power and authority to (a)
modify the terms and conditions of any Plan Awards made to Eligible Employees
employed outside the United States, and (b) establish subplans, modified option
exercise procedures, and other Award terms, conditions, and procedures to the
extent such actions may be necessary or advisable to comply with provisions of
the laws and regulations of countries outside the United States in order to
assure the lawfulness, validity and effectiveness of Plan Awards granted
hereunder.

(d)         Notwithstanding the above, no Committee
member may participate in any action of the Committee with respect to any claim
or dispute regarding only that Committee member.

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 8,530,000; provided further that that aggregate
number of Plan Awards issued in the form of Restricted Stock or Restricted
Stock Units shall not exceed 1,700,000

(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; (ii) no person may be
granted Restricted Stock and Restricted Stock Units under the Plan during any
calendar year with respect to more than 50,000 shares of Stock in the
aggregate; and

(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.

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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.

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.  For periods prior to December 31, 2005, 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;

(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;

 8
 

 

(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.

(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.

 9
 

 

(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.

(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.

 10

 

 

(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.

(iv)           Upon initial election to office, each
Non-Employee Director shall receive 5,000 shares of Restricted Stock.

(v)            On the day following the date of
each annual meeting of the Company’s stockholders, each Non-Employee Director
with service greater than six months prior to such date shall receive 5,000
shares of Restricted Stock.

(vi)           The Restricted Stock granted pursuant
to clause (iv) or (v) above shall be granted pursuant to a Restricted Stock
Agreement in a form, and having such terms as are, approved by the Committee
including, without limitation, that (A) the purchase price for such shares
shall consist solely of such Director’s service as a Director and (B) the
Restrictions with respect to such Restricted Stock shall lapse on the first
anniversary of the Date of Grant, provided that the director remains
continuously in active service as a director for at least nine months following
the Date of Grant; provided further that the service requirement shall be
deemed to be satisfied with respect to a particular Director in the event of a
termination of such Director’s service as described in clause (i) of the
definition of “Normal Termination.”

(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.

(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 

 11
 

 

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 Award Notice or Agreement. 
Restricted Stock shall be issued only pursuant to a written Restricted
Stock Award Notice or Agreement, which shall specify the terms of the award and
contain such other terms and conditions as the Committee shall determine,
consistent with this Plan.

(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.

 12
 

 

 

8A.          Restricted Stock Units

(a)          Award
of Restricted Stock Units.

(i)             The Committee is authorized to
award Restricted Stock Units to any Eligible Person.  The Committee shall from time to time, in its
sole and absolute discretion, (A) select which Eligible Persons shall be
awarded Restricted Stock Units, and (B) determine any terms and conditions
applicable to such Restricted Stock Units consistent with this Plan, and impose
such conditions on the issuance of such Stock pursuant to such Restricted Stock
Units as it deems appropriate.

(ii)            The Committee may set restrictions
on the vesting of Restricted Stock Units 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.

(iii)           Restricted Stock Units that become
payable in accordance with their terms and conditions shall be settled in
shares of Stock or, if so designated by the Committee, in cash or a combination
of cash and shares of Stock, as determined by the Committee.  Any person who holds Restricted Stock Units
shall have no ownership interest in the shares of Stock to which such
Restricted Stock Units relate unless and until payment with respect to such
Restricted Stock Units is actually made in shares of Stock.  Each award of Restricted Stock Units shall be
subject to the terms and conditions of this Section 8A and/or to such other
terms and conditions as may be reflected in the applicable Restricted Stock
Unit Award Notice or Agreement.

(b)         Section 162(m) Performance Restrictions.  For purposes of qualifying grants of
Restricted Stock Units 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 Units to qualify as “performance-based
compensation” under Section 162(m) of the Code. 
In granting Restricted Stock Units that are 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 Units under Section 162(m) of the Code
(e.g., in determining the Performance Goals).

(c)          Termination
of Employment.  Except as
otherwise expressly provided for herein or in the applicable Restricted Stock
Unit Agreement, any Restricted Stock Units that have not vested at the time of
an Employee’s termination of employment with the Company for any reason (or, if
applicable, 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 Restricted Stock Units.

(d)         Dividend
Equivalents; Extraordinary Distributions.  A Participant who holds Restricted Stock
Units shall be credited with Dividend Equivalents.  Such Dividend Equivalents shall be credited
to and paid to such Participant in the manner and at the time as dividends are
otherwise payable to Participants who hold Restricted Stock.  In the discretion of the Committee, any
extraordinary distributions on the Common Stock with respect to which an
adjustment is made to the Restricted Stock Units shall be subject to the terms
and conditions, vesting and other restrictions described in this Section 8A.

(e)          Restricted
Stock Unit Award Notice or Agreement.  Restricted Stock Units shall be issued only
pursuant to a written Restricted Stock Unit Award Notice or Agreement, which
shall specify the terms of the award and contain such other terms and
conditions as the Committee shall determine, consistent with this Plan.

 13
 

 

 

9.             General

(a)          Additional Provisions of a
Plan Award.  Subject to Section
409A of the Code, 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 with respect to
Restricted Stock Units or 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)         Compliance
with Section 409A of the Code.  It
is the Company’s intention that all Plan Awards granted hereunder shall be
designed and administered in such manner that they are either exempt from the
application of, or comply with, the requirements of Section 409A of the
Code.  Notwithstanding anything herein to
the contrary, any provision in the Plan that is inconsistent with Section 409A
of the Code shall be deemed to be amended to comply with Section 409A of the
Code, and to the extent such provision cannot be amended to comply therewith,
it shall be null and void.

(c)          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.

(d)         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 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.

(e)          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.

 14
 

 

 

(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.

(f)          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.

(g)         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.

(h)         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.

(i)           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”);

 15
 

 

 

(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 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.

(j)           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.

(k)          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.

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

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

 16
 

 

 

(n)         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.

(o)         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.

(p)         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, 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

(a)          Adjustments.  Plan Awards granted under the Plan and any
Plan Award Agreements, the maximum number of shares of Stock subject to all
Plan Awards 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

 17
 

 

 

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

(b)         Section 409A
of the Code.  Notwithstanding
Section 10(a) above, or anything herein to the contrary, (i) any
adjustments made pursuant to Section 10(a) to Plan Awards that are
considered “deferred compensation” within the meaning of Section 409A of the
Code shall be made in compliance with the requirements of Section 409A of the
Code, (ii) any adjustments made pursuant to Section 10(a) to Plan
Awards that are not considered “deferred compensation” subject to Section 409A
of the Code shall be made in such a manner as to ensure that, after such
adjustment, the Plan Awards either (x) continue not to be subject to
Section 409A of the Code or (y) comply with the requirements of Section 409A of
the Code, and (c) in any event, neither the Committee nor the Board shall have
the authority to make any adjustments pursuant to Section 10(a) to the
extent the existence of such authority would cause a Plan Award that is not
intended to be subject to Section 409A of the Code at the time such Plan Award
is granted to be subject thereto.

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, all Options shall become
exercisable, and any restrictions applicable to shares of Restricted Stock or
Restricted Stock Units 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
or awards of Restricted Stock or Restricted Stock Units 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.

 18
 

 

 

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.

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. Notwithstanding the foregoing or
anything in the Plan to the contrary, if the Committee determines that any
provision of any Plan Award would cause a Participant to incur any additional
tax or interest under Section 409A of the Code or any Treasury regulations or
guidance promulgated thereunder, the Committee shall have the right, in its
sole discretion, to reform such provision to comply with Section 409A of the
Code; provided that, the Committee shall maintain, to the maximum extent
practicable, the original intent and economic benefit to such Participant of
such provisions without violating Section 409A of the Code.

(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.

*       *      
*

 19
 

 

 

Revision History:

 

	
  Date

  	
   

  	
  Description

  	
   

  	
  Notes

  
	
  May 12, 2000

  	
   

  	
  Original adoption of plan

  	
   

  	
  Plan named “Veeco Instruments Inc. 2000 Stock Option
  Plan”

  
	
  May 11, 2001

  	
   

  	
  Amendment No. 1

  	
   

  	
   

  
	
  May 10, 2002

  	
   

  	
  Amendment No. 2

  	
   

  	
   

  
	
  May 11, 2003

  	
   

  	
  Amendment No. 3

  	
   

  	
   

  
	
  May 7, 2004

  	
   

  	
  Amendment and Restatement

  	
   

  	
  Plan renamed “Veeco Instruments Inc. 2000 Stock
  Incentive Plan”

  
	
  May 25, 2005

  	
   

  	
  Amendment No. 1

  	
   

  	
   

  
	
  October 20, 2005

  	
   

  	
  Amendment No. 2

  	
   

  	
  Amendment effective January 1, 2006

  
	
  July 20, 2006

  	
   

  	
  Amendment and Restatement

  	
   

  	
   

  

 

 

 20

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