Document:

Exhibit
10.1

 

AMENDMENT
TO EMPLOYMENT AGREEMENT

 

September 12,
2008

 

Reference is made to the
Employment Agreement dated April 1, 2003 between Veeco Instruments Inc.
and John F. Rein, Jr., as amended June 9, 2006 (the “Employment
Agreement”).  Capitalized terms used but
not defined herein shall have the meanings assigned to such terms in the
Employment Agreement.

 

The Employment Agreement
is hereby amended by adding a new section at the end thereof to read as
follows:

 

17.           IRC Section 409A.  The parties understand and agree that certain
payments contemplated by this Agreement, including severance pay, may be “deferred
compensation” for purposes of IRC Section 409A.  Notwithstanding any provision of this
Agreement to the contrary, any payments constituting deferred compensation
required to be made upon or in respect of the Executive’s termination of
employment hereunder shall not be paid prior to six months after the Executive’s
termination of employment, to the extent necessary to comply with IRC Section 409A(2)(B)(i).  The Company shall identify in writing
delivered to the Executive any payments it reasonably determines are subject to
delay hereunder and shall promptly pay any such delayed payments, without
interest, at the conclusion of the applicable six month period (or, if later,
when scheduled to be paid under the terms of the Agreement).  No deferred compensation payable hereunder
shall be subject to acceleration or to any change in the specified time or
method of payment, except as otherwise provided under this Agreement and
consistent with IRC Section 409A. 
In no event shall the Company have any liability or obligation with
respect to taxes for which the Executive may become liable as a result of the
application of IRC Section 409A.

 

 

AGREED:

 

	
  Veeco Instruments Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Authorized Signatory

  	
   

  	
  /s/ John F.
  Rein, Jr.

  
	
  Name:

  	
   

  	
  John F. Rein, Jr.

  
	
  Title:Exhibit
10.2

 

AMENDMENT
TO LETTER AGREEMENT

 

September 12,
2008

 

Reference is made to the
Letter Agreement dated October 31, 2005 between Veeco Instruments Inc. and
Robert P. Oates (the “Letter Agreement”).

 

In connection with the
designation of Mr. Oates as an eligible employee under Veeco’s Senior
Executive Change in Control Policy, in the form presented and effective on the
date hereof, the parties agree as follows:

 

The Letter Agreement is
hereby amended by deleting the definition of “Good Reason” and substituting
therefor the following:

 

“Good Reason” shall mean (a) a reduction
of your base salary, other than as part of a salary reduction program affecting
management employees generally, (b) a material reduction in the total
benefits available to you under cash incentive, stock incentive and other
employee benefit plans, other than as part of a reduction in incentives or
benefits  affecting similarly situated
employees, generally, or (c) the relocation of your primary place of work
by more than 50 miles (it being understood that your decision not to relocate
would not be a basis for Termination for Cause).

 

 

	
  Veeco Instruments Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Authorized Signatory

  	
   

  	
  /s/ Robert P. Oates

  
	
  Name:

  	
   

  	
  Robert P. Oates

  
	
  Title:Exhibit
10.3

 

VEECO INSTRUMENTS INC.

SENIOR EXECUTIVE CHANGE IN CONTROL POLICY

 

1.             Purpose.  Effective
as of September 12, 2008, Veeco
Instruments Inc., a Delaware  corporation
(the “Company” or “Veeco”), has adopted this Senior Executive
Change in Control Policy (as may be amended from time to time, the “Policy”).
The Compensation Committee of the Board (the “Committee”) recognizes
that, as is the case for most publicly held companies, the possibility of a
Change in Control (as defined below) exists, and the Company wishes to ensure
that certain Eligible Employees (as defined below) are not practically disabled
from discharging their duties in respect of a proposed or actual transaction
involving a Change in Control. Accordingly, the Company wishes to provide
additional inducement for the Eligible Employees to continue to remain in the
employ of the Company and to provide certain severance benefits to the Eligible
Employees in the event that their employment is terminated under certain
circumstances related to a Change in Control.

 

2.             Certain Defined Terms.  In addition to terms defined elsewhere
herein, the following capitalized terms have the following meanings when used
herein:

 

“Affiliate” shall
mean with respect to any Person, any other Person directly or indirectly,
through one or more intermediaries, controlling, controlled by, or under common
control with, such Person.  For purposes
of this definition, “control” shall have the meaning given such term under Rule 405
of the Securities Act of 1933, as amended.

 

“Board” shall mean
the Board of Directors of the Company.

 

“Cause”
shall mean a termination based on (i) Eligible Employee’s willful and
substantial misconduct in the performance of his duties, (ii) Eligible
Employee’s willful failure to perform his duties after two weeks written notice
from the Company (other than as a result of a total or partial incapacity due
to a physical or mental illness, accident or similar event), (iii) the Eligible
Employee’s material breach of any of the agreements contained in Section 6
hereof, (iv) the commission by the Eligible Employee of any material
fraudulent act with respect to the business and affairs of the Company or any
subsidiary or affiliate thereof, or (v) Eligible Employee’s conviction of
(or plea of nolo contendere to) a crime constituting a felony.

 

“Change in Control” shall mean:

 

(i)            the
acquisition, as evidenced by the filing with the Securities and Exchange
Commission (the “Commission”) of an executed report on Schedule 13D, by any
Person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of
beneficial ownership (determined in accordance with Rule 13d-3 under the
Exchange Act), directly or indirectly, through a purchase, merger or other
acquisition transaction or series of transactions, of shares of the capital
stock of the Company entitling that Person to exercise (A) 25% or more of
the total voting power of all shares of such capital stock entitled to vote
generally in elections of directors without the prior written consent of a
majority of the Continuing Directors or (B) 40% or more of the total
voting power of all shares of such capital stock entitled to vote generally in
elections of directors with the prior written consent of a majority of the
Continuing Directors.

 

(ii)           any
consolidation or merger of the Company with or into any other person, any
merger of another person into the Company, or any conveyance, transfer, sale,
lease 

 

1

 

or other disposition of
all or substantially all of the Company’s properties and assets to another
person, other than:

 

(A)          any transaction (1) that does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of the capital stock
of the Company or (2) pursuant to which holders of the capital stock of
the Company immediately prior to the transaction are entitled to exercise,
directly or indirectly, 50% or more of the total voting power of all shares of
the capital stock of the Company entitled to vote generally in the election of
directors of the continuing or surviving person immediately after the
transaction; or

 

(B)           any merger solely for the purpose of changing the Company’s jurisdiction
of incorporation and resulting in a reclassification, conversion or exchange of
outstanding shares of common stock of the Company solely into shares of common
stock of the surviving entity;

 

(iii)          during
any consecutive two-year period, individuals who at the beginning of that
two-year period constituted the Board of Directors (together with any new
directors whose election or nomination to the Board of Directors was approved
by a vote of a majority of the directors then still in office who were either directors
at the beginning of such period or whose election or nomination for election
was approved by the Board of Directors or a nominating committee thereof, the
majority of the members of which meet the above criteria) (each, a “Continuing
Director”) cease for any reason to constitute a majority of the Board of
Directors then in office;

 

(iv)          the
Company is liquidated or dissolved or a resolution is passed by the Company’s
stockholders approving a plan of liquidation or dissolution of the Company; or

 

(v)           in
the case of a Group Executive Participant, the Company sells to a third party,
or otherwise disposes of, all or substantially all of the relevant Group’s
assets or sells to a third party or otherwise disposes of a majority of the
outstanding capital stock of the entity which owns the assets and conducts the
business of the relevant Group, each as determined by the Committee in its sole
discretion (as described in this clause (v), a “Group Change in Control”).

 

“Code” shall mean Internal Revenue Code of 1986, as
amended.

 

“Confidential Information” shall mean  any information that:  (a) is disclosed to an Eligible
Employee, learned by an Eligible or created by an Eligible Employee in
connection with his employment with Veeco (or a predecessor company now owned
by or part of Veeco), and (b) Veeco treats as proprietary, private or
confidential.  Confidential Information
may include, without limitation, information relating to Veeco’s products,
services and methods of operation, the identities and competencies of Veeco’s
employees, customers and suppliers, trade secrets, know-how, processes,
techniques, data, sketches, plans, drawings, chemical formulae, computer
software, financial information, operating and cost data, research databases,
selling and pricing information, business and marketing plans, and information
concerning potential acquisitions, dispositions or joint ventures.  Notwithstanding the foregoing, “Confidential
Information” does not include any of the foregoing items which has become
publicly known or made generally available (provided that information will not
cease to be “Confidential Information” as a result of an Eligible Employee’s
breach of confidentiality).

 

2

 

“Eligible Employee” shall
mean an employee of the Company selected by the Committee to be covered by the
Policy pursuant to Section 3 and listed on Exhibit A hereto,
as it may be amended from time to time.

 

“Good Reason” shall
mean any of the following events: (i) any reduction in the total amount of
an Eligible Employee’s base salary or target bonus; or (ii) any
involuntary relocation of an Eligible Employee’s principal place of business to
a location more than 50 miles from the Eligible Employee’s current principal
place of business (or, in the case of employees whose principal place of
business is more than 50 miles from their primary residence, an involuntary
relocation of such employee’s principal place of business such that the
employee’s overall level of commuting substantially increases). Good Reason shall not be deemed to have
occurred unless the Eligible Employee provides the Company with written notice
of the existence of the applicable condition described in clauses (i) and (ii) above,
within 90 days after the initial existence of such condition and the Company
fails to remedy such condition within 30 days of the date of such written
notice.

 

“Group Executive
Participants” shall mean those Eligible Employees who are designated as “Group
Executive Participants” on Exhibit A hereto.  If applicable, the relevant Group shall also
be specified on Exhibit A opposite the name of the Eligible Employee.

 

“Person” shall mean
an individual, partnership, corporation, business trust, limited liability company,
joint stock company, trust, unincorporated association, joint venture,
governmental authority or other entity of whatever nature.

 

“Voting Stock” shall
mean all capital stock of the Company which by its terms may be voted on all
matters submitted to stockholders of the Company generally.

 

3.             Eligibility.  The Committee shall determine which employees
of the Company shall be Eligible Employees covered by the Policy.  As of the effective date of the Policy, all
Eligible Employees are listed on Exhibit A.  From time to time, the Committee may, in its
sole discretion, revise the list of individuals who are Eligible Employees by
adding additional employees to, or, subject to Section 13, removing any
Eligible Employee from, the list of Eligible Employees set forth on Exhibit A.

 

4.             Effect
of Change in Control; Certain Terminations in Connection with a Change in
Control.

 

(a)           Upon the
consummation of a Change in Control (other than a Group Change in Control), the
vesting, payment and/or exercisability of all stock option grants, restricted
stock awards and any other equity-based compensation awards held by the
Eligible Employee that would otherwise be eligible to become vested during the
Eligible Employee’s continued employment shall be accelerated and any
outstanding stock options then held by the Eligible Employee shall remain
exercisable until the earlier of (x) 12 months following the date of
termination of the Eligible Employee’s employment with the Company and (y) the
expiration of the original term of such options.

 

(b)           If an Eligible Employee’s
employment shall be terminated by the Company without Cause, or by the Eligible
Employee for Good Reason, during the period commencing three (3) months
prior to, and ending eighteen (18) months following, a Change in Control, and 

 

3

 

subject to the Eligible
Employee’s execution of a separation and release agreement in a form reasonably
satisfactory to the Company:

 

(i)            The Company shall pay
to the Eligible Employee an amount equal to the product of (i) the sum of
his then current (A) annual base salary and (B) the target bonus
payable to the Eligible Employee pursuant to the Company’s performance-based
compensation bonus plan with respect to the fiscal year ending immediately
prior to the date of termination, and (ii) 1.5; such amount shall be payable in a lump sum as soon as
reasonably practicable (x) if such termination of employment occurs on or
following the consummation of the Change in Control, after the date of such
termination of employment, or (y) if such termination occurs prior to the
consummation of the Change in Control, after the effective date of such Change
in Control (either such date, the “Vesting Date”), but in any event,
such payment shall be made within 21⁄2 months following the end of the calendar
year in which the Vesting Date occurs;

 

(ii)           The Company shall continue
to provide the Eligible Employee (and his dependents) with all health and
welfare benefits which he (or his dependents) was participating in or receiving
as of the date of termination (at a level then in effect with respect to
coverage and employee premiums) until the 18-month anniversary of the date of termination. If such
benefits cannot be provided under the Company’s programs, such benefits and
perquisites will be provided on an individual basis to the Eligible Employee
such that his after-tax costs will be no greater than the costs for such
benefits and perquisites under the Company’s programs;

 

(iii)          The Company shall pay
to the Eligible Employee a pro-rated amount of the Eligible Employee’s bonus
for the fiscal year in which the date of termination occurs equal to the
product of (i) the amount of the bonus the Eligible Employee would have
otherwise earned had he been employed by the Company on the last day of the
fiscal year in which the date of termination occurs multiplied by (ii) the
number of days elapsed during such fiscal year prior to the date of termination
divided by 365.  Such pro-rated bonus
shall be payable at the same time as bonuses for the year of termination are
paid to employees generally, provided, however,
that such payment shall be made within 2 1⁄2 months following the end of the
calendar year in which the Vesting Date occurs; and

 

(iv)          The vesting,
payment and/or exercisability of all stock option grants, restricted stock
awards and any other equity-based compensation awards held by the Eligible
Employee that would otherwise be eligible to become vested during the Eligible
Employee’s continued employment shall be accelerated and any outstanding stock
options then held by the Eligible Employee shall remain exercisable until the
earlier of (x) 12 months following the date of termination of the Eligible
Employee’s employment with the Company and (y) the expiration of the
original term of such options.

 

(c)           For the sake of clarity, “termination” as used in this Section 4
shall not include the case where (i) Veeco offers to retain the Eligible
Employee in a position of substantial responsibility or (ii) Veeco
requests that the Eligible Employee accepts a position with the acquiring
entity in the Change in Control but the Eligible Employee declines the
position.

 

4

 

5.             Parachute
Payments.

 

(a)           Notwithstanding Section 4 (but subject to Section 5(b)),
in the event that an Eligible Employee becomes entitled to any payments or
benefits under this Policy and any portion of those payments or benefits, when
added to any other amount theretofore or thereafter payable to the Eligible
Employee as a result of or in connection with any Change in Control, whether or
not under any other plan, arrangement or agreement with the Company, any Person
whose actions resulted in the Change in Control or any Person having such a
relationship with the Company or such Person as to require attribution of stock
ownership between the parties under Section 318(a) of the Code (the “Aggregate
Payments”), would be subject to the tax (the “Excise Tax”) imposed
by Section 4999 of the Code, then the payments or benefits under this
Policy and, if applicable, any other plan, arrangement or agreement shall be
reduced (first by reducing the cash payments under this Policy, then by
reducing any fringe or other benefits required to be provided under this
Policy, and finally by reducing the payments and/or benefits under any other
plan, arrangement or agreement) to an amount which is ten dollars ($10.00) less
than the amount of the Aggregate Payments that could be made to the Eligible
Employee before any portion of the Aggregate Payments would be subject to the
Excise Tax.

 

(b)           Notwithstanding Section 5(a), the Aggregate Payments
shall be reduced pursuant to Section 5(a) only if the net after-tax
amount received by the Eligible Employee after the application of Section 5(a) is
greater than the net after-tax amount (taking into account the application of
the Excise Tax) that the Eligible Employee would otherwise receive in
connection with the Change in Control without the application of Section 5(a).

 

(c)           All determinations and calculations required to effectuate
this Section 5 (including, without limitation, the determination as to
whether any Aggregate Payments would be subject to the Excise Tax and the
amount of any reduction of the Aggregate Payments) shall be made by the Company’s
independent auditors (or another nationally recognized United States public
accounting firm selected in good faith by the Company) (the “Auditors”).
For purposes of making the calculations and determinations required by this Section 5,
the Auditors may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of Sections 280G and 4999 of the Code and the
Department of Treasury Regulations issued thereunder.

 

6.             Obligations
of the Eligible Employee

 

As a condition to being designated as an Eligible
Employee and to being eligible to receive benefits hereunder, each individual
so designated agrees as follows (any individual not so agreeing shall notify
the Company in writing within 10 days of being notified of the designation, in
which case the designation shall be null and void):

 

(a)           Confidentiality. The Eligible
Employee acknowledges that the Company and its Affiliates continually develop
Confidential Information; that the Eligible Employee may develop Confidential
Information for the Company and its Affiliates; and that the Eligible Employee
may learn of Confidential Information during the course of employment,
including Confidential Information that may relate to a transaction which, if consummated,
would constitute a Change in Control.  The Eligible Employee will comply with the
policies and procedures of the Company and its Affiliates for protecting
Confidential Information and shall not disclose Confidential Information to any
Person or use Confidential Information except for the benefit of the Company or
as required by applicable law after notice to the Company and a reasonable 

 

5

 

opportunity for the Company to seek protection of the Confidential
Information prior to disclosure.  The Eligible
Employee understands that this restriction shall continue to apply after his
employment terminates, regardless of the reason for such termination.

 

(b)           Return of Company Property.
All documents, records, tapes and other media of every kind and description
relating to the business, present or otherwise, of the Company and its
Affiliates and any copies, in whole or in part, thereof (the “Documents”),
whether or not prepared by the Eligible Employee, shall be the sole and
exclusive property of the Company and its Affiliates. The Eligible Employee
shall safeguard all Documents and shall surrender to the Company at the time
his employment terminates, or at such earlier time or times as the Board or its
designee may specify, all Documents and other property of the Company and its
Affiliates then in the Eligible Employee’s possession or control.

 

(c)           Restricted Activities.
In further consideration of the compensation that the Eligible Employee may
become entitled to hereunder, the Eligible Employee agrees that some
restrictions on his activities during and after his employment are necessary to
protect the goodwill, Confidential Information and other legitimate interests
of the Company and its Affiliates:

 

(i)            While
the Eligible Employee is employed by the Company and for eighteen  (18) months after the termination of the Eligible
Employee’s employment (the “Non-Competition Period”), the Eligible Employee will
not own, manage, work for or otherwise participate in any business whose
products, services or activities compete with the current or currently
contemplated products, services or activities of Veeco in any state or country
in which Veeco sells products or conducts business and (x) in which such
Eligible Employee was involved or (y) with respect to which such Eligible
Employee had access to Confidential Information, in each case, during the 5
years prior to termination, provided,
however, that the Eligible
Employee may own up to 1% of the securities of any such public company (but
without otherwise participating in the activities of such enterprise).

 

(ii)           The
Eligible Employee further agrees that while he is employed by the Company and
during the Non-Competition Period, the Eligible Employee will not for himself
or any other person:  (a) induce or
try to induce any employee to leave Veeco or otherwise interfere with the
relationship between Veeco and any of its employees, (b) employ or engage
as an independent contractor, any current or former employee of Veeco, other
than former employees who have not worked for Veeco within the past year, (c) induce
or try to induce any customer, supplier, licensor or business relation to stop
doing business with Veeco or otherwise interfere with the relationship between
Veeco and any of its customers, suppliers, licensors or business relations; or (d) solicit
the business of any person known by the Eligible Employee to be a customer of
Veeco, whether or not the Eligible Employee had personal contact with such
person, with respect to products or activities which compete with the products
or activities of Veeco in existence or contemplated at the time of termination
of such Eligible Employee’s employment.

 

(d)           Enforcement of Covenants.
The Eligible Employee acknowledges that he has carefully read and considered
all the terms and conditions of this Agreement, including the restraints
imposed upon him pursuant to this Section 6. The Eligible Employee agrees
that those restraints are necessary for the reasonable and proper protection of
the Company and its 

 

6

 

Affiliates and that each and every one of the restraints is reasonable
in respect to subject matter, length of time and geographic area. The Eligible
Employee further acknowledges that, were he to breach any of the covenants
contained in this Section 6, the damage to the Company could be
irreparable. The Eligible Employee therefore agrees that the Company, in
addition to any other remedies available to it, shall be entitled to seek
preliminary and permanent injunctive relief against any breach or threatened
breach by the Eligible Employee of any of said covenants, without having to
post bond. The Eligible Employee agrees that, in the event that any provision
of this Section 6 shall be determined by any court of competent
jurisdiction to be unenforceable by reason of its being extended over too great
a time, too large a geographical area or too great a range of activities, such
provision shall be deemed to be modified to permit its enforcement to the
maximum extent permitted by law.

 

7.             Successors.

 

(a)           The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation, reorganization or otherwise,
including, without limitation, any successor due to a Change in Control) to the
business or assets of the Company expressly to assume this Policy and to
perform in the same manner and to the same extent the Company would be required
to perform if no such succession had taken place. This Policy will be binding
upon and inure to the benefit of the Company and any successor to the Company,
including, without limitation, any persons directly or indirectly acquiring the
business or assets of the Company in a transaction constituting a Change in
Control (and such successor shall thereafter be deemed the “Company” for the
purpose of this Policy), but will not otherwise be assignable, transferable or
delegable by the Company.

 

(b)           This Policy will inure to the benefit of and be enforceable
by the Eligible Employees’ personal or legal representatives, executors,
administrators, successors, heirs, distributees and legatees.

 

(c)           This Policy is personal in nature and neither the Company nor
any Eligible Employee shall, without the consent of the Company, assign,
transfer or delegate any rights or obligations hereunder except as expressly
provided in Sections 7(a) and 7(b). Without limiting the generality or
effect of the foregoing, an Eligible Employee’s right to receive payments
hereunder will not be assignable, transferable or delegable, other than by a
transfer by such Eligible Employee’s will or by the laws of descent and
distribution and, in the event of any attempted assignment or transfer contrary
to this Section 7(c), the Company shall have no liability to pay any amount
so attempted to be assigned, transferred or delegated.

 

8.             Administration;
ERISA. 
This Policy shall be administered by the Committee (or the Committee’s
delegate or successor). The Committee shall have the sole authority to
interpret this Policy and to determine all questions (whether of fact or
interpretation) arising in connection with this Policy. The Committee’s
decisions shall be final and bind all parties. This Policy is intended to be an
unfunded “top hat plan” that is not subject to the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”).

 

9.             Notices.  For all purposes of
this Policy, all communications, including without limitation notices,
consents, requests or approvals, required or permitted to be given hereunder
will be in writing and will be deemed to have been duly given when hand
delivered or dispatched by electronic facsimile transmission (with receipt
thereof orally confirmed), or five business days after having been mailed by
United States registered or certified mail, return receipt requested, 

 

7

 

postage prepaid, or three business days after having been sent by a
nationally recognized overnight courier service, addressed to the Company (to
the attention of the General Counsel of the Company) at its principal executive
office and to the Eligible Employee at his principal residence, or to such
other address as any party may have furnished to the other in writing and in
accordance herewith, except that notices of changes of address shall be
effective only upon receipt.

 

10.           Validity.  If any provision of
this Policy or the application of any provision hereof to any person or
circumstances is held invalid, unenforceable or otherwise illegal, the
remainder of this Policy and the application of such provision to any other
person or circumstances will not be affected, and the provision so held to be
invalid, unenforceable or otherwise illegal will be reformed to the extent (and
only to the extent) necessary to make it enforceable, valid or legal.

 

11.           Governing
Law; Jurisdiction. The laws
of the state of New York shall
govern the interpretation, validity and performance of the terms of this
Policy, regardless of the law that might be applied under principles of
conflicts of law. Any suit, action or proceeding against any Eligible Employee,
with respect to this Policy may be brought in any court of competent
jurisdiction in the State of New York.

 

12.           Relationship
with Other Plans.  This Policy is intended to supplement, but
not duplicate, any benefits to which an Eligible Employee may be entitled under
any other severance, employment or other individual agreement.  The Committee, in its sole discretion, will
make any interpretation or determination necessary to implement this provision.

 

13.           Amendment;
Termination. The Company expressly
reserves the right to amend or terminate this Policy, to discontinue or
eliminate benefits hereunder or to remove any employee from the list of
Eligible Employees covered by this Policy at any time in its sole discretion; provided, however, that, during the period commencing upon
the earlier of (a) three months prior to the signing of a definitive
agreement that, if consummated, would result in a Change in Control, and (b) the
filing of a Schedule TO (or any appropriate successor form) with respect to a tender
offer with the Commission that, if accepted, would result in a Change in
Control, (each, a “Triggering Event”) and ending upon the earlier of (x) the
date on which the Committee in its sole discretion determines that the
Triggering Event will not actually result in a Change in Control, and (y) the
18 month anniversary of the Change in Control, no amendment which would deprive
an Eligible Employee of any benefit to which he would have been entitled
hereunder, nor any termination of this Policy, nor removal of an employee from
the list of Eligible Employees covered by this Policy, shall be effective with
respect to such Eligible Employee.

 

8

 

14.           Section 409A.

 

(a)           This Policy is intended to be exempt from the requirements of
Section 409A of the Code (together with any Department of Treasury
regulations and other interpretive guidance issued thereunder, including
without limitation any such regulations or other guidance that may be issued
after the date hereof, “Section 409A”). The Company may, in its
discretion, adopt such amendments to the Policy or adopt other procedures, or
take any other actions, as the Company determines are necessary or appropriate
to exempt this Policy from Section 409A (or, if the Committee determines
appropriate, to comply with the requirements of Section 409A), including
without limitation amendments, procedures and action with retroactive effect.

 

(b)           Notwithstanding the foregoing or any other provision of this
Policy, if and to the extent that the Company determines, in its sole
discretion, that any payments or benefits payable under this Policy are
deferred compensation subject to Section 409A, the following will apply:

 

(i)            if
the Eligible Employee is a “specified employee” (as defined in Section 409A)
at the time of his termination of employment, (x) during the first 6
months after such Eligible Employee’s termination of employment, such Eligible
Employee shall be paid only the portion, if any, of such payments that will not
subject him to additional taxes and interest under Section 409A (“ Delay
Period “). If this Section applies and the method of payment is not a lump
sum, the first payment to the Eligible Employee will include all amounts that
would have been paid during the Delay Period but for this Section, and (y) to
the extent that benefits to be provided to such an Eligible Employee pursuant
to this Policy are not non-taxable medical benefits or other benefits not considered
nonqualified deferred compensation for Section 409A, such provision of
benefits shall be delayed until the end of the Delay Period to the extent
necessary to avoid the imposition of additional taxes and interest on the
Eligible Employee, provided that,  if the
provision of any ongoing benefits would not be required to be delayed if the
premiums were paid by the Eligible Employee, 
the Eligible Employee shall pay the full cost of the premiums for such
benefits during the Delay Period and the Company shall pay him an amount equal
to the amount of such premiums within ten (10) days after the end of the
Delay Period.

 

(ii)           To
the extent that any benefits to be provided to an Eligible Employee pursuant to
this Policy are considered nonqualified deferred compensation and are
reimbursements subject to Section 409A, the reimbursement of eligible
expenses related to such benefits shall be made on or before the last day of
the Eligible Employee’s taxable year following the Eligible Employee’s taxable
year in which the expense was incurred.

 

15.           Miscellaneous.

 

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

 

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

 

*  *  *  *  *

 

9

 

I hereby certify that the
forgoing Policy was duly adopted by the Committee as of the date first above
written.

 

Executed as of this 12th day
of September, 2008

 

 

	
   

  	
  /s/ Roger D. McDaniel

  
	
   

  	
  Roger D. McDaniel

  
	
   

  	
  Chairman of the Compensation Committee

  

 

10

 

Exhibit A

 

Eligible Employees

 

11

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