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Veeco Relocation Program

November 1st, 2004

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Overview

• Initial Objective• Areas of Opportunity• Benchmark Data• New Objective• Proposed Relocation Program• Estimated Cost Savings• Next Steps

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Initial Objective

• To find a New Moving Van Line Company & Agent which provides better customer service and competitive pricing.

• Why?• Veeco outgrew current agent• Too many complaints / issues from new

employees / transferees

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Areas of Opportunity • Relocation Policy vs. “True” Program• Monitor, Control and Reduce Relocation &

Recruitment Costs• Not Employee Focused• Lack Expertise• Various Point of Contacts

• HR, Moving Co., Relocation Co., Payroll, Mtg Co., Tax Dept, etc.

• We want our employees focused on their new role and not worried about their relocation

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Benchmark DataComponent Current Veeco Policy ERC Runzheimer

Tiered Policies - Two TiersHome Owners: same for all levelsRenters

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--

52% of organizations use tiered approachThree Tiers is most common72% use grade or salary level for criteria

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66% of organizations use tiered approachTwo or more is most commonMost common tiers job level, homeowner

Home Sales Assistance

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-

Direct reimbursement to typical expensesSelling commission cost excluded from policy cap for homeowners

- 70% of companies surveyed use a third party company; 13 % uses an in-house program and 9% by direct reimbursement

- 85% reimburse some of all costs to sell home

New Home Purchase Assistance

- Covers typical fees incurred - 90% cover normal closing costs - Reimbursement of normal closing costs remains constant

Rental Assistance - Up to three months' rent for ease cancellation charges

- Generally two months' rent for lease cancellation fees

- Not surveyed

Temporary Housing

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Up to 60 daysOne Trip home every two weeks

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97% provide assistanceAvg. Length of time is 57 days for employees / 50 days for familiesTwo trips per month commonly allowed

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83% provide assistanceAvg. length of time is 54 days

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New Objective• To find a Full Service Relocation partner which

provides better customer service and innovative products to reduce our total spend while increasing employee benefits and program delivery.

• Why?• Veeco outgrew current agent• Too many complaints / issues from new employees /

transferees• Employee Satisfaction• Reduce Expenses• Create consistency across all Veeco business units• Vendor accountability for full process

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New Objective - Full Service Program

ExpenseAdministration

Cost Savings

Technology

Flexibility(Tiered Program)

DestinationServices

Move Management /Moving Services

Home Purchase /Home Sale

One Point of ContactRelo Counselor

Employee FocusedAnd Dedicated

“Soup to Nuts”Relocation Program

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The Relocation Company• SIRVA Relocation

• The world’s largest global moving and relocation services company

• Publicly traded company listed on NYSE (SIR)• In excess of $2.3 billion in revenue• Over 7,700 employees in 46 countries across 4

continents• Six Sigma Initiatives – 50+ black belts• Operating Network in over 148 countries• Over 5,000 corporate clients around the world• Moving Services, Relocation Services,

Insurance Services

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Customer Dashboard - Sample

Measure-Customer Driven CTQ’s

Analyze-Factors Affect Key Measurements(Critical X’s)

Improve-Processes Internally

Control-Dashboards, Controls Charts, Early & Often

From Analysis to New Philosophy of Metrics. . .

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Service OverviewTransferee is

offeredrelocation

Client sendsauthorization form

to SIRVA

DestinationSpecialist makes

initial call totransferee

Needs analysis

DestinationSpecialist

arranges pre-decision trip, if

needed

DestinationSpecialist

arranges face-to-face homefinding

Pre-decision tripTransferee

acceptsrelocation?

Final billing sent toClientNO

RelocationCounselor calls

transferee todiscuss relocation

Additional needsanalysis/Q&A re:home marketing,

destinationservices

Transferee givesappraiser choices

to SIRVA

Transfereereceives pre-

decision materials

Transfereereceives auth.

package

Transfereecooperates with

brokers conductingBMAs & anyinspectors

DestinationSpecialistarranges

homefinding trip(s)

RelocationCounselor calls T

with brokerrecommendations

Transferee selectsbroker from SIRVArecommendations

Transferee,broker, & personal

move managerdevelop marketing

plan

SIRVA makesguaranteed offeron transferee's

home7

Outside buyerfound?

YES

Offeraccepted?

Transfereeforwards offer topersonal move

manager

Transfereenegotiates withbuyer (SIRVA'

assistance)

SIRVA makesoffer to transferee

that matchesbuyer's

Transfereeaccepts SIRVA'

offer

SIRVA listsproperty; closes

with outside buyer

YES

Transfereemarkets home on

his or her ownNO

Transferee signsContract of Saleand sends it to

SIRVA

Transferee sellshome to SIRVA; isfinished with home

sale process

YES

SIRVA sends finalreconciliation to

Client

Transferee selectshomefinding

broker from SIRVArecommendations

Homefinding trip(s) Home found?SIRVA assiststransferee with

offer negotiations

SIRVA assists withtemporary living

accommodations

YES

NO

SIRVA stays incontact with

transferee throughclosing

SIRVA sends finalreconciliation to

Client

Transfereecooperates with

appraisers

Transfereemarkets home toattempt to find an

outside buyer

NO

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Two Tiered Program OptionsFixed BVO• Veeco pays 9.80% of home sale

price.• All standard and customary home

sale closing costs included• Eliminate the need to gross up the

employee’s home sale costs• No Guaranteed Buyout offered

• Outside buyer needed • If home sale falls through or goes to

inventory, Veeco is not responsible for loss on resale, cost of carrying the home, etc

• Closing Costs on New Home Purchase Included

• Expense Administration, Reimbursement & year end tax reporting ($300 per person)• SIRVA reimburses expenses to

the employee and supply chain per policy then bills Veeco

Flex Fee 60/90 • Veeco pays 11.85% of home sale

price.• All standard and customary home

sale closing costs included• Eliminate the need to gross up the

employee’s home sale costs• Employee offered a guaranteed

buyout on day 90 of marketing period from SIRVA.• No outside buyer needed• Sale Price is based on

average of two appraisals • SIRVA not Veeco takes title on

purchase• Closing Costs on New Home

Purchase Included• Expense Administration,

Reimbursement & year end tax reporting ($300 per person)• SIRVA reimburses expenses to

the employee and supply chain per policy then bills Veeco

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Cost Analysis SIRVA

Based on a home sale followed by Current Fixed BVO Flex Feea home purchase by a single individual Veeco Policy (UnBuyout) (60/90)

Sales Price of Home: $340,000 340,000.00 340,000.00Shared Service Fee 9.80% 11.85%Related Commissions/Closing Costs: $21,501 21,501.00 33,320.00 40,290.00

Federal Withholding 28% 10,589.76 0.00 0.00State Withholding 7.5% 2,836.54 0.00 0.00Medicare Withholding 1.45% 548.40 0.00 0.00FICA Withholding 6.2% 2,344.88 0.00 0.00

Grossed Up Amount - Home Sale 37,820.58 33,320.00 40,290.00

Purchase Price of Home: $629,000Related Purchase Costs: $12,529.16 12,529.16 0.00 0.00

Federal Withholding 30.38% 6,988.83 Included in Included in Federal Withholding 28% 0.00 fee above fee aboveState Withholding 7.5% 1,725.22 Medicare Withholding 1.45% 333.54FICA Withholding 6.2% 1,426.18

Grossed Up Amount - Home Purchase 23,002.93 0.00 0.00

Overall Cost

Van Line Cost 15,127.00 13,614.00 13,614.00

Total Original Cost 34,030.16 33,320.00 40,290.00Total Gross Up Cost 26,793.35 0.00 0.00Expense Administration Fee 0.00 300.00 300.00

Total Cost to Veeco 75,950.51 47,234.00 54,204.00

Increase/(Decrease) in Veeco Cost 0.00 (28,716.51) (21,746.51)

Percentage Increase Charged to P&L 154.51%

Estimated Annual Relos by Veeco = 30Annual (Savings)/Additional Cost (861,495.30) (652,395.30)

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Estimated Savings

$0$200,000$400,000$600,000$800,000

$1,000,000$1,200,000$1,400,000

Tier IITier I

Tier II $287,160 $430,740 $574,320 $717,900 Tier I $217,460 $326,190 $434,920 $543,650

10 Relo's per Tier

15 Relo's per Tier

20 Relo's per Tier

25 Relo's per Tier

: this annual savings has an EPS impact1 of ~1.6 ¢ EPS annually 1-($750K savings *.65% effective after tax rate) / 30.2M shares outstanding as reported

in Q204 financials

$504,620

$756,930

$1,009,240

$1,261,550

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Next Steps

Next Steps Status / Timeline

Conduct Reference Checks on Sirva Completed

Meet with Executive Management 15-Oct-04

Greg Robbins to Review Contract Agreement Week of October 18th

Hold Implementation Meeting with Corporate HR / Finance Team and Sirva Management

22-Oct-04

Conference Call with General Managers & HR Team to Review Program

1-Nov-04

Facilitate Conference Call with Business Unit HR Team and Sirva Management

Week of 11/8/2004

Implement New Relocation Program 15-Nov-04 / 30-Nov-04