EXHIBIT 10.7

AMENDED AND RESTATED EXECUTIVE SEVERANCE AGREEMENT

December 16, 2008

 

Don Kania    Executive c/o FEI Company    5350 NE Dawson Creek Drive   
Hillsboro, OR 97124   

 

FEI Company    an Oregon corporation    5350 NE Dawson Creek Drive    Hillsboro,
OR 97124    FEI

FEI considers the establishment and maintenance of a sound and vital management
to be essential to protecting and enhancing the best interests of FEI and its
shareholders. FEI recognizes that, as is the case with many publicly held
corporations, the possibility of a change of control may exist and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of management personnel
to the detriment of FEI and its shareholders. In order to induce Executive to
remain employed by FEI in the face of uncertainties about the long-term
strategies of FEI and possible change of control of FEI and their potential
impact on Executive’s position with FEI, this Amended and Restated Executive
Severance Agreement (“Agreement”), which has been approved by the Board of
Directors of FEI, sets forth the severance benefits that FEI will provide to
Executive in the event Executive’s employment by FEI is terminated under the
circumstances described in this Agreement.

1. Employment Relationship. Effective as of August 14, 2006 (the “Employment
Commencement Date”), Executive became employed by FEI as President and Chief
Executive Officer (“Current Position”). Executive and FEI acknowledge that
Executive’s employment with FEI constitutes “at-will” employment, and either
party may terminate this employment relationship at any time and for any or no
reason, subject to the obligation of FEI to provide the severance benefits
specified in this Agreement in accordance with the terms hereof.

2. Release of Claims. In consideration for and as a condition precedent to
receiving the severance benefits outlined in this Agreement, Executive agrees to
execute a Release of Claims in the form attached as Exhibit A (“Release of
Claims”). Executive promises to execute and deliver the Release of Claims to FEI
within the later of (a) 21 days from the date Executive receives the Release of
Claims (or within such longer period of time as required by applicable law but
in no event later than sixty (60) days following Executive’s termination,
inclusive of any revocation period set forth in the Release of Claims) or
(b) the last day of Executive’s active employment.

3. Compensation Upon Termination for Death, Disability or Other than For Cause
not in Connection with a Change of Control. In the event of a Termination of
Executive’s Employment (as defined in Section 8.1 of this Agreement) from the
Current Position due to Executive’s death, Disability (as defined in Section 8.4
of this Agreement) or termination by FEI for any reason other than for Cause (as
defined in Section 8.2 of this Agreement), and such termination is not in
Connection with a Change of Control (as defined in Section 8.5 of this
Agreement), then contingent upon Executive’s execution of the Release of Claims
and compliance with Sections 9, 10 and 12 FEI shall pay Executive, in a single
lump sum payment after employment has ended and eight days have passed following
execution of the Release of Claims without revocation (subject to Section 23),
the amounts set out below as severance pay and in lieu of any other compensation
for periods subsequent to the date of termination:

(a) If the date of Termination of Executive’s Employment occurs prior to the
first anniversary of the Employment Commencement Date, then Executive shall be
paid a lump sum amount in cash equal to the sum of: (i) twenty-four (24) months
of Executive’s annual base pay at the rate in effect immediately prior to the
date of termination, plus (ii) 200% of the Executive’s target bonus for the year
in which Termination of Executive’s

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Employment occurs under the annual cash incentive plan(s) in effect at the time
of termination (less bonus amounts already paid for such year).

(b) If the date of Termination of Executive’s Employment occurs on or after the
first anniversary of the Employment Commencement Date, then Executive shall be
paid a lump sum amount in cash equal to the sum of: (i) eighteen (18) months of
Executive’s annual base pay at the rate in effect immediately prior to the date
of termination, plus (ii) 150% of the Executive’s target bonus for the year in
which Termination of Executive’s Employment occurs under the annual cash
incentive plan(s) in effect at the time of termination (less bonus amounts
already paid for such year).

4. Compensation Upon Termination Without Cause or Resignation for Good Reason in
Connection with a Change of Control. In the event of a Termination of
Executive’s Employment in Connection with a Change of Control (i) for Good
Reason (ii) other than for Cause, or (iii) upon Executive’s death or Disability
and Executive was employed in his Current Position at the time of a Change of
Control, then in each event contingent upon Executive’s executing and not
revoking the Release of Claims and compliance with Sections 9, 10 and 12,
Executive shall be entitled to the benefits set forth in this Section 4 (subject
to Section 23). If Executive is entitled to benefits under this Section 4,
Executive shall not be entitled to any benefits under Section 3 of this
Agreement as they are not cumulative.

4.1 Base Pay and Bonus. Executive shall be paid a lump sum amount in cash equal
to the sum of: (i) twenty-four (24) months of Executive’s annual base pay at the
rate in effect immediately prior to the date of termination, plus (ii) 200% of
the Executive’s target bonus for the year in which Termination of Executive’s
Employment occurs under the annual cash incentive plan(s) in effect at the time
of termination (less bonus amounts already paid for such year). Subject to
Section 23, if Executive’s employment ends on or before October 15 of a calendar
year, his or her severance pay will be paid after eight days have passed
following execution of the Release of Claims without revocation but on or before
December 31 of that calendar year. If Executive’s employment ends after
October 15 if a calendar year, his or her severance pay will paid on the later
of (a) the second payroll date in the calendar year next following the calendar
year in which the Executive’s employment has ended or (b) the first payroll date
following the date his or her Release of Claims becomes effective, subject to
Section 23 below.

4.2 Health Insurance. Pursuant to COBRA, a federal law, Executive is entitled to
extend coverage under any FEI group health plan in which Executive and
Executive’s dependents are enrolled at the time of termination of employment.
FEI will pay Executive a lump sum cash payment in an amount equivalent to two
times (2x) the reasonably estimated cost Executive may incur to extend for a
period of 18 months under the COBRA continuation laws Executive’s group health
and dental plan coverage in effect at the time of termination. Executive may use
this payment for such COBRA continuation coverage or for any other purpose. The
amount payable pursuant to Section 4.2 shall be paid on the same date that the
Section 4.1 payment is payable.

4.3. Life Insurance. For a period of two years following Termination of
Executive’s Employment, FEI shall maintain in full force and effect, at its sole
cost and expense, for Executive’s continued benefit, any life insurance policy
insuring Executive’s life in effect immediately prior to termination, provided
that Executive’s continued participation is possible under the general terms and
provisions of such policy. In the event that Executive’s continued participation
in such policy is barred, FEI shall make a lump sum cash payment to Executive
equal to the total premiums that would have been paid by FEI for such two-year
period. The amount payable pursuant to Section 4.3, if any, shall be paid on the
same date that the Section 4.1 payment is payable.

4.4 Stock Options and Other Awards. All outstanding stock options held by
Executive shall become immediately exercisable in full and shall remain
exercisable until the earlier of (a) two (2) years after termination of
employment or (b) the option expiration date as set forth in the applicable
option agreement. All vesting and performance requirements shall be deemed fully
satisfied, and all repurchase rights of FEI shall immediately terminate, under
all outstanding restricted stock awards held by the Executive. With respect to
outstanding awards other than stock options and restricted stock (but including
restricted stock units), Executive will immediately vest in and have the right
to exercise such awards, all restrictions will lapse, and all performance goals
or other vesting criteria will be deemed achieved at 100 percent target levels
and all other terms and conditions met. Such awards will be paid or otherwise
settled as soon as administratively practicable following the date of
termination or, if later, the date of exercise (subject to Section 23, to the
extent applicable).

 

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5. Capped Benefit. Notwithstanding any provision in this Agreement, in the event
that Executive would receive a greater after-tax benefit from the Capped Benefit
(as defined in the next sentence) than from the payments pursuant to this
Agreement (the “Specified Benefits”), the Capped Benefit shall be paid to
Executive and the Specified Benefits shall not be paid. The Capped Benefit is
the Specified Benefits, reduced by the amount necessary to prevent any portion
of the Specified Benefits from being “parachute payments” as defined in
Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (“IRC”), or
any successor provision. In the event of a reduction in accordance with the
preceding sentence, the reduction will occur in the following order: reduction
of the cash severance pay provided pursuant to Sections 4.1 and 4.2, the vesting
acceleration of outstanding equity awards provided pursuant to Section 4.4, and
the Company-paid life insurance coverage (or the cash equivalent) provided
pursuant to Section 4.3. For purposes of determining whether Executive would
receive a greater after-tax benefit from the Capped Benefit than from the
Specified Benefits, there shall be taken into account all payments and benefits
Executive will receive in connection with a Change of Control (collectively,
excluding the Specified Benefits, the “Change of Control Payments”) as
determined in accordance with Section 280G of the IRC and the regulations issued
thereunder. To determine whether Executive’s after-tax benefit from the Capped
Benefit would be greater than Executive’s after-tax benefit from the Specified
Benefits, there shall be subtracted from the sum of the before-tax Specified
Benefits and the Change of Control Payments (including the monetary value of any
non-cash benefits) any excise tax that would be imposed under IRC Section 4999
and all federal, state and local taxes required to be paid by Executive in
respect of the receipt of such payments, assuming that such payments would be
taxed at the highest marginal rate applicable to individuals in the year in
which the Specified Benefits are to be paid or such lower rate as Executive
advises FEI in writing is applicable to Executive. Unless FEI and Executive
otherwise agree in writing, any determination required under this Section shall
be made in writing by FEI’s independent public accountants or other nationally
recognized accountants reasonably acceptable to both parties (the
“Accountants”), whose determination shall be conclusive and binding upon
Executive and FEI for all purposes. For purposes of making the calculations
required by this Section, the Accountants may rely on reasonable, good faith
interpretations concerning the application of Sections 280G and 4999 of the IRC.
FEI and Executive shall furnish to the Accountants such information and
documents as the Accountants may reasonably request in order to make a
determination under this Section. FEI shall bear all costs the Accountants may
reasonably incur in connection with any calculations contemplated by this
Section.

6. Tax Withholding; Subsequent Employment.

6.1 Withholding. All payments provided for in this Agreement are subject to
applicable tax withholding obligations imposed by federal, state and local laws
and regulations.

6.2 Subsequent Employment. The amount of any payment provided for in this
Agreement shall not be reduced, offset or subject to recovery by FEI by reason
of any compensation earned by Executive as the result of employment by another
employer after termination.

7. Other Agreements or Arrangements. In the event that severance benefits are
payable to Executive under any other agreement or arrangement with or plan or
policy of FEI in effect at the time of termination (including but not limited to
any employment agreement or severance plan or policy, but excluding for this
purpose any stock option agreement, restricted stock agreement or restricted
share unit agreement, or any plan under which any such stock options, shares of
restricted stock or restricted stock units may have been issued, that may
provide for accelerated vesting, extension of exercise periods or related
benefits upon the occurrence of a change of control, death or disability), the
benefits provided in this Agreement shall be in lieu of the benefits provided in
all such other agreements and arrangements.

8. Definitions.

8.1 Termination of Executive’s Employment. Termination of Executive’s Employment
means that FEI has terminated Executive’s employment from his Current Position
with FEI, provided that such termination is a “separation from service” within
the meaning of Section 409A, as determined by FEI. For purposes of Section 4,
Termination of Executive’s Employment shall include termination by Executive in
Connection with a Change of Control, by written notice to FEI referring to the
applicable paragraph of Section 8.1, for “Good Reason” based on:

 

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(A) the assignment to Executive of a different title, job or responsibilities
that results in any decrease in the level of responsibility of Executive with
respect to the surviving company after the Change of Control when compared to
Executive’s Current Position;

(B) a reduction by FEI or the surviving company in Executive’s base pay as in
effect immediately prior to the Change of Control, other than a salary reduction
that is part of a general salary reduction affecting employees generally;

(C) a reduction by FEI or the surviving company in total benefits available to
Executive under cash incentive, stock incentive and other employee benefit plans
after the Change of Control compared to the total package of such benefits as in
effect prior to the Change of Control; or

(D) FEI or the surviving company requires Executive to be based more than 50
miles from where Executive’s office is located immediately prior to the Change
of Control except for required travel on company business to an extent
substantially consistent with the business travel obligations which Executive
undertook on behalf of FEI prior to the Change of Control.

8.2 Cause. Termination for “Cause” shall mean a termination by FEI based on
(i) Executive’s willful and substantial misconduct in the performance of his
duties, (ii) Executive’s willful failure to perform his duties after two weeks
written notice from FEI (other than as a result of a total or partial incapacity
due to a physical or mental illness, accident or similar event), (iii) the
Executive’s material breach of this Agreement, (iv) the commission by Executive
of any material fraudulent act with respect to the business and affairs of FEI
or any subsidiary or affiliate thereof or (v) Executive’s conviction of (or plea
of nolo contendere to) a crime constituting a felony. FEI may terminate
Executive’s employment for Cause only with the approval of a majority of the
Board.

8.3 Change of Control. A Change of Control shall mean that one of the following
events has taken place:

(A) any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) becomes the “beneficial owner” (as
defined in Rule 13d-3 under said Act), directly or indirectly, of securities of
FEI representing more than twenty percent (20%) of the total voting power
represented by FEI’s then outstanding voting securities (other than to the
extent such beneficial ownership arises from a voting agreement, proxy or
similar document entered into in connection with and pertaining to a merger or
similar transaction approved by FEI’s Board);

(B) the consummation of the sale or disposition by FEI of all or substantially
all of FEI’s assets;

(C) the consummation of a merger or consolidation of FEI with any other
corporation, other than a merger or consolidation which would result in the
voting securities of FEI outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity or its parent) at least fifty percent
(50%) of the total voting power represented by the voting securities of FEI or
such surviving entity or its parent outstanding immediately after such merger or
consolidation; or

 

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(D) a change in the composition of the Board occurring within a one (1) year
period, as a result of which less than a majority of the directors are Incumbent
Directors. “Incumbent Directors” means directors who either (A) are directors of
FEI as of the date hereof, or (B) are elected, or nominated for election, to the
Board with the affirmative votes of at least two-thirds of the directors of FEI
at the time of such election or nomination (but will not include an individual
whose election or nomination is in connection with an actual or threatened proxy
contest relating to the election of directors to FEI).

Notwithstanding anything in the foregoing to the contrary, no Change of Control
shall be deemed to have occurred for purposes of this Agreement by virtue of any
transaction which results in Executive, or a group of persons which includes
Executive, acquiring, directly or indirectly, securities representing 20 percent
or more of the voting power of outstanding securities of FEI.

8.4 Disability. For purposes of the payment of severance benefits under
Section 3 or Section 4 of this Agreement, “Disability” shall mean Executive’s
absence from full-time duties with FEI for 180 consecutive days as a result of
Executive’s incapacity due to physical or mental illness, unless within 30 days
after notice of termination by FEI following such absence Executive shall have
returned to the full-time performance of Executive’s duties. The conclusive and
binding determination of Executive’s Disability will be made by the Board of
Directors in accordance with the definition of Disability as set forth above.

8.5 In Connection with a Change of Control. For purposes of this Agreement, a
termination of Executive’s employment with FEI is “in Connection with a Change
of Control” if Executive’s employment is terminated on or within eighteen
(18) months following a Change of Control (as such term is defined in
Section 8.3 of this Agreement).

9. Non-Competition. For the duration of Executive’s employment with FEI and, if
severance benefits are payable under Section 3 or 4 following the termination of
such employment, for one year following the date of termination (collectively,
the “Noncompete Period”), Executive will not, without the prior written consent
of FEI, directly or indirectly, engage or invest in, own, manage, operate,
finance, control or participate in the ownership, management, operation,
financing or control of, be employed by, associated with, or in any manner
connected with, lend Executive’s name to, lend Executive’s credit to or render
services or advice to, any business whose products or activities compete in
whole or in part with the former, current or currently contemplated products or
activities of FEI or any of its subsidiaries, in any state of the United States
or in any country in which FEI or any of its subsidiaries sells products or
conducts business; provided, however, that Executive may purchase or otherwise
acquire up to (but not more than) one percent of any class of securities of any
enterprise (but without otherwise participating in the activities of such
enterprise) if such securities are listed on any national or regional securities
exchange or have been registered under Section 12(g) of the Securities Exchange
Act of 1934, as amended. Executive agrees that this covenant is reasonable with
respect to its duration, geographical area, and scope. During the Noncompete
Period, Executive will, within ten days after accepting any employment, advise
FEI of the identity of any employer of Executive. Receipt of the benefits
provided under Sections 3 and 4 hereof is conditioned upon compliance by
Executive with this Section.

10. Non-Solicitation; Non-Hire. For the Noncompete Period, Executive hereby
agrees that Executive will not, directly or indirectly, either for himself or
any other person: (a) induce or attempt to induce any employee of FEI or any of
its subsidiaries to leave the employ of FEI or such subsidiary; (b) in any way
interfere with the relationship between FEI and its subsidiaries and any
employee of FEI or any of its subsidiaries; (c) employ, or otherwise engage as
an employee, independent contractor or otherwise, any current or former employee
of FEI or any of its subsidiaries, other than such former employees who have not
worked for FEI or any of its subsidiaries in the prior 12 months; (d) induce or
attempt to induce any customer, supplier, licensee or business relation of FEI
or any of its subsidiaries to cease doing business with FEI or such subsidiary,
or in any way interfere with the relationship between FEI and its subsidiaries
and any customer, supplier, licensee or business relation of FEI or any of its
subsidiaries; or (e) solicit the business of any person known to Executive to be
a customer of FEI or any of its subsidiaries, whether or not Executive had
personal contact with such person, with respect to products or activities which
compete in whole or in part with the former, current or currently contemplated
products or activities of FEI and its subsidiaries or the products or activities
of FEI and its subsidiaries in existence or contemplated at the

 

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time of termination of Executive’s employment. Receipt of the benefits provided
under Sections 3 and 4 are conditioned upon compliance by Executive with this
Section.

11. Successors; Binding Agreement.

11.1 This Agreement shall be binding on and inure to the benefit of FEI and its
successors and assigns.

11.2 This Agreement shall inure to the benefit of and be enforceable by
Executive and Executive’s legal representatives, executors, administrators and
heirs. None of the rights of Executive to receive any form of compensation
payable pursuant to this Agreement may be assigned or transferred except by will
or the laws of descent and distribution. Any other attempted assignment,
transfer, conveyance, or other disposition of Executive’s right to compensation
or other benefits will be null and void.

12. Resignation of Corporate Offices. Executive will resign Executive’s office,
if any, as a director, officer or trustee of FEI, its subsidiaries or affiliates
and of any other corporation or trust of which Executive serves as such at the
request of FEI, effective as of the date of termination of employment. Executive
agrees to provide FEI such written resignation(s) upon request and that no
severance will be paid until after such resignation(s) are provided.

13. Governing Law, Attorneys Fees. This Agreement shall be construed in
accordance with and governed by the laws of the State of Oregon. FEI shall pay
all reasonable attorney’s fees and expenses (including at trial and on appeal)
of Executive in enforcing its rights under Section 4 of this Agreement in the
event of a Termination of Executive’s Employment in Connection with a Change of
Control.

14. Amendment. No provision of this Agreement may be modified unless such
modification is agreed to in a writing signed by Executive and FEI.

15. Severability. If any of the provisions or terms of this Agreement shall for
any reason be held invalid or unenforceable, such invalidity or unenforceability
shall not affect any other terms of this Agreement, and this Agreement shall be
construed as if such unenforceable term had never been contained in this
Agreement.

16. Injunctive Relief. A breach of Executive’s obligations under Section 9 or 10
hereof may not be one which is capable of being easily measured by monetary
damages and, consequently, Executive specifically agrees that such sections may
be enforced by injunctive relief. Further, Executive specifically agrees that,
in addition to such injunctive relief, and not in lieu of it, FEI may also bring
suit for damages incurred by FEI as a result of a breach of Executive’s
obligations under such sections.

17. Notices.

17.1 General. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. In the case of Executive, mailed notices
shall be addressed to him at the home address which he most recently
communicated to FEI in writing. In the case of FEI, mailed notices shall be
addressed to its corporate headquarters, and all notices shall be directed to
the attention of its General Counsel.

17.2 Notice of Termination. Any termination by FEI for Cause or by Executive for
Good Reason or otherwise shall be communicated by a notice of termination to the
other party hereto given in accordance with this Section. Such notice shall
indicate the specific termination provision in this Agreement relied upon, shall
set forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination under the provision so indicated, and shall specify the
date of termination. The failure by Executive to include in the notice any fact
or circumstance which contributes to a showing of Good Reason shall not waive
any right of Executive hereunder or preclude Executive from asserting such fact
or circumstance in enforcing his rights hereunder.

 

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18. Integration. This Agreement, together with the equity award grant notices
and agreements that describe Executive’s outstanding equity awards, FEI’s
standard form of indemnification agreement and indemnification policies, and
FEI’s standard form of confidentiality agreement, represents the entire
agreement and understanding between the parties as to the subject matter herein
and supersedes all prior or contemporaneous agreements whether written or oral.
In entering into this Agreement, no party has relied on or made any
representation, warranty, inducement, promise, or understanding that is not in
this Agreement. To the extent that any provisions of this Agreement conflict
with those of any other agreement, including but not limited to any equity award
grant notices and agreements whether issued and entered into prior to,
contemporaneously with, or following this Agreement, the terms of this Agreement
will prevail except to the extent this Agreement is specifically referenced in
such other agreement.

19. Waiver of Breach. The waiver of a breach of any term or provision of this
Agreement, which must be in writing, will not operate as or be construed to be a
waiver of any other previous or subsequent breach of this Agreement.

20. Arbitration. The Parties agree that any and all disputes arising out of the
terms of this Agreement, Executive’s employment by FEI, Executive’s service as
an officer or director of FEI, or Executive’s compensation and benefits, their
interpretation, and any of the matters herein released, will be subject to
binding arbitration in Portland, Oregon before the American Arbitration
Association under its National Rules for the Resolution of Employment Disputes,
supplemented by the Oregon Rules of Civil Procedure. The Parties agree that the
prevailing party in any arbitration will be entitled to injunctive relief in any
court of competent jurisdiction to enforce the arbitration award. The Parties
hereby agree to waive their right to have any dispute between them resolved in a
court of law by a judge or jury. This paragraph will not prevent either party
from seeking injunctive relief (or any other provisional remedy) from any court
having jurisdiction over the Parties and the subject matter of their dispute
relating to Executive’s obligations under this Agreement.

21. Headings. All captions and Section headings used in this Agreement are for
convenient reference only and do not form a part of this Agreement.

22. Acknowledgment. Executive acknowledges that he has had the opportunity to
discuss this matter with and obtain advice from his private attorney, has had
sufficient time to, and has carefully read and fully understands all the
provisions of this Agreement, and is knowingly and voluntarily entering into
this Agreement.

23. IRC Section 409A.

23.1 Notwithstanding anything to the contrary in this Agreement, if Executive is
a “specified employee” within the meaning of Section 409A of the IRC and the
final regulations and any guidance promulgated thereunder (“Section 409A”) at
the time of Executive’s termination of employment (other than due to death),
then the severance benefits payable to Executive under this Agreement, if any,
and any other severance payments or separation benefits that may be considered
deferred compensation under Section 409A (together, the “Deferred Compensation
Separation Benefits”) otherwise due to Executive on or within the six (6) month
period following Executive’s termination will accrue during such six (6) month
period and will become payable in a lump sum payment (less applicable
withholding taxes) on the date six (6) months and one (1) day following the date
of Executive’s termination of employment. All subsequent payments, if any, will
be payable in accordance with the payment schedule applicable to each payment or
benefit. Notwithstanding anything herein to the contrary, if Executive dies
following his termination but prior to the six-month anniversary of his date of
termination, then any payments delayed in accordance with this paragraph will be
payable in a lump sum (less applicable withholding taxes) to Executive’s estate
as soon as administratively practicable after the date of Executive’s death and
all other Deferred Compensation Separation Benefits will be payable in
accordance with the payment schedule applicable to each payment or benefit.

23.2 It is the intent of this Agreement to comply with the requirements of
Section 409A so that none of the severance payments and benefits to be provided
hereunder will be subject to the additional tax imposed under Section 409A, and
any ambiguities herein will be interpreted to so comply. FEI and Executive agree
to work together in good faith to consider amendments to this Agreement and to
take such reasonable actions which are

 

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necessary, appropriate or desirable to avoid imposition of any additional tax or
income recognition under Section 409A prior to actual payment to Executive.

24. Counterparts. This Agreement may be executed in counterparts, and each
counterpart will have the same force and effect as an original and will
constitute an effective, binding agreement on the part of each of the
undersigned.

[Remainder of page intentionally left blank]

 

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FEI COMPANY     EXECUTIVE By:   /s/ T. Ashcroft     /s/ Don Kania   T. Ashcroft
    Don Kania Title:   V.P. Human Resources      

 

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EXHIBIT A

RELEASE OF CLAIMS

1. PARTIES. The parties to this Release of Claims (hereinafter “Release”) are
Don Kania and FEI Company, an Oregon corporation, as hereinafter defined.

1.1 EXECUTIVE. For the purposes of this Release, “Executive” means Don Kania,
and his heirs, executors, administrators, assigns, and spouse.

1.2 THE COMPANY. For purposes of this Release, the “Company” means FEI Company,
an Oregon corporation, its predecessors and successors, corporate affiliates,
and all of each corporation’s officers, directors, employees, insurers, agents,
or assigns, in their individual and representative capacities.

2. BACKGROUND AND PURPOSE. Executive was employed by the Company. Executive’s
employment is ending effective              pursuant to Section [3 or 4] of the
Amended and Restated Executive Severance Agreement dated             , 2008
between the Company and Executive (“Agreement”). Pursuant to Section [3 or 4] of
the Agreement, the Company is required to make certain payments and/or provide
certain benefits to Executive as a result of termination of Executive’s
employment.

The purpose of this Release is to settle, release and discharge all claims
Executive may have against the Company, whether asserted or not, known or
unknown, including, but not limited to, all claims arising out of or related to
Executive’s employment, any claim for reemployment, or any other claims, whether
asserted or not, known or unknown, past or present, that relate to Executive’s
employment, compensation, reemployment, or application for reemployment.

3. RELEASE.

3.1 General Release. Executive agrees that the foregoing consideration
represents settlement in full of all outstanding obligations owed to Executive
by the Company and its current and former officers, directors, employees,
agents, investors, attorneys, shareholders, administrators, affiliates,
divisions, and subsidiaries, and predecessor and successor corporations and
assigns (collectively, the “Releasees”). Executive, on his own behalf and on
behalf of his respective heirs, family members, executors, agents, and assigns,
hereby and forever releases the Releasees from, and agrees not to sue
concerning, or in any manner to institute, prosecute or pursue, any claim,
complaint, charge, duty, obligation, or cause of action relating to any matters
of any kind, whether presently known or unknown, suspected or unsuspected, that
Executive may possess against any of the Releasees arising from any omissions,
acts, facts, or damages that have occurred up until and including the Effective
Date of this Release, including, without limitation:

a) Any and all claims relating to or arising from Executive’s employment
relationship with the Company and the termination of that relationship;

b) Any and all claims relating to, or arising from, Executive’s right to
purchase, or actual purchase of shares of stock of the Company, including,
without limitation, any claims for fraud, misrepresentation, breach of fiduciary
duty, breach of duty under applicable state corporate law, and securities fraud
under any state or federal law;

c) Any and all claims for wrongful discharge of employment; termination in
violation of public policy; discrimination; harassment; retaliation; breach of
contract, both express and implied; breach of covenant of good faith and fair
dealing, both express and implied; promissory estoppel; negligent or intentional
infliction of emotional distress; fraud; negligent or intentional
misrepresentation; negligent or intentional interference with contract or
prospective economic advantage; unfair business practices; defamation; libel;
slander; negligence; personal injury; assault; battery; invasion of privacy;
false imprisonment; conversion; and disability benefits;

 

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d) Any and all claims for violation of any federal, state, or municipal statute,
including, but not limited to, any claim arising under the Oregon statutes
dealing with employment and discrimination in employment, Title VII of the Civil
Rights Act of 1964, the Civil Rights Act of 1991, the Rehabilitation Act of
1973, the Americans with Disabilities Act of 1990, the Equal Pay Act, the Fair
Labor Standards Act, except as prohibited by law, the Fair Credit Reporting Act,
the Age Discrimination in Employment Act of 1967 (the “ADEA”), the Older Workers
Benefit Protection Act, the Employee Retirement Income Security Act of 1974
(“ERISA”), the Worker Adjustment and Retraining Notification Act, the Family and
Medical Leave Act, except as prohibited by law, the Sarbanes-Oxley Act of 2002,
Executive Order 11246, the Uniformed Services Employment and Reemployment Rights
Act of 1994, the Oregon wage and hour statutes, all as amended, any regulations
under such authorities, and any applicable contract, tort, or common law
theories;

e) any and all claims for violation of the federal or any state constitution;

f) any and all claims arising out of any other laws and regulations relating to
employment or employment discrimination;

g) any claim for any loss, cost, damage, or expense arising out of any dispute
over the non-withholding or other tax treatment of any of the proceeds received
by Executive as a result of this Release or the Agreement; and

h) any and all claims for attorneys’ fees and costs.

Executive agrees that the release set forth in this section shall be and remain
in effect in all respects as a complete general release as to the matters
released. This release does not release claims that cannot be released as a
matter of law.

3.2 Reservations of Rights. This Release shall not affect any rights which
Executive may have under any medical insurance, disability plan, workers’
compensation, unemployment compensation, applicable company stock incentive
plan(s), applicable indemnification agreement (or as to indemnification rights
only, any applicable company policy, bylaw, provision, statute, or law), the
401(k) plan maintained by the Company or any other plan maintained by the
Company that is subject to ERISA. This release does not extend to any
obligations incurred under this Agreement.

3.3 No Admission of Liability. It is understood and agreed that the acts done
and evidenced hereby and the Release granted in this Agreement is not an
admission of liability on the part of Executive or the Company.

4. CONSIDERATION TO EXECUTIVE.

The Company shall pay:

a) the lump sum of              DOLLARS ($            ) to Executive (less
proper withholding) for severance (calculated on the basis of Executive’s base
salary and target bonus) as provided in Section              of the Agreement;
[and]

[b) the lump sum of              DOLLARS ($            ) to Executive (less
proper withholding) for the reasonable estimate of COBRA continuation coverage
as provided in Section              of the Agreement;] [and]*

[c) the lump sum of              DOLLARS ($            ), representing the cash
equivalent (less proper withholding) of the premium to maintain Executive’s life
insurance policy for two years (in lieu of maintaining such policy) as provided
in Section              of the Agreement;] [and]*

[d) acceleration of vesting and/or payment of all of Executive’s stock options,
restricted stock, restricted stock units and other equity awards, the
termination of the Company’s rights to repurchase shares of

 

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Company stock from the Executive, and the ability to exercise all of Executive’s
options until the earlier of two years after the date his employment ends or the
option expiration date as set forth in the applicable option agreement, all as
provided in Section              of the Agreement.]*

If the Executive’s employment ends on or before October 15 of a calendar year,
these amounts will be paid after receipt of this Release by the Company fully
endorsed by executive, and following the expiration of the seven- (7) day
revocation period described in Section 11 of this Release, but on or before
December 31 of that calendar year, subject to six (6) month period specified in
Section 23 of the Agreement to the extent the amounts described above may be
considered deferred compensation under Section 409A. If the Executive’s
employment ends after October 15 of a calendar year, these amounts will be paid
on the later of (a) the second payroll date in the calendar year next following
the calendar year in which the Executive’s employment has ended or (b) the fist
payroll date following the date this Release becomes effective, subject to the
six (6) month period specified in Section 23 of the Agreement to the extent the
amounts described above may be considered deferred compensation under
Section 409A.

5. NO DISPARAGEMENT. Executive agrees that henceforth Executive will not
disparage or make false or adverse statements about the Company. The Company may
take actions consistent with breach of this Release should it determine that
Executive has disparaged or made false or adverse statements about the Company.
The Company agrees to follow the applicable policy(ies) regarding release of
employment reference information.

6. CONFIDENTIALITY, PROPRIETARY, TRADE SECRET AND RELATED INFORMATION. Executive
shall not make unauthorized use or disclosure of any of the Company’s
confidential, proprietary or trade secret information, including, without
limitation, confidential, proprietary or trade secret information regarding its
products, customers and suppliers. Moreover, Executive acknowledges that,
subject to the enforcement limitations of applicable law, the Company reserves
the right to enforce the terms of any employment agreement between Executive and
the Company (including the Confidential Intellectual Property and
Non-solicitation Agreement). Should Executive or Executive’s attorney or agents
be requested in any judicial, administrative, or other proceeding to disclose
confidential, proprietary or trade secret information Executive learned as an
employee of the Company, Executive shall promptly notify the Company of such
request by the most expeditious means in order to enable the Company to take any
reasonable and appropriate action to limit such disclosure.

7. OPPORTUNITY FOR ADVICE OF COUNSEL. Executive acknowledges that Executive has
been, and hereby is, advised to seek advice of counsel with respect to this
Release. Executive represents that he has carefully read and understands the
scope and effect of the provisions of this Release.

8. ENTIRE RELEASE. Executive and the Company acknowledge that no other party has
made any promise, representation, or warranty, express or implied, not contained
in this Release concerning the subject matter of this Release to induce this
Release, and Executive and Company acknowledge that they have not executed this
Release in reliance upon any such promise, representation, or warranty not
contained in this Release. This Release represents the entire agreement and
understanding between the Company and Executive concerning the subject matter of
this Release and Executive’s relationship with the Company, the termination
thereof, and the events leading thereto and associated therewith, and supersedes
and replaces any and all prior agreements and understandings concerning the
subject matter of this Release and Executive’s relationship with the Company,
with the exception of the Agreement, the equity award grant notices and
agreements that describe Executive’s outstanding equity awards, the Company’s
standard form of indemnification agreement and indemnification policies, and the
Company’s standard form of confidentiality agreement.

9. SEVERABILITY. Every provision of this Release is intended to be severable. In
the event any term or provision of this Release is declared to be illegal or
invalid for any reason whatsoever by a court of competent jurisdiction, such
illegality or invalidity shall not affect the remaining terms and provisions of
this Release, which terms and provisions shall remain binding and enforceable.

 

 

* Applicable only to termination under Section 4 of the Agreement

 

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10. ACKNOWLEDGMENTS. Executive acknowledges that the Release provides severance
pay and benefits which the Company would otherwise have no obligation to
provide.

Executive acknowledges that he is waiving and releasing any rights he may have
under the ADEA, and that this waiver and release is knowing and voluntary.
Executive agrees that this waiver and release does not apply to any rights or
claims that may arise under the ADEA after the Effective Date of this Release.
Executive acknowledges that the consideration given for this waiver and release
is in addition to anything of value to which Executive was already entitled.
Nothing in this Release prevents or precludes Executive from challenging or
seeking a determination in good faith of the validity of this waiver under the
ADEA, nor does it impose any condition precedent, penalties, or costs for doing
so, unless specifically authorized by federal law.

11. REVOCATION. As provided by the Older Workers Benefit Protection Act,
Executive shall have up to twenty-one (21) days to consider this Release. For a
period of seven (7) days from execution of this Release, Executive may revoke
this Release by so indicating in a signed writing delivered to the Company
during the seven (7) day revocation period. This Release shall not be effective
until after the revocation period has expired. In the event Executive signs this
Release and returns it to the Company in less than the 21-day period identified
above, Executive hereby acknowledges that he has freely and voluntarily chosen
to waive the time period allotted for considering this Release. Executive
acknowledges and understands that revocation must be accomplished by a written
notification to the Company’s General Counsel that is received prior to the
Effective Date of this Release. Upon receipt of Executive’s signed Release, the
end of the revocation period without revocation by Executive and, to the extent
applicable with respect to severance payments or separation benefits that may be
considered deferred compensation under Section 409A, the expiration of the six
(6) month period specified in Section 23 of the Agreement, the payments
described in paragraph 4 above will be made by the Company to Executive in
accordance with paragraph 4.

12. NO PENDING OR FUTURE LAWSUITS. Executive represents that he has no lawsuits,
claims, or actions pending in his name, or on behalf of any other person or
entity, against the Company or any of the other Releasees. Executive also
represents that he does not intend to bring any claims on his own behalf or on
behalf of any other person or entity against the Company or any of the other
Releasees.

13. BREACH. Executive acknowledges and agrees that any material breach of this
Release, unless such breach constitutes a legal action by Executive challenging
or seeking a determination in good faith of the validity of the waiver herein
under the ADEA, shall entitle the Company immediately to recover and/or cease
providing the consideration provided to Executive under this Release and the
Agreement, except as provided by law.

14. ARBITRATION. Executive and the Company agree that any and all disputes
arising out of the terms of this Release or the Agreement, Executive’s
employment by the Company, Executive’s service as an officer or director of the
Company, or Executive’s compensation and benefits, their interpretation, and any
of the matters herein released, will be subject to binding arbitration in
Portland, Oregon before the American Arbitration Association under its National
Rules for the Resolution of Employment Disputes, supplemented by the Oregon
Rules of Civil Procedure. The Parties agree that the prevailing party in any
arbitration will be entitled to injunctive relief in any court of competent
jurisdiction to enforce the arbitration award. The Parties hereby agree to waive
their right to have any dispute between them resolved in a court of law by a
judge or jury. This paragraph will not prevent either party from seeking
injunctive relief (or any other provisional remedy) from any court having
jurisdiction over the Parties and the subject matter of their dispute relating
to Executive’s obligations under this Agreement.

15. TAX CONSEQUENCES. The Company makes no representations or warranties with
respect to the tax consequences of the payments and any other consideration
provided to Executive or made on his behalf under the terms of this Release or
the Agreement. Executive agrees and understands that he is responsible for
payment, if any, of local, state, and/or federal taxes on the payments and any
other consideration provided hereunder by the Company and any penalties or
assessments thereon. Executive further agrees to indemnify and hold the Company
harmless from any claims, demands, deficiencies, penalties, interest,
assessments, executions, judgments, or recoveries by any government agency
against the Company for any amounts claimed due on account of (a) Executive’s
failure to pay

 

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or the Company’s failure to withhold, or Executive’s delayed payment of, federal
or state taxes, or (b) damages sustained by the Company by reason of any such
claims, including attorneys’ fees and costs.

16. ATTORNEYS’ FEES. Except with regard to a legal action challenging or seeking
a determination in good faith of the validity of the waiver herein under the
ADEA, in the event that either Party brings an action to enforce or effect its
rights under this Release, the prevailing Party shall be entitled to recover its
costs and expenses, including the costs of mediation, arbitration, litigation,
court fees, and reasonable attorneys’ fees incurred in connection with such an
action.

17. COUNTERPARTS. This Release may be executed in counterparts and by facsimile,
and each counterpart and facsimile shall have the same force and effect as an
original and shall constitute an effective, binding agreement on the part of
each of the undersigned.

18. NO ORAL MODIFICATION. This Release may only be amended in a writing signed
by Executive and the Company.

19. GOVERNING LAW. This Release shall be construed, interpreted, governed, and
enforced in accordance with Oregon law.

20. EFFECTIVE DATE. Each Party has seven (7) days after that Party signs this
Release to revoke it. This Release will become effective on the eighth day after
it has been signed by both parties, so long as it is not revoked by either Party
before that date (the “Effective Date”).

21. VOLUNTARY EXECUTION OF RELEASE. Executive understands and agrees that he
executed this Release voluntarily, without any duress or undue influence on the
part or behalf of the Company or any third party, with the full intent of
releasing all of his claims against the Company and any of the other Releasees.
Executive acknowledges that:

21.1 He has read this Release;

21.2 He has been represented in the preparation, negotiation, and execution of
this Release by legal counsel of his own choice or has elected not to retain
legal counsel;

21.3 He understands the terms and consequences of this Release and of the
releases it contains; and

21.4 He is fully aware of the legal and binding effect of this Release.

 

COMPANY:     FEI COMPANY     By:         Date:     Title:           EXECUTIVE:  
          Date:     Don Kania      

 

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