Exhibit 10.3


FEI
COMPANY


STAND-ALONE NON-STATUTORY STOCK OPTION AGREEMENT


I.              NOTICE
OF STOCK OPTION GRANT


                Name:    Don Kania


                Address:


As an inducement material
to your decision to accept employment with the Company, you have been granted a
Nonstatutory Stock Option to purchase Common Stock of the Company, subject to
the terms and conditions of this Agreement, as follows:


                Date of Grant                                                        ___________________,
2006


                Vesting Commencement Date            ___________________, 2006


                Exercise Price per Share                      $


                Total Number of Shares Granted       100,000


                Total Exercise Price                                              $


                Term/Expiration Date:                          ___________________,
2013


                Vesting Schedule:


Subject to the
accelerated vesting provisions set forth in the Executive Severance Agreement
between Optionee and the Company effective ________________, 2006 (the “Severance
Agreement”), which is hereby incorporated by reference, and Section 11 of this
Agreement, this Option shall vest and may be exercised, in whole or in part, in
accordance with the following schedule:


Twenty-five percent (25%) of the Shares subject to
the Option shall vest on each anniversary of the Vesting Commencement Date, so
that the Option shall be fully vested four (4) years from the Vesting
Commencement Date, subject to the Optionee continuing to be a Service Provider
through each applicable vesting date. 
Notwithstanding the foregoing, in the event Optionee ceases to be a
Service Provider due to Optionee’s death, any outstanding unvested portion of
the Option shall become fully vested and immediately exercisable as of the date
of Optionee’s death.


                Termination Period


Unless extended by
the Board or except as otherwise provided in the Severance Agreement, this
Option shall be exercisable for thirty (30) days after Optionee ceases to be a
Service Provider, unless such termination is due to Optionee’s death or Total
Disability, in which case this Option shall be exercisable for twelve (12)
months after Optionee ceases to be a Service Provider, subject to earlier
termination as set forth in this Agreement. 
In no event shall this Option be exercised later than the
Term/Expiration Date provided above.









 



II.            AGREEMENT


1.             Definitions.  As used herein, the following definitions
shall apply:


(a)           “Agreement” means this stock
option agreement between the Company and Optionee evidencing the terms and
conditions of this Option.


(b)           “Applicable
Laws” means the requirements relating to the administration of stock
options under U.S. state corporate laws, U.S. federal and state securities
laws, the Code, any stock exchange or quotation system on which the Common
Stock is listed or quoted and the applicable laws of any foreign country or
jurisdiction that may apply to this Option.


(c)           “Board”
means the Board of Directors of the Company or any committee of the Board that
has been designated by the Board to administer this Agreement.


(d)           “Code”
means the Internal Revenue Code of 1986, as amended.


(e)           “Common
Stock” means the common stock of the Company.


(f)            “Company”
means FEI Company, an Oregon corporation.


(g)           “Consultant”
means any person, including an advisor, engaged by the Company or a Parent or
Subsidiary to render services to such entity.


(h)           “Director”
means a member of the Board.


(i)            “Employee”
means any person, including Officers and Directors, employed by the Company or
any Parent or Subsidiary of the Company. 
Neither service as a Director nor payment of a director’s fee by the
Company shall be sufficient to constitute “employment” by the Company.


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


(k)           “Fair
Market Value” means, as of any date, the value of Common Stock determined
as follows:


(1)           If
the Common Stock is listed on any established stock exchange or a national
market system, including without limitation the Nasdaq National Market or The
Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall
be the closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system on the day of determination, as
reported in The Wall Street Journal or such other
source as the Board deems reliable;


(2)           If
the Common Stock is regularly quoted by a recognized securities dealer but
selling prices are not reported, its Fair Market Value shall be the mean
between the high bid and low asked prices for the Common Stock on the day of
determination; or


(3)           In
the absence of an established market for the Common Stock, the Fair Market
Value thereof shall be determined in good faith by the Board.


(l)            “Nonstatutory
Stock Option” means an Option not intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code and the regulations
promulgated thereunder.


(m)          “Notice
of Grant” means a written notice, in Part I of this Agreement, evidencing
certain terms and conditions of this Option grant.  The Notice of Grant is part of this
Agreement.









 



(n)           “Officer”
means a person who is an officer of the Company within the meaning of Section
16 of the Exchange Act and the rules and regulations promulgated thereunder.


(o)           “Option”
means this option to purchase shares of Common Stock granted pursuant to this
Agreement.


(p)           “Optionee”
means the person named in the Notice of Grant or such person’s successor.


(q)           “Parent”
means a “parent corporation,” whether now or hereafter existing, as defined in
Section 424(e) of the Code.


(r)            “Service
Provider” means an Employee, Director or Consultant.


(s)           “Share”
means a share of the Common Stock, as adjusted in accordance with Section 11 of
this Agreement.


(t)            “Subsidiary”
means a “subsidiary corporation”, whether now or hereafter existing, as defined
in Section 424(f) of the Code.


(u)           “Total
Disability” means a medically determinable mental or physical impairment
which is expected to result in death or which has lasted or is expected to last
for a continuous period of 12 months or more and which causes the Optionee to
be unable, in the opinion of the Company and two independent physicians, to
perform his or her duties as an Employee, Director, Officer or Consultant and
to be engaged in any substantial gainful activity.  Total Disability shall be deemed to have
occurred on the first day after the Company and the two independent physicians
have furnished their opinion of Total Disability to the Company.


2.             Grant
of Option.  The Company hereby grants
to the Optionee this Option to purchase the number of Shares, as set forth in
the Notice of Grant, at the exercise price per share set forth in the Notice of
Grant (the “Exercise Price”), subject to the terms and conditions of
this Agreement.


3.             Exercise
of Option.


(a)           Right
to Exercise.  The Option shall be
exercisable to the extent vested in accordance with the Notice of Grant.  The Option will be exercisable only in
accordance with the terms of this Agreement. 
The Option may not be exercised after the Expiration Date.


(b)           Method
of Exercise.  This Option is
exercisable by delivery of an exercise notice, in the form attached as Exhibit
A (the “Exercise Notice”), which shall state the election to
exercise the Option, the number of Shares in respect of which the Option is
being exercised (the “Exercised Shares”), and such other representations
and agreements as may be required by the Company.  The Exercise Notice shall be completed by the
Optionee and delivered to the Company. 
The Exercise Notice shall be accompanied by payment of the aggregate
Exercise Price as to all Exercised Shares, together with any applicable
withholding taxes.  This Option shall be
deemed to be exercised upon receipt by the Company of such fully executed
Exercise Notice accompanied by such aggregate Exercise Price and applicable
withholding taxes.


(c)           Legal
Compliance.  No Shares shall be
issued pursuant to the exercise of this Option, unless such issuance and
exercise complies with Applicable Laws. 
Assuming such compliance, for income tax purposes the Exercised Shares
shall be considered transferred to the Optionee on the date the Option is
exercised with respect to such Exercised Shares.


4.             Method
of Payment.  Payment of the aggregate
Exercise Price shall be by any of the following, or a combination thereof, at
the election of the Optionee:


(a)           cash
or check;









 



(b)           consideration
received by the Company under a cashless exercise program implemented by the
Company; or


(c)           surrender
of other Shares, provided Shares acquired from the Company, (i) have been
vested and owned by the Optionee for more than six (6) months on the date of
surrender, and (ii) have a Fair
Market Value on the date of surrender equal to the aggregate Exercise Price of
the Exercised Shares.


5.             Non-Transferability
of Option.  This Option may not be
transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Optionee only by the
Optionee.  The terms of this Agreement shall
be binding upon the executors, administrators, heirs, successors and assigns of
the Optionee.


6.             Rights
as a Stockholder.  Until the Shares
are issued, no right to vote or receive dividends or any other rights as a
stockholder will exist with respect to the Exercised Shares, notwithstanding
the exercise of the Option.  No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the shares are issued, except as provided in Section 11
below.


7.             Term
of Option.  This Option may be
exercised only within the term set out in the Notice of Grant, and may be
exercised during such term only in accordance with the terms of this Agreement.


8.             Termination
of Relationship as a Service Provider. 
If the Optionee ceases to be a Service Provider (other than for death or
Total Disability), this Option may be exercised for a period of thirty (30)
days unless extended by the Board after the date of such termination or except
as otherwise provided in the Severance Agreement (but in no event later than
the expiration date of this Option as set forth in the Notice of Grant) to the
extent that the Option is vested on the date of such termination.  To the extent that the Optionee does not
exercise this Option within the time specified herein, the Option shall
terminate.  The Optionee, however, shall
not be deemed to have ceased to be a Service Provider due to (i) absence on
leave or on account of illness or disability under rules established by the
Board for this purpose or (ii) a result of a transfer between locations of the
Company or between the Company, its Parent, any Subsidiary, or any
successor.  Unless otherwise determined
by the Board, vesting of this Option shall not continue during an absence on
leave (including an extended illness) or on account of disability.


9.             Total
Disability of Optionee.  If the
Optionee ceases to be a Service Provider as a result of the Optionee’s Total
Disability, this Option may be exercised for a period of twelve (12) months
after the date of such termination except as otherwise provided in the
Severance Agreement (but in no event later than the expiration date of this
Option as set forth in the Notice of Grant) to the extent that the Option is
vested on the date of such termination. 
To the extent that Optionee does not exercise this Option within the
time specified herein, the Option shall terminate.


10.           Death
of Optionee.  If the Optionee dies
while a Service Provider, the Option may be exercised at any time within twelve
(12) months following the date of death except as otherwise provided in the
Severance Agreement (but in no event later than the expiration date of this
Option as set forth in the Notice of Grant), by the Optionee’s estate or by a
person who acquired the right to exercise the Option by bequest or
inheritance.  If, after death, the
Optionee’s estate or a person who acquired the right to exercise the Option by
bequest or inheritance does not exercise the Option within the time specified
herein, the Option shall terminate.


11.           Adjustments Upon Changes
in Capital Structure.


(a)           Adjustments.  In the event that any dividend or other
distribution (whether in the form of cash, Shares, other securities, or other
property), recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase, or exchange
of Shares or other securities of the Company, or other change in the corporate
structure of the Company affecting the Shares occurs, the Board, in order to
prevent diminution or enlargement of the benefits or potential benefits
intended to be made available under this Agreement, may (in its sole
discretion) adjust the number, class, and price of Shares covered by this
Agreement.


(b)           Mergers,
Reorganizations, Etc.  In the event
of a merger, consolidation or plan of exchange to which the Company is a party
or a sale of all or substantially all of the Company’s assets (each, a “Transaction”),
the 









 



Board shall, in its sole discretion and to the extent possible under
the structure of the Transaction, select one of the following alternatives for
treating the Option:


(1)           The Option shall
remain in effect in accordance with its terms.


(2)           The Option shall be
converted into an option to purchase stock in the corporation that is the
surviving or acquiring corporation in the Transaction.  The amount, type of securities subject
thereto and exercise price of the converted option shall be determined by the
Board, taking into account the relative values of the companies involved in the
Transaction and the exchange rate, if any, used in determining shares of the
surviving corporation to be issued to holders of shares of the Company.  Conversions shall be made without change in
the total price applicable to the unexercised portion of the Option and with a
corresponding adjustment in the Option price per share and shall neither
(i) make the ratio, immediately after the event, of the Option price per
share to the fair market value per share more favorable to the Optionee than
that ratio immediately before the event nor (ii) make the aggregate spread,
immediately after the event, between the fair market value of shares as to
which the Option is exercisable and the Option price of such shares more
favorable to the Optionee than that aggregate spread immediately before the
event.  Unless otherwise determined by
the Board, the converted option shall be exercisable only to the extent that
the exercisability requirements relating to the Option have been satisfied.


(3)           The Board of
Directors shall provide a 30-day period prior to the consummation of the
Transaction during which the Option may be exercised to the extent then
exercisable, and, upon the expiration of such 30-day period, the Option shall
immediately terminate to the extent not exercised.  The Board of Directors shall accelerate the
exercisability of the Option so that it is exercisable in full during such
30-day period.


(c)           Dissolution or
Liquidation.  In the event of the
proposed dissolution or liquidation of the Company, the Option shall be treated
in accordance with Section 11(b)(3) of this Agreement.


12.           Notices.  Any notice to be given to the Company
hereunder shall be in writing and shall be addressed to the Company at its then
current principal executive office or to such other address as the Company may
hereafter designate to the Optionee by notice as provided in this Section.  Any notice to be given to the Optionee
hereunder shall be addressed to the Optionee at the address set forth beneath
his signature hereto, or at such other address as the Optionee may hereafter
designate to the Company by notice as provided herein.  A notice shall be deemed to have been duly
given when personally delivered or mailed by registered or certified mail to
the party entitled to receive it.


13.           Withholding
Taxes.  At the time the Option is
exercised, the Optionee hereby authorizes withholding from payroll and other
amounts payable to Optionee by the Company, or will remit to the Company, an
amount sufficient to satisfy federal, state, and local withholding tax
requirements prior to the delivery of any certificate or certificates for such
Shares.


14.           Entire
Agreement; Governing Law.  This
Agreement, together with the Severance Agreement, constitute the entire
agreement of the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the
Company and Optionee with respect to the subject matter hereof, and may not be
modified adversely to the Optionee’s interest except by means of a writing
signed by the Company and Optionee.  This
Agreement is governed by the internal substantive laws, but not the choice of
law rules, of Oregon.


15.           Compliance
with Securities Law.  This Option
will be subject to the requirement that if, at any time, counsel to the Company
will determine that the listing, registration or qualification of the Shares
subject hereto upon any securities exchange or under any state or federal law,
or the consent or approval of any governmental or regulatory body, or that the
disclosure of non-public information or the satisfaction of any other condition
is necessary as a condition of, or in connection with, the issuance or purchase
of Shares hereunder, this Option may not be exercised, in whole or in part,
unless such listing, registration, qualification, consent or approval,
disclosure or satisfaction of such other condition will have been effected or
obtained on terms acceptable to the Board. 
Nothing herein will be deemed to require the Company to apply for,
effect or obtain such listing, registration, qualification, or disclosure, or to
satisfy such other condition.









 



16.           Rule
16b-3.  This Option has been granted
in compliance with Rule 16b-3 and will be deemed to contain such additional
conditions or restrictions as may be required thereunder to qualify for the
maximum exemption from Section 16 of the Exchange Act.


17.           NO
GUARANTEE OF CONTINUED SERVICE. 
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO
THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER
AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING
GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER).  OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT
THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE
SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT
ALL, AND SHALL NOT INTERFERE WITH OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO
TERMINATE OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR
WITHOUT CAUSE.


By Optionee’s
signature and the signature of the Company’s representative below, Optionee and
the Company agree that this Option is granted under and governed by the terms
and conditions of this Agreement. 
Optionee has reviewed this Agreement in its entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Agreement
and fully understands all provisions of this Agreement.  Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Board made in good
faith upon any questions relating to this Agreement.  Optionee further agrees to notify the Company
upon any change in the residence address indicated below.


	
  OPTIONEE

  	
   

  	
  FEI COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
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EXHIBIT A


FEI
COMPANY


EXERCISE NOTICE


FEI
Company
5350 NE Dawson Creek Drive
Hillsboro, Oregon 97124


Attention:              Vice President of Human Resources


1.             Exercise of Option.  Effective as of today, ________________,
20__, the undersigned (“Optionee”) hereby elects to purchase ______________
shares (the “Shares”) of the Common Stock of FEI Company (the “Company”) under
and pursuant to the Stand-Alone Non-Statutory Stock Option Agreement dated
[DATE] (the “Option Agreement”).


2.     Delivery
of Payment.  Optionee herewith
delivers to the Company the full purchase price for the Shares together with
any required withholding taxes to be paid in connection with the exercise of
the Option.


3.     Representations
of Optionee.  Optionee acknowledges
that Optionee has received, read and understood the Option Agreement and agrees
to abide by and be bound by its terms and conditions.


4.     Rights
as Shareholder.  Until the issuance
(as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) of the Shares, no right to vote or
receive dividends or any other rights as a stockholder shall exist with respect
to the Shares subject to the Option, notwithstanding the exercise of the
Option.  The Shares so acquired shall be
issued to the Optionee as soon as practicable after exercise of the
Option.  No adjustment will be made for a
dividend or other right for which the record date is prior to the date of
issuance, except as provided in Section 11 of the Option Agreement.


5.     Tax
Consultation.  Optionee understands
that Optionee may suffer adverse tax consequences as a result of Optionee’s
purchase or disposition of the Shares. 
Optionee represents that Optionee has consulted with any tax consultants
Optionee deems advisable in connection with the purchase or disposition of the
Shares and that Optionee is not relying on the Company for any tax advice.


6.     Successors
and Assigns.  The Company may assign
any of its rights under this Exercise Notice to single or multiple assignees,
and this Exercise Notice shall inure to the benefit of the successors and
assigns of the Company.  Subject to the
restrictions on transfer herein set forth, this Exercise Notice shall be
binding upon Optionee and his or her heirs, executors, administrators,
successors and assigns.


7.     Interpretation.  Any dispute regarding the interpretation of
this Exercise Notice shall be submitted by Optionee or by the Company forthwith
to the Board of Directors of the Company (the “Board”), which shall review such
dispute at its next regular meeting.  The
resolution of such a dispute by the Board made in good faith shall be final and
binding on all parties.


8.     Entire
Agreement; Governing Law.  The Option
Agreement is incorporated herein by reference together with any documents
incorporated by reference therein.  This
Agreement, together with the Option Agreement and Executive Severance Agreement
between Optionee and the Company effective [DATE], constitute the entire
agreement of the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the
Company and Optionee with respect to the subject matter hereof, and may not be
modified adversely 









 



to
the Optionee’s interest except by means of a writing signed by the Company and
Optionee.  This agreement is governed by
the internal substantive laws, but not the choice of law rules, of Oregon.


	
  Submitted by:

  	
   

  	
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  OPTIONEE

  	
   

  	
  FEI COMPANY

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
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  Date Received: