last edit date by Stoel Rives 5/3/00 PESmart









Exhibit

10.21




 




EXECUTIVE

SEVERANCE AGREEMENT




 




                                 , 2001




 




	

  [Named Executive Officer]


  	

   


  	

   


  
	

  c/o FEI Company


  	

   


  	

   


  
	

  7451 NW Evergreen Parkway


  	

   


  	

   


  
	

  Hillsboro, Oregon 

  97124-5830


  	

   


  	

  Executive


  
	

   


  	

   


  	

   


  
	

  FEI Company


  	

   


  	

   


  
	

  an Oregon corporation


  	

   


  	

   


  
	

  7451 NW Evergreen Parkway


  	

   


  	

   


  
	

  Hillsboro, Oregon 97124-5830


  	

   


  	

  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. 

In this connection, 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 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.  Executive is

currently employed by FEI as Vice President and General Manager – Asia Sales

and Service Division.  Executive and FEI

acknowledge that 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

appropriate 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) 45 days from the date

Executive receives the Release of Claims or (b) the last day of Executive’s

active employment.




 




3.             Compensation

Upon Termination Following A Change of Control.  In the event of a Termination of Executive’s

Employment (as defined in Section 6.1 of this Agreement) other than for Cause

(as defined in Section 6.2 of this Agreement), death or Disability (as defined

in Section 6.3 of this Agreement) within 18 months following a Change of

Control (as defined in 




 





























 




Section 6.4 of this Agreement), or prior to a Change of Control at the

direction of a person who has entered into an agreement with FEI, the

consummation of which will constitute a Change of Control, and contingent upon

Executive’s execution of the Release of Claims and compliance with Section 8,

Executive shall be entitled to the following benefits:




 




3.1           As

severance pay and in lieu of any other compensation for periods subsequent to

the date of termination, FEI shall pay Executive, in a single payment after

employment has ended and eight days have passed following execution of the

Release of Claims without revocation, an amount in cash equal to two years of

Executive’s annual base pay at the rate in effect immediately prior to the date

of termination.




 




3.2           Pursuant

to COBRA, a federal law, Executive is entitled to extend coverage under any

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 payment in an amount equivalent to

1.33 times 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.




 




3.3           Executive

shall be entitled to receive an amount equal to 100% of the Executive’s target

benefit for the year in which Termination occurs under annual cash incentive

plans in effect at the time of termination (less amounts previously paid).  The amount payable pursuant to Section 3.3

shall be paid on the same date that the Section 3.1 payment is payable.




 




3.4           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.  At Executive’s election or

in the event that Executive’s  continued

participation in such policy is barred, FEI shall make a lump sum payment to

Executive equal to the total premiums that would have been paid by FEI for such

two-year period.  The maximum amount

that FEI shall be obligated to pay pursuant to this Section 3.4 in premiums and

payments to Executive shall be $5,000.




 




3.5           All

outstanding stock options held by Executive under all stock option and stock

incentive plans of FEI shall become immediately exercisable in full and shall

remain exercisable until the earlier of (a) two years after termination of

employment or (b) the option expiration date as set forth in the applicable

option agreement.  All vesting

requirements and repurchase rights of FEI under all outstanding restricted

stock awards held by the Executive shall immediately terminate.




 




2





























 




3.6           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.  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 upon a change in

control of the Company (collectively, excluding the Specified Benefits, the

“Change of Control Payments”).  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 § 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.




 




4.             Tax

Withholding; Subsequent Employment.




 




4.1           All

payments provided for in this Agreement are subject to applicable tax

withholding obligations imposed by federal, state and local laws and

regulations.




 




4.2           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.




 




5.             Other

Agreements.  In the event

that severance benefits are payable to Executive under any other agreement with

FEI in effect at the time of termination (including but not limited to any

employment agreement, but excluding for this purpose any stock option agreement

that may provide for accelerated vesting or related benefits upon the

occurrence of a change in control), the benefits provided in this Agreement

shall not be payable to Executive. 

Executive may, however, elect to receive all of the benefits provided

for in this Agreement in lieu of all of the benefits provided in all such other

agreements.  Any such election shall be

made with respect to the agreements as a whole, and Executive cannot select

some benefits from one agreement and other benefits from this Agreement.




 




6.             Definitions.




 




6.1           Termination

of Executive’s Employment. 

Termination of Executive’s Employment means that FEI has terminated

Executive’s employment with FEI (including any subsidiary of FEI).  Termination of Executive’s Employment shall

include termination by Executive, within 18 months of a Change of Control, by

written notice to FEI referring to the applicable paragraph of Section 6.1, for

“Good Reason” based on:




 




3





























 




(A)         the assignment to Executive of a

different title, job or responsibilities that results in a substantial decrease

in the level of responsibility of Executive with respect to the surviving

company after the Change of Control when compared to Executive’s level of

responsibility for FEI’s operations prior to the Change of Control;




 




(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 significant 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.




 




6.2           Cause.   Termination of Executive’s Employment for

“Cause” shall mean termination upon (a) the willful and continued failure by

Executive to perform substantially Executive’s reasonably assigned duties with

FEI (other than any such failure resulting from Executive’s incapacity due to

physical or mental illness) after a demand for substantial performance is

delivered to Executive by the Board of Directors, the Chief Executive Officer,

or the President of FEI, which specifically identifies the manner in which the

Board of Directors or FEI believes that Executive has not substantially

performed Executive’s duties or (b) the willful engaging by Executive in

illegal conduct which is materially and demonstrably injurious to FEI.  No act, or failure to act, on Executive’s

part shall be considered “willful” unless done, or omitted to be done, by

Executive without reasonable belief that Executive’s action or omission was in,

or not opposed to, the best interests of FEI. 

Any act, or failure to act, based upon authority given pursuant to a

resolution duly adopted by the Board of Directors shall be conclusively

presumed to be done, or omitted to be done, by Executive in the best interests

of FEI.




 




6.3           Change

of Control.  A Change of Control

shall mean that one of the following events has taken place:




 




(A)         The shareholders of FEI approve one of

the following (“Approved Transactions”):




 




4





























 




(i)            Any merger or statutory plan of

exchange involving FEI (“Merger”) in which FEI is not the continuing or

surviving corporation or pursuant to which Common Stock would be converted into

cash, securities or other property, other than a Merger involving FEI in which

the holders of Common Stock immediately prior to the Merger have the same

proportionate ownership of Common Stock of the surviving corporation after the

Merger; or




 




(ii)           Any sale, lease, exchange, or other

transfer (in one transaction or a series of related transactions) of all or

substantially all of the assets of FEI or the adoption of any plan or proposal

for the liquidation or dissolution;




 




(B)          A tender or exchange offer, other than

one made by FEI, is made for Common Stock (or securities convertible into

Common Stock) and such offer results in a portion of those securities being

purchased and the offeror after the consummation of the offer is the beneficial

owner (as determined pursuant to Section 13(d) of the Securities Exchange Act

of 1934, as amended (the “Exchange Act”)), directly or indirectly, of

securities representing at least 20 percent of the voting power of outstanding

securities of FEI;




 




(C)          FEI receives a report on Schedule 13D

of the Exchange Act reporting the beneficial ownership by any person (other than

Philips Business Electronics BV or any of its affiliates) of securities

representing 20 percent or more of the voting power of outstanding securities

of FEI, except that if such receipt shall occur during a tender offer or

exchange offer described in (B) above, a Change of Control shall not take place

until the conclusion of such offer; or




 




(D)          During any period of 12 months or

less, individuals who at the beginning of such period constituted a majority of

the Board of Directors cease for any reason to constitute a majority thereof

unless the nomination or election of any person becoming a new director during

such period was approved by either (i) a vote of at least two-thirds of the

directors then still in office who were directors at the beginning of such

period or (ii) a vote of at least two-thirds of the directors then still in

office who were directors at the beginning of such period and are not a party

to this Agreement or a similar Executive Severance Agreement with the Company.




 




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




 




5





























 




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.




 




6.4           Disability.  Termination of Executive’s Employment based

on “Disability” shall mean termination without further compensation under this

Agreement, due to Executive’s absence from Executive’s 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.




 




7.             Successors;

Binding Agreement.




 




7.1           This

Agreement shall be binding on and inure to the benefit of FEI and its

Successors and assigns.




 




7.2           This

Agreement shall inure to the benefit of and be enforceable by Executive and

Executive’s legal representatives, executors, administrators and heirs.




 




8.             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.




 




9.             Governing

Law, Attorneys Fees.  This

Agreement shall be construed in accordance with and governed by the laws of the

State of Oregon.




 




10.           Amendment.  No

provision of this Agreement may be modified unless such modification is

agreed to in a writing signed by Executive and FEI.




 




11.           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.




 




	

  FEI COMPANY


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  By:


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

  Title:


  	

   


  	

  Executive


  





 




6





























 




EXHIBIT A




 




RELEASE OF CLAIMS




 




1.             PARTIES.




 




The parties to Release of Claims (hereinafter

“Release”) are                                                     and FEI

Company, an Oregon corporation, as hereinafter defined.




 




1.1           EXECUTIVE.




 




For the purposes of this Release, “Executive”

means                                                 , and his

attorneys, 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 Company.  Executive’s employment is ending

effective                      

following a Change in Control as defined in Section 6.3 (“Change in

Control”) of the Executive Severance Agreement (“Agreement”).  Pursuant to Section 3 of the Agreement, FEI

is required to make certain payments and/or provide certain benefits to

Employee 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 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 future, that relate

to Executive’s employment, compensation, reemployment, or application for

reemployment.




 




A-1





























 




3.             RELEASE.




 




Executive waives, acquits and forever discharges

Company from any obligations Company has and all claims Executive may have

against Company including, without limitation, all claims arising from or

related to Executive’s employment with the Company, the termination of that

employment, and all obligations and/or claims arising from the Agreement or any

other document or oral agreement relating to employment compensation, benefits,

severance or post-employment issues. 

Executive hereby releases Company from any and all claims, demands,

actions, or causes of action, whether known or unknown, that relates in any way

to Executive’s employment, compensation, benefits, reemployment, or application

for employment, and the termination of Executive’s employment.  This release includes any and all claims,

direct or indirect, under any applicable local, state or federal authority,

including but not limited to any claim arising under the Oregon statutes

dealing with employment, discrimination in employment, Title VII of the

Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans With

Disabilities Act, the Family and Medical Leave Act of 1993, the Equal Pay Act

of 1963, Executive Order 11246, the Rehabilitation Act of 1973, the Uniformed

Services Employment and Reemployment Rights Act of 1994, the Age Discrimination

in Employment Act, the Fair Labor Standards Act, Oregon wage and hour statutes,

all as amended, any regulations under such authorities, the Employee Retirement

Income Security Act, and any applicable contract, tort, or common law theories.




 




3.1           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), indemnifications, or the 401(k) plan maintained by the Company.




 




3.2           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 Company.




 




4.             CONSIDERATION TO

EXECUTIVE.




 




After receipt of this Release by Company fully

endorsed by Executive, and following the expiration of the seven- (7) day

revocation period described in Section 11 of this Release, without Executive’s

revocation, Company shall pay:




 




a)  the lump

sum of                          DOLLARS

($                         ) to

Executive (less proper withholding) for severance and the reasonable estimate

of COBRA continuation coverage as provided in Sections 3.1 and 3.2 of the Agreement;




 




b)  the amount

of annual cash incentive based on the terms of Section 3.3 of the Agreement

(less proper withholding); [and]




 




A-2





























 




 




[c) the cash equivalent (less proper withholding) of

the premium to maintain Executive’s life insurance plan for 18 months as

provided in Section 3.4 of the Agreement.]




 




5.             NO DISPARAGEMENT.




 




Executive agrees that henceforth Executive will not

disparage or make false or adverse statements about 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 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, 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 the Executive and Company. 

Should Executive, 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

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.




 




8.             ENTIRE RELEASE.




 




Executive and 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.




 




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.




 




A-3





























 




 




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, in the event of

termination as part of a group layoff, the Company has provided the following

information:  (a) the class or group of

employees offered the opportunity to obtain severance benefits similar to those

in the Release, (b) the eligibility factors required to obtain severance

benefits similar to those in the Release, (c) the time limits required to

obtain severance benefits similar to those in the Release, (d) the job titles

and ages of employees eligible or selected for severance benefits similar to

those in the Release, and (e) the ages of employees in the same classification

either not eligible or not selected.




 




11.           REVOCATION.




 




As provided by the Older Workers Benefit Protection

Act, Executive shall have up to forty-five (45) 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.  Upon receipt of

Executive’s signed Release and the end of the revocation period without

revocation by




 




A-4





























 




 




Executive, payment by Company as described in paragraph 4 above

will be promptly forwarded to Executive.




 




Dated:                                          




[Name of Executive]




 




STATE OF OREGON  )




                                

) ss.




County of                      )




 




Personally appeared the above named                                                     

and acknowledged the foregoing instrument to be his or her voluntary act

and deed.




 




	

   


  	

  Before me:


  	

   


  	

   


  
	

   


  	

  Notary Public for


  	

   


  	

   


  	 

	

   


  	

  My commission expires:


  	

   


  	

   


  	 

								





 




	

  FEI COMPANY


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  By:


  	

   


  	

   


  	

  Dated:


  	

   


  
	

   


  	

   


  	

   


  
	

  Its:


  	

   


  	

   


  	

   


  
	

       On Behalf of “Company”


  	

   


  	

   


  





 




A-5