Document:

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EXHIBIT 10.15

                              EMPLOYMENT AGREEMENT

This Employment Agreement, effective as of August 12, 1999, by and between FEI
Company, an Oregon corporation ("Employer"), and Nicholas P. Economou, an
individual ("Employee"). IN CONSIDERATION OF the mutual covenants herein
contained, and other good and valuable consideration, the parties hereto agree
as follows:

1)   EMPLOYMENT.

     a)   Employer hereby agrees to employ Employee, and Employee agrees to
          serve, as Chief Operating Officer of Employer, during the Period of
          Employment as defined in Section 2.

2)   PERIOD OF EMPLOYMENT.

     a)   DURATION UNDER NORMAL CIRCUMSTANCES.

          i)   The "Period of Employment" shall be the period commencing on the
               date hereof and ending on the second anniversary of the closing
               of the merger transaction between the Employer and Micrion
               Corporation ("Micrion").

     b)   TERMINATION EVENTS.

          i)   Notwithstanding anything in this Section 2 to the contrary, the
               Period of Employment shall terminate upon the earliest to occur
               of the following:

               A.   the retirement of Employee under the terms of Employer's
                    401(k) plan;

               B.   the Disability (as defined in Section 8) of Employee and the
                    expiration of the 30-day period referred to in the
                    definition of Disability without the actions referred to
                    therein being taken by Employee;

               C.   the death of Employee;

               D.   the 90th day after service of notice by Employee to
                    Employer, in accordance with the provisions of Section 11,
                    that Employee elects to terminate the Period of Employment
                    (with or without Good Reason) (a "voluntary termination by
                    Employee");

               E.   the 90th day after service of notice by Employer to
                    Employee, in accordance with the provisions of Section 11,
                    that Employer elects to terminate the Period of Employment
                    (a "voluntary termination by Employer"), other than a
                    termination by

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                    Employer with Cause; and

               F.   promptly upon service of notice by Employer to Employee, in
                    accordance with the provisions of Section 11, that Employer
                    elects to terminate the Period of Employment with Cause.

3)   DUTIES DURING THE PERIOD OF EMPLOYMENT.

          i)   Employee shall devote his full business time, attention and best
               efforts to the affairs of Employer and its subsidiaries during
               the Period of Employment and shall have such duties,
               responsibilities and authority as shall be assigned to him from
               time to time by the Chief Executive Officer or the Board of
               Directors of Employer, which duties, responsibilities and
               authority shall be commensurate in all material respects with
               those held, exercised and assigned as of the date of this
               Agreement. It is expressly acknowledged and agreed that Employee
               may be requested to assume the position of president or senior
               officer of any subsidiary or division of Employer or any position
               of corporate officer of Employer, provided that the
               responsibilities and authority assigned to such position are
               commensurate in all material respects with those assigned to, or
               held and exercised by, Employee as of the date of this Agreement,
               and provided further that, in the event of a transfer of Employee
               to the employ of a subsidiary of Employer, such subsidiary
               expressly assumes all of Employer's obligations under this
               Agreement. Employee may engage in other activities, such as
               activities involving charitable, educational, religious and
               similar types of organizations (all of which are deemed to
               benefit Employer), non-industry speaking engagements, and similar
               type activities, and may serve on the board of directors of other
               corporations approved by the Chief Executive Officer of Employer,
               in each case to the extent that such other activities do not
               materially detract from or limit the performance of his duties
               under this Agreement, or inhibit or conflict in any material way
               with the business of Employer and its subsidiaries.

4)   LOCATION OF EMPLOYMENT.

          i)   During the Period of Employment, Employer may only require
               Employee to be based in or within 50 miles of Peabody, MA except
               that Employer may require Employee to be based more than 50 miles
               from Peabody, MA in connection with the relocation of the
               executive office of Employer in which Employee is employed;
               PROVIDED, HOWEVER, that Employer shall pay to, or reimburse
               Employee for, on an after-tax basis, all reasonable expenses of
               relocation of Employee and Employee's immediate family living
               with Employee at the time of such relocation, incurred and
               substantiated by Employee in connection with any such relocation.

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5)   CURRENT CASH COMPENSATION.

          i)   Employer will pay to Employee during the Period of Employment a
               base annual salary of not less than Employee's salary at Micrion
               as of January 1, 1999 (or such greater amount as may have been
               approved by the Employer's Board of Directors in its sole
               discretion), payable in substantially equal monthly installments
               during each calendar year, or portion thereof, of the Period of
               Employment; PROVIDED, HOWEVER, that Employer agrees to review
               such base annual salary annually and in light of such review may,
               in the sole discretion of the Board of Directors of Employer,
               increase such salary, taking into account such factors as it
               deems pertinent.

6)   EMPLOYEE BENEFITS.

     a)   VACATION AND SICK LEAVE.

          i)   Employee shall be entitled to the usual number of days of paid
               annual vacation, all paid Employer holidays and reasonable sick
               leave consistent with Employer's existing policies and giving
               full credit for the Employee's service with Micrion.

     b)   REGULAR REIMBURSED BUSINESS EXPENSES.

          i)   Employer shall reimburse Employee for all expenses and
               disbursements reasonably incurred at Employer's request or
               consistent with Employer's policies, and substantiated by
               Employee, in the performance of his duties during the Period of
               Employment.

     c)   EMPLOYEE BENEFIT PLANS OR ARRANGEMENTS.

          i)   In addition to the cash compensation provided for in Section 5
               hereof, Employee, subject to meeting eligibility requirements and
               to the provisions of this Agreement, shall be entitled to
               participate without discrimination or duplication in all employee
               (including executive) benefit plans of Employer, as presently in
               effect or as they may be modified or added to by Employer from
               time to time, to the extent such plans are available to other
               similarly situated executives or employees of Employer,
               including, without limitation, plans providing retirement
               benefits, medical and other health insurance, life insurance,
               disability insurance, and accidental death or dismemberment
               insurance.

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     d)   EMPLOYER'S INCENTIVE COMPENSATION PLANS.

          i)   In addition to the cash compensation provided for in Section 5
               hereof and the employee benefits of Employer provided for in
               paragraph (c) of this Section 6, Employee, subject to meeting
               eligibility requirements and to the provisions of this Agreement,
               shall be entitled to participate in all incentive compensation
               plans of Employer, as presently in effect or as they may be
               modified or added to by Employer from time to time, to the extent
               such plans are available to similarly situated executives or
               employees of Employer, including, without limitation, the 1995
               Stock Incentive Plan and the 1995 Supplemental Stock Incentive
               Plan (as the same may be modified, replaced, or added to by
               Employer from time to time), and other performance share plans,
               management incentive plans, deferred compensation plans, and
               supplemental retirement plans.

7)   TERMINATION.

     a)   DEATH, OR RETIREMENT OR DISABILITY.

          i)   If the Period of Employment terminates pursuant to paragraph (b)
               of Section 2 as a result of (1) the death of Employee, (2) the
               retirement of Employee under the terms of Employer's 401(k) plan
               or (3) the Disability of the Employee, Employee (or Employee's
               estate) will be entitled to receive only:

               (i)  the base salary otherwise payable under Section 5 through
                    the end of the month in which Employee's employment is
                    terminated, together with salary, compensation or benefits
                    which have been earned or become payable as of the date of
                    termination but which have not yet been paid to Employee;

               (ii) such other awards or bonuses as the Board of Directors may
                    in its sole discretion determine;

               (iii) during the 12-month period following the termination of
                    Employee's employment as a result of the death of Employee,
                    maintenance in effect for the continued benefit of
                    Employee's dependents of all insured and self-insured
                    employee medical and dental benefit plans in which Employee
                    was participating immediately prior to termination provided
                    that such continued participation is possible under the
                    general terms and conditions of such plans (and any
                    applicable funding media) and Employee's dependents continue
                    to pay an amount equal to the Employee's regular
                    contribution for such participation; and

               (iv) such other benefits, if any, as shall be determined to be
                    applicable in accordance with Employer's plans and practices
                    as in effect on the date of termination.

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     b)   VOLUNTARY TERMINATION BY EMPLOYEE WITHOUT GOOD REASON.

          i)   If the Period of Employment terminates pursuant to paragraph (b)
               of Section 2 as a result of a voluntary termination by Employee
               without Good Reason, Employee will be entitled to receive only:

               A. the base salary otherwise payable under Section 5 through the
               day on which Employee's employment is terminated, together with
               salary, compensation or benefits payable to other similarly
               situated employees (excluding any incentive compensation) which
               have been earned or become payable as of the date of termination
               but which have not yet been paid to Employee;

               B. to the extent possible, the opportunity to convert group and
               individual life and disability insurance policies of Employer
               then in effect for Employee to individual policies of Employee
               upon the same terms as similarly situated employees of Employer
               may apply for such conversions; and

               C. such other benefits, if any, as shall be determined to be
               applicable in accordance with Employer's plans and practices for
               similarly situated employees in effect on the date of
               termination.

     c)   VOLUNTARY TERMINATION BY EMPLOYEE WITH GOOD REASON OR BY EMPLOYER
          WITHOUT CAUSE.

          i)   If the Period of Employment terminates pursuant to paragraph (b)
               of Section 2 as a result of a voluntary termination by Employee
               with Good Reason (as hereinafter defined), or a voluntary
               termination by Employer without Cause (as hereinafter defined),
               then Employee will be entitled to receive:

                    A. the base salary otherwise payable under Section 5 through
                    the end of the month in which Employee's employment is
                    terminated, together with salary, compensation or benefits
                    which have been earned or become payable as of the date of
                    termination but which have not yet been paid to the
                    Employee;

                    B. a lump-sum severance payment in an amount equal to the
                    product of (A) the base annual salary at the rate in effect
                    under Section 5 on the date of termination, and (B) a
                    multiplier equal to x/52, where "x" equals the number of
                    weeks remaining until the Final Day of Period of Employment;
                    provided that the payment made pursuant to this paragraph
                    (ii) shall be repaid by Employee in the event Employee
                    violates in any material respect the provisions of Section 9
                    hereof;

                    C. maintenance in effect for the continued benefit of
                    Employee and his spouse and his dependents for a period
                    terminating on the earlier of (A) the earlier of

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                    the Final Day of Period of Employment and the date on which
                    Employee retires under the terms of Employer's 401(k) plan,
                    and (B) the commencement of equivalent benefits from a new
                    employer of: (I) all insured and self-insured medical and
                    dental benefit plan in which Employee was participating
                    immediately prior to termination, provided that Employee's
                    continued participation if possible under the general terms
                    and conditions of such plans (and any applicable funding
                    media) and Employee continues to pay an amount equal to
                    Employee's regular contribution for such participation; and
                    (II) the group and individual life and disability insurance
                    policies of Employer then in effect for Employee;

                    provided, however, that if Employer so elects, or if such
                    continued participation is not possible under the general
                    terms and conditions of such plans or under such policies,
                    Employer shall, in lieu of the foregoing, arrange to have
                    issued for the benefit of Employee and Employee's dependents
                    individual policies of insurance providing benefits
                    substantially similar (on an after-tax basis) to those
                    described in this paragraph, or, if such insurance is not
                    available at a reasonable cost to Employer, Employer shall
                    otherwise provide Employee and Employee's dependents
                    equivalent benefits (on an after-tax basis);

                    provided further that, in no event shall Employee be
                    required to pay any premiums or other charges in an amount
                    greater than that which Employee would have paid in order to
                    participate in Employer's plans and policies; and for a
                    period terminating on the earlier of the Final Day of Period
                    of Employment and the date on which Employee reaches age 65,
                    Employer shall provide Employee with benefits equivalent to
                    the additional benefits Employee would have received under
                    the employee pension and retirement benefit plans maintained
                    by the Employer and supplemental or excess executive
                    retirement plans, or executive plans of deferred
                    compensation whether or not qualified for federal income tax
                    purposes in which Employee was participating immediately
                    prior to termination and assuming an annual rate of Salary
                    equal to the rate applicable to the Employee immediately
                    prior to termination is in effect, as if Employee had
                    received credit under such plans for service with Employer
                    during such period following Employee's termination, with
                    such benefits payable by Employer at the same times and in
                    the same manner as such benefits would have been received by
                    Employee under such plans.

     d)   TERMINATION BY EMPLOYER WITH CAUSE.

          i)   If the Period of Employment terminates pursuant to paragraph (b)
               of Section 2 as a result of a termination by Employer with Cause,
               Employee will be entitled to receive only:

               A. the base salary otherwise payable under Section 5 through the
               day on which Employee's employment is terminated, together with
               salary, compensation or

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               benefits which have been earned or become payable as of the date
               of termination but which have not yet been paid to Employee; and

               B. such other benefits, if any, as shall be determined to be
               applicable under the circumstances in accordance with Employer's
               plans and practices in effect on the date of termination.

     e)   DATE OF PAYMENT.

          i)   Except as otherwise provided herein, all cash payments and
               lump-sum awards required to be made pursuant to the provisions of
               paragraphs (a) through (e) of this Section 7 shall be made no
               later than the thirtieth day following the date of Employee's
               termination.

     f)   EXCLUSIVE REMEDY.

          i)   Employee shall have no claim for damages or other remedies, at
               law, in equity or otherwise, by reason of any breach of this
               Agreement by Employer, or of termination of this Agreement by
               reason thereof, other than as set forth in this Section 7.

8)       DEFINITIONS.

          i)   For purposes of this Agreement, the following capitalized terms
               shall have the meanings set forth below:

          ii)  "CAUSE" shall mean (i) the willful engaging by Employee in
               conduct which is not authorized by the Board of Directors of
               Employer or within the normal course of Employee's business
               decisions and is known by Employee to be materially detrimental
               to the best interests of Employer or any of its subsidiaries,
               (ii) the willful engaging by Employee in conduct which Employee
               knows is, or has substantial reason to believe to be, illegal to
               the extent of a felony violation, or the equivalent seriousness
               under laws other than those of the United States, and which has
               effects on Employer or Employee materially injurious to Employer,
               (iii) the engaging by Employee in any willful and conscious act
               of serious dishonesty, in each case which the Board of Directors
               of Employer reasonably determines affects adversely, or could in
               the future affect adversely, the value, reliability or
               performance of Employee to Employer in a material manner; (iv)
               the willful and continued failure by Employee to perform
               substantially his duties to Employer under this Agreement
               (including any sustained and unexcused absence of Employee from
               the performance of his duties under this Agreement, which absence
               has not been certified in writing as due to physical or mental
               illness in accordance with the procedures set forth in this
               Section 8 under "Disability"), after a written demand for
               substantial performance has been delivered to Employee by the
               Board of Directors specifically identifying the manner in which
               Employee has failed to

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               substantially perform his duties and after such Employee has had
               a reasonable opportunity to cease such failure to perform, or (v)
               the sustained and unexcused absence of Employee from the
               performance of his duties under this Agreement for a period of
               180 days or more within any period of 365 consecutive days,
               regardless of the reason for such absence, unless Employee
               demonstrates that such absence is due to Disability. For purposes
               of this paragraph, no act, or failure to act, on Employee's part
               shall be considered "willful" unless done, or omitted to be done,
               in bad faith and without reasonable belief that such action or
               omission was in, or not opposed to, the best interests of
               Employer. Any act, or failure to act, based upon authority given
               pursuant to a resolution duly adopted by the Board of Directors
               of Employer or based upon the advice of counsel for Employer
               shall be conclusively presumed to be done, or omitted to be done,
               in good faith and in the best interests of Employer.
               Notwithstanding the foregoing, there shall not be deemed to be a
               termination by Employer with Cause unless and until there shall
               have been delivered to Employee a copy of a resolution duly
               adopted by the affirmative vote of a majority of the entire
               membership of the Board of Directors of Employer at a meeting of
               such Board held after reasonable notice to Employee and at which
               Employee has an opportunity, together with his counsel, to be
               heard before such Board, finding that, in the good faith opinion
               of such Board, Employee was guilty of the conduct set forth above
               and specifying the particulars thereof in detail.

          iii) "DISABILITY" shall mean the absence of Employee from his duties
               with Employer on a full-time basis for one hundred eighty (180)
               days within any period of three hundred and sixty-five (365)
               consecutive days as a result of Employee's incapacity due to
               physical or mental illness as certified in writing by a physician
               selected by Employee and reasonably acceptable to Employer (it
               being understood that such physician shall be deemed to be
               reasonably acceptable to Employer if, within a period of fifteen
               (15) days after Employee notifies Employer of the name of such
               physician, Employer does not object to the use of such
               physician), unless within thirty (30) days after written notice
               to Employee by Employer, in accordance with the provisions of
               Section 12, that Employee's employment is being terminated by
               reason of such absence, Employee shall have returned to the full
               performance of Employee's duties.

          iv)  "FINAL DAY OF PERIOD OF EMPLOYMENT" shall mean the final day of
               the Period of Employment under Section 2(a) as in effect on the
               date of termination.

          v)   Voluntary termination by Employee with "GOOD REASON" shall mean a
               voluntary termination by Employee resulting from the Employer (i)
               reducing Employee's base annual salary as in effect immediately
               prior to such reduction or reducing in a material respect
               Employee's opportunity to earn incentive compensation as provided
               in Section 6(d) of this Agreement; (ii) effecting a change in the
               position of Employee which does not represent a promotion from
               Employee's position provided for herein; (iii) assigning Employee
               duties or responsibilities which are

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               materially inconsistent with Employee's position provided for
               herein or requiring Employee to be based in a location that is
               outside 50 miles from the location specified in Section 4 of this
               Agreement; (iv) removing Employee from or failing to reappoint or
               reelect Employee to such position, except in connection with a
               termination as a result of death, Disability, voluntary
               termination by Employee, retirement by Employee or termination by
               Employer with Cause; or (v) otherwise materially breaching its
               obligations under this Agreement, in each case after notice in
               writing from Employee to Employer and a period of 30 days after
               such notice during which Employer fails to correct such conduct;
               PROVIDED, HOWEVER, that it is expressly acknowledged and agreed
               that a transfer of Employee (a) to the position of another
               corporate officer of Employer, or to any subsidiary of Employer
               in the capacity of president or senior officer of such subsidiary
               or (b) from the position of president or senior officer of any
               subsidiary of Employer to a position of corporate officer of
               Employer (in each case as contemplated by the second sentence of
               Section 3 of this Agreement) shall not by itself constitute "Good
               Reason" within the meaning of clauses (ii), (iii), (iv) or (v) of
               this paragraph, provided that, in the case of any transfer to a
               subsidiary of Employer, such subsidiary expressly assumes all of
               Employer's obligations under this Agreement.

9)   NON-COMPETITION AND NON-DISCLOSURE; EMPLOYEE COOPERATION.

     a)   Without the consent in writing of the Board of Directors of Employer,
          upon termination of Employee's employment for any reason, Employee
          will not for a period of two years thereafter, acting alone or in
          conjunction with others, directly or indirectly (i) engage (either as
          owner, partner, stockholder, employer, employee, director, consultant
          or agent) in any business in which he has been directly engaged, or
          has supervised as an executive, during the last two years prior to
          such termination and which is directly in competition with a business
          conducted by Employer or any of its subsidiaries; (ii) induce any
          customers of Employer or any of its subsidiaries with whom Employee
          has had contacts or relationships, directly or indirectly, during and
          within the scope of his employment with Employer or any of its
          subsidiaries, to curtail or cancel their business with such companies
          or any of them; (iii) solicit or canvas business from any person who
          was a customer of Employer or any of its subsidiaries at or during the
          two-year period immediately preceding termination of Employee's
          employment; or (iv) induce, or attempt to influence, any Employee of
          Employer or any of its subsidiaries to terminate his employment;
          PROVIDED, HOWEVER, that the limitation of subparagraph (i) shall
          not apply if Employee's employment is terminated as a result of a
          voluntary termination by Employee with Good Reason or a termination
          by Employer without Cause. The provisions of subparagraphs (i),
          (ii), (iii) and (iv) above are separate and distinct commitments
          independent of each of the other subparagraphs. It is agreed that
          the ownership of not more than 1/2 of 1% of the equity securities
          of any company having securities listed on an exchange or regularly
          traded in the over-the-counter market shall not, of itself, be
          deemed inconsistent with clause (i) of this paragraph (a).

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     b)   Employee shall not, at any time during the Period of Employment or
          following Employee's termination of employment for any reason
          whatsoever, disclose, use, transfer or sell, except in the course of
          employment with Employer, any confidential or proprietary information
          of Employer and its subsidiaries so long as such information has not
          otherwise been publicly disclosed by Employer or is not otherwise in
          the public domain, except as required by law or pursuant to legal
          process.

     c)   Employee agrees to cooperate with Employer, by making himself
          available to testify on behalf of Employer or any subsidiary or
          affiliate of Employer, in any action, suit or proceeding, whether
          civil, criminal, administrative or investigative, and to assist
          Employer, or any subsidiary or affiliate of Employer in any such
          action, suit or proceeding, by providing information and meeting and
          consulting with the Board of Directors of Employer or its
          representatives or counsel, or representatives or counsel of Employer,
          or any subsidiary or affiliate of Employer, as requested by such Board
          of Directors, representatives or counsel. Employer agrees to reimburse
          the Employee, on an after-tax basis, for all expenses actually
          incurred in connection with his provision of testimony or assistance.

10)  GOVERNING LAW; MODIFICATION AND SEVERABILITY; DISPUTES; ARBITRATION.

     a)   This Agreement is governed by and is to be construed and enforced in
          accordance with the laws of the State of Oregon.

     b)   If any portion of this Agreement is at any time deemed to be in
          conflict with any applicable statute, rule, regulation, ordinance or
          principle of law, such portion shall be deemed to be modified or
          altered to the extent necessary to conform thereto or, if that is not
          possible, to be omitted from this Agreement; and the invalidity of any
          such portion shall not affect the force, effect and validity of the
          remaining portion hereof.

     c)   Except as provided in this Section 10(c), any controversy or claim
          arising out of or relating to this Agreement, or the breach thereof,
          shall be settled by arbitration administered by the American
          Arbitration Association in accordance with its Commercial Arbitration
          Rules, and judgment on the award rendered by the arbitrators may be
          entered in any court having jurisdiction thereof.

          i)   The arbitrators shall have the authority to award such remedies
               or relief that a court of the State of Oregon could order or
               grant in an action governed by Oregon law, including, without
               limitation, specific performance of any obligation created under
               this Agreement, the issuance of an injunction, or the imposition
               of sanctions for abuse or frustration of the arbitration process,
               but shall not be empowered to award punitive damages. The
               arbitration proceedings shall be conducted in Portland, Oregon
               or, in the event that the executive office of Employer has been
               relocated, in such other major city as is most proximate to such
               relocated executive office.

          ii)  Notwithstanding the foregoing, any party may bring and pursue an
               action in any

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               Federal or State court in the city where the arbitration
               proceedings shall be conducted pursuant to the foregoing sentence
               seeking provisional relief, including a temporary restraining
               order or preliminary injunction, pending an arbitration
               proceeding. Any provisional relief obtained shall be discontinued
               once the arbitrators have assumed jurisdiction and ordered such
               discontinuance.

     d)   Any amounts that have become payable pursuant to the terms of this
          Agreement or any judgment by a court of law or a decision by
          arbitrators pursuant to this Section 10 but which are not timely paid
          shall bear interest at the prime rate in effect at the time such
          payment first becomes payable, as quoted by Key Bank of Oregon.

11)  NOTICES.

          i)   All notices or other communications hereunder shall be deemed to
               have been duly given and made if in writing and if served by
               personal delivery upon the party for whom it is intended, if
               delivered by registered or certified mail, return receipt
               requested, or by a national courier service, or if sent by
               telecopier, PROVIDED that the telecopy is promptly confirmed by
               telephone confirmation thereof, to the person at the address set
               forth below, or such other address as may be designated in
               writing hereafter, in the same manner, by such person:

          To Employee:

         ---------------------------
         ---------------------------
         ---------------------------
         ---------------------------
         Telephone:
         Telecopy:

         ---------------------------

         To Employer:

         FEI Company
         7451 NW Evergreen Parkway
         Hillsboro, OR  97124
                  Attn:  Chief Executive Officer

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         With a copy to:

         STOEL RIVES LLP
         900 SW Fifth Avenue, Suite 2600
         Portland, Oregon  97204-1268
         Telephone:  503-224-3380
         Telecopy:   503-220-2480
         Attn:  Stephen E. Babson

12)  WITHHOLDING.

          i)   All payments to be made to Employee under this Agreement will be
               subject to required withholding taxes and other deductions.

13)  SUCCESSORS; BINDING AGREEMENT.

     a)   Any Successor (as hereinafter defined) to Employer shall be bound by
          this Agreement. Employer will seek to have any Successor assent to the
          fulfillment by Employer of its obligations under this Agreement at
          Employee's request. Failure of Employer to obtain such assent within
          thirty (30) days after such request shall constitute Good Reason for
          termination by Employee of Employee's employment and, upon a voluntary
          termination by Employee pursuant to Section 2, shall entitle Employee
          to the benefits provided in Section 7(c). For purposes of this
          Agreement, "Successor" shall mean any person other than Philips
          Electronics N.V. and its affiliates that succeeds to, or has the
          practical ability to control (either immediately or with the passage
          of time), Employer's business directly, by merger or consolidation, or
          indirectly, by purchase of the Employer's voting securities, all or
          substantially all of its assets or otherwise.

     b)   For purposes of this Agreement, "Employer" shall include any
          corporation or other entity which is the surviving or continuing
          entity in respect of any amalgamation, merger, consolidation,
          dissolution, asset acquisition or other form of business combination.

14)  MISCELLANEOUS.

     a)   Except to the extent that the terms of this Agreement confer benefits
          that are more favorable to Employee than are available under any other
          employee benefit or executive compensation plan of Employer in which
          Employee is a participant, Employee's rights under any such employee
          (including executive) benefit plan or executive compensation plan
          shall be determined in accordance with the terms of such plan (as it
          may be modified or added to by Employer from time to time).

     b)   This Agreement constitutes the entire understanding between Employer
          and Employee relating to employment of Employee by Employer and its
          subsidiaries and supersedes and cancels all prior agreements and
          understandings with respect to the subject matter

<PAGE>

          of this Agreement and such other written agreements. Employee shall
          not be entitled to any payment or benefit under this Agreement which
          duplicates a payment or benefit received or receivable by Employee
          under such prior agreements and understandings.

     c)   This Agreement may be amended but only by a subsequent written
          agreement of the parties.

     d)   This Agreement shall be binding upon and shall inure to the benefit of
          Employee, his heirs, executors, administrators and beneficiaries, and
          shall be binding upon and inure to the benefit of Employer and its
          successors and assigns.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
year and day first above written.

FEI COMPANY

By:_______________________________
(Authorized Officer)

__________________________________
Nicholas P. Economou<PAGE>

EXHIBIT 10.16

                                  May 14, 1998

Mr. Vahe Sarkissian
22000 Rolling Hills Rd.
Saratoga, CA 95070

     Subject: FEI Employment Terms

Dear Mr. Sarkissian:

On behalf of the search committee of the FEI Board of Directors this letter will
confirm our offer of employment to you as Chief Executive Officer for FEI
Company. The terms and conditions of employment are as follows:

REPORTING RELATIONSHIP:       You will report to the FEI Board of Directors

RESPONSIBILITIES:             You will lead and direct the Senior Management
                              Team (SMT) with primary accountability for
                              delivering value to the FEI stockholders through
                              the strategic planning, direction and delivery of
                              performance that will enhance shareholder value of
                              FEI Company. You will be a member of the Board of
                              Directors.

COMPENSATION:                 Your compensation will be subject to approval by
                              the Compensation Committee of the Board and will
                              be based upon the following four components:

                              1) A base salary at the annual rate of $310,000,
                              to be paid semi-monthly and reviewed annually
                              during the last week of December.

                              2) An annual bonus with a guarantee of $200,000
                              for the initial twelve (12) month period of
                              employment and thereafter paid on the basis of
                              two-thirds the annual salary based on achievement
                              of objectives.

<PAGE>

Mr. Vahe Sarkissian
May 14, 1998
Page Two

                              3) A grant of 50,000 shares of FEI common stock
                              with vesting of 25,000 shares immediately and
                              25,000 shares upon completing thirteen (13) months
                              of employment. A loan to cover the state and
                              federal taxes payable in connection with the stock
                              grant. The loan will be forgiven at 20 per cent
                              per year for five years. The balance of the loan
                              plus interest is due FEI should you terminate your
                              employment prior to five years.

                              4) Options of 200,000 shares of FEI common stock
                              to vest 20 per cent per year over five (5) years
                              from the date of issue. The option price will be
                              based on the market value of the stock at the date
                              of the grant or the date of employment whichever
                              is later. The exercise period is ten (10) years.
                              [Terms changed by mutual agreement to 49,380 ISO's
                              and 150,620 restricted stock purchase.]

                              5) As the CEO of FEI you will participate in stock
                              option grants made on an annual basis by the FEI
                              Board Compensation Committee and in such amounts
                              as are commensurate with your responsibilities.
                              The Committee currently considers annual grants in
                              the range of 40,000 to 50,000 shares to meet these
                              criteria in light of the capital structure of the
                              Company, the competitive environment and the
                              general outlines of the Company's existing stock
                              incentive plans. Future grants of options are
                              within the discretion of the Compensation
                              Committee and subject to the availability at the
                              time of grant of options under a
                              shareholder-approved plan. A portion of the option
                              grants or their vesting may be made contingent
                              upon company performance.

BENEFITS:                     You will be eligible to participate in the FEI
                              benefit and perquisite programs offered to other
                              Company Executives (see attached for list of
                              standard benefits). Your annual vacation will be
                              four (4) weeks.

SEVERANCE:                    Should FEI terminate you without cause during the
                              first three (3) years of employment, you will be
                              entitled to twelve (12) months of base salary as

<PAGE>

Mr. Vahe Sarkissian
May 14, 1998
Page Three

                              severance, your stock and options will be credited
                              with an additional twelve (12) months of vesting,
                              the loan described above will be forgiven and will
                              be entitled to CEO bonus or incentive compensation
                              for any period of service not covered by an
                              earlier payment

RELOCATION/TEMPORARY
HOUSING:                      You will be eligible for the Company's executive
                              relocation package and temporary housing cost
                              reimbursement.

OUTSIDE BUSINESS ACTIVITY:    Your role in the existing four companies with
                              which you are associated will be diminished
                              operationally; however, you will still function as
                              a member of their respective boards. [You will
                              continue as Chairman of Surface Interface, Inc.]

I would appreciate your response to this offer letter no later than May 15, 1998
and would like to establish your official date of employment as May 15, 1998.

I look forward to your joining the FEI team and the future success we will
enjoy.

                                                     Sincerely yours,

                                                     Dr. Lynwood Swanson
                                                     Chairman

If you agree with the above, please sign on the below stated line and return one
copy to FEI and retain one copy for yourself.

---------------------------------
Vahe Sarkissian

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