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.
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
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