EXHIBIT 10.01

 

SEPARATION AGREEMENT AND MUTUAL RELEASE

 

This Separation Agreement and Mutual Release (“Agreement”) is entered into as of
May 1, 2009, between FormFactor, Inc. (the “Company”) and Dr. Igor Khandros (the
“Executive”).

 

WHEREAS, Executive has retired as an employee and as Executive Chairman and
member of the Board of Directors of the Company (the “Board”) as of the above
date and such retirement was voluntary on the part of Executive and was not the
result of a disagreement with the Company on any matters relating to the
Company’s operations, policies or practices;

 

NOW, THEREFORE, in consideration of the mutual promises contained herein, the
parties agree as follows:

 

1.                                       Equity Awards. Upon the Effective Date
and in connection with Executive’s retirement and in consideration of his
release hereunder, (i) 75,000 unvested stock options granted by Company then
held by Executive with an exercise price of $19.36 shall fully vest and (ii) all
fully vested unexercised stock options then held by Executive shall remain
outstanding and exercisable until the earlier of (1) May 1, 2014 or (2) the
expiration term of the applicable stock option as noted below:

 

Grant
Date

 

Exercise
Price

 

Vested \
Exercisable (#)

 

Original
Expiration Date

 

New Exercise
Expiration Date

 

6/11/2003

 

$

14.00

 

104,228

 

5/10/2013

 

5/10/2013

 

8/14/2003

 

$

19.50

 

5,128

 

5/16/2014

 

5/1/2014

 

8/14/2003

 

$

19.50

 

5,128

 

2/20/2015

 

5/1/2014

 

8/14/2003

 

$

19.50

 

94,872

 

5/10/2013

 

5/10/2013

 

8/14/2003

 

$

19.50

 

24,872

 

5/10/2013

 

5/10/2013

 

2/15/2005

 

$

23.56

 

58,000

 

5/10/2013

 

5/10/2013

 

11/4/2005

 

$

25.39

 

100,000

 

5/10/2013

 

5/10/2013

 

2/20/2008

 

$

19.36

 

100,000

*

2/20/2015

 

5/1/2014

 

 

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*Accelerated vesting as noted above.

 

The stock options noted below shall remain subject to their original terms and
conditions and their vesting shall not be accelerated nor their exercise period
be extended.

 

Grant
Date

 

Exercise
Price

 

Vested \
Exercisable (#)

 

Original
Expiration Date

 

Exercise Expiration
Date

 

5/11/2006

 

$

39.84

 

65,770

 

5/10/2013

 

8/1/2009

 

5/16/2007

 

$

41.39

 

25,000

 

5/16/2014

 

8/1/2009

 

 

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2.                                       Return of Material.  Upon the Company’s
request, Executive will deliver to the Company all of the Company’s property or
confidential information that Executive may have in Executive’s possession or
control.

 

3.                                       Non-Disparagement.  Company and
Executive agree not to disparage the other party to any individual, organization
or entity.

 

4.                                       Amendment. No provision of this
Agreement may be changed or waived except by an agreement in writing signed by
the party against whom enforcement of any such waiver or change is sought.

 

5.                                       Arbitration.  The parties agree that
any controversy involving the construction or application of any terms,
covenants or conditions of this Agreement, or any claims arising out of or
relating to this Agreement or the breach thereof, with the exception of claims
relating to violation of Company’s confidentiality agreement, will be submitted
to and settled by final and binding arbitration, pursuant to the Federal
Arbitration Act, in Alameda County, California before a single neutral
arbitrator selected by the parties. The Company shall pay the cost and expenses
of such arbitration.  Each side will bear its own attorneys’ fees in any such
arbitration, and the arbitrator shall not have authority to award attorneys’
fees unless a statutory section at issue in the dispute authorizes the award of
attorneys’ fees to the prevailing party, in which case the arbitrator has the
authority to make such award as permitted by the statute in question.  Company
shall be unconditionally responsible for all fees and costs of the arbitrator.

 

6.                                       Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of California
without regard to its conflict of laws principles.

 

7.                                       Entire Agreement. This Agreement
contains all of the agreements, conditions, promises and covenants between the
parties with respect to the subject matter hereof and supersedes all prior or
contemporaneous agreements, representations, arrangements or understandings,
whether written or oral, with respect to the subject matter hereof.

 

8.                                       Counterparts. This Agreement may be
executed in one or more counterparts, all of which shall constitute one
agreement.

 

9.                                       Successors and Assigns. This Agreement
shall be binding upon and shall inure to the benefit of Company (including its
direct and indirect subsidiaries) and its successors and assigns. This Agreement
may not be assigned by Executive.

 

10.                                 Release of Executive.  In exchange for
Executive’s promises set forth herein, all of which are good and valuable
consideration, the Company agrees to and does hereby release and forever
discharge Executive from any rights, claims, actions and demands it has against
Executive as a result of, or arising out of Executive’s prior employment as an
employee, or service as an officer or director of the Company, and from any and
all other rights, claims, actions, demands, causes of action, obligations,
attorneys’ fees, costs, damages, and liabilities of whatever kind or nature, in
law or in equity that are known to the Company and accruing to it as of the
above date of this Agreement including but not limited to any claims it may have
under any other federal, state or local Constitution, Statute, Ordinance and/or
Regulation and/or those

 

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arising under common law including but not limited to tort, express and/or
implied contract and/or implied contract, arising out of or, in any way, related
to Executive’s prior relationship with the Company.  Claims not released include
claims the Company may have in connection with Executive’s conviction of
securities fraud or his violation of the Sarbanes-Oxley Act of 2002 for acts
occurring while he was an employee of the Company for which the Company is not
permitted to indemnify Executive.

 

11.                                 Executive’s Release of Claims. In exchange
for the Company’s promises set forth herein, all of which are good and valuable
consideration, Executive hereby releases and forever discharges the Company of
and from any and all rights, claims, actions, demands, causes of action,
obligations, attorneys’ fees, costs, damages, and liabilities of whatever kind
or nature, in law or in equity, known to Executive (“Claims”), accruing to him
as of the above date of this Agreement, that he has ever had, arising out of or,
in any way, related to Executive’s previous relationship with the Company,
including but not limited to Claims based on and/or arising under Title VII of
the Civil Rights Act of 1964, as amended, The Americans with Disabilities Act,
The Family Medical Leave Act, The Equal Pay Act, The Employee Retirement Income
Security Act, The Fair Labor Standards Act, and/or the California Fair
Employment and Housing Act; The California Constitution, The California
Government Code, The California Labor Code, The Industrial Welfare Commission’s
Orders and any and all other Claims he may have under any other federal, state
or local Constitution, Statute, Ordinance and/or Regulation; and all other
Claims arising under common law including but not limited to tort, express
and/or implied contract and/or quasi-contract, arising out of or, in any way,
related to Executive’s previous relationship with the Company, excepting his
rights under Section 21 of the Consulting Agreement between the parties hereto. 
Furthermore, Executive acknowledges that he is waiving and releasing any rights
he may have under the Age Discrimination in Employment Act of 1967 (“ADEA”), as
amended, and that this waiver and release is knowing and voluntary.  Claims not
released include claims Executive may have against the Company for
indemnification, and/or advancement of expenses for defense, by the Company
under the Company’s certificate of incorporation, by-laws, indemnification
agreements currently in effect or under applicable law, for actions of Executive
while an employee, officer or director of the Company as provided in the
consulting Agreement.  Executive acknowledges that the consideration given for
this waiver and release is in addition to anything of value to which Executive
was already entitled.  Executive further acknowledges that he has been advised
by this writing that:

 

(a)  he should consult with an attorney prior to executing this Agreement;

 

(b)  he has at least twenty-one (21) days within which to consider this
Agreement;

 

(c)  he has up to seven (7) days following the execution of this Agreement by
the parties to revoke the Agreement; and

 

(d)  this Agreement shall not be effective until the revocation period has
expired (the “Effective Date”).

 

Executive has read Section 1542 of the Civil Code of the State of California,
which provides as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

 

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Executive understands that he is not releasing any claims that are not known by
him.

 

12.                                 No Representations. Each party represents
that it has had the opportunity to consult with an attorney, and has carefully
read and understands the scope and effect of the provisions of this Agreement. 
Neither party has relied upon any representations or statements made by the
other party hereto which are not specifically set forth in this Agreement.

 

IN WITNESS WHEREOF, the parties have set their hands hereto.

 

 

FORMFACTOR, INC.

 

EXECUTIVE

 

 

 

 

 

 

By:

/s/ JAMES A. PRESTRIDGE

 

/s/ DR. IGOR KHANDROS

 

James A. Prestridge

 

Dr. Igor Khandros

 

 

 

Title:

Chairman of the Board

 

 

 

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