Exhibit 10.1

 

SEPARATION AGREEMENT AND GENERAL RELEASE

 

1.             Purpose of Agreement:  The intent of this Separation Agreement
and General Release (“Agreement”) is to mutually, amicably and finally resolve
and compromise all issues and claims surrounding the employment of Jean Vernet
(“Employee”) with FormFactor, Inc. (“Company”) and the separation thereof.

 

2.             Separation of Employment:  Company and Employee agree that the
last day of his employment with Company will be May 19, 2010 (“Separation
Date”).  Employee tendered his resignation as Chief Financial Officer to be
effective on the Separation Date.  As of the Separation Date, Employee is no
longer eligible to receive further payments for wages, salary, vacation or
benefits.

 

3.             Company’s Consideration for Agreement:  In exchange for the
release and agreements that Employee is making in this Agreement, Company agrees
as follows:

 

(a)           Promptly after the Effective Date (and in no event later than
March 15, 2011), Company shall provide lump sum severance pay to Employee in the
amount of $162,500, less all legally mandated payroll deductions and
withholdings, representing six (6) months of Employee’s current annual base
salary;

 

(b)           Company shall pay Employee’s monthly premium under federal COBRA
continuation coverage for six (6) months (or such shorter period if Employee
ceases to be covered under federal COBRA).  Such payments shall be taxable to
Employee to the extent advisable or required under Section 105(h) of the
Internal Revenue Code of 1986, as amended.;

 

(c)           Executive Out Placement Services delivered by a provider selected
by the Company.

 

(d)           Employee shall be credited with accelerated vesting under each
Stock Option (Option) and Restricted Stock Unit (RSU) grant held by Employee as
of the Separation Date as set forth in the following table:

 

Acceleration Table

 

 

 

 

 

Vested

 

 

 

 

 

 

 

 

 

Options/RSUs As

 

 

 

Total Vested

 

Original

 

Original

 

of

 

Accelerated

 

Under

 

Grant

 

Grant Date

 

05/19/2010

 

Options/RSUs

 

Agreement

 

12,000 RSUs

 

5/20/2009

 

—

 

3,000 RSUs

 

3,000 RSUs

 

30,000 Options

 

5/20/2009

 

—

 

7,500 Options

 

7,500 Options

 

 

Employee shall have nine (9) months following the Separation Date to exercise
any vested and unexpired outstanding stock options.

 

Employee acknowledges and agrees but for his execution of this Agreement, he
would not otherwise be entitled to the benefits described in this Paragraph.

 

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4.             Employee’s Consideration for Agreement:  In further consideration
for the payments and undertakings described in this Agreement, Employee releases
and waives any and all claims that he might possibly have against Company,
whether he is aware of them or not.  In legal terms, this means that,
individually and on behalf of his representatives, successors, and assigns,
Employee does hereby completely release and forever discharge Company, its
parents, subsidiaries, affiliates, successors, assigns, directors, officers,
managers, agents, and past and present employees (“the Releasees”) from all
claims, rights, demands, actions, obligations, and causes of action of any and
every kind, nature and character, known or unknown, which Employee may now have,
or has ever had, against them arising from or in any way connected with
Employee’s employment with Company and/or the termination thereof.  This Release
covers all statutory, common law, constitutional and other claims, including but
not limited to:

 

(a)           Any and all claims for wrongful discharge, constructive discharge,
or wrongful demotion;

 

(b)           Any and all claims relating to any contracts of employment,
express or implied, or breach of the covenant of good faith and fair dealing,
express or implied;

 

(c)           Any and all tort claims of any nature, including but not limited
to claims for negligence, defamation, misrepresentation, fraud, or negligent or
intentional infliction of emotional distress;

 

(d)           Any and all claims under federal, state or municipal statutes or
ordinances; any claims under the California Fair Employment and Housing Act,
Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, 42
U.S.C. Section 1981, the Age Discrimination in Employment Act, the Older
Workers’ Benefit Protection Act, the Americans With Disabilities Act, the
Employment Retirement Income Security Act, the California Labor, Civil and
Business and Professions Codes, the California Constitution, the Federal
Rehabilitation Act of 1973, Federal Family and Medical Leave Act, the California
Family Rights Act, the Worker Adjustment and Retraining Notification Act, and
any other laws and regulations relating to employment, employment discrimination
and employment termination;

 

(e)           Any and all claims for unpaid wages, bonuses, commissions or other
compensation; and

 

(f)            Any and all claims for attorneys’ fees or costs.

 

Employee further agrees that if any such claim is prosecuted in his name before
any court or administrative agency, he waives and agrees not to take any award
of money or other damages from such suit. Notwithstanding any other provision of
this Agreement to the contrary, Employee does not by this Agreement or otherwise
waive or release any current or future rights and claims to indemnity arising
from his service as an employee, officer, director, and/or fiduciary of the
Company (including any constituent, affiliated, parent, and/or subsidiary
entity) or any employee benefit plan sponsored by the Company, including, but
not limited to, rights and claims for indemnity arising under

 

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Section 2802 of the California Labor Code, Section 145 of the Delaware General
Corporation Law, the by-laws and resolutions and policies and practices of the
Company, and insurance policies benefiting Employee during or following his
service as an employee, officer, director, and/or fiduciary of the Company
and/or any employee benefit plan sponsored by the Company.  Furthermore, the
Company agrees that, in the event Employee is or is sought to be made a party to
any civil, criminal, administrative, or investigative proceeding based upon his
employment and/or the services he provided during the time he was an employee of
the Company, the Company will advance, within 30 days of submission of a
documented request for advancement, the reasonable expenses actually incurred by
Employee in his defense.  Employee will, if legally required to do so, execute
an undertaking to repay same in the event he is determined by a court to be
ineligible for indemnification of such expenses.

 

Notwithstanding any other provision of this Agreement to the contrary, Employee
does not by this Agreement or otherwise waive or release any claims for
industrial injury or illness, any claims for unemployment compensation, and any
claims arising out of acts or omissions after the date Employee signs this
Agreement.

 

Notwithstanding any other provision of this Agreement to the contrary, Employee
does not by this Agreement or otherwise waive or release any rights or claims to
vested benefits from any employee benefit plan sponsored by the Company or any
parent, affiliate, or subsidiary.

 

5.             Waiver of Unknown Future Claims:  Employee 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.

 

Employee understands that Section 1542 gives him the right not to release
existing claims of which he is not now aware, unless he voluntarily chooses to
waive this right.  Even though he is aware of this right, Employee nevertheless
hereby voluntarily waives the rights described in Section 1542, and elects to
assume all risks for claims that now exist in his favor, known or unknown,
arising from the subject matter of this Agreement.

 

6.             Proprietary Information:  Employee acknowledges and agrees that
he remains bound by the terms of Company’s Employment, Confidential Information
and Invention Assignment Agreement (“Confidentiality Agreement”), which he
executed at the time of hire.

 

7.             Confidentiality of Agreement:  Employee agrees that the terms and
conditions of this Agreement are strictly confidential.  Employee shall not
disclose, discuss or reveal the terms or negotiation of this Agreement to any
persons, entities or organizations except as follows:  (a) as required by court
order; (b) to Employee’s spouse; or (c) to Employee’s attorneys or accountants. 
Employee understands that Company will make all

 

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disclosures necessary under the applicable rules and regulations of the U.S.
Securities and Exchange Commission.

 

8.             Interpretation and Construction of Agreement:  This Agreement
shall be construed and interpreted in accordance with the laws of the State of
California, without regard to its conflicts of law principles.  Regardless of
which party initially drafted this Agreement, it shall not be construed against
any one party, and shall be construed and enforced as a mutually prepared
Agreement.

 

9.             No Admission of Liability:  By entering into this Agreement,
Company is not admitting to any liability, wrongdoing or legal violation
whatsoever with regard to the employment relationship between the parties, with
regard to the company-director relationship between the parties or with respect
to any claims released herein.  Company expressly denies any and all such
liability and wrongdoing.

 

At present, Company is not aware of any claim it may have against Employee.

 

10.           Non-Disparagement:  Company and Employee agree not to disparage
the other party to any individual, organization or entity.

 

11.           Older Workers’ Benefit Protection Act:  Pursuant to the Age
Discrimination in Employment Act and the Older Workers’ Benefit Protection Act,
Company hereby advises Employee of the following:

 

(a)           Employee is advised to consult with an attorney prior to signing
this Agreement.

 

(b)           Employee has up to twenty-one (21) days after the Separation Date
within which to consider whether he should sign this Agreement.  Employee may
sign this Agreement at any time during this 21-day period.  This 21-day period
begins on the date Company first provides Employee with the Agreement providing
additional consideration in return for a general release of claims. If the
Agreement is not signed within twenty-one (21) days, it is revoked.

 

(c)           If Employee signs the Agreement, he shall have seven (7) days
thereafter to revoke the Agreement.  To revoke the Agreement, Employee must
deliver written notice of the revocation to Hank Feir, Company’s vice president
of Human Resources, so that it is received before the seven-day revocation
period expires. The Agreement is effective on the eighth day unless revoked
(“Effective Date”).

 

(d)           In signing this Agreement, Employee is not releasing or waiving
any federal age discrimination claims based on conduct or events that occur
after the Agreement is signed.

 

12.           Complete and Voluntary Agreement:  Employee acknowledges that he
has read and understands this Agreement; that he has had the opportunity to seek
legal counsel of his own choosing and to have the terms of the Agreement fully
explained to him; that he is not executing this Agreement in reliance on any
promises, representations or

 

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inducements other than those contained herein; and that he is executing this
Agreement voluntarily, free of any duress or coercion.  Employee specifically
understands that by entering into this Agreement he is forever foreclosed from
pursuing any of the claims he has waived in Paragraphs 4 and 5 above.

 

13.           Severability Clause:  Should any of the provisions of this
Agreement be determined to be invalid or unenforceable by a court or arbitrator
of competent jurisdiction, it is agreed that such determination shall not affect
the enforceability of the other provisions herein.

 

14.           Scope of Agreement:  This Agreement constitutes the entire
understanding of the parties on the subjects covered.  Except as expressly
provided here, this Agreement supersedes and renders null and void any and all
prior agreements between Employee and Company.  This Agreement shall not
supersede or extinguish Employee’s interests in any Company option and/or
incentive plan agreement, to the extent any such agreement conflicts with this
Agreement and advantage Employee.

 

15.           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.

 

PLEASE READ CAREFULLY.  THIS AGREEMENT CONTAINS A FULL RELEASE OF LEGAL CLAIMS,
BOTH KNOWN CLAIMS AND UNKNOWN CLAIMS.

 

 

Company:

 

Employee:

 

 

 

FormFactor, Inc.

 

 

 

 

 

By:

/s/ Hank Feir

 

/s/ Jean Vernet

 

 

Jean Vernet

 

 

 

Date:  6/1/2010

 

Date:  6/1/ 2010

 

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