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

  	
   

  



 






*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

  	
   

  



 

















 


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


 

















 


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.


 

















 


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