EXHIBIT
10.02


 


CONSULTING
AGREEMENT


 


This Consulting Agreement (“Agreement”) is entered
into as of May 1, 2009 (the “Effective Date”) between FormFactor, Inc.
(the “Company”) and Dr. Igor Khandros (the “Consultant”).


 


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


 


WHEREAS, Company desires to retain Consultant as a
consultant to perform consulting services to the Company as of the Effective
Date and Consultant is willing to perform such services, on terms set forth
more fully below.


 


NOW, THEREFORE, Company and Consultant agree as
follows:


 


1.                                       Engagement. Commencing on
the Effective Date, Consultant shall become a consultant of the Company during
the Consulting Period upon the terms and conditions hereinafter set forth.


 


2.                                       Services. During the
Consulting Period, Consultant shall provide advice and counsel to the Company
at such time and places and in such manner as reasonably requested from time to
time from the Chairman of the Board. 
Consultant understands that he is to report directly to the Chairman of
the Board and will perform faithfully the duties assigned to him to the best of
his abilities and in the best interests of the Company.  The terms of Consultant’s service during the
Consulting Period are determined hereunder and no employee manual, policy
statement or similar item issued from time to time by Company to its employees
shall constitute part of this Agreement or modify, affect or govern the terms
of the engagement of Consultant during the Consulting Period.


 


3.                                       Compensation.


 


(a)  During the Consulting Period, Consultant
shall be paid a quarterly retainer equal to $75,000 (“Consulting Fee”).  Such Consulting Fee shall be payable in
advance on the first business day of each three-month period commencing with
the Effective Date.  Each payment of
Consulting Fees shall be a separate payment for purposes of Section 409A
of the Internal Revenue Code.  The Company
will not withhold from the Consultant’s Consulting Fee any amount for taxes,
social security or other payroll deductions. 
The Company will issue Consultant a 1099 form with respect to Consultant’s
Consulting Fee.  Consultant acknowledges
that he will be entirely responsible for payment of any such taxes, and he
hereby indemnifies and holds harmless the Company from any liability for any
taxes, penalties or interest which may be assessed by any taxing authority.


 


(b)  Consultant shall be reimbursed, upon
presentation of proper receipts, for Consultant’s reasonable business expenses
related to travel requested by the Chairman of 


 

















 


the
Board.  Company shall also, if requested
by Consultant, provide Consultant with such computer equipment and support as
Consultant may need to render services hereunder.


 


4.                                       Use
of Name. Consultant hereby consents to the use and publication, without
further consideration, of his name, picture and image in training materials and
other materials relating to the business of the Company, regardless of whether
such use or publication is in the form of printed matter, photographs, audio
tape, video tape, computer disk, electronic transmission, or otherwise. Such
consent applies to both the use and publication of such items during Consultant’s
engagement.


 


5.                                       Disclosure
or Misuse of Confidential Information. Consultant shall not, at
any time during the Consultant Period or thereafter, directly or indirectly,
disclose, furnish or make accessible to any person, firm, corporation, or other
entity, or make use of, any confidential information obtained at any time from
the Company (whether prior or subsequent to the Effective Date), including,
without limitation Company proprietary information, technical data, trade
secrets or know-how, including, but not limited to, research product plans,
products, services, customers, customer lists, markets, software, developments,
inventions, processes, formulas, technology, designs, drawings, engineering,
hardware configuration information, marketing, finances or other business
information disclosed by the Company either directly or indirectly in writing,
orally or by drawings or inspection of parts or equipment, information with
respect to the name, address, contact persons or requirements of any customer,
client, applicant or employee of the Company. 
Consultant acknowledges that such information is safeguarded by the
Company as trade secrets and it is understood that such confidential
information will remain the sole property of the Company.  Consultant further agrees to take all
reasonable precautions to prevent any unauthorized disclosure of such
confidential information.  Confidential
information does not include information which (i) is known to Consultant
at the time of disclosure to Consultant by the Company (unless that knowledge
was acquired in the course of Consultant’s previous employment with the
Company), (ii) has become publicly known and made generally available
through no wrongful act of Consultant, or (iii) has been rightfully
received by Consultant from a third party who is authorized to make such
disclosure.  Upon termination of
Consultant’s services, Consultant shall deliver to the Company all copies of
all records, confidential information and other property belonging to the
Company or used in connection with their business which may be in Consultant’s
possession.  The provisions of this
section shall survive termination of either Consultant’s services or this
Agreement for any reason.


 


6.                                       Ownership.


 


(a)  Assignment.  Consultant agrees that
all copyrightable material, notes, records, drawings, designs, inventions,
improvements, developments, discoveries and trade secrets (all collectively, “Inventions”)
conceived, made or discovered by Consultant, solely or in collaboration with
others, either (i) in performing duties according to this Agreement or (ii) at
any time during the period of this Agreement to the extent related to the fields
of semiconductor wafer test and of MEMS sockets, interconnects and switches,
are the sole property of the Company.  Consultant further agrees to assign (or


 

















 


cause
to be assigned) and does hereby assign fully to the Company all Inventions and
any copyrights, patents, mask work rights or other intellectual property rights
relating thereto.


 


(b)  Further Assurances.  Consultant agrees to assist Company, or its
designee, at the Company’s expense, as requested by the Company and as
reasonably necessary, to secure the Company’s rights in the Inventions and any
copyrights, patents, mask work rights or other intellectual property rights
relating thereto in any and all countries, including the disclosure to the
Company of all pertinent information and data with respect thereto, the
execution of all applications, specifications, oaths, assignments and all other
instruments which the Company deems necessary in order to apply for and obtain
such rights and in order to assign and convey to the Company, its successors,
assigns and nominees the sole and exclusive right, title and interest in and to
such Inventions, and any copyrights, patents, mask work rights or other
intellectual property rights relating thereto. 
Consultant further agrees that Consultant’s obligation to execute or
cause to be executed, when it is in Consultant’s power to do so, any such
instrument or papers will continue after the termination of this Agreement.


 


(c)  Pre-Existing Materials.  Consultant agrees that if in the course of
performing services under this Agreement, Consultant incorporates into any
Invention developed hereunder any invention, improvement, development, concept,
discovery or other proprietary information owned by Consultant or in which
Consultant has an interest, (i) Consultant will inform Company, in writing
before incorporating such invention, improvement, development, concept,
discovery or other proprietary information into any Invention and (ii) the
Company is hereby granted and will have a nonexclusive, royalty-free,
perpetual, irrevocable, worldwide license to make, have made, modify, use and
sell such item as part of or in connection with such Invention.  Consultant will not incorporate any
invention, improvement, development, concept, discovery or other proprietary
information owned by any third party into any Invention without Company’s prior
written permission.


 


(d)  Attorney in Fact.  Consultant agrees that if the Company is
unable because of Consultant’s unavailability, dissolution, mental or physical
incapacity, or for any other reason, to secure Consultant’s signature to apply
for or to pursue any application for any United States or foreign patents or
mask work or copyright registrations covering the Inventions assigned to the
Company above, then Consultant hereby irrevocably designates and appoints the
Company and its duly authorized officers and agents as Consultant’s agent and
attorney in fact, to act for and in Consultant’s behalf and stead to execute and
file any such applications and to do all other lawfully permitted acts to
further the prosecution and issuance of patents, copyright and mask work
registrations thereon with the same legal force and effect as if executed by
Consultant.


 


7.                                       Restrictive
Covenant. In consideration and view of (i) the valuable
consideration furnished to Consultant by Company entering into this Agreement, (ii) Consultant’s
access to confidential information and trade secrets of the Company and (iii) the
value of such confidential information and trade secrets to the Company, during
the Consulting Period, for so long as Consultant is rendering services to the
Company hereunder, Consultant shall not render services to any other firm,
person, corporation, partnership or 


 

















 


other
entity or individual engaged in a business within the fields of semiconductor
wafer test and/or MEMS sockets, interconnects or switches.  The covenants of Consultant contained in this
section are in addition to, and not in amendment, modification or replacement
of, any obligations of Consultant contained in any other agreement between
Consultant and Company.


 


8.                                       Non-solicitation
of Other Employees. In consideration and view of (i) the valuable
consideration furnished to Consultant by Company entering into this Agreement, (ii) Consultant’s
access to confidential information and trade secrets of the Company, and (iii) the
value of such confidential information and trade secrets to the Company, during
the Consulting Period and ending on the one (1) year anniversary following
the end of the Consulting Period, Consultant shall not, directly or indirectly,
solicit, induce, encourage (or assist any other person, firm, entity, business
or organization in soliciting, inducing or encouraging) any employee of any of
the Company to leave the employ of the Company. 
The covenants of Consultant contained in this section are in addition
to, and not in amendment, modification or replacement of, any obligations of
Consultant contained in any other agreement between Consultant and Company.


 


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


 


10.                                 Injunction. In view of
Consultant’s access to confidential information and trade secrets and in
consideration of the value of such property to the Company, Consultant
expressly acknowledges that the covenants set forth herein are reasonable and
necessary in order to protect and maintain the proprietary and other legitimate
business interests of the Company, and that the enforcement thereof would not
prevent Consultant from earning a livelihood. 
Consultant further agrees that in the event of an actual or threatened
breach by Consultant of such covenants, the Company would be irreparably harmed
and the full extent of injury resulting therefrom would be impossible to
calculate and the Company therefore will not have an adequate remedy at
law.  Accordingly, Consultant agrees that
temporary and permanent injunctive relief would be appropriate remedies against
such breach, without bond or security; provided, that nothing herein shall be
construed as limiting any other legal or equitable remedies the Company might
have.


 


11.                                 Independent
Contractor.  It is the
express intention of the parties that Consultant is an independent
contractor.  Nothing in this Agreement
will in any way be construed to constitute Consultant as an agent, employee or
representative of the Company, but Consultant will perform the services
hereunder as an independent contractor.


 


12.                                 Termination.


 


(a)  Consultant may terminate Consultant’s
services during the Consulting Period at any time on written notice to the
Chairman of the Board.


 


(b)  Company may terminate Consultant’s
services during the Consulting Period at any time on written notice to Consultant.


 


(c)  The consulting relationship will terminate
in the event of Consultant’s death or permanent and total disability.


 


(d)  If Consultant’s services are terminated on
or after the Effective Date and prior to the one (1) year anniversary of
the Effective Date (other than pursuant to Section 


 

















 


12(c))
(1)  by Consultant, as a result of a willful and material breach of this
Agreement by Company which has not been cured by the Company within thirty (30)
days after notice thereof is provided by Consultant within ninety (90) days of
initial existence of such breach, or (2) by Company, other than a
Termination for Cause or Termination for Nonperformance, Company shall continue
to pay Consultant the Consulting Fee specified herein following Consultant’s termination
of services until the earlier of (i) the one (1) year anniversary of
the Effective Date, or (ii) any breach by Consultant of the provisions of
Sections 5, 6, 7, 8, or 9 hereof which has resulted in material detriment to
the Company .


 


13.                                 Waiver. Failure of
any party to insist upon strict compliance with any of the terms, covenants and
conditions hereof shall not be deemed a waiver or relinquishment of the right
to subsequently insist upon strict compliance with such term, covenant or
condition or a waiver or relinquishment of any similar right or power hereunder
at any subsequent time.


 


14.                                 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.


 


15.                                 Severability. The
provisions of this Agreement are severable. If any provision is found by any
court of competent jurisdiction to be unreasonable and invalid, that
determination shall not affect the enforceability of the other provisions.
Furthermore, if any of the restrictions against various activities is found to
be unreasonable and invalid, the court before which the matter is pending shall
enforce the restriction to the maximum extent it deems to be valid. Such restrictions
shall be considered divisible both as to time and as to geographical area, with
each month being deemed a separate period of time and each one mile radius from
any office being deemed a separate geographical area. The restriction shall
remain effective so long as the same is not unreasonable, arbitrary or against
public policy.


 


16.                                 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.


 


17.                                 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.


 

















 


18.                                 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.


 


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


 


20.                                 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 Consultant.


 


21.                                 Definitions.


 


“Consulting Period” means a one (1) year period
of time commencing on the Effective Date. 
The Consulting Period may be extended beyond the one (1) anniversary
of the Effective Date should both parties agree to the terms and conditions for
such an extension.


 


“Termination for Cause” shall mean termination by
Company of Consultant’s services under this Agreement by Company by reason of (a) Consultant’s
willful dishonesty towards, fraud upon, or deliberate injury or attempted
injury to Company which has resulted in material injury to Company, or (b) violation
by Consultant of the provisions of Sections 5, 6, 7, 8 or 9 hereof which
has resulted in material injury to Company.


 


“Termination for Nonperformance” shall mean
termination by Company of Consultant’s services under this Agreement by Company
by reason of failure by Consultant, following written notice, to materially
perform the service obligations contained in Section 2 hereof.


 


22.                                 Indemnification. The Company
shall indemnify Consultant for all actions taken while performing services
hereunder to the fullest extent permitted by Delaware law, the Certificate of
Incorporation and the By-laws of the Company and by the terms of any
indemnification agreement that has been or shall be entered into from time to
time between the Company and Consultant, which indemnification agreement shall
remain in full force and effect during and after the Consulting Period and
shall cover the actions of Consultant during the Consulting Period as if he
were a director or an officer during and after the Consulting Period and the
Company shall continue any fiduciary liability insurance policy in effect under
which Consultant is an insured party for a period of five (5) years
following the Effective Date.


 


23.                                 Attorneys’
Fees. In the event of any litigation pertaining to this Agreement, the
prevailing party shall be reimbursed by the non-prevailing party for the
prevailing party’s reasonable attorney’s fees and expenses incurred in such
litigation.


 


24.                                 Notices.  For purposes of this Agreement, notices and other
communications provided for in this Agreement will be in writing and will be
delivered personally or sent by United States certified mail, return receipt
requested, postage prepaid, addressed as follows:


 

















 


	
  If
  to Consultant:

  	
   

  	
  Dr. Igor
  Khandros

  
	
   

  	
   

  	
  FormFactor,
  Inc.

  
	
   

  	
   

  	
  7005
  Southfront Road

  
	
   

  	
   

  	
  Livermore,
  CA 94551

  
	
   

  	
   

  	
   

  
	
  If to the Company:

  	
   

  	
  James A. Prestridge

  
	
   

  	
   

  	
  Chairman

  
	
   

  	
   

  	
  Board of the Directors

  
	
   

  	
   

  	
  FormFactor, Inc.

  
	
   

  	
   

  	
  7005 Southfront Road

  
	
   

  	
   

  	
  Livermore, CA 94551

  



 


or
to such other address or the attention of such other person as the recipient
party has previously furnished to the other party in writing in accordance with
this section.  Such notices or other
communications will be effective upon delivery or, if earlier, three (3) days
after they have been mailed as provided above.


 


25.                                 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.

  	
   

  	
  CONSULTANT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ JAMES A. PRESTRIDGE

  	
   

  	
  /s/ DR. IGOR KHANDROS

  
	
   

  	
  James A. Prestridge

  	
   

  	
  Dr. Igor Khandros

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Chairman of the Board of
  Directors