Exhibit
10.2.16


VERIGY LTD. 2006 EQUITY INCENTIVE
PLAN


NOTICE OF SHARE OPTION AWARD


(FOUR
TRANCHE)


On
<Date> (the "Award Date") you were awarded an option to
purchase Verigy Ltd. (the “Company”) ordinary shares.  The Option shall be divided into four tranches,
each representing 1/4 of the total shares
covered by the Option.  Each traunch will
be summarized on the Award Summary page of your Smith Barney account.  Each summary (including the number of shares
and exercise price of each traunche) will be posted to your Smith Barney
account shortly after the exercise price is determined as follows:


	
  Exercise Prices (1)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exercise Price Per Share, 1st Tranche:

  	
   

  	
  The last sale price of Verigy
  ordinary shares on <Date>;

  
	
   

  	
   

  	
   

  
	
  Exercise Price Per Share, 2nd Tranche:

  	
   

  	
  The last sale price of Verigy ordinary shares on the
  third business day following Verigy’s announcement of financial results for
  the fiscal quarter ending <Date>;

  
	
   

  	
   

  	
   

  
	
  Exercise Price Per Share, 3rd Tranche:

  	
   

  	
  The last sale price of Verigy ordinary shares on the
  third business day following Verigy’s announcement of financial results for
  the fiscal quarter ending <Date> ; and

  
	
   

  	
   

  	
   

  
	
  Exercise Price Per Share, 4th Tranche:

  	
   

  	
  The last sale price of Verigy ordinary shares on the
  third business day following Verigy’s announcement of financial results for
  the fiscal quarter ending <Date>.

  
	
   

  	
   

  	
   

  
	
  Vesting
  Schedule

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1st Tranche
  (1/4shares):

  	
   

  	
  The first tranche of shares subject
  to this option vests and becomes exercisable in 16 equal quarterly
  installments, (2) with the first installment vesting on <Date>,
  provided that you continue to be an Awardee Eligible to Vest as of the
  applicable vesting date.

  
	
   

  	
   

  	
   

  
	
  2nd Tranche
  (1/4shares):

  	
   

  	
  The second tranche of shares
  subject to this option vests and becomes exercisable in 15 equal
  quarterly installments,(2) with the first installment vesting on
  <Date>, provided that you continue to be an Awardee Eligible to Vest as
  of the applicable vesting date.

  
	
   

  	
   

  	
   

  
	
  3rd Tranche
  (1/4shares):

  	
   

  	
  The third tranche of shares subject
  to this option vests and becomes exercisable in 14 equal quarterly
  installments,(2) with the first installment vesting on <Date>, provided
  that you continue to be an Awardee Eligible to Vest as of the applicable
  vesting date.

  
	
   

  	
   

  	
   

  
	
  4th Tranche
  (1/4shares):

  	
   

  	
  The fourth tranche of shares
  subject to this option vests and becomes exercisable in 13 equal
  quarterly installments,(2) with the first installment vesting on
  <Date>, provided that you continue to be an Awardee Eligible to Vest as
  of the applicable vesting date.

  



 


You
and the Company agree that this option is granted under and governed by the
terms and conditions of the Verigy Ltd. 2006 Equity Incentive Plan (the “Plan”)
and the Stock Option Agreement, both of which are made a part of this document.












You further agree that the Company
shall cause the shares issued upon exercise of this option to be deposited in
your Smith Barney Account and,
further, that the Company may deliver electronically all documents relating to
the Plan or this option (including, without limitation, prospectuses required
by the Securities and Exchange Commission) and all other documents that the
Company is required to deliver to its security holders (including, without
limitation, annual reports and proxy statements).  You also agree that the Company may deliver
these documents by posting them on a web site maintained by the Company or by a
third party under contract with the Company. 
If the Company posts these documents on a web site, it will notify you
regarding such posting.


	
  BY CLICKING ON THE “ACCEPT” BUTTON ON THE SCREEN
  TITLED “STEP 3: CONFIRM THE REVIEW/ACCEPTANCE OF YOUR AWARD,” YOU AGREE TO BE
  BOUND BY THE STOCK OPTION AGREEMENT, THIS NOTICE AND THE PLAN.

  	
   

  	
  VERIGY LTD.

   

  
	
   

  	
   

  	
  BY:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  KEITH L. BARNES

  
	
   

  	
   

  	
   

  	
  PRESIDENT AND CHIEF EXECUTIVE OFFICER

  
	
   

  	
   

  	
   

  	
   

  



 






(1) Except as set forth in the accompanying Option Agreement, the
exercise prices for the 2nd through 4th tranches shall be equal to the closing
price of Verigy ordinary shares on the pricing dates indicated above.  Such prices shall be set automatically and
without any further action on the part of the Company or the optionee.


(2) No fractional shares shall be issuable.  The number of shares exercisable at each
vesting event other than the last shall be rounded down to the nearest whole
share and the last vesting event shall cover all shares not previously vested.












VERIGY LTD. 2006 EQUITY INCENTIVE
PLAN


SHARE
OPTION AGREEMENT


(Four Tranche)


	
  Tax Treatment

  	
   

  	
  This option is intended to be a nonstatutory stock
  option.

  
	
   

  	
   

  	
   

  
	
  Vesting

  	
   

  	
  This option becomes
  exercisable in installments, during the Option term as shown in the Notice of
  Stock Option Award, as long as you remain an Awardee Eligible to Vest (as defined
  in the Plan).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  This option will in no event become exercisable for
  additional shares after your Service has terminated for any reason, except as
  otherwise provided in the Plan and this agreement.

   

  
	
   

  	
   

  	
   

  
	
  Term

  	
   

  	
  This option expires in any
  event at the close of business at Company headquarters on the day before the
  7th anniversary of the Date of Award, as shown
  in the Notice of Stock Option Award. 
  (It may expire earlier if your Service terminates, as described
  below.)

  
	
   

  	
   

  	
   

  
	
  Regular  Termination

  	
   

  	
  Unless otherwise provided in an agreement between
  you and the Company, if your Service terminates for any reason except death,
  total and permanent disability, or retirement due to age, in accordance with
  the Company’s or a Subsidiary’s or Affiliate’s retirement policy, then this
  option will expire at the close of business at Company headquarters on the
  date three months after your termination date, or, if earlier, the expiration
  of the term of this option. The Company determines when your Service
  terminates for this purpose.

  
	
   

  	
   

  	
   

  
	
  Termination as a result of Death,
  Disability or Retirement

  	
   

  	
  If you die before your Service terminates, or if
  your Service terminates because of your total and permanent disability or in
  connection with your retirement due to age, then (i) the vested portion of
  each tranche of this option will be determined by adding 12 months to your
  length of service and (ii) you will be entitled to exercise this option until
  the close of business at Company headquarters on the one year anniversary of
  the date of death, disability or retirement, or, if earlier, until the
  expiration of the term of this option, as provided in the Plan.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For all purposes under this
  Agreement, “total and permanent disability” means that you are unable to
  engage in any substantial gainful activity by reason of any medically
  determinable physical or mental impairment which can be expected to result in
  death or which has lasted, or can be expected to last for a continuous period
  of not less than one year.

  
	
   

  	
   

  	
   

  
	
  Special Provisions 

  	
   

  	
  Notwithstanding the establishment
  of pricing dates for the 2nd, 3rd and 4th tranches of
  the award as set forth in the Notice of Stock Option Award, the exercise
  price of any 

  



 












 


	
  for Accelerated Pricing of 

  	
   

  	
  previusly unpriced tranche shall be
  established in accordance with the following in the 

  
	
  Unpriced Tranches

  	
   

  	
  following circumstances:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Change of Control.  In the
  event that prior to any pricing date the Company or any third party publicly
  announces any transaction or event which, as announced or if consummated,
  would constitute a Change of Control (as defind in the Plan) of the Company,
  the per-share exercise price for each tranche of this option not already
  priced as of the date of such announcement shall become fixed at an amount
  equal to the closing price of Verigy ordinary shares on the last trading day
  immediately preceding such announcement.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Termination of Employment.  In the event
  that prior to any pricing date your Service (as defined in the Plan) with the
  Company and its affiliates shall terminate for any reason, then the per-share
  exercise price for each tranche of this option not already priced as of the
  date of such termination of Service shall become fixed at an amount equal to
  the closing price of Verigy ordinary shares on the last trading day
  immediately preceding your last day of Service. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  No Affect On Vesting.  The Vesting
  provisions applicable to any tranche shall not be affected by a change in the
  timing of establishing the exercise price in accordance with the preceding
  paragraphs.

  
	
   

  	
   

  	
   

  
	
  Leaves of Absence and Part-Time Work

  	
   

  	
  For purposes of this option,
  your Service does not terminate when you go on a military leave, a sick leave
  or another Company approved leave of absence, and if continued crediting of
  Service is required by the terms of the leave or by applicable law.  But your Service terminates when the
  approved leave ends, unless you immediately return to active work.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Your status as an Awardee Eligible to Vest (as
  defined in the Plan) will always cease upon termination of employment with
  the Company or a Subsidiary or Affiliate
  except as provided in Article 5 of the Plan.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If you commence working on a part-time basis, then
  the vesting schedule specified in the Notice of Stock Option Award may be
  adjusted in accordance with the Company’s part-time work policy or the terms
  of an agreement between you and the Company pertaining to your part-time
  schedule.

  
	
   

  	
   

  	
   

  
	
  Restrictions on  Exercise

  	
   

  	
  The Company will not permit you to exercise this
  option if the issuance of shares at that time would violate any law or
  regulation.

  



 












 


	
  Notice of Exercise

  	
   

  	
  You may exercise this option from time to time for
  any number of shares for which the option is then exercisable, by notice in
  writing, electronically or by other means to, and as prescribed by, the
  Company’s equity incentive administration service provider (the
  “administration service provider”). Your exercise notice will be effective
  and irrevocable at such time as your notice, method of payment (whether by
  cash, check, proceeds from the immediate sale of the option shares, or as
  otherwise provided in the Plan) and such other documentation as the
  administration service provider may require have been received by the
  administration service provider.  Your
  exercise notice must specify which tranche(s) of this option you are
  exercising.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If someone else wants to
  exercise this option after your death, that person must prove to the
  Company's satisfaction that he or she is entitled to do so.

  
	
   

  	
   

  	
   

  
	
  Form of
  Payment

  	
   

  	
  When you
  exercise this option, you must provide for payment of the option exercise price
  for the shares that you are purchasing. 
  To the extent permitted by applicable law, payment may be made in one
  (or a combination of two or more) of the forms set forth in Sections 5.7 (a),
  (c) and (d) of the Plan.

  
	
   

  	
   

  	
   

  
	
  Withholding Taxes and Stock Withholding

  	
   

  	
  Regardless of any action the Company  or
  your employer (the “Employer”) takes with respect to any or all income
  tax, social insurance, payroll tax, payment on account or other tax-related
  withholding (“Tax-Related Items”), you acknowledge that the ultimate
  liability for all Tax-Related Items legally due by you is and remains your
  responsibility and that the Company  and/or
  the Employer (1) make no representations or undertakings regarding the
  treatment of any Tax-Related Items in connection with any aspect of the
  option grant, including the grant, vesting or exercise of the option, the
  subsequent sale of shares acquired pursuant to such exercise and the receipt
  of any dividends; and (2) do not commit to structure the terms of the grant
  or any aspect of the option to reduce or eliminate your liability for
  Tax-Related Items.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Prior to exercise of the option, you will pay or
  make adequate arrangements satisfactory to the Company  and/or the Employer to
  satisfy all withholding and payment on account obligations of the Company  and/or the Employer.  In this regard, you authorize the Company
  and/or the Employer to withhold all applicable Tax-Related Items legally
  payable by you from your wages or other cash compensation paid to you by the Company
  and/or the Employer or from proceeds of the sale of shares.  Alternatively, or in addition, if
  permissible under local law, the Company may (1) sell or
  arrange for the sale of shares that you acquire to meet the withholding
  obligation for Tax-Related Items, and/or (2) withhold in shares, provided
  that the Company only withholds the amount of shares necessary to
  satisfy the minimum withholding amount. 
  Finally, you will pay to the Company or the Employer any
  amount of Tax-Related Items that the Company or the Employer may
  be required to withhold as a result of your participation in the Plan or your
  purchase of shares that cannot be satisfied by the means previously
  described.  The Company may
  refuse to honor the exercise and refuse to deliver the shares if you 

  



 












 


	
  

  	
   

  	
  fail to comply with your obligations in connection
  with the Tax-Related Items as described in this section.

  
	
   

  	
   

  	
   

  
	
  Restrictions on Resale

  	
   

  	
  You agree not to sell any
  option shares at a time when applicable laws, Company policies or an
  agreement between the Company and its underwriters prohibit a sale.  This restriction will apply as long as your
  Service continues and for such period of time after the termination of your
  Service as the Company may specify.

  
	
   

  	
   

  	
   

  
	
  Transfer of Option

  	
   

  	
  Unless determined
  otherwise by the Committee, this option may not be sold, pledged, assigned,
  hypothecated, transferred, or disposed of in any manner other than by the
  beneficiary designation, will or by the laws of descent or distribution and
  may be exercised, during your lifetime, only by you.  If the Committee
  makes this option transferable, it shall contain such additional terms and
  conditions as the Committee deems appropriate. 

  
	
   

  	
   

  	
   

  
	
  Retention Rights

  	
   

  	
  Your option or this Agreement
  does not give you the right to be retained by the Company or a subsidiary of
  the Company in any capacity.  The
  Company and its subsidiaries reserve the right to terminate your Service at
  any time, with or without cause.

  
	
   

  	
   

  	
   

  
	
  Stockholder
  Rights

  	
   

  	
  You, or your estate or heirs, have no rights as a
  stockholder of the Company until you have exercised this option by submitting
  the required notice in accordance with the provisions under “Notice of
  Exercise” set forth above and paying the exercise price and any applicable
  withholding taxes. No adjustments are made for dividends or other rights if
  the applicable record date occurs before you exercise this option, except as
  described in the Plan.

  
	
   

  	
   

  	
   

  
	
  Adjustments

  	
   

  	
  In the event of a stock split,
  a stock dividend or a similar change in Company stock, the number of shares
  covered by this option and the exercise price per share may be adjusted
  pursuant to the Plan.

  
	
   

  	
   

  	
   

  
	
  

  	
   

  	
  In accepting the grant, you acknowledge that:

  
	
  Nature
  of the Grant

  	
   

  	
  (a)  the Plan
  is established voluntarily by the Company, it is discretionary in nature and
  it may be modified, amended, suspended or terminated by the Company at any
  time, unless otherwise provided in the Plan and this Share Option Agreement;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)  the
  grant of the option is voluntary and occasional and does not create any
  contractual or other right to receive future grants of options, or benefits
  in lieu of options, even if options have been granted repeatedly in the past;
  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c)  all
  decisions with respect to future option grants, if any, will be at the sole
  discretion of the Company; 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (d)  you are
  voluntarily participating in the Plan;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (e)  the
  option is an extraordinary item that does not constitute compensation of any
  kind for services of any kind rendered to the Company  or the Employer, and which is outside
  the scope of your employment contract, if any;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (f)  the
  option is not part of normal or expected compensation or salary for any
  purposes, including, but not limited to, calculating any severance,
  resignation,

  



 












 


	
  

  	
   

  	
  termination, redundancy, end of service payments,
  bonuses, long-service awards, pension or retirement benefits or similar
  payments and in no event should be considered as compensation for, or
  relating in any way to, past services for the Company or the Employer;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (g)  in the
  event that you are not an employee of the Company, the option grant will not
  be interpreted to form an employment contract or relationship with the
  Company; and furthermore, the option grant will not be interpreted to form an
  employment contract with the Employer or any subsidiary or affiliate of the
  Company; 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (h)  the
  future value of the underlying shares is unknown and cannot be predicted with
  certainty; 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)  if the
  underlying shares do not increase in value, the option will have no value;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (j)  if you
  exercise your option and obtain shares, the value of those shares acquired
  upon exercise may increase or decrease in value, even below the exercise
  price;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (k)  in
  consideration of the grant of the option, no claim or entitlement to
  compensation or damages shall arise from termination of the option or
  diminution in value of the option or shares purchased through exercise of the
  option resulting from termination of your employment by the Company or the
  Employer (for any reason whatsoever and whether or not in breach of local
  labor laws) and you irrevocably release the Company  and the Employer from any such claim that may arise; if,
  notwithstanding the foregoing, any such claim is found by a court of
  competent jurisdiction to have arisen, then, by signing this Share Option
  Agreement, you shall be deemed irrevocably to have waived your entitlement to
  pursue such claim; and 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (l)  in the
  event of termination of your employment (whether or not in breach of local
  labor laws), your right to receive the option and vest in the option under
  the Plan, if any, will terminate effective as of the date that you are no
  longer actively employed and will not be extended by any notice period
  mandated under local law (e.g.,
  active employment would not include a period of “garden leave” or similar
  period pursuant to local law); furthermore, in the event of termination of
  employment (whether or not in breach of local labor laws), your right to
  exercise the option after termination of employment, if any, will be measured
  by the date of termination of your active employment and will not be extended
  by any notice period mandated under local law;  the Company shall have the exclusive
  discretion to determine when you are no longer actively employed for purposes
  of your option grant.

  



 












 


	
  Data Privacy Notice and Consent

  	
   

  	
  You
  hereby explicitly and unambiguously consent to the collection, use and
  transfer, in electronic or other form, of your personal data as described in this Share
  Option Agreement by and among, as applicable, your employer, the Company, its subsidiaries and
  its affiliates for the exclusive purpose of implementing, administering and
  managing your
  participation in the Plan.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  You  understand that the Company and your employer may hold certain personal information about
  you, including, but not limited to, your name, home address and telephone number, date of
  birth, social insurance number or other identification number, salary,
  nationality, job title, any shares of stock or directorships held in the
  Company, details of all options or any other
  entitlement to shares awarded, canceled, vested, unvested or outstanding in your favor, for the purpose of implementing, administering
  and managing the Plan (“Data”).  You understand that Data may be transferred to any third
  parties assisting in the implementation, administration and management of the
  Plan, that these recipients may be located in your
  country, or elsewhere, and that the recipient’s country may have different
  data privacy laws and protections than your
  country.  You
  understand that you may request a list with the
  names and addresses of any potential recipients of the Data by contacting your local human resources representative.  You authorize the
  recipients to receive, possess, use, retain and transfer the Data, in
  electronic or other form, for the purposes of implementing, administering and
  managing your participation in the Plan, including
  any requisite transfer of such Data as may be required to a broker, escrow
  agent or other third party with whom the shares received upon exercise of the option  may be
  deposited.  You
  understand that Data will be held only as long as is necessary to implement,
  administer and manage your participation in the
  Plan.  You
  understand that you may, upon request, view Data,
  request additional information about the storage and processing of Data,
  correct Data or refuse or withdraw the consents herein, in any case without
  cost, by contacting in writing your local human
  resources representative.  You understand that refusal or withdrawal of consent may
  affect your ability to participate in the
  Plan.  For more information on the
  consequences of your refusal to consent or
  withdrawal of consent, You understand that You may contact your local
  human resources representative.

  
	
   

  	
   

  	
   

  
	
  Language

  	
   

  	
  If you
  have received this Share Option Agreement or any other document related to
  the Plan translated into a language other than English and if the translated
  version is different than the English version, the English version will
  control.

  
	
   

  	
   

  	
   

  
	
  Applicable
  Law

  	
   

  	
  This Agreement shall be
  governed by, and construed in accordance with, the laws of the Republic of
  Singapore (except its choice-of-law provisions).

  



 












 


	
  The Plan and Other Agreements

  	
   

  	
  The text of the Plan is incorporated in this
  Agreement by reference.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  This Agreement and the Plan
  constitute the entire understanding between you and the Company regarding
  this option.  Any prior agreements,
  commitments or negotiations concerning this option are
  superseded.  This Agreement may be
  amended only by another written agreement between the parties.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If one or more of the provisions of this Share Option Agreement shall
  be held invalid, illegal or unenforceable in any respect, the validity,
  legality and enforceability of the remaining provisions shall not in any way
  be affected or impaired thereby and the invalid, illegal or unenforceable
  provisions shall be deemed null and void; however, to the extent permissible
  by law, any provisions which could be deemed null and void shall first be
  construed, interpreted or revised retroactively to permit this Share Option
  Agreement to be construed so as to foster the intent of this Share Option
  Agreement and the Plan

  



 


YOUR ELECTRONIC SIGNATURE TO THIS
NOTICE AND AGREEMENT IS YOUR AGREEMENT TO ALL OF THE TERMS AND CONDITIONS
DESCRIBED ABOVE AND IN THE PLAN.