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.


 

















 


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



 


3

















 


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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