Form of Contingent Share Option Agreement for Officers in France



 Exhibit 10.5 
 France Contingent Option Agt – December 2009 
 VERIGY LTD. 2006 EQUITY INCENTIVE PLAN 
 NOTICE OF CONTINGENT SHARE OPTION AWARD 
 (FRENCH OPTIONEE) 
 On
«AwardDate» (the “Award Date”) you were awarded, on a contingent basis, an option to purchase Verigy Ltd. (the “Company”) ordinary shares under the Company’s 2006 Equity Incentive Plan (the
“Plan”). This award is contingent as described in the section titled “Contingency” in the accompanying Share Option Award Agreement. 
  

			
	Name of Optionee:	  	«Name»
		
	Total Number of Shares:	  	«TotalShares»
		
	Type of Option:	  	Nonstatutory Stock Option
		
	Expiration Date:	  	«ExpDate». This option may expire earlier if your Service terminates earlier, as described in the Stock Option Agreement.
		
	Exercise Price1:	  	The closing price of Verigy ordinary shares on the 11th business day following Verigy’s announcement of financial results for the fiscal quarter ending
«pricingdate»2.
		
	Vesting Schedule3:	  	The shares subject to this option vest and become exercisable in 13 equal quarterly installments, with the first installment vesting on «vestingdate», provided that you
continue to be an Awardee Eligible to Vest as of the applicable vesting date.
		
	Exercisability of Option:	  	Except as otherwise provided in the event of death or disability, each tranche of this option shall first become exercisable on that date that is four years and one day following
the date on which the exercise price of such tranche became fixed.

 You and the Company agree that this option is granted under and governed by the terms
and conditions of the French Option Plan, as defined in the Verigy Ltd 2006 Equity Incentive Plan Option Sub-Plan for French Employees (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 Morgan Stanley
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. This consent will remain in effect until you give the Company written notice that it should deliver
paper documents. 








							
	  
 BY CLICKING ON THE “ACCEPT” BUTTON ON
THE ONLINE AWARD ACCEPTANCE SCREEN, YOU AGREE TO BE BOUND BY THE
SHARE OPTION AGREEMENT, THIS NOTICE AND THE PLAN.
	  	  
     VERIGY LTD.

	 			 
	 	  	BY:	  	  
	    	 
	 	  	 TITLE:
  
	  	 	    	 

  
  

	1	 Except as set forth in the accompanying Option Agreement, the exercise price will be equal to the greater of (A) the closing price of the
Company’s ordinary shares on the pricing date indicated above or (B) 80% of the average of the closing prices for the 20 trading days preceding the applicable pricing date; provided, however, that if the date on which the shareholders
approve an increase in the number of shares available for issuance under the Plan falls after the 11th business day following Verigy’s announcement of financial results for the fiscal quarter ending July 31, 2010, then the exercise price
of this option will be the greater of (A) the closing price of Verigy’s ordinary shares on the date of such shareholder approval or (B) 80% of the average of the closing prices for the 20 trading days preceding the date of such
shareholder approval. In any event, the exercise price shall be set automatically and without any further action on the part of the Company or the optionee. 



	2	 If such pricing date falls during a Closed Period (as defined by Section L. 255-177 of the French Commercial Code), then the pricing shall take place
on the next trading day following expiration of the Closed Period. 



	3	 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. 










 France Contingent Option Agt – December 2009 
  

 VERIGY LTD. 2006 EQUITY
INCENTIVE PLAN 
 CONTINGENT SHARE OPTION
AGREEMENT 
 (FRENCH OPTIONEE) 
  

			
	Contingency	  	This award is contingent upon the shareholders of the Company approving an increase in the number of shares available for issuance under the Plan during calendar 2010. If the
shareholders vote on but do not approve an increase in the number of shares available for issuance under the Plan during calendar 2010, then this award shall become null and void on the date of the meeting of shareholders at which the proposal was
not approved, and no benefit shall accrue as a result of this award. Notwithstanding the foregoing, in the event that the pricing of this option is accelerated as described in the below section titled “Special Provisions for Accelerated
Pricing—Change of Control” prior to the date on which a vote of shareholders is held with respect to a proposal to approve an increase in the number of shares available for issuance under the Plan, then the contingency will be deemed
satisfied and this option shall no longer be contingent.
		
	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 Share Option Award. (It may expire earlier if your Service
terminates, as described below.)
		
	Vesting	  	 This option becomes exercisable in installments, during the Option term as shown in the Notice of Share 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.

		
	Regular Termination	  	Unless otherwise provided in an agreement between you and the Company, if your Service terminates for any reason except death, disability (as defined below), or retirement, as
provided in the Plan, 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.
		
	Death	  	 If you die before your Service terminates, this option will become immediately vested and exercisable in full and will expire at the
close of business at Company headquarters on the date 6 months after the date of death.
  
 In the event of your death after cessation of employment but prior to the termination of the option, your heirs may exercise the vested options for 6 months following your death. In these circumstances,
all unvested options will lapse upon your death.
  
 All vested options that
are not exercised within 6 months of your death will be forfeited. The 6-month exercise period will apply without regard to the term of the option.

		
	Disability	  	If your Service terminates because of your disability which is defined as disability under categories 2 or 3 under Section L. 341-4 of the French Social Security Code, then this
option will become immediately vested and exercisable in full and expire at the close of business at Company headquarters on the date 12 months after your termination date, or, if earlier, the expiration of the term of this option.









			
	Retirement	  	If your Service terminates because of retirement, as provided in the Plan, the options will continue to vest for 12 months following the date of termination, the option shall
terminate as to the shares that do not vest in such 12-month period and the option shall be exercisable as to the vested shares for one year after the date you cease to be an Awardee Eligible to Vest or, if earlier, the expiration of the term of the
option.
		
	Special Provisions for Accelerated Pricing	  	 Notwithstanding the establishment of the pricing date as set forth in the Notice of Share Option Award, the exercise price of this
option shall be established in accordance with the following in the following circumstances:
  
 Change of Control. In the event that, prior to the date on which a vote of shareholders is scheduled to be held with respect to a proposal to approve an increase in the number of shares available
for issuance under the Plan, 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 defined in the Plan) of the Company, the per-share exercise price
for this option, if 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 11th trading day immediately preceding such announcement.
  
 Termination of Employment. In the event that prior to the 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 this option, if 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 11th trading day immediately preceding your last day of Service.
  
 No Affect On Vesting or Exercisablity. The Vesting provisions applicable to this option 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 Share 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. Notwithstanding any provision in the U.S. Plan to
the contrary, upon exercise of an option, the full exercise price will be paid either in cash, by check or by credit transfer. Under a cashless exercise program, you may give irrevocable instructions to the administration service provider to
properly deliver the option price to the Company.
		
	Withholding Taxes and Share 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, within legal limits, or from proceeds of the sale of shares. Finally, you will pay to the Company or the Employer, by means of cash, check or
credit transfer, 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	  	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.









			
	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.
		
	Shareholder Rights	  	You, or your estate or heirs, have no rights as a Shareholder 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.
		
	Nature of the Grant	  	 In accepting the grant, you acknowledge that:
  
 (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, 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, 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, together with the Equity Award Modification Agreement by
and between you and the Company, if applicable, (the “Modification Agreement”) constitute the entire understanding between you and the Company regarding this option. Any prior agreements, commitments or negotiations concerning this option,
except for the Modification Agreement, are superseded. This Agreement may be amended only by another written agreement between the parties.


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