Document:

Exhibit 10.9

SEVERANCE AGREEMENT

This Severance Agreement
(the “Agreement”) is
entered into this          day of                         ,
2006 (the “Effective Date”), between
Verigy Ltd., a Singapore corporation (the “Company”), and                               
(“Executive”), who currently serves as
[title] of the Company.

RECITALS

A.            As is the case
with most, if not all, publicly traded businesses, it is expected that the
Company from time to time may consider or may be presented with the need to
consider the possibility of an acquisition by another company or other change
in control of the ownership of the Company. 
The Board of Directors of the Company (the “Board”)
recognizes that such considerations can be a distraction to Executive and can
cause Executive to consider alternative employment opportunities or to be
influenced by the impact of a possible change in control of the ownership of
the Company on Executive’s personal circumstances in evaluating such
possibilities.  The Board has determined
that it is in the best interests of the Company and its shareholders to ensure
that the Company will have the continued dedication and objectivity of
Executive, notwithstanding the possibility, threat or occurrence of a Change of
Control of the Company.

B.            The Board believes
that it is in the best interests of the Company and its shareholders to provide
Executive with an incentive to continue his/her employment and to motivate
Executive to maximize the value of the Company for the benefit of its
shareholders.

C.            The Board believes
that it is important to provide Executive with certain benefits upon Executive’s
termination of employment in certain instances that provide Executive with
enhanced financial security and incentive and encouragement to Executive to remain
with the Company.

D.            At the same time, the
Board expects the Company to receive certain benefits in exchange for providing
Executive with this measure of financial security and incentive under the
Agreement.  Therefore, the Board believes
that Executive should provide various specific commitments, which are intended
to assure the Company that Executive will not direct Executive’s skills,
experience and knowledge to the detriment of the Company for a period not to
exceed the period during which payments are being made to Executive under this
Agreement.

E.             Certain
capitalized terms used in this Agreement are defined in Article VIII.

The Company and Executive
hereby agree as follows:

 

ARTICLE I

EMPLOYMENT BY THE COMPANY

1.1          This Agreement shall be in effect
commencing on the Effective Date and ending on the later of (i) the date
when Executive ceases to be employed by the Company for any reason or
(ii) the date when all obligations of the parties under this Agreement
have been met.

1.2          The Company and Executive each
agree and acknowledge that Executive is employed by the Company as an “at-will”
employee and that either Executive or the Company has the right at any time to
terminate Executive’s employment with the Company, with or without cause or
advance notice, for any reason or for no reason.  This
Agreement does not constitute a contract of employment or impose on Executive
any obligation to remain as an employee or impose on the Company any obligation
(i) to retain Executive as an employee, (ii) to change the status of
Executive as an at-will employee or (iii) to change the Company’s policies
regarding termination of employment.  In
this Agreement, the Company and Executive wish to set forth the compensation
and benefits that Executive shall be entitled to receive in the event that
Executive’s employment with the Company terminates under the circumstances
described in Article II or III.

1.3          The duties and obligations of the
Company to Executive under this Agreement shall be in consideration for
Executive’s past services to the Company, Executive’s continued employment with
the Company, Executive’s compliance with the obligations described in
Section 5.4, and Executive’s execution of the general waiver and release
described in Section 5.5.  The
Company and Executive agree that Executive’s compliance with the obligations
described in Section 5.4 and Executive’s execution of the general waiver
and release described in Section 5.5 are preconditions to Executive’s
entitlement to the receipt of benefits under this Agreement and that these
benefits shall not be earned unless all such conditions have been satisfied
through the scheduled date of payment. 
The Company hereby declares that it has relied upon Executive’s
commitments under this Agreement to comply with the requirements of
Article V and would not have been induced to enter into this Agreement or
to execute this Agreement in the absence of such commitments.

ARTICLE II

TERMINATION BEFORE CHANGE IN CONTROL

2.1          Termination
without Cause.  In the event (i) Executive’s employment with
the Company and its subsidiaries is involuntarily terminated at any time by the
Company without Cause or (ii) Executive voluntarily terminates his/her
employment within three months of the occurrence of an event constituting Good
Reason and on account of an event constituting Good Reason and, in each case,
Article III does not apply, then such termination of employment will be a
Termination Event and the Company shall pay Executive the compensation and
benefits described in this Article II, subject to Executive complying with
his/her obligations described in Sections 5.4 and 5.5 of this Agreement.

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2.2          Disability. 
In the event Executive’s employment with the Company and its
subsidiaries terminates as a result of his/her Disability, then Executive shall
be entitled to the pro rated final period bonus described in Section 2.5, the
stock award acceleration described in Section 2.6 and the Company-paid
health insurance coverage described in Section 2.7 (but none of the other
compensation and benefits described in this Article II).

2.3          Death. 
In the event Executive’s employment with the Company and its
subsidiaries terminates as a result of his/her death, then Executive’s
survivors shall be entitled to the pro rated final period bonus described in
Section 2.5 and the stock award acceleration described in Section 2.6 (but
none of the other compensation and benefits described in this Article II).

2.4          Salary Continuation upon
Termination before Change in Control.  If a Termination Event
described in Section 2.1 occurs, Executive shall receive an amount equal
to the sum of Executive’s Base Salary and Target Bonus, less any applicable
withholding of federal, state, local or foreign taxes.  Such salary and bonus continuation shall be
paid in accordance with the Company’s standard payroll procedures in equal
installments over the 12 month period following the date of the Termination
Event.

2.5          Bonus for Final Period.  If a Termination Event described in Section 2.1 occurs,
Executive shall receive a pro rated bonus for the performance period in which
the Termination Event occurs (in addition to the amount described in
Section 2.4).  The amount of the
bonus shall be equal to the Target Bonus for the period in which the
Termination Event occurred multiplied by a fraction in which (i) the
numerator is the number of days from and including the first day of the
performance period until and including the date of the Termination Event and
(ii) the denominator is the number of days in the performance period.  Such bonus shall be paid on the date
Executive would have received the bonus if the Termination Event had not
occurred during such performance period. 
Executive’s rights to the payment provided in this Section 2.5
shall not be subject to Section 5.4.

2.6          Stock Award Acceleration upon
Termination before Change in Control.

(a)           The vested portion of Executive’s
stock options and stock appreciation rights (the “Stock Options”) that are outstanding as of the date of an
event described in Section 2.1, 2.2 or 2.3 shall be determined as
follows upon the occurrence of such event:

(i)            A period equal to 12 months shall
be added to the actual length of Executive’s service; and

(ii)           If the vested portion of the Stock
Options otherwise would be determined in increments larger than one month, then
the vesting of the Stock Options shall be prorated on the basis of the full
months of service completed by Executive since the vesting commencement date of
the Stock Options.(1)

(1) For example, assume that Executive’s Stock Options ordinarily
vest in four equal annual installments and that Executive is subject to an
event described in Section 2.1, 2.2 or 2.3 after completing 18 months of
service from the vesting commencement date. 
Executive would be vested in 18/48ths of the Stock Options for the
actual period of service plus 12/48ths of the Stock Options for the added
vesting provided herein, for a total of 30/48ths vested.

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(b)           The Stock Options shall remain
exercisable until the fifteen month anniversary of the date of the Termination
Event provided that Executive complies with his/her obligations under Article V
of this Agreement. The term “Stock Options”
shall not include any rights of Executive under the Company’s 2006 Employee
Shares Purchase Plan or similar plans.

(c)           The vested portion of Executive’s
restricted stock awards (“Restricted Stock”)
that are outstanding as of the date of an event described in Section 2.1,
2.2 or 2.3 shall be determined as follows upon the occurrence of such
event:

(i)            A period equal to 12 months shall
be added to the actual length of Executive’s service; and

(ii)           If the vested portion of the
Restricted Stock otherwise would be determined in increments larger than one
month, then the vesting of the Restricted Stock shall be prorated on the basis
of the full months of service completed by Executive since the vesting
commencement date of the Restricted Stock.

All shares of Restricted Stock that have not yet been delivered to
Executive or his/her designee (whether because subject to joint escrow instructions
or otherwise) shall be promptly delivered to Executive or his/her designee upon
the occurrence of an event described in Section 2.1, 2.2 or 2.3.

(d)           The vested portion of Executive’s
stock unit awards (the “Stock Units”)
that are outstanding as of the date of an event described in Section 2.1,
2.2 or 2.3 shall be determined as follows upon the occurrence of such
event:

(i)            A period equal to 12 months shall
be added to the actual length of Executive’s service; and

(ii)           If the vested portion of the Stock
Units otherwise would be determined in increments larger than one month, then
the vesting of the Stock Units shall be prorated on the basis of the full
months of service completed by Executive since the vesting commencement date of
the Stock Units.

All Stock Units that have not yet been settled shall be promptly
settled, in the form specified in the relevant Stock Unit agreements and
relevant stock plans under which the Stock Units were granted, upon the
occurrence of an event described in Section 2.1, 2.2 or 2.3.

2.7          Health & Welfare Benefits
Coverage.

(a)           Following the occurrence of a Termination Event described in
Section 2.1, to the extent permitted by the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”)
and by the Company’s group health insurance policies, Executive and his/her
covered dependents will be eligible to continue their health insurance benefits
at their own

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expense.  If Executive elects COBRA continuation, the
Company shall pay Executive’s and his/her covered dependents’ COBRA
continuation premiums for 12 months following the date of such Termination
Event, provided that the Company’s obligation to make such payments shall cease
immediately to the extent that Executive and/or Executive’s covered dependents
are no longer entitled to receive COBRA continuation coverage.  Executive agrees to notify a duly authorized
officer of the Company, in writing, immediately upon Executive’s or a covered
dependent’s beginning to receive health benefits from another source, or as
otherwise required by COBRA.  This
Section 2.7(a) provides only for the Company’s payment of COBRA
continuation premiums for the periods specified above, and does not affect the
rights of Executive or Executive’s covered dependents under any applicable law
with respect to health insurance continuation coverage.

(b)           Following the occurrence of a Termination Event described in
Section 2.1, to the extent permitted by the Company’s health and welfare
plans (other than the medical plan described in Section 2.7(a)), Executive and
his/her covered dependents will be eligible to continue their benefits, and the
Company shall pay Executive’s and his/her covered dependents’ continuation
premiums under such plans for 12 months following the date of such Termination
Event, provided that the Company’s obligation to make such payments shall cease
immediately to the extent that Executive and/or Executive’s covered dependents
are no longer entitled to receive continuation coverage in accordance with the
plans.

ARTICLE III

TERMINATION AFTER CHANGE IN CONTROL

3.1          Involuntary
Termination upon or Following Change of Control. 
In the event Executive’s employment with the Company and its
subsidiaries is involuntarily terminated at any time by the Company without
Cause either (i) at the time of or within 24 months following the
occurrence of a Change of Control, (ii) within three months prior to a
Change of Control, whether or not such termination is at the request of an
Acquiror, or (iii) at any time prior to a Change of Control if such termination
is at the request of an Acquiror, then such termination of employment will be a
Termination Event and the Company shall pay Executive the compensation and
benefits described in this Article III in the manner and at the time
described in Section 3.3, subject to Executive complying with his/her
obligations described in Sections 5.4 and 5.5 of this Agreement.  If the Company reasonably believes that a
Change of Control will not occur within three months following the termination
of Executive, but in fact a Change of Control does occur within three months
following such termination, Executive will be provided with the compensation
and benefits described in this Article III in the manner and at the time
described in Section 3.3.  An “Acquiror” is either a person or a member of
a group of related persons representing such group that in either case obtains
effective control of the Company in the transaction or a group of related
transactions constituting the Change of Control.  For the elimination of doubt, in the event
Executive’s employment with the Company and its subsidiaries is involuntarily
terminated by the Company without Cause and the circumstances described in this
Section 3.1 are not applicable, then Article II will apply to such
event.

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3.2          Voluntary
Termination For Good Reason Upon or Following Change of Control.

(a)           In the event Executive voluntarily
terminates his/her employment within three months of the occurrence of an event
constituting Good Reason and on account of an event constituting Good Reason,
which event occurs either (i) at the time of or within 24 months
following the occurrence of a Change of Control, (ii) within three months
prior to a Change of Control, whether or not such termination is at the request
of an Acquiror, or (iii) at any time prior to a Change of Control if such
triggering event or Executive’s termination is at the request of an Acquiror,
then such termination of employment will be a Termination Event and the Company
shall pay Executive the compensation and benefits described in this
Article III in the manner and at the time described in Section 3.3,
subject to Executive complying with his/her obligations described in Sections
5.4 and 5.5 of this Agreement.  If the
Company reasonably believes that a Change of Control will not occur within
three months following the voluntary termination for Good Reason by Executive,
but a Change of Control does in fact occur within three months following such
termination, Executive will be provided with the compensation and benefits described
in this Article III in the manner and at the time described in Section
3.3.

(b)           In the event Executive voluntarily
terminates his/her employment for any reason other than on account of an event
constituting Good Reason under the circumstances described in
Section 3.2(a), then such termination of employment will not be a Termination Event, Executive will
not be entitled to receive any
payments or benefits under the provisions of this Agreement, and the Company
will cease paying compensation or providing benefits to Executive as of
Executive’s termination date.

3.3          Lump Sum Payment upon Termination
after Change in Control.

(a)           If a Termination Event described in
this Article III occurs, Executive shall receive an amount equal to two
times the sum of Executive’s Base Salary and Target Bonus, less any applicable
withholding of federal, state, local or foreign taxes; provided, however, that
the Company may deduct from amounts payable to Executive pursuant to this
Article III any amounts paid to Executive pursuant to Article II.

(b)           The salary and bonus amounts
payable pursuant to this Article III shall be paid in a single lump sum.  Such payments shall be made (i) not later
than immediately prior to completion of the Change of Control where the
Termination Event occurs prior to a Change of Control or (ii) within two
business days after the date of a Termination Event where the Termination Event
occurs subsequent to a Change of Control.

3.4          Bonus for Final Period.  If a Termination Event described in this Article III occurs,
Executive shall receive a pro rated bonus for the performance period in which
the Termination Event occurs (in addition to the amount described in
Section 3.3).  The amount of the
bonus shall be equal to Target Bonus for the period in which the Termination
Event occurred multiplied by a fraction in which (i) the numerator is the
number of days from and including the first day of the performance period until
and including the date of the Termination Event and (ii) the denominator is
the number of days in the performance period. 
Such bonus shall be paid at the time prescribed in Section 3.3(b).

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3.5          Stock Award Acceleration upon
Termination after Change in Control.

(a)           Executive’s Stock Options that are
outstanding as of the date of a Termination Event described in this
Article III shall become fully vested upon the occurrence of such
Termination Event and exercisable so long as Executive complies with the
restrictions and limitations set forth in Article V.  The Stock Options shall remain exercisable
until the second anniversary of the date of the Termination Event provided that
Executive complies with his/her obligations under Article V of this Agreement.
The term “Stock Options” shall not
include any rights of Executive under the Company’s 2006 Employee Shares
Purchase Plan or similar plans.

(b)           Executive’s Restricted Stock awards
that are outstanding as of the date of a Termination Event described in this
Article III shall become fully vested and free from any contractual rights
of the Company to repurchase or otherwise reacquire the Restricted Stock as a
result of Executive’s termination of employment.  All shares of Restricted Stock that have not
yet been delivered to Executive or his/her designee (whether because subject to
joint escrow instructions or otherwise) shall be promptly delivered to
Executive or his/her designee upon the occurrence of a Termination Event
described in this Article III.

(c)           Executive’s Stock Units that are
outstanding as of the date of a Termination Event described in this
Article III shall become fully vested as a result of Executive’s
termination of employment.  All Stock
Units that have not yet been settled shall be promptly settled, in the form
specified in the relevant Stock Unit agreements and relevant stock plans under
which the Stock Units were granted, upon the occurrence of a Termination Event
described in this Article III.

3.6          Health & Welfare Benefits
Coverage.

(a)           Following the occurrence of a Termination Event described in this
Article III, to the extent permitted by COBRA and by the Company’s group
health insurance policies, Executive and his/her covered dependents will be
eligible to continue their health insurance benefits at their own expense.  If Executive elects COBRA continuation, the
Company shall pay Executive’s and his/her covered dependents’ COBRA
continuation premiums for 24 months following the date of such Termination
Event, provided that the Company’s obligation to make such payments shall cease
immediately to the extent that Executive and/or Executive’s covered dependents
are no longer entitled to receive COBRA continuation coverage.  Executive agrees to notify a duly authorized
officer of the Company, in writing, immediately upon Executive’s or a covered
dependent’s beginning to receive health benefits from another source, or as
otherwise required by COBRA.  This
Section 3.6(a) provides only for the Company’s payment of COBRA
continuation premiums for the periods specified above.  This Section 3.6(a) does not affect the
rights of Executive or Executive’s covered dependents under any applicable law
with respect to health insurance continuation coverage.

(b)           Following the occurrence of a Termination Event described in this
Article III, to the extent permitted by the Company’s health and welfare plans
(other than the medical plan described in Section 3.6(a)), Executive and
his/her covered dependents will be eligible to continue their benefits, and the
Company shall pay Executive’s and his/her covered dependents’ continuation
premiums under such plans for 24 months following the date of such Termination

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Event,
provided that the Company’s obligation to make such payments shall cease
immediately to the extent that Executive and/or Executive’s covered dependents
are no longer entitled to receive continuation coverage in accordance with the
plans.

ARTICLE IV

TERMINATION FOR CAUSE

4.1          General Effect of Termination for
Cause.  In the event Executive’s employment with the
Company and its subsidiaries is involuntarily terminated by the Company with
Cause at any time, whether before or after a Change of Control, then such
termination of employment will not be a
Termination Event, Executive will not be
entitled to receive any payments or benefits under the provisions of this
Agreement, and the Company will cease paying compensation or providing benefits
to Executive as of Executive’s termination date.

4.2          Procedure for “Cause” Finding.

(a)           Prior to a Change in Control, Executive may only be terminated for
Cause if a majority of the Board then in office determines that grounds for
Cause exist.  In the event of such
determination, the Company will give Executive notice of the finding of Cause
with reasonable specificity, and will provide Executive with a reasonable
opportunity to meet with the Board to refute the finding.

(1)           If Executive elects to
appear before the Board to dispute the finding, the Board will meet with the
Executive.  Following such meeting, the
Board shall reconsider its initial finding and the decision of a majority of
the Board then in office will be required to confirm the determination that
grounds for Cause exist.

(2)           If Executive declines
to appear before the Board to dispute the finding, then the initial action by
the Board shall constitute the determination to terminate Executive for Cause.

(b)           Subsequent to a Change
in Control, the procedural requirements of Section 4.2(a) shall apply, except
that the findings of the Board must be approved by not less than 2/3rds of the
directors then in office.

ARTICLE V

LIMITATIONS AND CONDITIONS ON BENEFITS

5.1          Right to Benefits. 
If a Termination Event does not occur, Executive shall not be entitled
to receive any benefits described in this Agreement, except as otherwise
specifically set forth herein.  If a
Termination Event occurs, Executive shall be entitled to receive the benefits
described in this Agreement only if Executive complies with the restrictions
and limitations set forth in this Article V.

5.2          No Mitigation. 
Except as otherwise specifically provided herein, Executive shall not be
required to mitigate damages or the amount of any payment provided under this
Agreement by seeking other employment or otherwise, nor shall the amount of any
payment

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provided
for under this Agreement be reduced by any compensation earned by Executive as
a result of employment by another employer or by retirement benefits after the
date of the Termination Event, or otherwise.

5.3          Withholding Taxes. 
The Company shall withhold appropriate federal, state, local or foreign
income, employment and other applicable taxes from any payments hereunder.

5.4          Obligations of
Executive.

(a)           For two years following a
Termination Event, Executive agrees not to personally solicit any of the
employees either of the Company or of any entity in which the Company directly
or indirectly possesses the ability to determine the voting of 50% or more of
the voting securities of such entity (including two-party joint ventures in
which each party possesses 50% of the total voting power of the entity) to
become employed elsewhere or provide the names of such employees to any other
company that Executive has reason to believe will solicit such employees.

(b)           Following the occurrence of a
Termination Event, Executive agrees to continue to satisfy his/her obligations
under the terms of the Company’s standard form of Agreement Regarding
Confidential Information and Proprietary Development previously executed by
Executive (or any comparable agreement subsequently executed by Executive in
substitution or supplement thereto).

(c)           Executive acknowledges and
recognizes the highly competitive nature of the businesses of the Company and
its affiliates and accordingly agrees that for one year following a Termination
Event, Executive will not, whether on Executive’s own behalf or on behalf of or
in conjunction with any person, company, business entity or other organization
whatsoever, directly or indirectly, either (i) engage in any business that
is a Competitive Business or (ii) enter the employ of, or render any
services to, any person or entity (or any division of any person or entity)
that engages in a Competitive Business. 
For purposes of this Agreement, the term “Competitive Business” shall include any person or entity that
competes with any business of the Company or its affiliates at the time of the
Termination Event (including, without limitation, businesses that the Company
or its affiliates have specific plans at the time of the Termination Event to
conduct in the future, of which plans Executive is aware at that time) in any
geographical area where the Company or its affiliates manufacture, sell, lease,
rent, license, or otherwise provide their products or services (including,
without limitation, geographical areas where the Company or its affiliates have
specific plans at the time of the Termination Event to engage in one or more
such activities, of which plans Executive is aware at that time).  Notwithstanding the preceding sentence, a
person or entity shall be treated as a Competitive Business for purposes of this
Agreement only if the Company includes such person or entity (which,
unless otherwise specified by the Company, shall be considered to include all
of the subsidiaries and other affiliates of such listed person or entity) on a
list to be prepared by the Company at or shortly after the time of the
Termination Event, such list is provided to Executive, and such list includes
not more than 15 persons or entities.

Notwithstanding any provision in this Agreement to the contrary,
it shall not be a violation of this Section 5.4(c) if any one or more of
the following shall occur:

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(i)            Executive may own,
directly or indirectly, solely as a passive investment, securities of any
person engaged in a Competitive Business, which securities are publicly traded
on a national or regional stock exchange or on the over-the-counter market, if
Executive (A) is not a controlling person of, or a member of a group that
controls, such person and (B) does not, directly or indirectly, own 5% or
more of any class of securities of such person.

(ii)           If Executive is
providing services to or for the benefit of an entity that has two or more
distinct business units, at least one of which does not constitute a
Competitive Business, Executive may provide services to such entity so long as
Executive does not provide services, directly or indirectly, to or for the
benefit of a business unit that constitutes a Competitive Business.

(iii)          If Executive is
providing services to or for the benefit of an entity that does not engage in a
Competitive Business, and such entity subsequently is acquired by a person or
entity that does engage in a Competitive Business, Executive may continue such
employment so long as Executive does not personally engage, directly or
indirectly, in such Competitive Business or otherwise advise or assist such Competitive
Business.

(d)           It is expressly understood and
agreed that although Executive and the Company consider the restrictions
contained in this Section 5.4 to be reasonable, if a final judicial
determination is made by a court of competent jurisdiction that the time or
territory or any other restriction contained in this Agreement is an
unenforceable restriction against Executive, the provisions of this Agreement
shall not be rendered void but shall be deemed amended to apply as to such
maximum time or territory and to such maximum extent as such court may
judicially determine or indicate to be enforceable.  Alternatively, if any court of competent
jurisdiction finds that any restriction contained in this Agreement is unenforceable,
and such restriction cannot be amended so as to make it enforceable, such
finding shall not affect the enforceability of any of the other restrictions
contained herein.

(e)           Executive acknowledges and agrees
that the Company’s remedies at law for a breach or threatened breach of any of
the provisions of Section 5.4(a), (b) or (c) would be inadequate and,
in recognition of this fact, Executive agrees that, in the event of such a
breach or threatened breach, in addition to any remedies at law, the Company,
without posting any bond, shall be entitled to cease making any payments or
providing any benefit otherwise required by this Agreement and, with respect to
a breach or threatened breach of Section 5.4(a) or (b) only, obtain
equitable relief in the form of specific performance, temporary restraining
order, temporary or permanent injunction, or any other equitable remedy that
may then be available.

5.5          Employee Release Prior to Receipt
of Benefits.  Upon the occurrence of a Termination Event,
and prior to the receipt of any benefits under this Agreement on account of the
occurrence of the Termination Event, Executive shall, as of the date of the
Termination Event, execute an employee release substantially in the form
attached hereto as Exhibit A.  Such
employee release shall specifically relate to all of Executive’s rights and
claims in existence at the time of such execution relating to Executive’s
employment with the Company, but shall not include (i) Executive’s rights
under this Agreement, (ii) Executive’s rights under any employee benefit
plan sponsored by the Company or (iii) Executive’s rights to
indemnification or advancement of expenses under applicable law, the Company’s
bylaws or other governing

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instruments
or any agreement addressing such subject matter between Executive and the
Company.  It is understood that Executive
has 21 days to consider whether to execute such employee release and Executive
may revoke such employee release within seven days after execution of such
employee release.  In the event Executive
does not execute such employee release within the 21-day period, or if
Executive revokes such employee release within the seven-day period, no
benefits shall be payable under this Agreement and this Agreement shall be null
and void.  Nothing in this Agreement
shall limit the scope or time of applicability of such employee release once it
is executed and not timely revoked.

5.6          Compliance
with Section 409A.  In
the event that (i) one or more payments of compensation or benefits
received or to be received by Executive pursuant to this Agreement (“Agreement Payment”) would constitute
deferred compensation subject to Section 409A of the Internal Revenue Code
of 1986, as amended (the “Code”),
and (ii) Executive is deemed at the time of such termination of employment
to be a “specified employee” under Section 409A(a)(2)(B)(i) of the Code,
then such Agreement Payment shall not be made or commence until the earlier of
(i) the expiration of the six-month period measured from the date of
Executive’s “separation from service” (as such term is at the time defined in
Treasury Regulations under Section 409A of the Code) with the Company or
(ii) such earlier time permitted under Section 409A of the Code and
the regulations or other authority promulgated thereunder; provided, however,
that such deferral shall only be effected to the extent required to avoid
adverse tax treatment to Executive under Section 409A of the Code,
including (without limitation) the additional 20% tax for which Executive would
otherwise be liable under Section 409A(a)(1)(B) of the Code in the absence
of such deferral.  During any period in
which an Agreement Payment to Executive is deferred pursuant to the foregoing,
Executive shall be entitled to interest on the deferred Agreement Payment at a
per annum rate equal to the highest rate of interest applicable to six-month
non-callable certificates of deposit with daily compounding offered by Citibank
N.A., Wells Fargo Bank, N.A. or Bank of America on the date of such separation
from service.  Upon the expiration of the
applicable deferral period, any Agreement Payment that would have otherwise
been made during that period (whether in a single sum or in installments) in
the absence of this Section 5.6 shall be paid to Executive or his/her
beneficiary in one lump sum, including all accrued interest.

5.7          Golden Parachute Payments.

(a)           In the event that any payment received or to be
received by Executive pursuant to this Agreement or otherwise (“Payment”) would be subject to the excise
tax imposed by Section 4999 of the Code, or any comparable federal, state,
local or foreign excise tax (such excise tax, together with any interest and
penalties, is hereinafter collectively referred to as the “Excise Tax”), then Executive shall be
entitled to receive an additional payment from the Company (“Gross-Up Payment”) in such an amount that
after the payment of all taxes (including, without limitation, any interest and
penalties on such taxes and the Excise Tax) on the Payment and on the Gross-Up
Payment, Executive shall retain an amount equal to (a) the Payment minus
(b) all applicable taxes on the Payment other than the Excise Tax.  The intent of the parties is that the
Company shall be solely responsible for, and shall pay, any Excise Tax on the
Payment and Gross-Up Payment and any income, employment and other taxes (including, without limitation,
penalties and interest) imposed on the Gross-Up Payment (as well as any loss of
tax deduction caused by the Payment or the Gross-Up Payment).  Notwithstanding
the

 11
 

 

foregoing, in the
event that Excise Taxes could be avoided by a reduction in payments to
Executive pursuant to this Agreement, the Company may reduce such payments to
bring the total payments to that amount that falls immediately below the
threshold triggering the Excise Tax, up to a total reduction not to exceed
$25,000.

(b)           Unless the Company and Executive
otherwise agree in writing, all determinations required to be made under this
Section 5.7 and the assumptions to be utilized in arriving at such
determinations shall be made in writing in good faith by an independent tax
professional designated by the Company and reasonably acceptable to Executive
(the “Independent Tax Professional”).  For purposes of making the calculations
required by this Section 5.7, the Independent Tax Professional may make
reasonable assumptions and approximations
concerning applicable taxes and may rely on reasonable, good-faith
interpretations concerning the application of Sections 280G and 4999
of the Code.  The Company and Executive
shall furnish to the Independent Tax Professional such information and
documents as the Independent Tax Professional may reasonably request in order
to make a determination under this Section 5.7.  The Company shall bear all costs that the
Independent Tax Professional may reasonably incur in connection with any
calculations contemplated by this Section 5.7.

ARTICLE VI

OTHER RIGHTS AND BENEFITS NOT
AFFECTED

Nothing in the Agreement shall prevent or limit
Executive’s continuing or future participation in any benefit, bonus, incentive
or other plans, programs, policies or practices provided by the Company and for
which Executive may otherwise qualify, nor shall anything herein limit such
greater rights as Executive may have under any agreements with the Company
applicable to his/her Stock Options, Restricted Stock, Stock Units or other
equity awards; provided, however, that any benefits provided
hereunder shall be in lieu of any other severance benefits to which Executive
may otherwise be entitled, including (without limitation) under any employment
contract or severance plan, program or arrangement.  Except as otherwise expressly provided
herein, amounts that are vested benefits or that Executive is otherwise
entitled to receive under any plan, policy, practice or program of the Company
at or subsequent to the date of a Termination Event shall be payable in
accordance with such plan, policy, practice or program.

ARTICLE VII

NON-ALIENATION OF BENEFITS

No
benefit hereunder shall be subject to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge, and any attempt to do so shall be
void.

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ARTICLE VIII

DEFINITIONS

For
purposes of the Agreement, the following terms shall have the meanings set
forth below:

8.1          “Base Salary” means Executive’s
annual salary (excluding bonus, any other incentive or other payments and stock
option exercises) from the Company at the time of the occurrence of the Change
of Control (if applicable) or the Termination Event, whichever is greater.

8.2          “Cause” means (i) an unauthorized use or disclosure
by Executive of the Company’s confidential information or trade secrets, which
use or disclosure causes material harm to the Company, (ii) a material
breach by Executive of a material agreement between Executive and the Company,
(iii) a material failure by Executive to comply with the Company’s written
policies or rules resulting in material harm to the Company,
(iv) Executive’s conviction of, or plea of “guilty” or “no contest” to, a
felony under the laws of the United States or any State thereof or the
equivalent under the applicable laws outside of the United States,
(v) Executive’s gross negligence or willful misconduct resulting in
material harm to the Company, (vi) a continuing failure by Executive to
perform assigned duties after receiving written notification of such failure or
(vii) a failure by Executive to cooperate in good faith with a
governmental or internal investigation of the Company or its directors,
officers or employees, if the Company has requested Executive’s cooperation.

8.3          “Change of Control” means:

(a)           The consummation of a
merger or consolidation of the Company with or into another entity or any other
corporate reorganization, if persons who were not shareholders of the Company
immediately prior to such merger, consolidation or other reorganization own
immediately after such merger, consolidation or other reorganization 50% or
more of the voting power of the outstanding securities of each of (i) the
continuing or surviving entity and (ii) any direct or indirect parent
corporation of such continuing or surviving entity;

(b)           The sale, transfer or
other disposition of all or substantially all of the Company’s assets;

(c)           A change in the
composition of the Board, as a result of which fewer than 50% of the incumbent
directors are directors who either:

(i)            Had been directors of
the Company on the date 24 months prior to the date of such change in the
composition of the Board (the “Original Directors”); or

(ii)           Were appointed to the
Board, or nominated for election to the Board, with the affirmative votes of at
least a majority of the aggregate of (A) the Original Directors who were
in office at the time of their appointment or nomination and (B) the
directors whose appointment or nomination was previously approved in a manner
consistent with this Paragraph (ii); or

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(d)           Any transaction as a
result of which any person is the “beneficial owner” (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), directly or
indirectly, of securities of the Company representing at least 30% of the total
voting power represented by the Company’s then outstanding voting
securities.  For purposes of this
Subsection (d), the term “person” shall have the same meaning as when used
in Sections 13(d) and 14(d) of the Exchange Act but shall exclude
(i) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or of a Parent or Subsidiary and (ii) a
corporation owned directly or indirectly by the shareholders of the Company in
substantially the same proportions as their ownership of Shares.

A transaction shall not
constitute a Change in Control if its sole purpose is to change the
jurisdiction of the Company’s incorporation or to create a holding company that
will be owned in substantially the same proportions by the persons who held the
Company’s securities immediately before such transaction.

8.4          “Company” means Verigy Ltd., a Singapore corporation,
and any successor thereto and its subsidiaries; provided, however, that with
respect to determining whether a Change in Control has occurred, the term “Company”
shall mean Verigy Ltd. exclusively.

8.5          “Disability” means that
Executive is unable to perform the duties of his/her office with the Company or
any subsidiary, and is unable to perform substantially equivalent duties, by
reason of any medically determinable physical or mental impairment, and such condition has lasted or can be expected to last
for a continuous period of not less than 12 months.

8.6          “Good Reason” means: (i) a reduction of Executive’s
rate of compensation as in effect on the Effective Date of this Agreement or,
if a Change of Control has occurred, as in effect immediately prior to the
occurrence of a Change of Control, other than reductions in Base Salary that
apply broadly to employees of the Company or reductions due to varying metrics
and achievement of performance goals for different periods under variable-pay
programs; (ii) either (A) failure to provide a package of benefits
that, taken as a whole, provides substantially similar benefits to those in
which Executive is entitled to participate as of the Effective Date (except
that employee contributions may be raised to the extent of any cost increases
related to such benefits where such increases in employee contributions are
broadly applicable to employees of the Company) or (B) any action by the
Company that would significantly and adversely affect Executive’s participation
or reduce Executive’s benefits under any of the Company’s benefit plans, other
than changes that apply broadly to employees of the Company; (iii) a
change in Executive’s duties, responsibilities, authority, job title or
reporting relationships resulting in a significant diminution of position,
excluding for this purpose an isolated, insubstantial and inadvertent action
not taken in bad faith that is remedied by the Company promptly after notice
thereof is given by Executive; (iv) a request that Executive relocate to a
worksite that is more than 25 miles from his/her prior worksite, unless Executive
accepts such relocation opportunity; (v) a failure or refusal of a
successor to the Company to assume the Company’s obligations under this
Agreement, as provided in Section 9.9 or (vi) a material breach by
the Company or any successor to the Company of any of the material provisions
of this Agreement.  [Last Sentence  Version A:  For purposes of clause (iii) of the
immediately preceding sentence, Executive’s duties, responsibilities,
authority, job title or reporting relationships shall not be considered to be
significantly diminished (and therefore shall not constitute “Good Reason”) so

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long as Executive continues to perform substantially the same
functional role for the Company as Executive performed immediately prior to the
occurrence of the Change of Control, even if the Company becomes a subsidiary
or division of another entity.] [Last Sentence  Version B:  For purposes of clause (iii) of the
immediately preceding sentence, Executive’s duties, responsibilities,
authority, job title or reporting relationships shall be considered to be
significantly diminished (and therefore shall constitute “Good Reason”) if
Executive no longer to performs substantially the same functional role for the
Company as Executive performed immediately prior to the occurrence of the
Change of Control of an entity whose equity securities are publicly traded;
provided, however, that prior to terminating his/her employment for Good Reason
under clause (iii) of the immediately preceding sentence solely as a result of
the entity for which Executive is providing services not being an entity whose
securities are publicly traded, Executive shall notify the successor entity of
his/her intention to so terminate his/her employment and shall provide the
successor entity with a reasonable period of time, not to exceed 90 days, to
negotiate terms of employment which meet Executive’s requirements.  If, at the end of the notice and negotiation
period, the parties are unable to arrive at mutually satisfactory terms and
conditions of employment, then Executive may exercise his/her right to
termination for good reason as a result of no longer serving in a comparable
role with a company whose securities are publicly traded.]

8.7           “Target Bonus”
means:

(a)           With respect to a
Termination Event occurring on or before October 31, 2008, the “Target Bonus”
shall be an amount equal to the annualized bonus compensation that Executive
would be entitled to receive under the terms of any applicable
performance-based compensation plan in effect at the time of Executive’s
Termination Event, as set for Executive by the Compensation Committee of the
Board or other authorized body, covering the 12-month period ending at the end
of the performance period during which Executive’s Termination Event occurs,
assuming that the performance objectives are fully met.  The “Target Bonus” amount shall equal 100% of
the target amount regardless of whether or not, or to what degree, the actual
performance objectives are met.

(b)           With respect to a Termination Event
occurring on or after November 1, 2008, the “Target Bonus” shall be an amount
equal to an average of the annualized bonus compensation paid to Employee with
respect to the two fiscal years of the Company most recently preceding the date
of the Termination Event; provided, however, that if the Executive’s target
bonus in the year in which the Termination Event occurs, expressed as a percent
of Executive’s Base Salary, is higher than the percentage target bonus levels
in the years used for purposes of the average, then an equitable adjustment
will be made to the prior year amounts so as to treat Executive as if s/he were
at the higher target bonus percentage for the years used to determine the
average.

8.8          “Termination Event” means an involuntary termination of employment
described in Section 2.1 or 3.1(a) or a voluntary termination of
employment described in Section 3.2(a). 
No other event shall be a Termination Event for purposes of this
Agreement.

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ARTICLE IX

GENERAL PROVISIONS

9.1          Interpretation.  The parties acknowledge that Executive may
serve as an officer and/director of the Company as well as an officer and/or
director of one or more of the Company’s subsidiaries.  It is the parties’ intention that, when
determining whether a Termination Event or Change of Control has occurred, the
parties will look at the facts and circumstances affecting the highest level
entity in the Company’s corporate family in which Executive plays a role.  For example, an executive officer of the
Company who also served on the Board or as an officer of one or more of the
Company’s subsidiaries will not be deemed to have experienced a change in
Executive’s duties, responsibilities, authority, job title or reporting
relationships resulting in a significant diminution of position solely as a
result of the change at the subsidiary level, i.e., changes implemented solely
at the subsidiary level but not at the higher level would not constitute Good
Cause unless the overall effect of the subsidiary-level changes resulted in a
significant diminution of overall position with the Company and its
subsidiaries taken as a whole.

9.2          Subsidiaries
Bound.  To the extent that Executive is
employed by a subsidiary of Verigy Ltd. and not by Verigy Ltd. itself, (i)
Executive’s Base Salary and Target Bonus shall be the amounts as so defined as
payable by Executive’s direct employer; and (ii) to the extent that Verigy Ltd.
itself is not the direct employer or otherwise paying the benefits due to
Executive under this Agreement, Verigy Ltd. shall cause the subsidiary directly
employing Executive to make provide the benefits due to Executive under this
Agreement.

9.3          Notices.  Any notices provided hereunder must be in
writing, and such notices or any other written communication shall be deemed
effective upon the earlier of personal delivery (including personal delivery by
facsimile) or the third day after mailing by first-class mail, to the Company
at its primary U.S. office location and to Executive at Executive’s address as
listed in the Company’s payroll records. 
Any payments made by the Company to Executive under the terms of this
Agreement shall be delivered to Executive either in person or at such address
as listed in the Company’s payroll records.

9.4          Severability.  It is the intent of the parties to this
Agreement that, whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid, illegal
or unenforceable provisions had never been contained herein.

9.5          Waiver.  If either party should waive any breach of
any provisions of this Agreement, that party shall not thereby be deemed to
have waived any preceding or succeeding breach of the same or any other
provision of this Agreement.

9.6          Complete Agreement.  This Agreement, including Exhibit A,
constitutes the entire agreement between Executive and the Company and is the
complete, final and exclusive

 16
 

 

embodiment of their agreement with regard to this subject matter;
provided that nothing herein shall limit such greater rights as Executive may
have under any agreements with the Company applicable to his/her Stock Options,
Restricted Stock, Stock Units or other equity awards.  This Agreement shall be deemed to be an
amendment of any agreements between Executive and the Company applicable to
his/her Stock Options, Restricted Stock, Stock Units or other equity awards to
the extent that this Agreement provides greater rights.  This Agreement is entered into without
reliance on any promise or representation other than those expressly contained
herein.  Without limiting the foregoing,
this Agreement supersedes and replaces all prior agreements and
understandings, whether written or oral, on the matters set forth herein that
may exist between Executive and the Company or its predecessor, Agilent
Technologies, Inc. or any of their respective subsidiaries.

9.7          Counterparts.  This Agreement may be executed in separate
counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same
Agreement.

9.8          Headings.  The headings of the Articles and Sections
hereof are inserted for convenience only and shall neither be deemed to
constitute a part hereof nor to affect the meaning thereof.

9.9          Successors and
Assigns.  This Agreement is intended to bind
and inure to the benefit of and be enforceable by Executive and the Company,
and their respective successors, assigns, heirs, executors and administrators,
except that Executive may not delegate any of Executive’s duties hereunder and
may not assign any of Executive’s rights hereunder without the written consent
of the Company, which consent shall not be withheld unreasonably.  Any successor to the Company (whether direct
or indirect and whether by purchase, merger, consolidation, liquidation or
otherwise) to all or substantially all of the Company’s business and/or assets
shall assume the Company’s obligations under this Agreement in the same manner
and to the same extent as the Company would be required to perform such
obligations in the absence of a succession. 
For all purposes under this Agreement, the term “Company” shall include
any successor to the Company’s business and/or assets, whether or not such
successor executes and delivers an assumption agreement referred to in the
preceding sentence or becomes bound by the terms of this Agreement by operation
of law or otherwise.

9.10        Amendment or
Termination of this Agreement.  This
Agreement may be changed or terminated only upon the mutual written consent of
the Company and Executive.

9.11        Attorney Fees.  If either party hereto brings any action to
enforce such party’s rights hereunder, the prevailing party in any such action
shall be entitled to recover such party’s reasonable attorneys’ fees and costs
incurred in connection with such action.

9.12        Arbitration.  In order to ensure rapid and economical
resolution of any dispute that may arise under this Agreement, Executive and
the Company agree that any and all disputes or controversies arising from or
regarding the interpretation, performance, enforcement or termination of this
Agreement shall first be submitted for non-binding mediation.  If complete agreement cannot be reached
within 60 days after the date of submission to mediation, any remaining issues
will be submitted to the American Arbitration Association to be resolved by

 17
 

 

final and binding arbitration under the its National
Rules for the Resolution of Employment Disputes and California Law.

9.13        Choice of Law.  All questions concerning the construction,
validity and interpretation of this Agreement will be governed by the laws of
the State of California.

9.14        Construction of
Agreement.  In the event of a
conflict between the text of the Agreement and any summary, description or
other information regarding the Agreement, the text of the Agreement shall
control.

In Witness Whereof,
the parties have executed this Agreement on the day and year written above.

	
  Verigy Ltd.,

  	
   

  	
  EXECUTIVE

  
	
  a Singapore corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (Signature of Authorized Signatory)

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Print Name & Title of Signatory)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A:
  General Release and Agreement

  	
   

  	
   

  

 

 18

 

Exhibit A

GENERAL RELEASE AND AGREEMENT

This General
Release and Agreement (the “Agreement”) is
made and entered into by                                 
(“Executive”).  The Agreement is part of an agreement between
Executive and Verigy Ltd. (“Verigy”) to terminate
Executive’s employment with Verigy on the terms set forth in the Severance
Agreement dated                  ,
200  , between Verigy and Executive (the “Severance
Agreement”).

Verigy and
Executive hereby agree as follows:

1.                                       Executive agrees to attend a
Functional Exit Interview on                          ,
20    , at which time all company property and
identification will be turned in and the appropriate personnel documents will
be executed.  Thereafter, Executive
agrees to do such other acts as may be reasonably requested by Verigy in order
to effectuate the terms of this Agreement. 
Executive agrees to remove all personal effects from his/her current
office within seven days of signing this Agreement and in any event not later
than                        ,
20    .

2.                                       Executive agrees not to make any
public statement or statements to the press concerning Verigy, its business
objectives, its management practices, or other sensitive information without
first receiving Verigy’s written approval. 
Executive further agrees to take no action that would cause Verigy or
its employees or agents any embarrassment or humiliation or otherwise cause or
contribute to Verigy’s or any such person’s being held in disrepute by the
general public or Verigy’s employees, clients, or customers.  Verigy agrees to take no action that would
cause Executive any embarrassment or humiliation or otherwise cause or
contribute to Executive’s being held in disrepute by the general public or by
Verigy’s employees, clients or customers.

3.                                       Executive, on behalf of Executive
and his/her heirs, estate, executors, administrators, successors and assigns,
does fully release, discharge, and agree to hold harmless Verigy, its officers,
agents, employees, attorneys, subsidiaries, affiliated companies, predecessors,
successors and assigns from all actions, causes of action, claims, judgments,
obligations, damages, liabilities, costs, or expense of whatsoever kind and
character that he may have, including but
not limited to:

a.                                       any claims relating to employment
discrimination on account of race, sex, age, national origin, creed,
disability, or other basis, whether or not arising under the Federal Civil
Rights Acts, the Age Discrimination in Employment Act, California Fair
Employment and Housing Act, the Rehabilitation Act of 1973, the Americans With
Disabilities Act, any amendments to the foregoing laws, or any other federal,
state, county, municipal, foreign or other law, statute, regulation or order
relating to employment discrimination;

 1
 

 

b.                                      any claims relating to pay or leave
of absence arising under the Fair Labor Standards Act, the Family Medical Leave
Act, and any similar laws enacted in California or any other jurisdiction;

c.                                       any claims for reemployment,
salary, wages, bonuses, vacation pay, stock options, acquired rights,
appreciation from stock options, stock appreciation rights, benefits or other
compensation of any kind;

d.                                      any claims relating to, arising out
of, or connected with Executive’s employment with Agilent Technologies, Inc. (“Agilent”) or Verigy, or their respective subsidiaries,
whether or not the same be based upon any alleged violation of public policy;
compliance (or lack thereof) with any internal policy, procedure, practice or
guideline; or any oral, written, express, and/or implied employment contract or
agreement, or the breach of any terms thereof, including but not limited to,
any implied covenant of good faith and fair dealing; or any federal, state,
county, municipal or foreign law, statute, regulation or order, whether or not
relating to labor or employment; and

e.                                       any claims relating to, arising out
of, or connected with any other matter or event occurring prior to the
execution of this Agreement, whether or not brought before any judicial,
administrative, or other tribunal.

The foregoing notwithstanding, Executive does not release any
actions, causes of action, claims, judgments, obligations, damages,
liabilities, costs or expense of whatsoever kind and character that he may have
with respect to (i) Executive’s rights under this Agreement or the
Severance Agreement, (ii) Executive’s rights under any employee benefit
plan sponsored by Agilent or Verigy or (iii) Executive’s rights to
indemnification or advancement of expenses under applicable law, the bylaws of
Agilent or Verigy, or other governing instruments or any agreement addressing
such subject matter between Executive and Agilent or Verigy.

4.                                       Executive represents and warrants
that Executive has not assigned any such claim or authorized any other person
or entity to assert such claim on Executive’s behalf.  Further, Executive agrees that under this
Agreement Executive waives any claim for damages incurred at any time in the
future because of alleged continuing effects of past wrongful conduct involving
any such claims and any right to sue for injunctive relief against the alleged
continuing effects of past wrongful conduct involving such claims.

5.                                       In entering into this Agreement,
the parties have intended that this Agreement be a full and final settlement of
all matters, whether or not presently disputed, that could have arisen between
them.

6.                                       Executive understands and
expressly agrees that this Agreement extends to all claims of every nature and
kind whatsoever, known or unknown, suspected or unsuspected, past or present,
and all rights under Section 1542 of the California Civil Code and/or any
similar statute or law or any other jurisdiction are hereby expressly waived. 
Such Section reads as follows:

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“Section 1542.  A general release does not extend to claims which
the creditor does not know or suspect to exist in his/her favor at the time of
executing the release, which if known by him must have materially affected
his/her settlement with the debtor.”

7.                                       It is expressly agreed that the
claims released pursuant to this Agreement include all claims against
individual employees of Verigy, whether or not such employees were acting
within the course and scope of their employment.

8.                                       Executive understands and agrees
that, as a condition of this Agreement, Executive shall not be entitled to any
employment (including employment as an independent contractor or otherwise)
with Verigy, its subsidiaries or related companies, or any successor, and
Executive hereby waives any right, or alleged right, of employment or re-employment
with Verigy.  Executive further agrees
not to apply for employment with Verigy in the future and not to institute or
join any action, lawsuit or proceeding against Verigy, its subsidiaries,
related companies or successors for any failure to employ Executive.  In the event Executive should secure such
employment, it is agreed that such employment is voidable without cause in the
sole discretion of Verigy.  After
terminating Executive’s employment, should Executive become employed by another
company that Verigy merges with or acquires after the date of this Agreement,
Executive may continue such employment only if Verigy makes offers of
employment to all employees of the acquired or merged company.

9.                                       Executive agrees that the terms,
amount and fact of settlement shall be confidential until Verigy needs to make
any required disclosure of any agreements between Verigy and Executive.  Therefore, except as may be necessary to
enforce the rights contained herein in an appropriate legal proceeding or as
may be necessary to receive professional services from an attorney, accountant,
or other professional adviser in order for such adviser to render professional
services, Executive agrees not to disclose any information concerning these
arrangements to anyone, including, but not limited to, past, present and future
employees of Verigy, until such time of the public filings.

10.                                 The terms of this Agreement are
intended by the parties as a final expression of their agreement with respect
to such terms as are included in this Agreement and may not be contradicted by
evidence of any prior or contemporaneous agreement.  The parties further intend that this
Agreement constitutes the complete and exclusive statement of its terms and that
no extrinsic evidence whatsoever may be introduced in any judicial or other
proceeding, if any, involving this Agreement. 
No modification of this Agreement shall be effective unless in writing
and signed by both parties hereto.

11.                                 It is further expressly agreed and
understood that Executive has not relied upon any advice from Verigy and/or its
attorneys whatsoever as to the taxability, whether pursuant to federal, state,
local or foreign income tax statutes or regulations or otherwise, of the
payments made hereunder and that Executive will be solely liable for all tax
obligations, if any, arising from payment of the sums specified herein and
shall hold Verigy harmless from any tax obligations arising from said payment.

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12.                                 If there is any dispute arising out
of or related to this Agreement, which cannot be settled by good-faith
negotiation between the parties, such dispute will be submitted to JAMS for
non-binding mediation.  If complete
agreement cannot be reached within 60 days of submission to mediation, any
remaining issues will be submitted to JAMS for final and binding arbitration
pursuant to JAMS Arbitration Rules and Procedures for Employment Disputes.  The reference to JAMS shall refer to any
successor to JAMS, if applicable.  BY ENTERING INTO THIS AGREEMENT, EXECUTIVE
ACKNOWLEDGES THAT EXECUTIVE IS WAIVING EXECUTIVE’S RIGHT TO JURY TRIAL OF ANY
DISPUTE COVERED BY THIS AGREEMENT.

13.                                 The following notice is provided
in accordance with the provisions of Federal Law:

You have up to 21 days from the date this General
Release and Agreement is given to you in which to accept its terms, although
you may accept it any time within those 21 days.  You are advised to consult with an attorney
regarding this Agreement.  You have the
right to revoke your acceptance of this Agreement at any time within seven days
from the date you sign it, and this Agreement will not become effective and
enforceable until this seven-day revocation period has expired.  To revoke your acceptance, you must send a
written notice of revocation to Verigy Ltd., Attention: Vice President and
General Counsel, by 5:00 p.m. on or before the seventh day after you sign this
Agreement.

EXECUTIVE FURTHER
STATES THAT EXECUTIVE HAS HAD THE OPPORTUNITY TO CONSULT WITH THE ATTORNEY OF
EXECUTIVE’S CHOICE, THAT EXECUTIVE HAS CAREFULLY READ THIS AGREEMENT, THAT
EXECUTIVE HAS HAD AMPLE TIME TO REFLECT UPON AND CONSIDER ITS CONSEQUENCES,
THAT EXECUTIVE FULLY UNDERSTANDS ITS FINAL AND BINDING EFFECT, THAT THE ONLY
PROMISES MADE TO EXECUTIVE TO SIGN THIS AGREEMENT ARE THOSE STATED ABOVE OR IN
THE SEVERANCE AGREEMENT, AND THAT EXECUTIVE IS SIGNING THIS AGREEMENT
VOLUNTARILY.

IN WITNESS
WHEREOF, this Agreement has been executed in duplicate originals on the dates
indicated below, and shall become effective as indicated above.

EXECUTIVE

	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Print Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
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 4Exhibit 10.10

Description of Verigy’s
Pay-for-Results Program

General

The following is summary of the key provisions of
Verigy’s Pay-for-Results program as in effect during fiscal 2006.  There is no formal plan document related to
this program.  The program is currently
under review by Verigy’s Compensation Committee, and the program may be
different for fiscal 2007 and in subsequent years than it was in fiscal 2006.

The pay-for-results program is designed to link the
cash compensation for designated executives and other key contributors directly
to business performance.  The program
provides for the payment of cash bonuses above base pay if pre-determined
business performance measures are met and/or exceeded.

Administration

Beginning with Verigy’s separation from Agilent
Technologies, Inc., the Compensation Committee of the Board administered the
program as it related to executives, and approved attainment levels for all
participants.

Participation and Eligibility

All executives and certain other key contributors
participated in the program during fiscal 2006. 
To be eligible for payment, participants had to be employed at the last
day of the bonus period.

Plan Operation

The program was administered in six-month performance
periods that coincided with each half of Verigy’s fiscal year. Each participant’s
target bonus was an amount, equal to a fixed percentage of the participant’s
base salary.  The stated percentage
included, in each case, a target of 15% of the participant’s base salary that
is tied to the same objective as applies to all employees under Verigy’s
company-wide bonus program.  Target
bonuses were paid if 100% of all applicable performance measures were met in
the performance period.

Performance
measures for both periods in fiscal 2006 were achievement of target pro forma
operating profit.  Pro forma operating
margin is calculated for purposes of the program by excluding from GAAP results
(i) FAS123R compensation expenses recorded with respect to equity-based
compensation; and (ii) restructuring and separation expenses incurred in
connection with Verigy’s separation from Agilent Technologies, Inc.  For certain individuals, the program provided
weighting for the financial results associated with the product family with
which they are primarily associated while other participants targets were based
entirely on overall company-wide results.

 

For each 6-month
performance period, a plan participant was eligible to earn a bonus of up to 2
times his or her target bonus.

As Verigy had not yet separated from Agilent
Technologies, Inc. until part way into the second half of fiscal 2006,
achievement of performance measures for the first half of fiscal 2006 was
determined by Agilent management. 
Achievement of performance measures, and the specific compensation amounts
payable to executives, for the second half of fiscal 2006 were determined by
Verigy’s Compensation Committee.

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