Document:

Exhibit 10.3

 

SOURCE INTERLINK COMPANIES, INC.

2007 OMNIBUS LONG-TERM COMPENSATION PLAN

RESTRICTED STOCK AWARD AGREEMENT

 

This Agreement is entered into as of               ,
20    , between Source Interlink Companies, Inc., a
Delaware corporation (the “Company”), and                           
(the “Recipient”).

 

The
Company has awarded restricted stock to the Recipient pursuant to Article 10
of the Company’s 2007 Omnibus Long-Term Compensation Plan (the “Plan”) and the
Recipient desires to accept the award subject to the terms and conditions of
this agreement.  All capitalized terms
not defined in this Agreement shall have the definition ascribed to such terms
in the Plan.

 

NOW,
THEREFORE, the parties agree as follows:

 

1.             Award
of Restricted Stock.  Subject
to the terms and conditions of this Agreement, the Company hereby grants to the
Recipient               
shares (the “Restricted Shares”) of the Company’s common stock, par value $0.01
per share (“Common Stock”).  The
Restricted Shares are subject to forfeiture to the Company as set forth in Section 3
below.

 

2.             Vesting.

 

2.1           Generally.  All of the Restricted Shares shall initially
be unvested, and shall vest with respect to                
of the total Restricted Shares on each of the first three anniversaries of the
date of this Agreement.

 

2.2           Acceleration Upon Death or
Disability.  If the Recipient ceases
to be employed by or in the service of the Company or any parent or subsidiary
corporation of the Company as a result of the Recipient’s death or Disability,
all of the Restricted Shares shall immediately vest.

 

2.3           Special Acceleration upon Change
in Control.  All of the Restricted
Shares shall immediately vest at any time upon a Change in Control, except a
Change in Control pursuant to which the Surviving Company or Parent Company, as
applicable, assumes (or substitutes) this Agreement pursuant to the terms of
the Plan.

 

 

3.             Forfeiture
Restriction.  If the
Recipient breaches his or her obligations to hold material non-public
information about the Company in the strictest confidence or ceases to be
employed by or in the service of the Company or any parent or subsidiary
corporation of the Company for any reason or for no reason, with or without
cause, any Restricted Shares that did not vest pursuant to Section 2 above
at or prior to the time of such termination of employment or service shall be
forfeited to the Company.  Nothing
contained in this Agreement shall confer upon the Recipient any right to be
employed by the Company or any parent or subsidiary corporation of the Company
or to continue to provide services to the Company or any parent or subsidiary
corporation of the Company or to interfere in any way with the right of the
Company or any parent or subsidiary corporation of the Company to terminate the
Recipient’s services at any time for any reason, with or without cause.

 

4.             Restriction
on Transfer.  The
Recipient shall not sell, assign, pledge, or in any manner transfer unvested
Restricted Shares, or any right or interest in unvested Restricted Shares,
whether voluntarily or by operation of law, or by gift, bequest or
otherwise.  Any sale or transfer, or
purported sale or transfer, of unvested Restricted Shares, or any right or
interest in unvested Restricted Shares, in violation of this Section 4
shall be null and void.

 

5.             Tax
Withholding.  The
Recipient acknowledges that, on the date (the “Vesting Date”) any portion of
the Restricted Shares vests, the Value (as defined below) on that date of such
vested Restricted Shares will be treated as ordinary compensation income for
federal and state income and FICA tax purposes, and that the Company will be
required to withhold taxes on this income amount.  To satisfy the required withholding amount,
the Recipient shall surrender to the Company the number of vested Restricted
Shares having a Value equal to the required withholding amount, and the Company
shall have the right to cancel such number of vested Restricted Shares without
any further action by the Recipient before delivering the balance of the vested
Restricted Shares to the Recipient in accordance with Section 7.  For purposes of this Section 5, the “Value”
of a Restricted Share shall be equal to the closing market price for the Common
Stock on the last trading day preceding the Vesting Date.  Notwithstanding the foregoing, the Recipient
may elect with respect to any Vesting Date to pay withholding taxes in cash
instead of having vested Restricted Shares withheld to cover taxes by giving
notice to the Company in writing at least 15 days prior to the Vesting Date, in
which case no vested Restricted Shares shall be delivered to the Recipient
until the Recipient shall have paid to the Company in cash any required tax
withholding.  The Recipient agrees not to
file with respect to any Restricted Shares any election under Section 83(b) of
the Internal Revenue Code of 1986, as amended (the “Code”).

 

6.             Rights
as Stockholder; Dividends.  Upon the execution and delivery of this
Agreement, the award of the Restricted Shares shall be completed and, except as
limited by this Agreement, the Recipient shall be the owner of the Restricted
Shares with all rights of a stockholder, including the right to vote the
Restricted Shares and to receive ordinary dividends payable with respect to the
Restricted Shares from the date of this Agreement.  Until the Restricted Shares become vested,
they will not be treated as issued shares for federal income tax purposes and
dividends paid to the Recipient with respect to the Restricted Shares will be
treated for federal income tax purposes as additional compensation subject to
applicable withholding.

 

 

7.             Stock
Certificate.  To secure
the rights of the Company under Sections 3 and 5, the Company will retain the
certificate or certificates representing the Restricted Shares.  Upon any forfeiture of the Restricted Shares
covered by this Agreement, the Company shall have the right to cancel the
Restricted Shares in accordance with this Agreement without any further action
by the Recipient.  After the Restricted
Shares have vested and all required withholding has been paid to the Company in
connection with such vesting, the Company shall deliver a certificate for the
remaining vested Restricted Shares to the Recipient.

 

8.             Additional
Company Shares.  If, prior to
vesting of Restricted Shares, the outstanding Common Stock is increased as a
result of a stock dividend or stock split, the restrictions and other
provisions of this Agreement shall apply to any such additional shares of
Common Stock that are issued in respect of the Restricted Shares to the same
extent as such restrictions and other provisions apply to the Restricted
Shares.

 

9.             Restrictive
Legends.  Stock
certificates for shares issued under this Agreement may bear the following
legends:

 

The shares represented by this certificate are
subject to a Restricted Stock Agreement between the registered owner and Source
Interlink Companies, Inc., which restricts the transferability of the
shares.  A copy of the agreement is on
file with the Secretary of Source Interlink Companies, Inc.

 

10.          Miscellaneous.

 

10.1         Entire Agreement; Amendment.  This Agreement constitutes the entire
agreement of the parties with regard to the subjects hereof and may be amended
only by written agreement between the Company and the Recipient.

 

10.2         Notices.  Any notice required or permitted under this
Agreement shall be in writing and shall be deemed sufficient when delivered
personally to the party to whom it is addressed or when deposited into the
United States Mail as registered or certified mail, return receipt requested,
postage prepaid, addressed to the Company, Attention: Secretary, at its
principal executive offices, or to the Recipient at the address of the
Recipient in the Company’s records, or at such other address as such party may
designate by ten (10) days’ advance written notice to the other party.

 

10.3         Rights and Benefits.  The rights and benefits of this Agreement
shall inure to the benefit of and be enforceable by the Company’s successors
and assigns and, subject to the restrictions on transfer of this Agreement, be
binding upon the Recipient’s heirs, executors, administrators, successors and
assigns.

 

10.4         Further Action.  The parties agree to execute such further
instruments and to take such further action as may reasonably be necessary to carry
out the intent of this Agreement.

 

 

10.5         Applicable Law. 
The terms and conditions of this Agreement shall be governed by the laws
of the State of Delaware.

 

10.6         Headings.  The headings in this Agreement are for
convenience only and will not control or affect the meaning or construction of
the provisions of this Agreement.

 

10.7         Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original.

 

10.8         Committee Determinations.  The Recipient agrees to accept as binding,
conclusive and final all decisions and interpretations of the Committee or
other administrator of the Plan as to the provisions of the Plan or this
Agreement or any questions arising thereunder.

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.

 

	
  SOURCE
  INTERLINK COMPANIES, INC.

  	
   

  	
  RECIPIENT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Title:EXHIBIT 10.01

 

SEPARATION AGREEMENT AND GENERAL RELEASE

 

1.                                       Purpose of Agreement: 
The intent of this Separation Agreement and General Release (“Agreement”)
is to mutually, amicably and finally resolve and compromise all issues and
claims surrounding the employment of Jorge Titinger (“Employee”) with
FormFactor, Inc. (“Company”) and the separation thereof.

 

2.                                       Separation of Employment: 
Company and Employee agree that the last day of his employment with
Company will be June 7, 2008 (“Separation Date”).  Employee tendered his resignation as Senior
Vice President to be effective on the Separation Date.  As of the Separation Date, Employee is no
longer eligible to receive further payments for wages, salary, vacation or
benefits.

 

3.                                       Company’s Consideration for Agreement:  In exchange for the release and agreements
that Employee is making in this Agreement, Company agrees as follows:

 

(a)          Promptly after the
Separation Date, assuming it occurs at least eight (8) calendar days after
Employee’s execution and return to the Company of this Agreement, Company shall
provide severance pay to Employee in the amount of $204,167.00, less all
legally mandated payroll deductions and withholdings;

 

(b)         Company shall reimburse
Employee in an amount not to exceed US$8,997.10 to cover uninterrupted
continuation of Employee’s health insurance benefits pursuant to the provisions
of COBRA through December 2008

 

(c)          Executive Out Placement Services delivered by a provider selected by the
Company

 

(d)         Employee shall be
credited with accelerated vesting under each Restricted Stock Unit (RSU) grant
held by Employee as of the Separation Date as set forth in the following table:

 

Acceleration Table

 

	
   

  	
   

  	
   

  	
   

  	
  Vested

  	
   

  	
   

  	
   

  	
  Total Vested

  	
   

  
	
  Original

  	
   

  	
  Original

  	
   

  	
  RSU’s As of

  	
   

  	
  Accelerated

  	
   

  	
  Under

  	
   

  
	
  Grant

  	
   

  	
  Grant Date

  	
   

  	
  04/07/08

  	
   

  	
  RSU’s

  	
   

  	
  Agreement

  	
   

  
	
  13,650

  	
   

  	
  11/12/07

  	
   

  	
  0

  	
   

  	
  13,650

  	
   

  	
  13,650

  	
   

  
	
  14,000

  	
   

  	
  02/20/08

  	
   

  	
  0

  	
   

  	
  5,030

  	
   

  	
  5,030

  	
   

  

 

Employee acknowledges and agrees but for his execution of this
Agreement, he would not otherwise be entitled to the benefits described in this
Paragraph.

 

Initials:  Company /s/ SLM
/ Employee /s/ JLT

 

 

4.                                    Employee’s Consideration for Agreement: 
In further consideration for the payments and undertakings
described in this Agreement, Employee releases and waives any
and all claims that he might possibly have against Company, whether he is aware of them or not.  In legal terms, this means that, individually
and on behalf of his representatives, successors, and assigns, Employee does
hereby completely release and forever discharge Company, its parents,
subsidiaries, affiliates, successors, assigns, directors, officers, managers,
agents, and past and present employees (“the Releasees”) from all
claims, rights, demands, actions, obligations, and causes of action of any and
every kind, nature and character, known or unknown, which Employee may now
have, or has ever had, against them arising from or in any way connected with
Employee’s employment with Company and/or the termination thereof.  This Release covers all statutory, common
law, constitutional and other claims, including but not limited
to:

 

(a)                                  Any and all claims
for wrongful discharge, constructive discharge, or wrongful demotion;

 

(b)                                 Any and all claims
relating to any contracts of employment, express or implied, or breach of the
covenant of good faith and fair dealing, express or implied;

 

(c)                                  Any
and all tort claims of any nature, including but not limited to claims for
negligence, defamation, misrepresentation, fraud, or negligent or intentional
infliction of emotional distress;

 

(d)                                 Any
and all claims under federal, state or municipal statutes or ordinances; any
claims under the California Fair Employment and Housing Act, Title VII of the
Civil Rights Act of 1964, the Civil Rights Act of 1991, 42 U.S.C. Section 1981,
the Age Discrimination in Employment Act, the Older Workers’ Benefit Protection
Act, the Americans With Disabilities Act, the Employment Retirement Income
Security Act, the California Labor, Civil and Business and Professions Codes,
the California Constitution, the Federal Rehabilitation Act of 1973, Federal
Family and Medical Leave Act, the California Family Rights Act, the Worker
Adjustment and Retraining Notification Act, and any other laws and regulations
relating to employment, employment discrimination and employment termination;

 

(e)                                  Any
and all claims for unpaid wages, bonuses, commissions or other compensation;
and

 

(f)                                    Any
and all claims for attorneys’ fees or costs.

 

Employee further agrees that if any such claim is
prosecuted in his name before any court or administrative agency, he waives and
agrees not to take any award of money or other damages from such suit.
Notwithstanding any other provision of this Agreement to the contrary, Employee
does not by this Agreement or otherwise waive or release any current or future
rights and claims to indemnity arising from his service as an employee,
officer, director, and/or fiduciary of the Company (including any constituent,
affiliated, parent, and/or subsidiary entity) or any employee benefit plan
sponsored by the Company, including, but not limited to, rights and claims for
indemnity arising under Section 2802 of the California Labor Code, Section 145
of the Delaware General Corporation Law, the by-laws and resolutions and
policies and practices of the 

 

Initials:  Company /s/ HIF
/ Employee /s/ JLT

 

2

 

Company, and insurance policies benefiting Employee
during or following his service as an employee, officer, director, and/or
fiduciary of the Company and/or any employee benefit plan sponsored by the
Company.  Furthermore, the Company agrees
that, in the event Employee is or is sought to be made a party to any civil,
criminal, administrative, or investigative proceeding based upon his employment
and/or the services he provided during the time he was an employee of the
Company, the Company will advance, within 30 days of submission of a documented
request for advancement, the reasonable expenses actually incurred by Employee
in his defense.  Employee will, if legally
required to do so, execute an undertaking to repay same in the event he is
determined by a court to be ineligible for indemnification of such expenses.

 

Notwithstanding any other provision of this Agreement
to the contrary, Employee does not by this Agreement or otherwise waive or
release any claims for industrial injury or illness, any claims for
unemployment compensation, and any claims arising out of acts or omissions
after the date Employee signs this Agreement.

 

Notwithstanding any other provision of this Agreement
to the contrary, Employee does not by this Agreement or otherwise waive or
release any rights or claims to vested benefits from any employee benefit plan
sponsored by the Company or any parent, affiliate, or subsidiary.

 

5.                                    Waiver of Unknown Future Claims:  Employee has read Section 1542 of the
Civil Code of the State of California, which provides as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

Employee understands that Section 1542 gives him the right not to
release existing claims of which he is not now aware, unless he voluntarily
chooses to waive this right.  Even though
he is aware of this right, Employee nevertheless hereby voluntarily waives the
rights described in Section 1542, and elects to assume all risks for
claims that now exist in his favor, known or unknown,
arising from the subject matter of this Agreement.

 

6.                                    Proprietary Information:  Employee
acknowledges and agrees that he remains bound by the terms of Company’s
Employment, Confidential Information and Invention Assignment Agreement (“Confidentiality
Agreement”), which he executed at the time of hire, a copy of which is
attached as Exhibit 2 and which is incorporated herein by reference.

 

7.                                    Confidentiality of Agreement:  Employee agrees that the terms and conditions
of this Agreement are strictly confidential. 
Employee shall not disclose, discuss or reveal the terms or negotiation
of this Agreement to any persons, entities or organizations except as
follows:  (a) as required by court
order; (b) to Employee’s spouse; or (c) to Employee’s attorneys or
accountants.  Employee understands that
Company will make all disclosures
necessary under the applicable rules and regulations of the U.S.
Securities and Exchange Commission.

 

Initials:  Company /s/ HIF
/ Employee /s/ JLT

 

3

 

8.                                    Interpretation and Construction of Agreement:  This Agreement shall be construed and
interpreted in accordance with the laws of the State of California, without
regard to its conflicts of law principles. 
Regardless of which party initially drafted this Agreement, it shall not
be construed against any one party, and shall be construed and enforced as a
mutually prepared Agreement.

 

9.                                    No Admission of Liability: 
By entering into this Agreement, Company is not admitting to any
liability, wrongdoing or legal violation whatsoever with regard to the
employment relationship between the parties, with regard to the
company-director relationship between the parties or with respect to any claims
released herein.  Company expressly denies
any and all such liability and wrongdoing.

 

10.                              Non-Disparagement: 
Company and Employee agree not to disparage the other party to any
individual, organization or entity.

 

11.                              Older Workers’ Benefit Protection Act: 
Pursuant to the Age Discrimination in Employment Act and the
Older Workers’ Benefit Protection Act, Company hereby advises Employee of the
following:

 

(a)                               Employee
is advised to consult with an attorney prior to signing this Agreement.

 

(b)                                 Employee has up to
twenty-one (21) days within which to consider whether he should sign this
Agreement.  Employee may sign this
Agreement at any time during this 21-day period.  This 21-day period begins on the date Company
first provides Employee with the Agreement providing additional consideration
in return for a general release of claims.

 

(b)                                If
Employee signs the Agreement, he shall have seven (7) days thereafter
to revoke the Agreement.  To revoke the
Agreement, Employee must deliver written notice of the revocation to Hank Feir,
Company’s vice president of Human Resources, so that it is received before the
seven-day revocation period expires.

 

(c)                                 In
signing this Agreement, Employee is not releasing or waiving any federal age
discrimination claims based on conduct or events that occur after the Agreement
is signed.

 

12.                              Complete and Voluntary Agreement:  Employee acknowledges that he has read and
understands this Agreement; that he has had the opportunity to seek legal
counsel of his own choosing and to have the terms of the Agreement fully
explained to him; that he is not executing this Agreement in reliance on any
promises, representations or inducements other than those contained herein; and
that he is executing this Agreement voluntarily, free of any duress or
coercion.  Employee specifically understands
that by entering into this Agreement he is forever foreclosed from pursuing any
of the claims he has waived in Paragraphs 4 and 5 above.

 

13.                              Severability Clause: 
Should any of the provisions of this Agreement be determined to be
invalid or unenforceable by a court or arbitrator of competent jurisdiction, it
is agreed that such determination shall not affect the enforceability of the
other provisions herein.

 

Initials:  Company /s/ HIF
/ Employee /s/ JLT

 

4

 

14.                              Scope of Agreement: 
This Agreement constitutes the entire understanding of the parties on
the subjects covered.  Except as
expressly provided here, this Agreement supersedes and renders null and void
any and all prior agreements between Employee and Company.  This Agreement shall not supersede or
extinguish Employee’s interests in any Company option and/or incentive plan
agreement, to the extent any such agreement conflicts with this Agreement and
advantage Employee.

 

15.                              Arbitration:  The
parties agree that any controversy involving the construction or application of
any terms, covenants or conditions of this Agreement, or any claims arising out
of or relating to this Agreement or the breach thereof, with the exception of
claims relating to violation of Company’s Confidentiality Agreement, will be
submitted to and settled by final and binding arbitration, pursuant to the
Federal Arbitration Act, in Alameda County, California before a single neutral
arbitrator selected by the parties. The Company shall pay the cost and expenses
of such arbitration.   Each side will
bear its own attorneys’ fees in any such arbitration, and the arbitrator shall
not have authority to award attorneys’ fees unless a
statutory section at issue in the dispute authorizes the award of attorneys’
fees to the prevailing party, in which case the arbitrator has the authority to
make such award as permitted by the statute in question.  Company shall be unconditionally responsible
for all fees and costs of the arbitrator.

 

PLEASE READ
CAREFULLY.  THIS AGREEMENT CONTAINS A
FULL RELEASE OF LEGAL CLAIMS, BOTH KNOWN CLAIMS AND UNKNOWN CLAIMS.

 

	
  Company:

  	
  Employee:

  
	
   

  	
   

  
	
  FormFactor, Inc.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ H I
  FEIR

  	
   

  	
  /s/ JORGE L. TITINGER

  
	
   

  	
  Hank Feir 

  	
   

  	
  Jorge Titinger

  
	
   

  	
  Vice President, Human Resources

  	
   

  	
   

  
	
  Date: April 15, 2008

  	
   

  	
  Date: April 15, 2008

  

 

Initials:  Company       
/ Employee       

 

5

Exhibit 2
to EXHIBIT 10.01

 

FormFactor, Inc.

 

AGREEMENT
REGARDING EMPLOYMENT, CONFIDENTIAL INFORMATION, INVENTION

ASSIGNMENT, AND ARBITRATION

 

As a condition of my
employment with FormFactor, Inc., its subsidiaries, affiliates, successors
or assigns (together the “Company”),
and in consideration of my employment with the Company and my receipt of the
compensation now and hereafter paid to me by Company, I agree to the following:

 

1.                                       At-Will Employment.  I
UNDERSTAND AND ACKNOWLEDGE THAT MY EMPLOYMENT WITH THE COMPANY IS FOR AN
UNSPECIFIED DURATION AND CONSTITUTES “AT-WILL” EMPLOYMENT.  I ACKNOWLEDGE THAT THIS EMPLOYMENT
RELATIONSHIP MAY BE TERMINATED AT ANY TIME, WITH OR WITHOUT GOOD CAUSE OR
FOR ANY OR NO CAUSE, AT THE OPTION EITHER OF THE COMPANY OR MYSELF, WITH OR
WITHOUT NOTICE.

 

2.             Confidential Information.

 

(a)           Company Information.  I agree at all times during the term of my
employment and thereafter, to (i) hold in strictest confidence, (ii) not
use, except for the benefit of the Company, and (iii) not disclose to any
person, firm or corporation without prior written consent and instruction from
an authorized officer of the Company, any Confidential Information of the
Company.  I understand that “Confidential
Information” means any Company proprietary information, technical data, trade
secrets or know-how, including, but not limited to, research, product plans,
products, services, customer lists and customers (including, but not limited
to, customers of the Company on whom I called or with whom I became acquainted
during the term of my employment), markets, software, developments, inventions,
processes, formulas, technology, designs, drawings, engineering, hardware
configuration information, marketing, finances or other business information
disclosed to me by the Company either directly or indirectly in writing, orally
or by drawings or observation of parts or equipment.  I further understand that Confidential
Information does not include any of the foregoing items that has become
publicly known and made generally available through no wrongful act of mine or
of others who were under confidentiality obligations as to the item or items
involved.

 

(b)           Former Employer
Information.  I agree that
I will not, during my employment with the Company, improperly use or disclose
any proprietary information or trade secrets of any former or concurrent
employer or other person or entity and that I will not bring onto the premises
of the Company any unpublished document or proprietary information belonging to
any such employer, person or entity unless consented to in writing by such
employer, person or entity.

 

(c)           Third Party Information.  I recognize that the Company has received and
in the future will receive from third parties their confidential or proprietary
information subject to a duty on the Company’s part to maintain the
confidentiality of such information and to use it only for certain limited
purposes.  I agree to hold all such
confidential or proprietary information in the strictest confidence and not to
disclose it to any person, firm or corporation or to use it except as necessary
in carrying out my work for the Company consistent with the Company’s agreement
with such third party.

 

 

3.                                       Inventions.

 

(a)           Inventions Retained and
Licensed.  I have attached
hereto, as Exhibit A,
a list describing all inventions, original works of authorship, developments,
improvements, and trade secrets which (i) were made by me prior to my
employment with the Company (collectively referred to as “Prior Inventions”), (ii) belong
to me, (iii) relate to the Company’s proposed business, products or
research and development, and (iv) are not assigned to the Company
hereunder; or, if no such list is attached, I represent on Exhibit A that
there are no such Prior Inventions.  If
in the course of my employment with the Company, I incorporate into a Company
product, process or machine a Prior Invention owned by me or in which I have an
interest, the Company is hereby granted and shall have a nonexclusive,
royalty-free, irrevocable, perpetual, worldwide license to make, have made,
modify, use and sell such Prior Invention as part of or in connection with such
product, process or machine.

 

(b)           Assignment of Inventions.  I agree that I will promptly make full
written disclosure to the Company, will hold in trust for the sole right and
benefit of the Company, and hereby assign to the Company, or its designee, all
my right, title, and interest in and to any and all inventions, original works
of authorship, developments, concepts, improvements or trade secrets, whether
or not patentable or registrable under copyright or similar laws, which I may
solely or jointly conceive or develop or reduce to practice, or cause to be
conceived or developed or reduced to practice, during the period of time I am in
the employ of the Company (collectively referred to as “Inventions”), except
as provided in Section 3(f) below. 
I further acknowledge that all original works of authorship which are
made by me (solely or jointly with others) within the scope of and during the
period of my employment with the Company and which are protectible by copyright
are “works made for hire,” as that term is defined in the United States
Copyright Act.

 

(c)           Inventions Assigned to the
United States.  I agree to
assign to the United States government all my right, title, and interest in and
to any and all Inventions whenever such full title is required to be in the
United States by a contract between the Company and the United States or any of
its agencies.

 

(d)           Maintenance of Records.  I agree to keep and maintain adequate and
current written records of all Inventions made by me (solely or jointly with
others) during the term of my employment with the Company.  The records will be in the form of notes,
sketches, drawings, and any other format that may be specified by the
Company.  The records will be available
to and remain the sole property of the Company at all times.

 

(e)           Patent and Copyright
Registrations.  I agree to
assist the Company, or its designee, at the Company’s expense, in every proper
way to secure the Company’s rights in the Inventions and any copyrights,
patents, mask work rights or other intellectual property rights relating
thereto in any and all countries, including the disclosure to the Company of
all pertinent information and data with respect thereto, the execution of all
applications, specifications, oaths, assignments and all other instruments
which the Company shall deem necessary in order to apply for and obtain such
rights and in order to assign and convey to the Company, its successors,
assigns, and nominees the sole and exclusive rights, title and interest in and
to such Inventions, and any copyrights, patents, mask work rights or other
intellectual property rights relating thereto. 
I further agree that my obligation to execute or cause to be executed,
when it is in my power to do so, any such instrument or papers shall continue
after the termination of this Agreement, with the understanding that I will not
receive any additional compensation for meeting this obligation.  If the Company is unable because of my mental
or physical incapacity or for any other reason to secure my signature to apply
for or to pursue any application for any United States or foreign patents or
copyright registrations covering Inventions or original works of authorship
assigned to the Company as above, then I hereby irrevocably designate and
appoint the Company and its duly authorized officers and agents as my

 

2

 

agent and attorney in fact,
to act for and in my behalf and stead to execute and file any such applications
and to do all other lawfully permitted acts to further the prosecution and
issuance of letters patent or copyright registrations thereon with the same
legal force and effect as if executed by me.

 

(f)            Exception to Assignments.  I understand that the provisions of this
Agreement requiring assignment of Inventions to the Company do not apply to any
invention which qualifies fully under the provisions of California Labor Code Section 2870
(attached hereto as Exhibit B).  I will advise the Company promptly in writing
of any inventions that I believe meet the criteria in California Labor Code Section 2870
and are not otherwise disclosed on Exhibit A.

 

4.                                       Duty not to Compete.  I
understand that my employment with the Company requires my undivided attention
and effort.  As a result, during my
employment, I will not, without the Company’s express prior written consent,
engage in any employment or business other than for the Company.  Additionally, I will not invest in or assist
in any manner any business which directly or indirectly competes with the
business or future business plans of the Company, except that I may own up to
one percent (1%) of the stock of a publicly-held company.

 

5.                                       Returning Company Documents.  I agree that, at the time of leaving the
employ of the Company, I will deliver to the Company (and will not keep in my
possession, recreate or deliver to anyone else) any and all devices, records,
data, notes, reports, proposals, lists, correspondence, specifications,
drawings blueprints, sketches, materials, equipment, other documents or
property, or reproductions of any aforementioned items developed by me pursuant
to my employment with the Company or otherwise belonging to the Company, its
successors or assigns.  In the event of
the termination of my employment, I agree to sign and deliver the “Termination
Certification” attached hereto as Exhibit C.

 

6.                                       Notification of New Employer.  In the event that I leave the employ of the
Company, I hereby grant consent to notification by the Company to my new
employer about my rights and obligations under this Agreement.

 

7.                                       Solicitation of Employees.  I agree that for a period of twelve (12)
months immediately following the termination of my relationship with the
Company for any reason, whether with or without cause, I shall not either
directly or indirectly solicit, induce, recruit or encourage any of the Company’s
employees to leave their employment, or take away such employees, or attempt to
solicit, induce, recruit, encourage or take away employees of the Company,
either for myself or for any other person or entity.

 

8.                                       Conflict of Interest Guidelines.  I agree to diligently adhere to the Conflict
of Interest Guidelines attached as Exhibit D hereto.

 

9.                                       Representations.  I agree to execute any proper oath or verify
any proper document required to carry out the terms of this Agreement.  I represent that my performance of all the
terms of this Agreement will not breach any agreement to keep in confidence
proprietary information acquired by me in confidence or in trust prior to my
employment by the Company.  I have not
entered into, and I agree I will not enter into, any oral or written agreement
in conflict herewith.

 

10.                                 Arbitration and Equitable Relief.

 

(a)           Arbitration.  The Company and I agree that any dispute or
controversy arising out of, or relating to, or concerning our employment
relationship, with the exception of those claims set forth in Section 10(b) below,
shall be settled by arbitration to be held in Alameda County, California, in
accordance with the Employment Dispute Resolution Rules then in effect of
the American Arbitration Association, and

 

3

 

permitting adequate and
reasonable discovery.  The arbitrator may
grant injunctions or other relief in such dispute or controversy.  The decision of the arbitrator, which shall
be rendered in a written opinion, shall be final, conclusive and binding on the
parties to the arbitration.  Judgment may
be entered on the arbitrator’s decision in any court having jurisdiction.  The Company shall pay the costs and expenses
of such arbitration, and unless authorized by a specific statute, each party
shall separately pay its own attorney’s fees and legal expenses.

 

This arbitration
provision constitutes a waiver of both parties’ right to a jury trial and
relates to the resolution of all disputes relating to all aspects of the
employer/employee relationship (except as provided in Section 10(b) below),
including but not limited to, the following claims:

 

i.              Any and all common law claims, including
tort and contract claims and including wrongful discharge of employment, breach
of contract, both express and implied, breach of the covenant of good faith and
fair dealing, both express and implied, negligent or intentional infliction of
emotional distress, negligent or intentional misrepresentation, negligent or
intentional interference with contract or prospective economic advantage and
defamation;

 

ii.             Any
and all claims for violation of any federal, state or municipal statute,
including, but not limited to, Title VII of the Civil Rights Act of 1964, the
Civil Rights Act of 1991, the Age Discrimination In Employment Act of 1967, the
Americans with Disabilities Act of 1990, the Fair Labor Standards Act, the
California Fair Employment and Housing Act, and the California Labor Code; and

 

iii.            Any and all claims arising out of any
other laws and regulations relating to employment or employment discrimination.

 

(b)                                 Claims Excluded From Arbitration.  The only claims which are excluded from this
arbitration agreement, and which shall not be subject to arbitration are the
following:  claims for workers’
compensation benefits or penalties; claims for unemployment insurance; claims
for unpaid earned wages (including associated penalties and liquidated
damages); and claims for preliminary and/or temporary injunctive relief
including claims for breach or threatened breach of Sections 2, 3, 5 and/or 7
herein.  Any claims for permanent
injunctive relief shall be subject to arbitration.

 

(c)                                  Consideration.  I understand that each party’s promise to
resolve claims by arbitration in accordance with the provisions of this
Agreement, rather than through the courts, is consideration for the other party’s
like promise. I further understand that I am offered employment in
consideration of my promise to arbitrate claims.

 

11.                                 General Provisions.

 

(a)                                  Governing Law; Consent to Personal Jurisdiction.  This Agreement will be governed by the laws
of the State of California, without regarding to its conflict of laws
provisions.  I hereby expressly consent
to the personal jurisdiction of the state and federal courts located in
California for any lawsuit filed there against me by the Company arising from
or relating to this Agreement.

 

(b)                                 Entire Agreement.  This Agreement sets forth the entire
agreement and understanding between the Company and me relating to the subject
matter herein and merges all prior discussions between us.  No modification of or amendment to this
Agreement, nor any waiver of any rights under this agreement,

 

4

 

will be effective unless
in writing signed by the party to be charged. 
Any subsequent change or changes in my duties, salary or compensation
will not affect the validity or scope of this Agreement.

 

(c)           Severability.  If one or more of the provisions in this
Agreement are deemed void by law, then the remaining provisions will continue
in full force and effect.

 

(d)           Successors and Assigns.  This Agreement will be binding upon my heirs,
executors, administrators and other legal representatives and will be for the
benefit of the Company, its successors, and its assigns.

 

 

	
  Date: 

  	
  11/12/2007

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature:

  	
  /s/ JORGE L. TITINGER

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  JORGE L. TITINGER

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name of Employee (typed or printed)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Witnessed by:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ JAN ROBINSON

  	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
   

  	
   

  	
   

  
							

 

5

 

EXHIBIT A

 

LIST OF
PRIOR INVENTIONS

AND ORIGINAL WORKS OF AUTHORSHIP

 

	
  Title

  	
   

  	
  Date

  	
   

  	
  Identifying Number 

  or Brief Description

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

N/A

 

	
  x 

  	
  No inventions or
  improvements

  
	
   

  	
   

  
	
   

  	
  Additional sheets
  attached

  

 

 

 

	
  Signature of Employee:

  	
  /s/ JORGE L. TITINGER

  	
   

  
	
   

  	
   

  	
   

  
	
  Print Name of Employee:

  	
  JORGE L. TITINGER

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  11/12/07

  	
   

  
					

 

 

EXHIBIT B

 

CALIFORNIA
LABOR CODE SECTION 2870

EMPLOYMENT
AGREEMENTS;

ASSIGNMENT
OF RIGHTS

 

“A.                             Any provision in an employment agreement
which provides that an employee shall assign, or offer to assign, any of his or
her rights in an invention to his or her employer shall not apply to an
invention that the employee developed entirely on his or her own time without
using the employer’s equipment, supplies, facilities, or trade secret
information except for those inventions that either:

 

(1)           Relate at the time of conception or
reduction to practice of the invention to the employer’s business, or actual or
demonstrably anticipated research or development of the employer.

 

(2)           Result from any work performed by the
employee for the employer.

 

B.                                     To the extent a provision in an
employment agreement purports to require an employee to assign an invention
otherwise excluded from being required to be assigned under
subdivision (a), the provision is against the public policy of this state
and is unenforceable.”

 

 

EXHIBIT C

 

FormFactor, Inc.

 

TERMINATION
CERTIFICATION

 

This is to certify that I
do not have in my possession, nor have I failed to return, any devices,
records, data, notes, reports, proposals, lists, correspondence,
specifications, drawings, blueprints, sketches, materials, equipment, other
documents or property, or reproductions of any aforementioned items belonging
to FormFactor, Inc., its subsidiaries, affiliates, successors or assigns
(together, the “Company”).

 

I further certify that I
have complied with all the terms of the Company’s Agreement Regarding
Employment, Confidential Information, Invention Assignment, and Arbitration
signed by me, including the reporting of any inventions and original works of
authorship (as defined therein), conceived or made by me (solely or jointly
with others) covered by that agreement.

 

I further agree that, in
compliance with the Agreement Regarding Employment, Confidential Information,
Invention Assignment, and Arbitration, I will preserve as confidential all
trade secrets, confidential knowledge, data or other proprietary information
relating to products, processes, know-how, designs, formulas, developmental or
experimental work, computer programs, data bases, other original works of
authorship, customer lists, business plans, financial information or other
subject matter pertaining to any business of the Company or any of its
employees, clients, consultants or licensees.

 

I further agree that for
twelve (12) months from this date, I will not hire any employees of the Company
and I will not solicit, induce, recruit or encourage any of the Company’s
employees to leave their employment.

 

 

	
  Date:

  	
   

  	
   

  
	
   

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Employee’s Signature)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Type/Print Employee’s Name)

  
					

 

 

EXHIBIT D

 

FormFactor, Inc.

 

CONFLICT OF INTEREST GUIDELINES(1)

 

Business dealings that appear to create a
conflict between the interests of FormFactor and an employee are
unacceptable.  FormFactor recognizes the
rights of employees to engage in activities outside of their employment which
are of a private nature and unrelated to our business.  However, employees must disclose any possible
conflicts so that FormFactor may assess and prevent potential conflicts of
interest from arising.  A potential or
actual conflict of interest occurs whenever an employee is in a position to
influence a decision that may result in a personal gain for the employee, an
immediate family member (i.e., spouse or significant other, children, parents,
siblings) or a personal friend as a result of FormFactor’s business
dealings.  Special care must be taken to
avoid the occurrence, or even the impression, of a conflict of interest.

 

Although it is not possible to specify
every action that might create a conflict of interest, this Code sets forth
those actions that most frequently present problems.  If you have any question whether an action or
proposed course of conduct would create a conflict of interest, you should
immediately contact an individual within the Human Resources Department or an
attorney in the Legal Department to obtain advice on the issue.

 

A.            Outside Employment

 

FormFactor expects its full-time
employees to devote their full energies to the Company.  Generally, full-time employees should not
accept outside employment.  To ensure
that no conflicts exist between your employment with the Company and any
outside work activities, all employees are required to obtain written approval
from the Human Resources Department before participating in outside work
activities.  Employees are hired and
continue in FormFactor’s employ with the understanding that FormFactor is their
primary employer and that other employment or commercial involvement that is in
conflict with the business interests of FormFactor is strictly prohibited.  In general, outside work activities are not
allowed when they:

 

·                                          Prevent
the employee from fully performing work for which he/she is employed at
FormFactor, including overtime assignments,

·                                          Involve
organizations that are doing or seek to do business with FormFactor, including
actual or potential vendors or customers, or

·                                          Violate
provisions of law or FormFactor’s policies or rules.

 

From time to time, FormFactor employees
may be required to work beyond normally scheduled hours.  Employees must perform this work when
requested.  In cases of conflict with any
outside activity, the employee’s obligations to FormFactor should be given
priority.

 

(1) These Conflict
of Interest Guidelines can also be found in the Company’s Statement of
Corporate Code of Business Conduct.

 

 

B.                                    Financial and Leadership Interests in Other Business

 

1.                                      Holdings

 

An employee and his/her immediate family may not
own or hold any significant interest in a supplier, customer or competitor of
FormFactor, except where such ownership or interest consists of securities in a
publicly owned company and that securities are regularly traded on the open
market.  For such publicly traded
companies, you may hold up to US$25,000 worth of stock or two percent (2%) of the company’s
outstanding shares, whichever is greater. 
FormFactor may issue
additional rules for officers and/or other groups of employees.

 

2.                                      Outside Directorships

 

Vice
Presidents and above may not serve as an officer or on the Board of Directors
of any other company without obtaining prior written approval from the
Compensation Committee of FormFactor’s Board of Directors.  All other FormFactor employees who wish to
serve on the Board of Directors of another company must obtain the prior
written approval from both FormFactor’s Human Resources Department and Legal
Department.

 

C.                                    Political Contributions

 

FormFactor has a policy not to provide support to
political candidates, to political parties, to religious or fraternal
organizations, to individuals or to ongoing capital or endowment fundraising
campaigns.  An individual employee, in
his/her private capacity, may provide support of the type set forth in the
preceding sentence.

 

D.                                    Business Gifts and Entertainment

 

1.                                      The
Avoidance of Even the Appearance of Impropriety

 

FormFactor’s business
practices are driven by objective standards and established needs.  To this end, because even the appearance of
improprieties may be misinterpreted, FormFactor has established strict
guidelines for the offering and acceptance of gifts,
favored treatment and entertainment.  All
employees are prohibited from offering or receiving gifts, except in those
specific circumstances in which all of the following criteria are met:

 

·                                          Accepting or giving the gift does not
violate applicable laws

·                                          The gifts are consistent with the Gift
Guidelines set forth below

·                                          The gifts are not given in violation of
the Foreign Corrupt Practices Act

·                                          The gifts are of limited value.

 

2.                                      Gift
Guidelines

 

As a basic rule and starting point,
no employee may solicit or accept gifts of significant value, lavish
entertainment or other benefits from potential and actual customers, suppliers
or competitors.

 

The following guidelines are provided:

 

·                                          Gifts should not be given, accepted or
solicited in which the value exceeds US$50, with the exception of those gifts
described in the next bullet point.

·                                          Gifts that do not exceed US$100 in value
may be given for holidays, births, deaths, weddings or similar occasions.

 

 

·                                          You
must disclose in writing to the Legal Department gifts falling within any of
the following parameters:

·                  All gifts given which have a value in
excess of US$50.

·                  All gifts given in any 12-month period to
a single entity or individual where aggregate of all gifts exceed US$500.

·                  All gifts received in any 3-month period where the aggregate value of the
gifts received exceeds US$100.

·                                          Approval by a Corporate Vice President or
higher-ranking executive must be obtained to give a gift with a value greater
than US$500.

·                                          Advance written clearance from an attorney
in the Legal Department for any gift being given to a government employee,
public official, political candidate or political party.

 

3.                                      Entertainment

 

Entertaining
customers and suppliers is permitted only for the limited purpose of building
business relationships.  You should at
all times act in accordance with FormFactor’s business goals and avoid any
behavior that could even be perceived as an attempt to influence decisions,
could create an obligation to reciprocate, or could place anyone in a
compromising position.  Reimbursable
expenses extend only to entertainment for the benefit of FormFactor.

 

E.                                      Interacting With
Suppliers

 

FormFactor evaluates and engages with qualified suppliers
(including vendors) on an objective basis grounded in fairness.  When selecting suppliers, employees must
assess each qualified supplier’s ability to provide satisfy FormFactor’s
business and technical needs and requirements. 
In addition, purchasing decisions are based on the long-term cost and
benefit to FormFactor.  All agreements
will be negotiated in good faith and fair and reasonable between the parties.

 

FormFactor at all times treats existing
suppliers, and potential suppliers, fairly and in good faith.  “Kickbacks” of any kind violate our Company’s
business ethics and policies.  A kickback
refers to any money, fee, commission, credit, gift, gratuity, and thing of
value, which is provided, directly or indirectly, for the purpose of improperly
obtaining or rewarding favorable treatment in connection with a contract or
business arrangement.  Therefore, you
should not offer, give, solicit or accept anything of value that is, or even
appears to be, improper or irregular. 
You should immediately report any such conduct of which you become aware
to the Legal Department.

 

F.                                      Reporting Potential Conflicts

 

An employee must
promptly disclose actual or potential conflicts of interest, in writing, to
his/her supervisor, or if you are uncomfortable reporting the matter to your
supervisor, to a member of the Human Resources Department or to an attorney in
the Legal Department.  Approval of the
activity(ies) will not be given unless the relationship will not interfere with
the employee’s duties and will not damage FormFactor’s relationship with any
specific third party or relationships in general.

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