8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

October 1, 2007

VERIGY LTD.

(Exact name of registrant as specified in its charter)

Singapore	000-52038	N/A
(State or Other Jurisdiction of	(Commission File Number)	(IRS Employer
Incorporation)		Identification No.)

Verigy Ltd.

No. 1 Yishun Ave 7

Singapore 768923

(Address of principal executive offices, including zip code)

(+65) 6755-2033

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02          Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(e)

CFO Housing Allowance

In connection with Mr. Nikl, Verigy’s Chief Financial Officer, joining Verigy, Verigy agreed that it would reimburse Mr. Nikl for up to $100,000 of relocation expenses in connection with him selling his home and relocating closer to Verigy’s offices in Cupertino, California. On September 28, 2007, the Compensation Committee approved a modification of this arrangement whereby, instead of being entitled to receive a relocation allowance, Verigy agreed that it would reimburse Mr. Nikl for the cost of an apartment near Verigy’s Cupertino offices. The letter agreement between the Company and Mr. Nikl, dated October 1, 2007, which sets forth the modification to the employment offer letter, is filed with this Current Report on Form 8-K and is incorporated by reference in this Item 5.02(e).

 Item 9.01          Financial Statements and Exhibits.

(d) Exhibits

The following exhibits are furnished herewith:

Exhibit Number	Description
99.1	Letter Agreement by and between Verigy and Robert Nikl, dated October 1, 2007

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Verigy Ltd.
By:	/s/ Kenneth M. Siegel
Kenneth M. Siegel
Vice President and General Counsel

Date:  October 2, 2007

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EXHIBIT INDEX

Exhibit Number	Description
99.1	Letter Agreement by and between Verigy and Bob Nikl, dated October 1, 2007

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EX-99.1

Exhibit 99.1

	Verigy US Inc.
	10100 N. Tantau
	Cupertino, CA 95014-2540
	408 864 2900 telephone
	www.verigy.com
October 1, 2007

Bob Nikl

c/o Verigy US Inc.

Dear Bob,

This is to confirm our understanding of the modification of your terms of employment as it relates to your temporary living expenses.

Per your employment offer and agreement dated May 25, 2006, Verigy agreed to reimburse you to assist with for reasonable relocation costs up to $100,000 if you should decide to relocate to a home nearer Verigy’s Cupertino offices.

Per our discussions, you have decided that, rather than relocating, you wish to lease temporary living accommodations in the vicinity of the Cupertino Verigy office. We have proposed that we modify your employment arrangement to replace the relocation assistance arrangement with a monthly cash allowance to defray, at least in part, the cost of your temporary living accommodations.

Under this new arrangement, your monthly income will be increased by $6,075(1)on a pre-tax basis, which will equate to a living allowance of approximately $3,295 per month after taxes. This change will take effect October 1, 2007 and continue until the earlier of: (i) 30 months from commencement; (ii) such date as you no longer lease an apartment near Verigy’s Cupertino office(2); or (iii) the date of your termination of employment with Verigy for any reason. Please note that you will be responsible for your actual temporary living expenses, which both we and you recognize may be higher or lower than the allowance provided by Verigy.

Please note your acceptance of replacing the agreement to provide relocation assistance with a temporary living allowance as described above by countersigning a copy of this letter and returning it to me.

Regards,	Agreed & Accepted:
/s/ Kristen Robinson	/s/ Bob Nikl
Kristen Robinson	Bob Nikl
VP Human Resources
	Date:   October 1, 2007

(1) The pre-tax amount was calculated using an estimated incremental effective tax rate of 45.75%.  This percentage is consistent with rates used for similar types of transactions with company officers.

(2) In the event that you stop leasing an apartment and then again lease an apartment, the housing allowance payments may be resumed, subject to the overall limit of 30 months of allowance.