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)

December 1, 2009

Verigy Ltd.

(Exact name of registrant as specified in its charter)

Singapore	000-52038	N/A
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer 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):

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

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

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

¨ 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) No Bonus Payout for Second Half of Fiscal 2009

On December 1, 2009, Verigy’s Compensation Committee determined the actual performance results for the performance measures under Verigy’s 2009 pay for results incentive compensation bonus program (the “2009 Bonus Program”) for the second half of fiscal 2009. Bonus payouts under the 2009 Bonus Program were based on achievement of operating profit and other short-term financial goals and relative total shareholder return targets for the performance period. The Compensation Committee determined that the minimum thresholds of the goals were not achieved, and, therefore, determined not to pay any bonuses pursuant to the plan. While the Compensation Committee retains the right to make discretionary adjustments to the final payouts, it did not make any adjustments in fiscal year 2009 and no bonuses under the 2009 Bonus Program were paid to named executive officers during fiscal 2009.

Fiscal 2010 Executive Compensation

On December 1, 2009, as part of its annual review process, Verigy’s Compensation Committee approved executive cash and equity compensation arrangements for fiscal 2010 for the chief executive officer and other executive officers of the company, including the named executive officers. Cash compensation is comprised of base salary and target cash bonus expressed as a percentage of base salary. Equity compensation is comprised of restricted share units, non-contingent stock options and contingent stock options.

The following table sets forth the base compensation, target bonus percentages and annual contingent and non-contingent equity awards for the company’s named executive officers, as approved by Compensation Committee on December 1, 2009. Base cash compensation and target bonus percentages for the named executive officers remained unchanged from the fiscal 2009 levels. A more detailed description of the fiscal 2010 cash and equity compensation follows the table.

Name/Title of Executive	Base Compensation (1)		Target Bonus (as a % of Base Compensation)		Aggregate Non-Contingent Three-Tranche Stock Options Awarded (2)	Aggregate Contingent One Tranche Stock Options Awarded (3)	Restricted Share Units Awarded (4)
Keith Barnes, President and Chief Executive Officer	$	582,400	100	%	93,750	31,250	55,000
Robert Nikl, Chief Financial Officer	$	335,000	80	%	46,875	15,625	27,500
Gayn Erickson, Vice President, Memory Test	$	268,000	60	%	28,125	9,375	16,500
Pascal Rondé, Vice President Sales, Service and Support	$	362,009	60	%	38,325	12,775	22,500
Hans-Juergen Wagner, Vice President, SOC Test	$	278,000	55	%	31,500	10,500	18,500

(1) Base compensation is unchanged from fiscal 2009 and fiscal 2008.

(2) See “Equity Compensation – Non-Contingent Awards” below for a description of the grant date, pricing and vesting provisions applicable to the Non-Contingent Three Tranche Stock Options Awarded.

(3) See “Equity Compensation – Contingent Awards” below for a description of the conditions applicable to whether the Contingent One Tranche Stock Options are in fact awarded as well as a description of the grant date, pricing and vesting provisions applicable to the Contingent One Tranche Stock Options if they are awarded.

(4) Consistent with past practices, the restricted share units vest and are paid out quarterly over a four-year period from the grant date. Verigy deducts from the number of shares deliverable at each vesting date a number of shares with a fair market value equal to the officer’s tax withholding obligation arising in connection with the vesting. The after-tax net shares are issued to the officer at each vesting date.

Discussion of 2010 Cash and Equity Compensation

Base Compensation – In February 2009, the Compensation Committee implemented a temporary reduction in the base compensation of the executive officers equal to 10%. The Compensation Committee has determined to restore base compensation in full for the named executive officers, beginning February 1, 2010. The base compensation approved for fiscal 2010 for the executive officers is unchanged from the base compensation amounts approved for fiscal 2009 as well as fiscal 2008. The base compensation approved for 2010 reflects the full amount of base compensation, without the temporary salary reduction; however, the salary reduction will remain in effect until February 1, 2010, when the full amount of base compensation will be restored.

Target Bonus – On December 1, 2009, the Compensation Committee approved Verigy’s 2010 pay for results incentive compensation bonus program (the “2010 Bonus Program”) and approved target bonuses as a percentage of base compensation for the named executive officers as set forth in the table above. The 2010 Bonus Program is designed to provide short-term incentive compensation based upon the achievement of operating profit goals, short-term financial goals based on the company’s financial plan and relative shareholder return. The program is administered in six-month performance periods that coincide with each half of Verigy’s fiscal year and provides for cash bonuses to be paid semi-annually. The Compensation Committee determines bonus metrics and goals at the beginning of each six-month performance period, and they are not adjusted during the period. A more detailed description of the 2010 Bonus Program is filed with this report as an exhibit and is incorporated herein by reference. While the Compensation Committee retains the right to make discretionary adjustments to the final payouts, it did not make any adjustments in fiscal year 2009.

Equity Compensation – In the past, as part of its annual performance review, the Compensation Committee has awarded executive officers a mix of restricted share units and options to purchase our ordinary shares, each representing approximately half of the total targeted grant value. On the date of grant, the entire number of restricted share units were granted, subject to quarterly vesting over a four year period. Also on the date of grant, an award agreement for the entire number of stock options was issued (subject to quarterly vesting over a four year period), but the exercise price of only 25% of the total award was fixed. The exercise price of the remaining 75% stock options is automatically set in three increments of 25% each at the closing price of our ordinary shares on the third business day following the quarterly earnings announcement for each of the next three fiscal quarters. We refer to this as our “four tranche option approach.” The Compensation Committee adopted the four-tranche option approach in 2006 in recognition of the volatility of our industry. The purpose of the four-tranche option approach is to provide cost-averaging of the exercise prices of an award over a period of several future quarters rather than establish a single exercise price applicable to the entire award. By linking the automatic pricing mechanism to future announcements of financial results, the exercise prices of the second, third and fourth tranches are established at times when the company’s insider trading window would generally be open and at times when the market has current information about the company’s recent financial results and outlook. This mechanism, in effect, automates a quarterly grant approach by allowing a single award to be priced as if it had been awarded in four separate actions.

On December 1, 2009, the Compensation Committee approved a mix of restricted share units and options as part of the fiscal 2010 officer compensation. The restricted share units vest and are paid out quarterly over a four-year period from the grant date. As of the end of fiscal year 2009, there were approximately 2,500,000 shares available for grant under our 2006 Equity Incentive Plan (the “2006 EIP”). We currently intend to seek shareholder approval at our 2010 annual general meeting to amend the 2006 EIP to increase the number of shares authorized under the plan. In order to conserve shares under the 2006 EIP until shareholders either approve or do not approve the proposed amendment to the 2006 EIP, the Compensation Committee determined to make a portion (25%) of the annual option awards contingent on the shareholders approving the addition of shares to the 2006 EIP at the 2010 annual general meeting of shareholders. Accordingly, the Compensation Committee granted each executive officer a non-contingent award representing 75% of their annual stock option award (the “Non-Contingent Award”) and a contingent award representing 25% of their annual stock option award (the “Contingent Award”). The following is a summary of the material terms of the Non-Contingent Awards and Contingent Awards, and is qualified by reference to the forms of agreement filed with this report:

Non-Contingent Awards – Similar to our four-tranche option approach used in the past:

• the exercise price of the 1^st tranche (1/3^rd of the shares) of the Non-Contingent Award was set as the closing price of our ordinary shares on the date of the award, and the first tranche vests in 16 equal quarterly installments with the first installment vesting on March 3, 2010;

• the exercise price of the 2^nd tranche (1/3^rd of the shares) of the Non-Contingent Award will be automatically set as the closing price of the company’s ordinary shares on the 3rd business day following Verigy’s announcement of its financial results for the quarter ending January 31, 2010, and will vest in 15 equal quarterly installments with the first installment vesting on June 13, 2010; and

• the exercise price of the 3^rd tranche (1/3^rd of the shares) of the Non-Contingent Award will be automatically set as the closing price of the company’s ordinary shares on 3rd business day following Verigy’s announcement of its financial results for the quarter ending April 30, 2010, and will vest in 14 equal quarterly installments with the first installment vesting on September 13, 2010.

In the case of Mr. Rondé, the first tranche of his Non-Contingent Award will be priced at the earliest date allowable subsequent to November 19, 2009. Each of the remaining two tranches will be priced at the earliest date allowable subsequent to the release of the company’s financial results for the quarters ending January 31, 2010, and April 30, 2010, in accordance with applicable French regulations regarding tax qualification for option grants. Generally, the pricing of each tranche of Mr. Rondé’s Non-Contingent Award will occur on the 11th business day following the public announcement of the company’s financial results, or on the 11th business day following a material announcement that occurs within that 11 day period. The option price for Mr. Rondé’s awards will be the greater of (A) the fair market value (closing price) of the company’s ordinary shares on the pricing date, or (B) 80% of the average of the fair market values (closing prices) for the twenty trading days preceding the pricing date.

Contingent Awards – If shareholders approve an amendment to the 2006 EIP to increase the number of authorized shares during 2010, the exercise price of the Contingent Award will be automatically set as the closing price of the company’s ordinary shares on the third business day following Verigy’s announcement of its financial results for the quarter ending July 31, 2010 (or, if later, on the date of shareholder approval). In the case of Mr. Rondé, the Contingent Award will be priced on the 11th business day following the public announcement of Verigy’s financial results for the quarter ending July 31, 2010 (or, if later, on the date of shareholder approval), or on the 11th business day following a material announcement that occurs within that 11 day period. The Continent Awards will vest in 13 equal quarterly installments, with the first installment vesting on December 13, 2010. If the shareholders vote on but do not approve an increase in the number of shares available for issuance under the 2006 EIP during 2010, then the Contingent Awards will become null and void on the date of the shareholder meeting at which the shareholders did not approve the amendment. In the event of a change in control of the company before a shareholder vote on a proposal to increase the shares reserved for issuance under the 2006 EIP, the exercise price of the awards would be automatically established as set forth the form of Contingent Share Option Agreement, the contingency will be deemed satisfied and the Contingent Options will no longer be contingent.

Item 8.01. Other Events.

Annual Review of Director Compensation

On December 1, 2009, Verigy’s Compensation Committee reviewed and considered non-employee director cash compensation for 2010. Verigy’s cash-based compensation for non-employee directors is paid following each annual general meeting of shareholders, making cash compensation, like the annual equity compensation, coincide with the directors’ terms of office. In January 2009, each member of the Board of Directors agreed to a temporary reduction in their base directors’ fees equal to 10% for the compensation cycle beginning on April 14, 2009 and ending at the 2010 annual general meeting of shareholders. The Compensation Committee determined to not make any changes to the director cash compensation, thus the director cash compensation will be the same as the full annual rates approved at our 2009 annual general meeting of shareholders for the 2010 pay cycle.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number	Description
10.1*	Form of Non-Contingent Three-Tranche Share Option Agreement for U.S. Officers
10.2*	Form of Non-Contingent Three-Tranche Share Option Agreement for Officers in France
10.3*	Form of Non-Contingent Three Tranche Share Option Agreement for Non-U.S. and Non-France Officers
10.4*	Form of Contingent Share Option Agreement for U.S. Officers
10.5*	Form of Contingent Share Option Agreement for Officers in France
10.6*	Form of Contingent Share Option Agreement for Non-U.S. and Non-France Officers
10.7*	Description of the 2010 Pay for Results Incentive Compensation Bonus Program

* Management contracts or compensation plans or arrangements in which directors or executive officers are eligible to participate.

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

Date: December 7, 2009

EX-10.1

Exhibit 10.1

US Three Tranche Option Agt – December 2009

VERIGY LTD. 2006 EQUITY INCENTIVE PLAN

NOTICE OF SHARE OPTION AWARD

(THREE TRANCHE)

You have been granted the following option to purchase Verigy Ltd. (the “Company”) ordinary shares as follows:

Name of Optionee:	«Name»
Total Number of Shares:	«TotalShares»
Type of Option:	Nonstatutory Stock Option
Date of Award:	«AwardDate»
Expiration Date:	«ExpDate». This option may expire earlier if your Service terminates earlier, as described in the Stock Option Agreement.

The Option shall be divided into three tranches of «1/3shares» each, with exercise prices and vesting as follows:

Exercise Prices1
Exercise Price Per Share, 1st Tranche:	$«PricePerShare1st» (The closing price of Verigy ordinary shares on the Date of Award);
Exercise Price Per Share, 2nd Tranche:	The closing price of Verigy ordinary shares on the third business day following Verigy’s announcement of financial results for the fiscal quarter ending «2pricingdate»;
Exercise Price Per Share, 3rd Tranche:	The closing price of Verigy ordinary shares on the third business day following Verigy’s announcement of financial results for the fiscal quarter ending «3pricingdate».
Vesting Schedule2
1st Tranche («1/3shares»):	The first tranche of shares subject to this option vests and becomes exercisable in 16 equal quarterly installments, with the first installment vesting on «1vestingdate», provided that you continue to be an Awardee Eligible to Vest as of the applicable vesting date.
2nd Tranche («1/3shares»):	The second tranche of shares subject to this option vests and becomes exercisable in 15 equal quarterly installments, with the first installment vesting on «2vestingdate», provided that you continue to be an Awardee Eligible to Vest as of the applicable vesting date.
3rd Tranche (1/3shares):	The third tranche of shares subject to this option vests and becomes exercisable in 14 equal quarterly installments, with the first installment vesting on «3vestingdate», provided that you continue to be an Awardee Eligible to Vest as of the applicable vesting date.

You and the Company agree that this option is granted under and governed by the terms and conditions of the Verigy Ltd. 2006 Equity Incentive Plan (the “Plan”) and the Share Option Agreement, both of which are made a part of this document.

You further agree that the Company shall cause the shares issued upon exercise of this option to be deposited in your Morgan Stanley Smith Barney Account and, further, that the Company may deliver electronically all documents relating to the Plan or this option (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that the Company is required to deliver to its security holders (including, without limitation, annual reports and proxy statements). You also agree that the Company may deliver these documents by posting them on a web site maintained by the Company or by a third party under contract with the Company. If the Company posts these documents on a web site, it will notify you regarding such posting. This consent will remain in effect until you give the Company written notice that it should deliver paper documents.

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

¹ Except as set forth in the accompanying Option Agreement, the exercise price for the 2^nd and 3^rd tranches shall be equal to the closing price of Verigy ordinary shares on the pricing date indicated above. Such price shall be set automatically and without any further action on the part of the Company or the optionee.

² The vesting dates for the awards will be each March 13, June 13, September 13 and December 13, commencing with the first vesting date noted. No fractional shares shall be issuable. The number of shares exercisable at each vesting event other than the last shall be rounded down to the nearest whole share and the last vesting event shall cover all shares not previously vested.

US Three Tranche Option Agt – December 2009

VERIGY LTD. 2006 EQUITY INCENTIVE PLAN

SHARE OPTION AGREEMENT

(Three Tranche)

Tax Treatment	This option is intended to be a nonstatutory stock option.
Vesting	This option becomes exercisable in installments, during the Option term as shown in the Notice of Share Option Award, as long as you remain an Awardee Eligible to Vest (as defined in the Plan). This option will in no event become exercisable for additional shares after your Service has terminated for any reason, except as otherwise provided in the Plan and this agreement.
Term	This option expires in any event at the close of business at Company headquarters on the day before the 7th anniversary of the Date of Award, as shown in the Notice of Share Option Award. (It may expire earlier if your Service terminates, as described below.)
Regular Termination	Unless otherwise provided in an agreement between you and the Company, if your Service terminates for any reason except death, disability (as defined in the Plan), or retirement, as provided in the Plan, then this option will expire at the close of business at Company headquarters on the date three months after your termination date, or, if earlier, the expiration of the term of this option. The Company determines when your Service terminates for this purpose.
Termination as a result of Death, Disability or Retirement	If you die before your Service terminates, or if your Service terminates because of your disability (as defined in the Plan) or in connection with your retirement as provided in the Plan, then (i) the vested portion of each tranche of this option will be determined by adding 12 months to your length of service and (ii) you will be entitled to exercise this option until the close of business at Company headquarters on the one year anniversary of the date of death, disability or retirement, or, if earlier, until the expiration of the term of this option, as provided in the Plan.
Special Provisions for Accelerated Pricing of Unpriced Tranches	Notwithstanding the establishment of the pricing dates for the 2nd and 3rd tranches of the award as set forth in the Notice of Share Option Award, the exercise price of the 2nd tranche and 3rd tranches, if previously unpriced, shall be established in accordance with the following in the following circumstances: Change of Control. In the event that prior to any pricing date the Company or any third party publicly announces any transaction or event which, as announced or if consummated, would constitute a Change of Control (as defind in the Plan) of the Company, the per-share exercise price for each tranche of this option not already priced as of the date of such announcement, shall become fixed at an amount equal to the closing price of Verigy ordinary shares on the last trading day immediately preceding such announcement. Termination of Employment. In the event that prior any pricing date your Service (as defined in the Plan) with the Company and its affiliates shall terminate for any reason, then the per-share exercise price for each tranche of this option not already priced as of the date of such termination of Service, shall become fixed at an amount equal to the closing price of Verigy ordinary shares on the last trading day immediately preceding your last day of Service.

	No Affect On Vesting. The Vesting provisions applicable to each tranche shall not be affected by a change in the timing of establishing the exercise price in accordance with the preceding paragraphs.
Leaves of Absence and Part-Time Work	For purposes of this option, your Service does not terminate when you go on a military leave, a sick leave or another Company approved leave of absence, and if continued crediting of Service is required by the terms of the leave or by applicable law. But your Service terminates when the approved leave ends, unless you immediately return to active work. Your status as an Awardee Eligible to Vest (as defined in the Plan) will always cease upon termination of employment with the Company or a Subsidiary or Affiliate except as provided in Article 5 of the Plan. If you commence working on a part-time basis, then the vesting schedule specified in the Notice of Share Option Award may be adjusted in accordance with the Company’s part-time work policy or the terms of an agreement between you and the Company pertaining to your part-time schedule.
Restrictions on Exercise	The Company will not permit you to exercise this option if the issuance of shares at that time would violate any law or regulation.
Notice of Exercise	You may exercise this option from time to time for any number of shares for which the option is then exercisable, by notice in writing, electronically or by other means to, and as prescribed by, the Company’s equity incentive administration service provider (the “administration service provider”). Your exercise notice will be effective and irrevocable at such time as your notice, method of payment (whether by cash, check, proceeds from the immediate sale of the option shares, or as otherwise provided in the Plan) and such other documentation as the administration service provider may require have been received by the administration service provider. Your exercise notice must specify which tranche(s) of this option you are exercising. If someone else wants to exercise this option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.
Form of Payment	When you exercise this option, you must provide for payment of the option exercise price for the shares that you are purchasing. To the extent permitted by applicable law, payment may be made in one (or a combination of two or more) of the forms set forth in Section 5.7 of the Plan.
Withholding Taxes and Share Withholding	You will not be allowed to exercise this option unless you make arrangements acceptable to the Company to pay any withholding taxes that may be due as a result of the option exercise. Such arrangements include an irrevocable direction to the Company’s securities broker service provider to sell all or a part of the Shares being purchased under this option and to deliver all or part of the sales proceeds to the Company, pursuant to Section 5.7(b) of the plan.

Restrictions on Resale	You agree not to sell any option shares at a time when applicable laws, Company policies or an agreement between the Company and its underwriters prohibit a sale. This restriction will apply as long as your Service continues and for such period of time after the termination of your Service as the Company may specify.
Transfer of Option	Unless determined otherwise by the Committee, this option may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by the beneficiary designation, will or by the laws of descent or distribution and may be exercised, during your lifetime, only by you. If the Committee makes this option transferable, it shall contain such additional terms and conditions as the Committee deems appropriate.
Retention Rights	Your option or this Agreement does not give you the right to be retained by the Company or a subsidiary of the Company in any capacity. The Company and its subsidiaries reserve the right to terminate your Service at any time, with or without cause.
Shareholder Rights	You, or your estate or heirs, have no rights as a Shareholder of the Company until you have exercised this option by submitting the required notice in accordance with the provisions under “Notice of Exercise” set forth above and paying the exercise price and any applicable withholding taxes. No adjustments are made for dividends or other rights if the applicable record date occurs before you exercise this option, except as described in the Plan.
Adjustments	In the event of a stock split, a stock dividend or a similar change in Company stock, the number of shares covered by this option and the exercise price per share may be adjusted pursuant to the Plan.
Applicable Law	This Agreement shall be governed by, and construed in accordance with, the laws of the Republic of Singapore (except its choice-of-law provisions).
The Plan and Other Agreements	The text of the Plan is incorporated in this Agreement by reference. This Agreement and the Plan, together with the Severance Agreement by and between you and the Company, if applicable, (the “Severance Agreement”) constitute the entire understanding between you and the Company regarding this option. Any prior agreements, commitments or negotiations concerning this option, except for the Severance Agreement, are superseded. This Agreement may be amended only by another written agreement between the parties.

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

EX-10.2

Exhibit 10.2

France Three Tranche Option Agt – December 2009

VERIGY LTD. 2006 EQUITY INCENTIVE PLAN

NOTICE OF SHARE OPTION AWARD

(THREE TRANCHE - FRENCH OPTIONEE)

You have been granted the following option to purchase Verigy Ltd. (the “Company”) ordinary shares as follows:

Name of Optionee:	«Name»
Total Number of Shares:	«TotalShares»
Type of Option:	Nonstatutory Stock Option
Date of Award:	«AwardDate»
Expiration Date:	«ExpDate». This option may expire earlier if your Service terminates earlier, as described in the Stock Option Agreement.

The Option shall be divided into three tranches of «1/3shares» each, with exercise prices and vesting as follows:

Exercise Prices1
Exercise Price Per Share, 1st Tranche:	The closing price of Verigy ordinary shares on $«PricePerShare1st»2;
Exercise Price Per Share, 2nd Tranche:	Closing price of Verigy ordinary shares on the 11th business day following Verigy’s announcement of financial results for the fiscal quarter ending «2pricingdate» 2;
Exercise Price Per Share, 3rd Tranche:	Closing price of Verigy ordinary shares on the 11th business day following Verigy’s announcement of financial results for the fiscal quarter ending «3pricingdate» 2;
Vesting Schedule3
1st Tranche («1/3shares»):	The first tranche of shares subject to this option vests in 16 equal quarterly installments, with the first installment vesting on «1vestingdate», provided that you continue to be an Awardee Eligible to Vest as of the applicable vesting date.
2nd Tranche («1/3shares»):	The second tranche of shares subject to this option vests in 15 equal quarterly installments, with the first installment vesting on «2vestingdate», provided that you continue to be an Awardee Eligible to Vest as of the applicable vesting date.
3rd Tranche («1/3shares»):	The third tranche of shares subject to this option vests in 14 equal quarterly installments, with the first installment vesting on «3vestingdate», provided that you continue to be an Awardee Eligible to Vest as of the applicable vesting date.
Exercisability of Option	Except as otherwise provided in the event of death or disability, each tranche of this option shall first become exercisable on that date that is four years and one day following the date on which the exercise price of such tranche became fixed.

France Three Tranche Option Agt – December 2009

You and the Company agree that this option is granted under and governed by the terms and conditions of the French Option Plan, as defined in the Verigy Ltd 2006 Equity Incentive Plan Option Sub-Plan for French Employees (the “Plan”) and the Stock Option Agreement, both of which are made a part of this document.

You further agree that the Company shall cause the shares issued upon exercise of this option to be deposited in your Morgan Stanley Smith Barney Account and, further, that the Company may deliver electronically all documents relating to the Plan or this option (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that the Company is required to deliver to its security holders (including, without limitation, annual reports and proxy statements). You also agree that the Company may deliver these documents by posting them on a web site maintained by the Company or by a third party under contract with the Company. If the Company posts these documents on a web site, it will notify you regarding such posting. This consent will remain in effect until you give the Company written notice that it should deliver paper documents.

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

¹ Except as set forth in the accompanying Option Agreement, the exercise prices for the first, second, and third tranches will be equal to the greater of (A) the closing price of the Company’s ordinary shares on the pricing dates indicated above or (B) 80% of the average of the last sale prices for the 20 trading days preceding the applicable pricing date. Such prices shall be set automatically and without any further action on the part of the Company or the optionee.

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

³ No fractional shares shall be issuable. The number of shares exercisable at each vesting event other than the last shall be rounded down to the nearest whole share and the last vesting event shall cover all shares not previously vested.

France Three Tranche Option Agt – December 2009

VERIGY LTD. 2006 EQUITY INCENTIVE PLAN

SHARE OPTION AGREEMENT

(THREE TRANCHE - FRENCH OPTIONEE)

Tax Treatment	This option is intended to be a nonstatutory stock option, as provided in the Notice of Share Option Grant.
Term	This option expires in any event at the close of business at Company headquarters on the day before the 7th anniversary of the Date of Award, as shown in the Notice of Share Option Award. (It may expire earlier if your Service terminates, as described below.)
Vesting	This option becomes exercisable in installments, during the Option term as shown in the Notice of Share Option Award, as long as you remain an Awardee Eligible to Vest (as defined in the Plan). This option will in no event become exercisable for additional shares after your Service has terminated for any reason, except as otherwise provided in the Plan and this agreement.
Regular Termination	Unless otherwise provided in an agreement between you and the Company, if your Service terminates for any reason except death, disability (as defined below), or retirement, as provided in the Plan, then this option will expire at the close of business at Company headquarters on the date three months after your termination date, or, if earlier, the expiration of the term of this option. The Company determines when your Service terminates for this purpose.
Death	If you die before your Service terminates, this option will become immediately vested and exercisable in full and will expire at the close of business at Company headquarters on the date 6 months after the date of death. In the event of your death after cessation of employment but prior to the termination of the option, your heirs may exercise the vested options for 6 months following your death. In these circumstances, all unvested options will lapse upon your death. All vested options that are not exercised within 6 months of your death will be forfeited. The 6-month exercise period will apply without regard to the term of the option.
Disability	If your Service terminates because of your disability which is defined as disability under categories 2 or 3 under Section L. 341-4 of the French Social Security Code, then this option will become immediately vested and exercisable in full and expire at the close of business at Company headquarters on the date 12 months after your termination date, or, if earlier, the expiration of the term of this option.
Retirement	If your Service terminates because of retirement, as provided in the Plan, the options will continue to vest for 12 months following the date of termination, the option shall terminate as to the shares that do not vest in such 12-month period and the option shall be exercisable as to the vested shares for one year after the date you cease to be an Awardee Eligible to Vest or, if earlier, the expiration of the term of the option.

France Three Tranche Option Agt – December 2009

Special Provisions for Accelerated Pricing of Unpriced Tranches	Notwithstanding the establishment of the pricing dates as set forth in the Notice of Share Option Award, the exercise price of any tranche, if previously unpriced, shall be established in accordance with the following in the following circumstances: Change of Control. In the event that prior to any pricing date the Company or any third party publicly announces any transaction or event which, as announced or if consummated, would constitute a Change of Control (as defined in the Plan) of the Company, the per-share exercise price for each tranche of this option not already priced as of the date of such announcement, shall become fixed at an amount equal to the closing price of Verigy ordinary shares on the 11th trading day immediately preceding such announcement. Termination of Employment. In the event that prior to any pricing date your Service (as defined in the Plan) with the Company and its affiliates shall terminate for any reason, then the per-share exercise price for each tranche of this option not already priced as of the date of such termination of Service, shall become fixed at an amount equal to the closing price of Verigy ordinary shares on the 11th trading day immediately preceding your last day of Service. No Affect On Vesting or Exercisability. The Vesting provisions applicable to each tranche shall not be affected by a change in the timing of establishing the exercise price in accordance with the preceding paragraphs.
Leaves of Absence and Part-Time Work	For purposes of this option, your Service does not terminate when you go on a military leave, a sick leave or another Company approved leave of absence, and if continued crediting of Service is required by the terms of the leave or by applicable law. But your Service terminates when the approved leave ends, unless you immediately return to active work. Your status as an Awardee Eligible to Vest (as defined in the Plan) will always cease upon termination of employment with the Company or a Subsidiary or Affiliate except as provided in Article 5 of the Plan. If you commence working on a part-time basis, then the vesting schedule specified in the Notice of Share Option Award may be adjusted in accordance with the Company’s part-time work policy or the terms of an agreement between you and the Company pertaining to your part-time schedule.
Restrictions on Exercise	The Company will not permit you to exercise this option if the issuance of shares at that time would violate any law or regulation.
Notice of Exercise	You may exercise this option from time to time for any number of shares for which the option is then exercisable, by notice in writing, electronically or by other means to, and as prescribed by, the Company’s equity incentive administration service provider (the “administration service provider”). Your exercise notice will be effective and irrevocable at such time as your notice, method of payment (whether by cash, check, proceeds from the immediate sale of the option shares, or as otherwise provided in the Plan) and such other documentation as the administration service provider may require have been received by the administration service provider. Your exercise notice must specify which tranche(s) of this option you are exercising.

France Three Tranche Option Agt – December 2009

	If someone else wants to exercise this option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.
Form of Payment	When you exercise this option, you must provide for payment of the option exercise price for the shares that you are purchasing. Notwithstanding any provision in the U.S. Plan to the contrary, upon exercise of an option, the full exercise price will be paid either in cash, by check or by credit transfer. Under a cashless exercise program, you may give irrevocable instructions to the administration service provider to properly deliver the option price to the Company.
Withholding Taxes and Share Withholding	Regardless of any action the Company or your employer (the “Employer”) takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the option grant, including the grant, vesting or exercise of the option, the subsequent sale of shares acquired pursuant to such exercise and the receipt of any dividends; and (2) do not commit to structure the terms of the grant or any aspect of the option to reduce or eliminate your liability for Tax-Related Items. Prior to exercise of the option, you will pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all withholding and payment on account obligations of the Company and/or the Employer. In this regard, you authorize the Company and/or the Employer to withhold all applicable Tax-Related Items legally payable by you from your wages or other cash compensation paid to you by the Company and/or the Employer, within legal limits, or from proceeds of the sale of shares. Finally, you will pay to the Company or the Employer, by means of cash, check or credit transfer, any amount of Tax-Related Items that the Company or the Employer may be required to withhold as a result of your participation in the Plan or your purchase of shares that cannot be satisfied by the means previously described. The Company may refuse to honor the exercise and refuse to deliver the shares if you fail to comply with your obligations in connection with the Tax-Related Items as described in this section.
Restrictions on Resale	You agree not to sell any option shares at a time when applicable laws, Company policies or an agreement between the Company and its underwriters prohibit a sale. This restriction will apply as long as your Service continues and for such period of time after the termination of your Service as the Company may specify.
Transfer of Option	This option may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by the beneficiary designation, will or by the laws of descent or distribution and may be exercised, during your lifetime, only by you
Retention Rights	Your option or this Agreement does not give you the right to be retained by the Company or a subsidiary of the Company in any capacity. The Company and its subsidiaries reserve the right to terminate your Service at any time.
Shareholder Rights	You, or your estate or heirs, have no rights as a Shareholder of the Company until you have exercised this option by submitting the required notice in accordance with the provisions under “Notice of Exercise” set forth above and paying the exercise price and any applicable withholding taxes. No adjustments are made for dividends or other rights if the applicable record date occurs before you exercise this option, except as described in the Plan.

France Three Tranche Option Agt – December 2009

Adjustments

In the event of a stock split, a stock dividend or a similar change in Company stock, the number of shares covered by this option and the exercise price per share may be adjusted pursuant to the Plan.

Nature of the Grant

In accepting the grant, you acknowledge that: (a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan and this Share Option Agreement; (b) the grant of the option is voluntary and occasional and does not create any contractual or other right to receive future grants of options, or benefits in lieu of options, even if options have been granted repeatedly in the past; (c) all decisions with respect to future option grants, if any, will be at the sole discretion of the Company; (d) you are voluntarily participating in the Plan; (e) the option is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company or the Employer, and which is outside the scope of your employment contract, if any; (f) the option is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or the Employer; (g) in the event that you are not an employee of the Company, the option grant will not be interpreted to form an employment contract or relationship with the Company; and furthermore, the option grant will not be interpreted to form an employment contract with the Employer or any subsidiary or affiliate of the Company; (h) the future value of the underlying shares is unknown and cannot be predicted with certainty; (i) if the underlying shares do not increase in value, the option will have no value; (j) if you exercise your option and obtain shares, the value of those shares acquired upon exercise may increase or decrease in value, even below the exercise price; (k) in consideration of the grant of the option, no claim or entitlement to compensation or damages shall arise from termination of the option or diminution in value of the option or shares purchased through exercise of the option resulting from termination of your employment by the Company or the Employer (for any reason whatsoever and whether or not in breach of local labor laws) and you irrevocably release the Company and the Employer from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by signing this Share Option Agreement, you shall be deemed irrevocably to have waived your entitlement to pursue such claim; and (l) in the event of termination of your employment, your right to receive the option and vest in the option under the Plan, if any, will terminate effective as of the date that you are no longer actively employed and will not be extended by any notice period mandated under local law (e.g., active

France Three Tranche Option Agt – December 2009

	employment would not include a period of “garden leave” or similar period pursuant to local law); furthermore, in the event of termination of employment, your right to exercise the option after termination of employment, if any, will be measured by the date of termination of your active employment and will not be extended by any notice period mandated under local law; the Company shall have the exclusive discretion to determine when you are no longer actively employed for purposes of your option grant.
Data Privacy Notice and Consent	You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this Share Option Agreement by and among, as applicable, your employer, the Company, its subsidiaries and its affiliates for the exclusive purpose of implementing, administering and managing your participation in the Plan. You understand that the Company and your employer may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all options or any other entitlement to shares awarded, canceled, vested, unvested or outstanding in your favor, for the purpose of implementing, administering and managing the Plan (“Data”). You understand that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in your country, or elsewhere, and that the recipient’s country may have different data privacy laws and protections than your country. You understand that you may request a list with the names and addresses of any potential recipients of the Data by contacting your local human resources representative. You authorize the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data as may be required to a broker, escrow agent or other third party with whom the shares received upon exercise of the option may be deposited. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that you may, upon request, view Data, request additional information about the storage and processing of Data, correct Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local human resources representative. You understand that refusal or withdrawal of consent may affect your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, You understand that You may contact your local human resources representative.
Language	If you have received this Share Option Agreement or any other document related to the Plan translated into a language other than English and if the translated version is different than the English version, the English version will control.
Applicable Law	This Agreement shall be governed by, and construed in accordance with, the laws of the Republic of Singapore (except its choice-of-law provisions).
	The text of the Plan is incorporated in this Agreement by reference.

France Three Tranche Option Agt – December 2009

The Plan and Other Agreements This Agreement and the Plan, together with the Equity Award Modification Agreement by and between you and the Company, if applicable, (the “Modification Agreement”) constitute the entire understanding between you and the Company regarding this option. Any prior agreements, commitments or negotiations concerning this option, except for the Modification Agreement, are superseded. This Agreement may be amended only by another written agreement between the parties.

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

EX-10.3

Exhibit 10.3

Non-US Executive Three Tranche Option Agt – December 2009

VERIGY LTD. 2006 EQUITY INCENTIVE PLAN

NOTICE OF SHARE OPTION AWARD

(THREE TRANCHE)

You have been granted the following option to purchase Verigy Ltd. (the “Company”) ordinary shares as follows:

Name of Optionee:	«Name»
Total Number of Shares:	«TotalShares»
Type of Option:	Nonstatutory Stock Option
Date of Award:	«AwardDate»
Expiration Date:	«ExpDate». This option may expire earlier if your Service terminates earlier, as described in the Stock Option Agreement.

The Option shall be divided into three tranches of «1/3shares» each, with exercise prices and vesting as follows:

Exercise Prices1
Exercise Price Per Share, 1st Tranche:	$«PricePerShare1st» (The closing price of Verigy ordinary shares on the Date of Award);
Exercise Price Per Share, 2nd Tranche:	The closing price of Verigy ordinary shares on the third business day following Verigy’s announcement of financial results for the fiscal quarter ending «2pricingdate»;
Exercise Price Per Share, 3rd Tranche:	The closing price of Verigy ordinary shares on the third business day following Verigy’s announcement of financial results for the fiscal quarter ending «3pricingdate».
Vesting Schedule2
1st Tranche («1/3shares»):	The first tranche of shares subject to this option vests and becomes exercisable in 16 equal quarterly installments, with the first installment vesting on «1vestingdate», provided that you continue to be an Awardee Eligible to Vest as of the applicable vesting date.
2nd Tranche («1/3shares»):	The second tranche of shares subject to this option vests and becomes exercisable in 15 equal quarterly installments, with the first installment vesting on «2vestingdate», provided that you continue to be an Awardee Eligible to Vest as of the applicable vesting date.
3rd Tranche (1/3shares):	The third tranche of shares subject to this option vests and becomes exercisable in 14 equal quarterly installments, with the first installment vesting on «3vestingdate», provided that you continue to be an Awardee Eligible to Vest as of the applicable vesting date.

You and the Company agree that this option is granted under and governed by the terms and conditions of the Verigy Ltd. 2006 Equity Incentive Plan (the “Plan”) and the Share Option Agreement, both of which are made a part of this document.

You further agree that the Company shall cause the shares issued upon exercise of this option to be deposited in your Morgan Stanley Smith Barney Account and, further, that the Company may deliver electronically all documents relating to the Plan or this option (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that the Company is required to deliver to its security holders (including, without limitation, annual reports and proxy statements). You also agree that the Company may deliver these documents by posting them on a web site maintained by the Company or by a third party under contract with the Company. If the Company posts these documents on a web site, it will notify you regarding such posting. This consent will remain in effect until you give the Company written notice that it should deliver paper documents.

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

¹ Except as set forth in the accompanying Option Agreement, the exercise price for the 2^nd and 3^rd tranches shall be equal to the closing price of Verigy ordinary shares on the pricing date indicated above. Such price shall be set automatically and without any further action on the part of the Company or the optionee.

² The vesting dates for the awards will be each March 13, June 13, September 13 and December 13, commencing with the first vesting date noted. No fractional shares shall be issuable. The number of shares exercisable at each vesting event other than the last shall be rounded down to the nearest whole share and the last vesting event shall cover all shares not previously vested.

Non-US Executive Three Tranche Option Agt – December 2009

VERIGY LTD. 2006 EQUITY INCENTIVE PLAN

SHARE OPTION AGREEMENT

(THREE TRANCHE)

Tax Treatment	This option is intended to be a nonstatutory stock option.
Vesting	This option becomes exercisable in installments, during the Option term as shown in the Notice of Share Option Award, as long as you remain an Awardee Eligible to Vest (as defined in the Plan). This option will in no event become exercisable for additional shares after your Service has terminated for any reason, except as otherwise provided in the Plan and this agreement.
Term	This option expires in any event at the close of business at Company headquarters on the day before the 7th anniversary of the Date of Award, as shown in the Notice of Share Option Award. (It may expire earlier if your Service terminates, as described below.)
Regular Termination	Unless otherwise provided in an agreement between you and the Company, if your Service terminates for any reason except death, disability (as defined in the Plan), or retirement, as provided in the Plan, then this option will expire at the close of business at Company headquarters on the date three months after your termination date, or, if earlier, the expiration of the term of this option. The Company determines when your Service terminates for this purpose.
Termination as a result of Death, Disability or Retirement	If you die before your Service terminates, or if your Service terminates because of your disability (as defined in the Plan) or in connection with your retirement as provided in the Plan, then (i) the vested portion of each tranche of this option will be determined by adding 12 months to your length of service and (ii) you will be entitled to exercise this option until the close of business at Company headquarters on the one year anniversary of the date of death, disability or retirement, or, if earlier, until the expiration of the term of this option, as provided in the Plan.
Special Provisions for Accelerated Pricing of Unpriced Tranches	Notwithstanding the establishment of the pricing dates for the 2nd and 3rd tranches of the award as set forth in the Notice of Share Option Award, the exercise price of the 2nd tranche and 3rd tranches, if previously unpriced, shall be established in accordance with the following in the following circumstances: Change of Control. In the event that prior to any pricing date the Company or any third party publicly announces any transaction or event which, as announced or if consummated, would constitute a Change of Control (as defined in the Plan) of the Company, the per-share exercise price for each tranche of this option not already priced as of the date of such announcement, shall become fixed at an amount equal to the closing price of Verigy ordinary shares on the last trading day immediately preceding such announcement. Termination of Employment. In the event that prior any pricing date your Service (as defined in the Plan) with the Company and its affiliates shall terminate for any reason, then the per-share exercise price for each tranche of this option not already priced as of the date of such termination of Service, shall become fixed at an amount equal to the closing price of Verigy ordinary shares on the last trading day immediately preceding your last day of Service.

	No Affect On Vesting. The Vesting provisions applicable to each tranche shall not be affected by a change in the timing of establishing the exercise price in accordance with the preceding paragraphs.
Leaves of Absence and Part-Time Work	For purposes of this option, your Service does not terminate when you go on a military leave, a sick leave or another Company approved leave of absence, and if continued crediting of Service is required by the terms of the leave or by applicable law. But your Service terminates when the approved leave ends, unless you immediately return to active work. Your status as an Awardee Eligible to Vest (as defined in the Plan) will always cease upon termination of employment with the Company or a Subsidiary or Affiliate except as provided in Article 5 of the Plan. If you commence working on a part-time basis, then the vesting schedule specified in the Notice of Share Option Award may be adjusted in accordance with the Company’s part-time work policy or the terms of an agreement between you and the Company pertaining to your part-time schedule.
Restrictions on Exercise	The Company will not permit you to exercise this option if the issuance of shares at that time would violate any law or regulation.
Notice of Exercise	You may exercise this option from time to time for any number of shares for which the option is then exercisable, by notice in writing, electronically or by other means to, and as prescribed by, the Company’s equity incentive administration service provider (the “administration service provider”). Your exercise notice will be effective and irrevocable at such time as your notice, method of payment (whether by cash, check, proceeds from the immediate sale of the option shares, or as otherwise provided in the Plan) and such other documentation as the administration service provider may require have been received by the administration service provider. Your exercise notice must specify which tranche(s) of this option you are exercising. If someone else wants to exercise this option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.
Form of Payment	When you exercise this option, you must provide for payment of the option exercise price for the shares that you are purchasing. To the extent permitted by applicable law, payment may be made in one (or a combination of two or more) of the forms set forth in Section 5.7 of the Plan.
Withholding Taxes and Share Withholding	You will not be allowed to exercise this option unless you make arrangements acceptable to the Company to pay any withholding taxes that may be due as a result of the option exercise. Such arrangements include an irrevocable direction to the Company’s securities broker service provider to sell all or a part of the Shares being purchased under this option and to deliver all or part of the sales proceeds to the Company, pursuant to Section 5.7(b) of the plan.

Restrictions on Resale	You agree not to sell any option shares at a time when applicable laws, Company policies or an agreement between the Company and its underwriters prohibit a sale. This restriction will apply as long as your Service continues and for such period of time after the termination of your Service as the Company may specify.
Transfer of Option	Unless determined otherwise by the Committee, this option may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by the beneficiary designation, will or by the laws of descent or distribution and may be exercised, during your lifetime, only by you. If the Committee makes this option transferable, it shall contain such additional terms and conditions as the Committee deems appropriate.
Retention Rights	Your option or this Agreement does not give you the right to be retained by the Company or a subsidiary of the Company in any capacity. The Company and its subsidiaries reserve the right to terminate your Service at any time, with or without cause.
Shareholder Rights	You, or your estate or heirs, have no rights as a Shareholder of the Company until you have exercised this option by submitting the required notice in accordance with the provisions under “Notice of Exercise” set forth above and paying the exercise price and any applicable withholding taxes. No adjustments are made for dividends or other rights if the applicable record date occurs before you exercise this option, except as described in the Plan.
Adjustments	In the event of a stock split, a stock dividend or a similar change in Company stock, the number of shares covered by this option and the exercise price per share may be adjusted pursuant to the Plan.
Nature of the Grant	In accepting the grant, you acknowledge that: (a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan and this Share Option Agreement; (b) the grant of the option is voluntary and occasional and does not create any contractual or other right to receive future grants of options, or benefits in lieu of options, even if options have been granted repeatedly in the past; (c) all decisions with respect to future option grants, if any, will be at the sole discretion of the Company; (d) you are voluntarily participating in the Plan; (e) the option is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company or the Employer, and which is outside the scope of your employment contract, if any; (f) the option is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or the Employer; (g) in the event that you are not an employee of the Company, the option grant will not be interpreted to form an employment contract or relationship with the Company; and furthermore, the option grant will not be interpreted to form an employment contract with the Employer or any subsidiary or affiliate of the Company;

(h) the future value of the underlying shares is unknown and cannot be predicted with certainty; (i) if the underlying shares do not increase in value, the option will have no value; (j) if you exercise your option and obtain shares, the value of those shares acquired upon exercise may increase or decrease in value, even below the exercise price; (k) in consideration of the grant of the option, no claim or entitlement to compensation or damages shall arise from termination of the option or diminution in value of the option or shares purchased through exercise of the option resulting from termination of your employment by the Company or the Employer (for any reason whatsoever and whether or not in breach of local labor laws) and you irrevocably release the Company and the Employer from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by signing this Share Option Agreement, you shall be deemed irrevocably to have waived your entitlement to pursue such claim; and (l) in the event of termination of your employment (whether or not in breach of local labor laws), your right to receive the option and vest in the option under the Plan, if any, will terminate effective as of the date that you are no longer actively employed and will not be extended by any notice period mandated under local law (e.g., active employment would not include a period of “garden leave” or similar period pursuant to local law); furthermore, in the event of termination of employment (whether or not in breach of local labor laws), your right to exercise the option after termination of employment, if any, will be measured by the date of termination of your active employment and will not be extended by any notice period mandated under local law; the Company shall have the exclusive discretion to determine when you are no longer actively employed for purposes of your option grant.

Data Privacy Notice and Consent

You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this Share Option Agreement by and among, as applicable, your employer, the Company, its subsidiaries and its affiliates for the exclusive purpose of implementing, administering and managing your participation in the Plan. You understand that the Company and your employer may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all options or any other entitlement to shares awarded, canceled, vested, unvested or outstanding in your favor, for the purpose of implementing, administering and managing the Plan (“Data”). You understand that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in your country, or elsewhere, and that the recipient’s country may have different data privacy laws and protections than your country. You understand that you may request a list with the names and addresses of any potential recipients of the Data by contacting your local human resources representative. You authorize the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data as may be required to a broker, escrow agent or other third party with whom the shares received upon exercise

	of the option may be deposited. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that you may, upon request, view Data, request additional information about the storage and processing of Data, correct Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local human resources representative. You understand that refusal or withdrawal of consent may affect your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, You understand that You may contact your local human resources representative.
Language	If you have received this Share Option Agreement or any other document related to the Plan translated into a language other than English and if the translated version is different than the English version, the English version will control.
Applicable Law	This Agreement shall be governed by, and construed in accordance with, the laws of the Republic of Singapore (except its choice-of-law provisions).
The Plan and Other Agreements	The text of the Plan is incorporated in this Agreement by reference. This Agreement and the Plan, together with the Equity Award Modification Agreement by and between you and the Company, if applicable, (the “Modification Agreement”) constitute the entire understanding between you and the Company regarding this option. Any prior agreements, commitments or negotiations concerning this option, except for the Modification Agreement, are superseded. This Agreement may be amended only by another written agreement between the parties.

YOUR ELECTRONIC SIGNATURE TO THIS NOTICE AND AGREEMENT IS YOUR AGREEMENT

TO ALL OF THE TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

EX-10.4

Exhibit 10.4

US Contingent Option Agt – December 2009

VERIGY LTD. 2006 EQUITY INCENTIVE PLAN

NOTICE OF CONTINGENT SHARE OPTION AWARD

On «AwardDate» (the “Award Date”) you were awarded, on a contingent basis, an option to purchase Verigy Ltd. (the “Company”) ordinary shares under the Company’s 2006 Equity Incentive Plan (the “Plan”). This award is contingent as described in the section titled “Contingency” in the accompanying Share Option Award Agreement.

Name of Optionee:	«Name»
Total Number of Shares:	«TotalShares»
Type of Option:	Nonstatutory Stock Option
Expiration Date:	«ExpDate». This option may expire earlier if your Service terminates earlier, as described in the Stock Option Agreement.
Exercise Price:1	The closing price of Verigy ordinary shares on the third business day following Verigy’s announcement of financial results for the fiscal quarter ending «pricingdate».
Vesting Schedule:2	The shares subject to this option vest and become exercisable in 13 equal quarterly installments, with the first installment vesting on «vestingdate», provided that you continue to be an Awardee Eligible to Vest as of the applicable vesting date.

You and the Company agree that this option is granted under and governed by the terms and conditions of the Verigy Ltd. 2006 Equity Incentive Plan (the “Plan”) and the Share Option Agreement, both of which are made a part of this document.

You further agree that the Company shall cause the shares issued upon exercise of this option to be deposited in your Morgan Stanley Smith Barney Account and, further, that the Company may deliver electronically all documents relating to the Plan or this option (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that the Company is required to deliver to its security holders (including, without limitation, annual reports and proxy statements). You also agree that the Company may deliver these documents by posting them on a web site maintained by the Company or by a third party under contract with the Company. If the Company posts these documents on a web site, it will notify you regarding such posting. This consent will remain in effect until you give the Company written notice that it should deliver paper documents.

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

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

² The vesting dates for the award will be each March 13, June 13, September 13 and December 13, commencing with the first vesting date noted. No fractional shares shall be issuable. The number of shares exercisable at each vesting event other than the last shall be rounded down to the nearest whole share and the last vesting event shall cover all shares not previously vested.

US Contingent Option Agt – December 2009

VERIGY LTD. 2006 EQUITY INCENTIVE PLAN

CONTINGENT SHARE OPTION AGREEMENT

Contingency	This award is contingent upon the shareholders of the Company approving an increase in the number of shares available for issuance under the Plan during calendar 2010. If the shareholders vote one but do not approve an increase in the number of shares available for issuance under the Plan during calendar 2010, then this award shall become null and void on the date of the meeting of shareholders at which the proposal was not approved, and no benefit shall accrue as a result of this award. Notwithstanding the foregoing, in the event that the pricing of this option is accelerated as described below in the section titled “Special Provisions for Accelerated Pricing—Change of Control” prior to the date on which a vote of shareholders is held with respect to a proposal to approve an increase in the number of shares available for issuance under the Plan, then the contingency will be deemed satisfied and this option shall no longer be contingent.
Tax Treatment	This option is intended to be a nonstatutory stock option.
Vesting	This option becomes exercisable in installments, during the Option term as shown in the Notice of Share Option Award, as long as you remain an Awardee Eligible to Vest (as defined in the Plan). This option will in no event become exercisable for additional shares after your Service has terminated for any reason, except as otherwise provided in the Plan and this agreement.
Term	This option expires in any event at the close of business at Company headquarters on the day before the 7th anniversary of the Date of Award, as shown in the Notice of Share Option Award. (It may expire earlier if your Service terminates, as described below.)
Regular Termination	Unless otherwise provided in an agreement between you and the Company, if your Service terminates for any reason except death, disability (as defined in the Plan), or retirement, as provided in the Plan, then this option will expire at the close of business at Company headquarters on the date three months after your termination date, or, if earlier, the expiration of the term of this option. The Company determines when your Service terminates for this purpose.
Termination as a result of Death, Disability or Retirement	If you die before your Service terminates, or if your Service terminates because of your disability (as defined in the Plan) or in connection with your retirement, as provided in the Plan, then (i) the vested portion of each tranche of this option will be determined by adding 12 months to your length of service and (ii) you will be entitled to exercise this option until the close of business at Company headquarters on the one year anniversary of the date of death, disability or retirement, or, if earlier, until the expiration of the term of this option, as provided in the Plan.
Special Provisions for Accelerated Pricing	Notwithstanding the establishment of the pricing date for this option as set forth in the Notice of Share Option Award, the exercise price of this option shall be established in accordance with the following in the following circumstances: Change of Control. In the event that, prior to the date on which a vote of shareholders is scheduled to be held with respect to a proposal to approve an increase in the number of shares available for issuance under the Plan, the Company or any third party publicly announces any transaction or event which, as

	announced or if consummated, would constitute a Change of Control (as defind in the Plan) of the Company, the per-share exercise price for this option (if not already priced as of the date of such announcement), shall become fixed at an amount equal to the closing price of Verigy ordinary shares on the last trading day immediately preceding such announcement. Termination of Employment. In the event that prior to the pricing date your Service (as defined in the Plan) with the Company and its affiliates shall terminate for any reason, then the per-share exercise price for this option, if not already priced as of the date of such termination of Service, shall become fixed at an amount equal to the closing price of Verigy ordinary shares on the last trading day immediately preceding your last day of Service. No Affect On Vesting. The Vesting provisions applicable to this option shall not be affected by a change in the timing of establishing the exercise price in accordance with the preceding paragraphs.
Leaves of Absence and Part-Time Work	For purposes of this option, your Service does not terminate when you go on a military leave, a sick leave or another Company approved leave of absence, and if continued crediting of Service is required by the terms of the leave or by applicable law. But your Service terminates when the approved leave ends, unless you immediately return to active work. Your status as an Awardee Eligible to Vest (as defined in the Plan) will always cease upon termination of employment with the Company or a Subsidiary or Affiliate except as provided in Article 5 of the Plan. If you commence working on a part-time basis, then the vesting schedule specified in the Notice of Share Option Award may be adjusted in accordance with the Company’s part-time work policy or the terms of an agreement between you and the Company pertaining to your part-time schedule.
Restrictions on Exercise	The Company will not permit you to exercise this option if the issuance of shares at that time would violate any law or regulation.
Notice of Exercise	You may exercise this option from time to time for any number of shares for which the option is then exercisable, by notice in writing, electronically or by other means to, and as prescribed by, the Company’s equity incentive administration service provider (the “administration service provider”). Your exercise notice will be effective and irrevocable at such time as your notice, method of payment (whether by cash, check, proceeds from the immediate sale of the option shares, or as otherwise provided in the Plan) and such other documentation as the administration service provider may require have been received by the administration service provider. Your exercise notice must specify the number of shares of this option you are exercising. If someone else wants to exercise this option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.
Form of Payment	When you exercise this option, you must provide for payment of the option exercise price for the shares that you are purchasing. To the extent permitted by applicable law, payment may be made in one (or a combination of two or more) of the forms set forth in Section 5.7 of the Plan.

Withholding Taxes and Share Withholding	You will not be allowed to exercise this option unless you make arrangements acceptable to the Company to pay any withholding taxes that may be due as a result of the option exercise. Such arrangements include an irrevocable direction to the Company’s securities broker service provider to sell all or a part of the Shares being purchased under this option and to deliver all or part of the sales proceeds to the Company, pursuant to Section 5.7(b) of the plan.
Restrictions on Resale	You agree not to sell any option shares at a time when applicable laws, Company policies or an agreement between the Company and its underwriters prohibit a sale. This restriction will apply as long as your Service continues and for such period of time after the termination of your Service as the Company may specify.
Transfer of Option	Unless determined otherwise by the Committee, this option may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by the beneficiary designation, will or by the laws of descent or distribution and may be exercised, during your lifetime, only by you. If the Committee makes this option transferable, it shall contain such additional terms and conditions as the Committee deems appropriate.
Retention Rights	Your option or this Agreement does not give you the right to be retained by the Company or a subsidiary of the Company in any capacity. The Company and its subsidiaries reserve the right to terminate your Service at any time, with or without cause.
Shareholder Rights	You, or your estate or heirs, have no rights as a Shareholder of the Company until you have exercised this option by submitting the required notice in accordance with the provisions under “Notice of Exercise” set forth above and paying the exercise price and any applicable withholding taxes. No adjustments are made for dividends or other rights if the applicable record date occurs before you exercise this option, except as described in the Plan.
Adjustments	In the event of a stock split, a stock dividend or a similar change in Company stock, the number of shares covered by this option and the exercise price per share may be adjusted pursuant to the Plan.
Applicable Law	This Agreement shall be governed by, and construed in accordance with, the laws of the Republic of Singapore (except its choice-of-law provisions).
The Plan and Other Agreements	The text of the Plan is incorporated in this Agreement by reference. This Agreement and the Plan, together with the Severance Agreement by and between you and the Company, if applicable, (the “Severance Agreement”) constitute the entire understanding between you and the Company regarding this option. Any prior agreements, commitments or negotiations concerning this option, except for the Severance Agreement, are superseded. This Agreement may be amended only by another written agreement between the parties.

YOUR ELECTRONIC SIGNATURE TO THIS NOTICE AND AGREEMENT IS YOUR AGREEMENT

TO ALL OF THE TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

EX-10.5

Exhibit 10.5

France Contingent Option Agt – December 2009

VERIGY LTD. 2006 EQUITY INCENTIVE PLAN

NOTICE OF CONTINGENT SHARE OPTION AWARD

(FRENCH OPTIONEE)

On «AwardDate» (the “Award Date”) you were awarded, on a contingent basis, an option to purchase Verigy Ltd. (the “Company”) ordinary shares under the Company’s 2006 Equity Incentive Plan (the “Plan”). This award is contingent as described in the section titled “Contingency” in the accompanying Share Option Award Agreement.

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

You and the Company agree that this option is granted under and governed by the terms and conditions of the French Option Plan, as defined in the Verigy Ltd 2006 Equity Incentive Plan Option Sub-Plan for French Employees (the “Plan”) and the Stock Option Agreement, both of which are made a part of this document.

You further agree that the Company shall cause the shares issued upon exercise of this option to be deposited in your Morgan Stanley Smith Barney Account and, further, that the Company may deliver electronically all documents relating to the Plan or this option (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that the Company is required to deliver to its security holders (including, without limitation, annual reports and proxy statements). You also agree that the Company may deliver these documents by posting them on a web site maintained by the Company or by a third party under contract with the Company. If the Company posts these documents on a web site, it will notify you regarding such posting. This consent will remain in effect until you give the Company written notice that it should deliver paper documents.

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

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

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

³ No fractional shares shall be issuable. The number of shares exercisable at each vesting event other than the last shall be rounded down to the nearest whole share and the last vesting event shall cover all shares not previously vested.

France Contingent Option Agt – December 2009

VERIGY LTD. 2006 EQUITY INCENTIVE PLAN

CONTINGENT SHARE OPTION AGREEMENT

(FRENCH OPTIONEE)

Contingency	This award is contingent upon the shareholders of the Company approving an increase in the number of shares available for issuance under the Plan during calendar 2010. If the shareholders vote on but do not approve an increase in the number of shares available for issuance under the Plan during calendar 2010, then this award shall become null and void on the date of the meeting of shareholders at which the proposal was not approved, and no benefit shall accrue as a result of this award. Notwithstanding the foregoing, in the event that the pricing of this option is accelerated as described in the below section titled “Special Provisions for Accelerated Pricing—Change of Control” prior to the date on which a vote of shareholders is held with respect to a proposal to approve an increase in the number of shares available for issuance under the Plan, then the contingency will be deemed satisfied and this option shall no longer be contingent.
Term	This option expires in any event at the close of business at Company headquarters on the day before the 7th anniversary of the Date of Award, as shown in the Notice of Share Option Award. (It may expire earlier if your Service terminates, as described below.)
Vesting	This option becomes exercisable in installments, during the Option term as shown in the Notice of Share Option Award, as long as you remain an Awardee Eligible to Vest (as defined in the Plan). This option will in no event become exercisable for additional shares after your Service has terminated for any reason, except as otherwise provided in the Plan and this agreement.
Regular Termination	Unless otherwise provided in an agreement between you and the Company, if your Service terminates for any reason except death, disability (as defined below), or retirement, as provided in the Plan, then this option will expire at the close of business at Company headquarters on the date three months after your termination date, or, if earlier, the expiration of the term of this option. The Company determines when your Service terminates for this purpose.
Death	If you die before your Service terminates, this option will become immediately vested and exercisable in full and will expire at the close of business at Company headquarters on the date 6 months after the date of death. In the event of your death after cessation of employment but prior to the termination of the option, your heirs may exercise the vested options for 6 months following your death. In these circumstances, all unvested options will lapse upon your death. All vested options that are not exercised within 6 months of your death will be forfeited. The 6-month exercise period will apply without regard to the term of the option.
Disability	If your Service terminates because of your disability which is defined as disability under categories 2 or 3 under Section L. 341-4 of the French Social Security Code, then this option will become immediately vested and exercisable in full and expire at the close of business at Company headquarters on the date 12 months after your termination date, or, if earlier, the expiration of the term of this option.

Retirement	If your Service terminates because of retirement, as provided in the Plan, the options will continue to vest for 12 months following the date of termination, the option shall terminate as to the shares that do not vest in such 12-month period and the option shall be exercisable as to the vested shares for one year after the date you cease to be an Awardee Eligible to Vest or, if earlier, the expiration of the term of the option.
Special Provisions for Accelerated Pricing	Notwithstanding the establishment of the pricing date as set forth in the Notice of Share Option Award, the exercise price of this option shall be established in accordance with the following in the following circumstances: Change of Control. In the event that, prior to the date on which a vote of shareholders is scheduled to be held with respect to a proposal to approve an increase in the number of shares available for issuance under the Plan, the Company or any third party publicly announces any transaction or event which, as announced or if consummated, would constitute a Change of Control (as defined in the Plan) of the Company, the per-share exercise price for this option, if not already priced as of the date of such announcement, shall become fixed at an amount equal to the closing price of Verigy ordinary shares on the 11th trading day immediately preceding such announcement. Termination of Employment. In the event that prior to the pricing date your Service (as defined in the Plan) with the Company and its affiliates shall terminate for any reason, then the per-share exercise price for this option, if not already priced as of the date of such termination of Service, shall become fixed at an amount equal to the closing price of Verigy ordinary shares on the 11th trading day immediately preceding your last day of Service. No Affect On Vesting or Exercisablity. The Vesting provisions applicable to this option shall not be affected by a change in the timing of establishing the exercise price in accordance with the preceding paragraphs.
Leaves of Absence and Part-Time Work	For purposes of this option, your Service does not terminate when you go on a military leave, a sick leave or another Company approved leave of absence, and if continued crediting of Service is required by the terms of the leave or by applicable law. But your Service terminates when the approved leave ends, unless you immediately return to active work. Your status as an Awardee Eligible to Vest (as defined in the Plan) will always cease upon termination of employment with the Company or a Subsidiary or Affiliate except as provided in Article 5 of the Plan. If you commence working on a part-time basis, then the vesting schedule specified in the Notice of Share Option Award may be adjusted in accordance with the Company’s part-time work policy or the terms of an agreement between you and the Company pertaining to your part-time schedule.
Restrictions on Exercise	The Company will not permit you to exercise this option if the issuance of shares at that time would violate any law or regulation.
Notice of Exercise	You may exercise this option from time to time for any number of shares for which the option is then exercisable, by notice in writing, electronically or by other means to, and as prescribed by, the Company’s equity incentive administration service provider (the “administration service provider”).

	Your exercise notice will be effective and irrevocable at such time as your notice, method of payment (whether by cash, check, proceeds from the immediate sale of the option shares, or as otherwise provided in the Plan) and such other documentation as the administration service provider may require have been received by the administration service provider. Your exercise notice must specify which tranche(s) of this option you are exercising. If someone else wants to exercise this option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.
Form of Payment	When you exercise this option, you must provide for payment of the option exercise price for the shares that you are purchasing. Notwithstanding any provision in the U.S. Plan to the contrary, upon exercise of an option, the full exercise price will be paid either in cash, by check or by credit transfer. Under a cashless exercise program, you may give irrevocable instructions to the administration service provider to properly deliver the option price to the Company.
Withholding Taxes and Share Withholding	Regardless of any action the Company or your employer (the “Employer”) takes with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the option grant, including the grant, vesting or exercise of the option, the subsequent sale of shares acquired pursuant to such exercise and the receipt of any dividends; and (2) do not commit to structure the terms of the grant or any aspect of the option to reduce or eliminate your liability for Tax-Related Items. Prior to exercise of the option, you will pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all withholding and payment on account obligations of the Company and/or the Employer. In this regard, you authorize the Company and/or the Employer to withhold all applicable Tax-Related Items legally payable by you from your wages or other cash compensation paid to you by the Company and/or the Employer, within legal limits, or from proceeds of the sale of shares. Finally, you will pay to the Company or the Employer, by means of cash, check or credit transfer, any amount of Tax-Related Items that the Company or the Employer may be required to withhold as a result of your participation in the Plan or your purchase of shares that cannot be satisfied by the means previously described. The Company may refuse to honor the exercise and refuse to deliver the shares if you fail to comply with your obligations in connection with the Tax-Related Items as described in this section.
Restrictions on Resale	You agree not to sell any option shares at a time when applicable laws, Company policies or an agreement between the Company and its underwriters prohibit a sale. This restriction will apply as long as your Service continues and for such period of time after the termination of your Service as the Company may specify.
Transfer of Option	This option may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by the beneficiary designation, will or by the laws of descent or distribution and may be exercised, during your lifetime, only by you.

Retention Rights	Your option or this Agreement does not give you the right to be retained by the Company or a subsidiary of the Company in any capacity. The Company and its subsidiaries reserve the right to terminate your Service at any time.
Shareholder Rights	You, or your estate or heirs, have no rights as a Shareholder of the Company until you have exercised this option by submitting the required notice in accordance with the provisions under “Notice of Exercise” set forth above and paying the exercise price and any applicable withholding taxes. No adjustments are made for dividends or other rights if the applicable record date occurs before you exercise this option, except as described in the Plan.
Adjustments	In the event of a stock split, a stock dividend or a similar change in Company stock, the number of shares covered by this option and the exercise price per share may be adjusted pursuant to the Plan.
Nature of the Grant	In accepting the grant, you acknowledge that: (a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan and this Share Option Agreement; (b) the grant of the option is voluntary and occasional and does not create any contractual or other right to receive future grants of options, or benefits in lieu of options, even if options have been granted repeatedly in the past; (c) all decisions with respect to future option grants, if any, will be at the sole discretion of the Company; (d) you are voluntarily participating in the Plan; (e) the option is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company or the Employer, and which is outside the scope of your employment contract, if any; (f) the option is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or the Employer; (g) in the event that you are not an employee of the Company, the option grant will not be interpreted to form an employment contract or relationship with the Company; and furthermore, the option grant will not be interpreted to form an employment contract with the Employer or any subsidiary or affiliate of the Company; (h) the future value of the underlying shares is unknown and cannot be predicted with certainty; (i) if the underlying shares do not increase in value, the option will have no value; (j) if you exercise your option and obtain shares, the value of those shares acquired upon exercise may increase or decrease in value, even below the exercise price;

(k) in consideration of the grant of the option, no claim or entitlement to compensation or damages shall arise from termination of the option or diminution in value of the option or shares purchased through exercise of the option resulting from termination of your employment by the Company or the Employer (for any reason whatsoever and whether or not in breach of local labor laws) and you irrevocably release the Company and the Employer from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by signing this Share Option Agreement, you shall be deemed irrevocably to have waived your entitlement to pursue such claim; and (l) in the event of termination of your employment, your right to receive the option and vest in the option under the Plan, if any, will terminate effective as of the date that you are no longer actively employed and will not be extended by any notice period mandated under local law (e.g., active employment would not include a period of “garden leave” or similar period pursuant to local law); furthermore, in the event of termination of employment, your right to exercise the option after termination of employment, if any, will be measured by the date of termination of your active employment and will not be extended by any notice period mandated under local law; the Company shall have the exclusive discretion to determine when you are no longer actively employed for purposes of your option grant.

Data Privacy Notice and Consent

You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this Share Option Agreement by and among, as applicable, your employer, the Company, its subsidiaries and its affiliates for the exclusive purpose of implementing, administering and managing your participation in the Plan. You understand that the Company and your employer may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all options or any other entitlement to shares awarded, canceled, vested, unvested or outstanding in your favor, for the purpose of implementing, administering and managing the Plan (“Data”). You understand that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in your country, or elsewhere, and that the recipient’s country may have different data privacy laws and protections than your country. You understand that you may request a list with the names and addresses of any potential recipients of the Data by contacting your local human resources representative. You authorize the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data as may be required to a broker, escrow agent or other third party with whom the shares received upon exercise of the option may be deposited. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that you may, upon request, view Data, request additional information about the storage and processing of Data, correct Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local human resources representative. You understand that refusal or withdrawal of consent may affect your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, You understand that You may contact your local human resources representative.

Language	If you have received this Share Option Agreement or any other document related to the Plan translated into a language other than English and if the translated version is different than the English version, the English version will control.
Applicable Law	This Agreement shall be governed by, and construed in accordance with, the laws of the Republic of Singapore (except its choice-of-law provisions).
The Plan and Other Agreements	The text of the Plan is incorporated in this Agreement by reference. This Agreement and the Plan, together with the Equity Award Modification Agreement by and between you and the Company, if applicable, (the “Modification Agreement”) constitute the entire understanding between you and the Company regarding this option. Any prior agreements, commitments or negotiations concerning this option, except for the Modification Agreement, are superseded. This Agreement may be amended only by another written agreement between the parties.

YOUR ELECTRONIC SIGNATURE TO THIS NOTICE AND AGREEMENT IS YOUR AGREEMENT

TO ALL OF THE TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

EX-10.6

Exhibit 10.6

Non US Contingent Option Agt – December 2009

VERIGY LTD. 2006 EQUITY INCENTIVE PLAN

NOTICE OF CONTINGENT SHARE OPTION AWARD

On «AwardDate» (the “Award Date”) you were awarded, on a contingent basis, an option to purchase Verigy Ltd. (the “Company”) ordinary shares under the Company’s 2006 Equity Incentive Plan (the “Plan”). This award is contingent as described in the section titled “Contingency” in the accompanying Share Option Award Agreement.

Name of Optionee:	«Name»
Total Number of Shares:	«TotalShares»
Type of Option:	Nonstatutory Stock Option
Expiration Date:	«ExpDate». This option may expire earlier if your Service terminates earlier, as described in the Stock Option Agreement.
Exercise Price:1	The closing price of Verigy ordinary shares on the third business day following Verigy’s announcement of financial results for the fiscal quarter ending «pricingdate».
Vesting Schedule:2	The shares subject to this option vest and become exercisable in 13 equal quarterly installments, with the first installment vesting on «vestingdate», provided that you continue to be an Awardee Eligible to Vest as of the applicable vesting date.

You and the Company agree that this option is granted under and governed by the terms and conditions of the Verigy Ltd. 2006 Equity Incentive Plan (the “Plan”) and the Share Option Agreement, both of which are made a part of this document.

You further agree that the Company shall cause the shares issued upon exercise of this option to be deposited in your Morgan Stanley Smith Barney Account and, further, that the Company may deliver electronically all documents relating to the Plan or this option (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that the Company is required to deliver to its security holders (including, without limitation, annual reports and proxy statements). You also agree that the Company may deliver these documents by posting them on a web site maintained by the Company or by a third party under contract with the Company. If the Company posts these documents on a web site, it will notify you regarding such posting. This consent will remain in effect until you give the Company written notice that it should deliver paper documents.

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

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

² The vesting dates for the award will be each March 13, June 13, September 13 and December 13, commencing with the first vesting date noted. No fractional shares shall be issuable. The number of shares exercisable at each vesting event other than the last shall be rounded down to the nearest whole share and the last vesting event shall cover all shares not previously vested.

Non US Contingent Option Agt – December 2009

VERIGY LTD. 2006 EQUITY INCENTIVE PLAN

CONTINGENT SHARE OPTION AGREEMENT

Contingency	This award is contingent upon the shareholders of the Company approving an increase in the number of shares available for issuance under the Plan during calendar 2010. If the shareholders vote on but do not approve an increase in the number of shares available for issuance under the Plan during calendar 2010, then this award shall become null and void on the date of the meeting of shareholders at which the proposal was not approved, and no benefit shall accrue as a result of this award. Notwithstanding the foregoing, in the event that the pricing of this option is accelerated as described below in the section titled “Special Provisions for Accelerated Pricing—Change of Control” prior to the date on which a vote of shareholders is held with respect to a proposal to approve an increase in the number of shares available for issuance under the Plan, then the contingency will be deemed satisfied and this option shall no longer be contingent.
Tax Treatment	This option is intended to be a nonstatutory stock option.
Vesting	This option becomes exercisable in installments, during the Option term as shown in the Notice of Share Option Award, as long as you remain an Awardee Eligible to Vest (as defined in the Plan). This option will in no event become exercisable for additional shares after your Service has terminated for any reason, except as otherwise provided in the Plan and this agreement.
Term	This option expires in any event at the close of business at Company headquarters on the day before the 7th anniversary of the Date of Award, as shown in the Notice of Share Option Award. (It may expire earlier if your Service terminates, as described below.)
Regular Termination	Unless otherwise provided in an agreement between you and the Company, if your Service terminates for any reason except death, disability (as defined in the Plan), or retirement, as provided in the Plan, then this option will expire at the close of business at Company headquarters on the date three months after your termination date, or, if earlier, the expiration of the term of this option. The Company determines when your Service terminates for this purpose.
Termination as a result of Death, Disability or Retirement	If you die before your Service terminates, or if your Service terminates because of your disability (as defined in the Plan) or in connection with your retirement, as provided in the Plan, then (i) the vested portion of each tranche of this option will be determined by adding 12 months to your length of service and (ii) you will be entitled to exercise this option until the close of business at Company headquarters on the one year anniversary of the date of death, disability or retirement, or, if earlier, until the expiration of the term of this option, as provided in the Plan.
Special Provisions for Accelerated Pricing	Notwithstanding the establishment of the pricing date for this option as set forth in the Notice of Share Option Award, the exercise price of this option shall be established in accordance with the following in the following circumstances: Change of Control. In the event that, prior to the date on which a vote of shareholders is scheduled to be held with respect to a proposal to approve an increase in the number of shares available for issuance under the Plan, the Company or any third party publicly announces any transaction or event which, as announced or if consummated, would constitute a Change of Control (as defind in the Plan) of the

	Company, the per-share exercise price for this option (if not already priced as of the date of such announcement), shall become fixed at an amount equal to the closing price of Verigy ordinary shares on the last trading day immediately preceding such announcement. Termination of Employment. In the event that prior to the pricing date your Service (as defined in the Plan) with the Company and its affiliates shall terminate for any reason, then the per-share exercise price for this option, if not already priced as of the date of such termination of Service, shall become fixed at an amount equal to the closing price of Verigy ordinary shares on the last trading day immediately preceding your last day of Service. No Affect On Vesting. The Vesting provisions applicable to this option shall not be affected by a change in the timing of establishing the exercise price in accordance with the preceding paragraphs.
Leaves of Absence and Part-Time Work	For purposes of this option, your Service does not terminate when you go on a military leave, a sick leave or another Company approved leave of absence, and if continued crediting of Service is required by the terms of the leave or by applicable law. But your Service terminates when the approved leave ends, unless you immediately return to active work. Your status as an Awardee Eligible to Vest (as defined in the Plan) will always cease upon termination of employment with the Company or a Subsidiary or Affiliate except as provided in Article 5 of the Plan. If you commence working on a part-time basis, then the vesting schedule specified in the Notice of Share Option Award may be adjusted in accordance with the Company’s part-time work policy or the terms of an agreement between you and the Company pertaining to your part-time schedule.
Restrictions on Exercise	The Company will not permit you to exercise this option if the issuance of shares at that time would violate any law or regulation.
Notice of Exercise	You may exercise this option from time to time for any number of shares for which the option is then exercisable, by notice in writing, electronically or by other means to, and as prescribed by, the Company’s equity incentive administration service provider (the “administration service provider”). Your exercise notice will be effective and irrevocable at such time as your notice, method of payment (whether by cash, check, proceeds from the immediate sale of the option shares, or as otherwise provided in the Plan) and such other documentation as the administration service provider may require have been received by the administration service provider. Your exercise notice must specify the number of shares of this option you are exercising. If someone else wants to exercise this option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.
Form of Payment	When you exercise this option, you must provide for payment of the option exercise price for the shares that you are purchasing. To the extent permitted by applicable law, payment may be made in one (or a combination of two or more) of the forms set forth in Section 5.7 of the Plan.

Withholding Taxes and Share Withholding	You will not be allowed to exercise this option unless you make arrangements acceptable to the Company to pay any withholding taxes that may be due as a result of the option exercise. Such arrangements include an irrevocable direction to the Company’s securities broker service provider to sell all or a part of the Shares being purchased under this option and to deliver all or part of the sales proceeds to the Company, pursuant to Section 5.7(b) of the plan.
Restrictions on Resale	You agree not to sell any option shares at a time when applicable laws, Company policies or an agreement between the Company and its underwriters prohibit a sale. This restriction will apply as long as your Service continues and for such period of time after the termination of your Service as the Company may specify.
Transfer of Option	Unless determined otherwise by the Committee, this option may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by the beneficiary designation, will or by the laws of descent or distribution and may be exercised, during your lifetime, only by you. If the Committee makes this option transferable, it shall contain such additional terms and conditions as the Committee deems appropriate.
Retention Rights	Your option or this Agreement does not give you the right to be retained by the Company or a subsidiary of the Company in any capacity. The Company and its subsidiaries reserve the right to terminate your Service at any time, with or without cause.
Shareholder Rights	You, or your estate or heirs, have no rights as a Shareholder of the Company until you have exercised this option by submitting the required notice in accordance with the provisions under “Notice of Exercise” set forth above and paying the exercise price and any applicable withholding taxes. No adjustments are made for dividends or other rights if the applicable record date occurs before you exercise this option, except as described in the Plan.
Adjustments	In the event of a stock split, a stock dividend or a similar change in Company stock, the number of shares covered by this option and the exercise price per share may be adjusted pursuant to the Plan.
Nature of the Grant	In accepting the grant, you acknowledge that: (a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan and this Share Option Agreement; (b) the grant of the option is voluntary and occasional and does not create any contractual or other right to receive future grants of options, or benefits in lieu of options, even if options have been granted repeatedly in the past; (c) all decisions with respect to future option grants, if any, will be at the sole discretion of the Company; (d) you are voluntarily participating in the Plan; (e) the option is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company or the Employer, and which is outside the scope of your employment contract, if any; (f) the option is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or the Employer;

(g) in the event that you are not an employee of the Company, the option grant will not be interpreted to form an employment contract or relationship with the Company; and furthermore, the option grant will not be interpreted to form an employment contract with the Employer or any subsidiary or affiliate of the Company; (h) the future value of the underlying shares is unknown and cannot be predicted with certainty; (i) if the underlying shares do not increase in value, the option will have no value; (j) if you exercise your option and obtain shares, the value of those shares acquired upon exercise may increase or decrease in value, even below the exercise price; (k) in consideration of the grant of the option, no claim or entitlement to compensation or damages shall arise from termination of the option or diminution in value of the option or shares purchased through exercise of the option resulting from termination of your employment by the Company or the Employer (for any reason whatsoever and whether or not in breach of local labor laws) and you irrevocably release the Company and the Employer from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by signing this Share Option Agreement, you shall be deemed irrevocably to have waived your entitlement to pursue such claim; and (l) in the event of termination of your employment (whether or not in breach of local labor laws), your right to receive the option and vest in the option under the Plan, if any, will terminate effective as of the date that you are no longer actively employed and will not be extended by any notice period mandated under local law (e.g., active employment would not include a period of “garden leave” or similar period pursuant to local law); furthermore, in the event of termination of employment (whether or not in breach of local labor laws), your right to exercise the option after termination of employment, if any, will be measured by the date of termination of your active employment and will not be extended by any notice period mandated under local law; the Company shall have the exclusive discretion to determine when you are no longer actively employed for purposes of your option grant.

Data Privacy Notice and Consent

You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this Share Option Agreement by and among, as applicable, your employer, the Company, its subsidiaries and its affiliates for the exclusive purpose of implementing, administering and managing your participation in the Plan. You understand that the Company and your employer may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all options or any other entitlement to shares awarded, canceled, vested, unvested or outstanding in your favor, for the purpose of implementing, administering and managing the Plan (“Data”). You understand that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in your country, or elsewhere, and that the recipient’s country may have different data privacy laws and protections than your country. You understand that you may request a list with the names and addresses of any potential recipients of the Data by contacting your local

	human resources representative. You authorize the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data as may be required to a broker, escrow agent or other third party with whom the shares received upon exercise of the option may be deposited. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that you may, upon request, view Data, request additional information about the storage and processing of Data, correct Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local human resources representative. You understand that refusal or withdrawal of consent may affect your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, You understand that You may contact your local human resources representative.
Language	If you have received this Share Option Agreement or any other document related to the Plan translated into a language other than English and if the translated version is different than the English version, the English version will control.
Applicable Law	This Agreement shall be governed by, and construed in accordance with, the laws of the Republic of Singapore (except its choice-of-law provisions).
The Plan and Other Agreements	The text of the Plan is incorporated in this Agreement by reference. This Agreement and the Plan, together with the Equity Award Modification Agreement by and between you and the Company, if applicable, (the “Modification Agreement”) constitute the entire understanding between you and the Company regarding this option. Any prior agreements, commitments or negotiations concerning this option, except for the Modification Agreement, are superseded. This Agreement may be amended only by another written agreement between the parties.

YOUR ELECTRONIC SIGNATURE TO THIS NOTICE AND AGREEMENT IS YOUR AGREEMENT

TO ALL OF THE TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

EX-10.7

Exhibit 10.7

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 2010. There is no formal plan document related to this program.

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 if pre-determined business performance measures are met and/or exceeded.

Administration

The Compensation Committee of the Board administers the program as it related to executives, and approves bonus attainment levels for all participants.

Participation and Eligibility

All executives and certain other key contributors designated by the executive officers are eligible to participate in the program during fiscal 2010. To be eligible for payment for a bonus period, participants have to be employed on the last day of that bonus period. Payouts for individuals who join the company and become eligible for participation in the program after the start of a bonus period will be pro rated.

Plan Operation

The program is administered in six-month performance periods that coincide with each half of Verigy’s fiscal year. Each participant’s target bonus is an amount, equal to a stated percentage of the participant’s base salary. The stated percentage includes, in each case, a target of 15% of the participant’s base salary that is tied to the same performance measures as apply to all employees under Verigy’s company-wide “Verigy Results Bonus” or “VRB” program. (The VRB program pays bonuses based on achievement of operating profit targets set in relation to a multi-year profitability model.)

In addition to the 15% of a participant’s base salary that is tied to the VRB program, another percentage of the participant’s base salary is based on achievement to short-term operating profit margin objectives set for each fiscal half year. For certain individuals, the program provides weighting for the financial results associated with the product family with which they are primarily associated while other participant targets are based entirely on overall company-wide results. Executive Officers are also measured against relative total shareholder return compared to a peer group of semiconductor equipment companies. Certain other individuals may also have a performance objective relating to sales results.

The overall Pay-for-Results target percentage of a participant’s base salary is based on the position level within the company and competitive practice. There are minimum performance levels that must be attained before paying a bonus. Pay-for-Results bonuses are paid if the minimum performance threshold is met or exceeded in the performance period. The maximum bonus represents 200% of the target bonus if meeting the maximum performance level.

A separate bonus program is administered for the newly acquired Touchdown Technologies, Inc. that is similar in nature to the Pay-for-Results bonus program. Instead of Verigy’s operating profit margin and other performance measurements, the Touchdown Technologies bonus is based on meeting key Touchdown Technologies’ objectives.