FormFactor (FORM)

Note 16 — Subsequent Event

The Company entered into a Separation Agreement and Mutual Release effective May 1, 2009 (the “Separation Agreement”) with its founder and former Executive Chairman Dr. Igor Khandros, who retired from the company and the board of directors. Under the terms of the Separation Agreement, the Company accelerated vesting of options to acquire 75,000 shares and permitted certain vested stock options to be exercisable until the earlier of (i) May 1, 2014 or (ii) the original expiration date of the applicable stock option. The Company and Dr. Khandros also entered into a consulting agreement effective as of May 1, 2009 under which Dr. Khandros will continue to serve as a key advisor to the company for a term of one-year for a quarterly consulting fee of $75,000.

Note 14 — Subsequent Event

On or about November 13, 2007, the Company filed a complaint with the United States International Trade Commission, or “ITC”, seeking institution of a formal investigation by the United States government into the activities of Micronics Japan and of Phicom.  The requested investigation encompasses U.S. Patent Nos. 5,994,152, entitled “Fabricating Interconnects and Tips Using Sacrificial Substrates”, 6,509,751, entitled “Planarizer for a Semiconductor Contactor”, 6,615,485, entitled “Probe Card Assembly and Kit, And Methods of Making Same,” 6,624,648, entitled “Probe Card Assembly”, 7,168,162, entitled “Method of Manufacturing a Probe Card”, and 7,225,538, entitled “Resilient Contact Structures Formed and Then Attached to a Substrate,” and alleges that infringement by each of Micronics Japan and Phicom of certain of the identified patents constitute unfair acts in violation of 19 U.S.C. Section 1337.  In the ITC complaint, FormFactor requests a permanent exclusion order banning importation of infringing products into the United States.  The ITC has not yet initiated a formal investigation.

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