Incentive Plan

VERIGY LTD. 2006 EQUITY INCENTIVE PLAN NOTICE OF SHARE UNIT AWARD for Awardees Located Outside the United States

by Verigy
June 12th, 2006

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Exhibit 10.2.6


VERIGY LTD. 2006 EQUITY INCENTIVE PLAN
NOTICE OF SHARE UNIT AWARD

For Awardees located outside the United States

        You have been granted units representing Ordinary Shares of Verigy Ltd. (the "Company") on the following terms:

Name of Recipient:   «Name»

Total Number of Units Granted:

 

«TotalUnits»

Date of Grant:

 

«DateGrant»

Vesting Commencement Date:

 

«VestDay»

Vesting Schedule:

 

The first «CliffPercent»% of the units subject to this award vest when you complete «CliffPeriod» months of continuous "Service" (as defined in the Plan) as an "Awardee Eligible to Vest" (as defined in the Plan) from the date of this award. Thereafter, an additional «Percent»% of the units subject to this award vest on each subsequent anniversary of the award date, provided that you continue to be an Awardee Eligible to Vest as of such date.

        You and the Company agree that these units are granted under and governed by the terms and conditions of the Verigy Ltd. 2006 Equity Incentive Plan (the "Plan") and the Share Unit Agreement, both of which are attached to and made a part of this document.

        You further agree that the Company may deliver electronically all documents relating to the Plan or this award (including, without limitation, prospectuses required by the U.S. 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.

RECIPIENT:   VERIGY LTD.

    


 

By:

 

    


 

 

Title:

 

    



VERIGY LTD. 2006 EQUITY INCENTIVE PLAN
SHARE UNIT AGREEMENT

For Awardees located outside the United States

Payment for Units   No payment is required for the units that you are receiving.

Vesting

 

The units vest in installments, as shown in the Notice of Share Unit Award, as long as you remain an Awardee Eligible to Vest (as defined in the Plan). In addition, the units are subject to certain vesting acceleration provisions in the event your Service terminates because of retirement, total and permanent disability, death, or termination without Cause (as defined in the Plan), as provided in the Plan.

 

 

No additional units vest after your Service has terminated for any reason, except as otherwise provided in the Plan and this agreement.

 

 

For all purposes under this Agreement, "total and permanent disability" means that you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted, or can be expected to last, for a continuous period of not less than one year.

Forfeiture

 

If your Service terminates for any reason, then your units will be forfeited to the extent that they have not vested before the termination date and do not vest as a result of the termination. This means that the units will immediately be cancelled. You receive no payment for units that are forfeited.

 

 

The Company determines when your Service terminates for this purpose.

Leaves of Absence and Part-Time Work

 

For purposes of this award, 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 applicable law, the Company's leave of absence policy or the terms of your leave. But your Service terminates when the approved leave ends, unless you immediately return to active work.

 

 

Your status as an Awardee Eligible to Vest will cease upon termination of employment with the Company or a Subsidiary or Affiliate except as provided in Article 8 of the Plan.

 

 

If you commence working on a part-time basis, then the vesting schedule specified in the Notice of Share Unit 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.
     


Nature of Units

 

Your units are mere bookkeeping entries. They represent only the Company's unfunded and unsecured promise to issue Ordinary Shares on a future date. As a holder of units, you have no rights other than the rights of a general creditor of the Company.

No Voting Rights or Dividends

 

Your units carry neither voting rights nor rights to cash dividends. You have no rights as a shareholder of the Company unless and until your units are settled by issuing Ordinary Shares of the Company's stock.

Units Nontransferable

 

You may not sell, transfer, assign, pledge or otherwise dispose of any units. For instance, you may not use your units as security for a loan.

Settlement of Units

 

Each of your units will be settled when it vests, unless you and the Company have agreed to a later settlement date.

 

 

At the time of settlement, you will receive one share of the Company's Ordinary Shares for each vested unit. But the Company, at its sole discretion, may substitute an equivalent amount of cash if the distribution of stock is not reasonably practicable due to the requirements of applicable law. The amount of cash will be determined on the basis of the market value of the Company's Ordinary Shares at the time of settlement.

Withholding Taxes

 

Regardless of any action the Company or your actual employer takes with respect to any or all income tax (including federal, state and local taxes), 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 your actual employer (i) make no representations or undertakings regarding the treatment of any Tax Related Items in connection with any aspect of the units, including the grant of the units, the vesting of units, the conversion of the units into shares or the receipt of an equivalent cash payment, the subsequent sale of any shares acquired at vesting and the receipt of any dividends; and (ii) do not commit to structure the terms of the grant or any aspect of the units to reduce or eliminate your liability for Tax Related Items.
     


 

 

Prior to the issuance of shares upon vesting of the units or the receipt of an equivalent cash payment, you shall pay, or make adequate arrangements satisfactory to the Company or to your actual employer (in their sole discretion) to satisfy all withholding and payment on account obligations of the Company and/or your actual employer. In this regard, you authorize the Company or your actual employer to withhold all applicable Tax Related Items legally payable by you from your wages or other cash compensation payable to you by the Company or your actual employer or from any equivalent cash payment received upon vesting of the units. Alternatively, or in addition, if permissible under local law, the Company or your actual employer may, in their sole discretion, (i) sell or arrange for the sale of shares to be issued on the vesting of the units to satisfy the withholding or payment on account obligation, and/or (ii) withhold in shares, provided that the Company and your actual employer shall withhold only the amount of shares necessary to satisfy the minimum withholding amount. You shall pay to the Company or to your actual employer any amount of Tax Related Items that the Company or your actual employer may be required to withhold as a result of your receipt of units, the vesting of units, the receipt of an equivalent cash payment, or the conversion of vested units to shares that cannot be satisfied by the means previously described. The Company may refuse to deliver shares to you if you fail to comply with your obligation in connection with the Tax Related Items as described herein.

Restrictions on Resale

 

You agree not to sell any 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.

No Retention Rights

 

Your award 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.

Adjustments

 

In the event of a stock split, a stock dividend or a similar change in Company stock, the number of your units will be adjusted accordingly, as the Company may determine pursuant to the Plan.

Nature of the Grant

 

In accepting the award, you acknowledge that:

 

 

        (a)    the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, as provided in the Plan;

 

 

        (b)    the award of units is voluntary and occasional and does not create any contractual or other right to receive future awards of units, or benefits in lieu of units even if units have been awarded repeatedly in the past;
     


 

 

        (c)    all decisions with respect to future awards, if any, will be at the sole discretion of the Company;

 

 

        (d)    your participation in the Plan is voluntary;

 

 

        (e)    the units are an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company or to your actual employer, and units are outside the scope of your employment contract, if any;

 

 

        (f)    the units are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculation of any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments;

 

 

        (g)    neither the units nor any provision of this Agreement, the Plan or the policies adopted pursuant to the Plan confer upon you any right with respect to employment or continuation of current employment, and in the event that you are not an employee of the Company or any subsidiary of the Company, the units shall not be interpreted to form an employment contract or relationship with the Company or any subsidiary of the Company;

 

 

        (h)    the future value of the underlying shares is unknown and cannot be predicted with certainty;

 

 

        (i)    if you receive shares, the value of such shares acquired on vesting of units may increase or decrease in value;

 

 

        (j)    no claim or entitlement to compensation or damages arises from termination of units, and no claim or entitlement to compensation or damages shall arise from any diminution in value of the units or shares received upon vesting of units resulting from termination of your Service by the Company or your actual employer (for any reason whatsoever and whether or not in breach of local labor laws) and you irrevocably release the Company and your actual 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 agreement, you shall be deemed irrevocably to have waived your entitlement to pursue such claim; and
     


 

 

        (k)    in the event of involuntary termination of your Service (whether or not in breach of local labor laws), your right to receive units and vest 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 involuntary termination of Service (whether or not in breach of local labor laws), your right to receive shares pursuant to the units after termination of Service, if any, will be measured by the date of termination of your active Service and will not be extended by any notice period mandated under local law.

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 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 units 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 vesting of the units 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, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to 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 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 constitute the entire understanding between you and the Company regarding this award. Any prior agreements, commitments or negotiations concerning this award are superseded. This Agreement may be amended only by another written agreement between the parties.

 

 

If one or more of the provisions of this Agreement shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and the invalid, illegal or unenforceable provisions shall be deemed null and void; however, to the extent permissible by law, any provisions which could be deemed null and void shall first be construed, interpreted or revised retroactively to permit this Agreement to be construed so as to foster the intent of this Agreement and the Plan.

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




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